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Complaint #010: Certification Complaint
PT Teodore Garmindo Indonesia – Forced resignations

Details of Facility:
-PT. Teodore Garmindo Indonesia
-Manufacturer of knitted garments
-Jawa Barat, Indonesia
-Certified: March 10, 2005
-Certification Body: SGS

Actions Taken:
November 30, 2005: Two companies sent SAI a letter of complaint against PT Teodore Garmindo Indonesia stating that the facility had been shifting permanent workers to contract workers by forcing resignations since July 2005. One customer of this facility also informed SAI of previous intimidation of union members which was resolved prior to receipt of the complaint. SAI notified SGS, the certifier of this facility, of the complaint, and SGS submitted a plan of action and results of the initial inquiry to SAI.

December 1, 2005: An SGS auditor attended a meeting between one of the brands purchasing from this facility and PT Teodore workers. A review of the resignation letters revealed that all used similar wording.

December 27-29, 2005: A supplementary investigation audit was conducted by SGS in conjunction with the chairman of the Indonesian Labour Union Federation which included worker interviews on the subject of the forced resignations.

January 1, 2006: The auditors’ report was received by SAI, detailing the Corrective Action Requests (CARs) issued to PT Teodore. The CARs related to the mass resignations, re-election of labor leaders, worker attendance records, and improving communication between the labor leader and the members. Per the SGS certification procedures, the SA8000 certificate was suspended until satisfactory CAR closure was completed, and a second audit was scheduled within 90 days as a follow-up. During the audit, worker interviews confirmed that practice had been for managers to dictate a resignation letter to employees, who felt threatened and did not feel free to refuse to write it. Within days, the workers submit similarly worded applications for the jobs from which they had just resigned.

March 24, 2006: A follow-up audit conducted by SGS concluded that PT Teodore Garmindo was ineffective in closing out the CAR related to mass resignations – they were able to effectively close the other CARs issued to them. PT Teodore’s proposal had been that workers who repay the resignation money would be given back their permanent positions. Only 10 persons from a total resignation pool of 429 gave back the money from the resignation package. Worker interviews revealed that these workers were unable to pay back the money as they had used it to pay for basic necessities such as their children’s education and religious participation.

April 5, 2006: An update from SGS stated that only the 10 workers were given back permanent worker status and the company refused to reinstate workers that did not repay the resignation money.

May 2006: A union/management non-retaliation communication workshop was held with the goal of establishing communication between management, staff, and the trade union.

May 23, 2006: No agreement was reached on the issue of repayment of resignation money by the reinstated workers. The SA8000 certificate was suspended, per the SGS certification procedures, until satisfactory CAR closure was completed.

July 13, 2006: SGS conducted a follow-up audit with PT Teodore and reviewed training and other records, and did note improvements in production processes. Auditors met with the management of PT Teodore and concluded that the SA8000 certificate should be withdrawn as Management did not seek any alternative ways to close the corrective action, except that workers would have to give back the resignation money 100%.

September 6, 2006: SGS notified SAI that the SA8000 certificate for PT Teodore Garmindo had been cancelled by SGS due to lack of closure of CARs by PT Teodore.

SAI accepted the SGS decision to withdraw the SA8000 certificate for PT Teodore Garmindo and has determined that this complaint is formally closed.