Philippines: Faremo Intl. factory closure leaves over 1,000 jobless; union suspects shutdown was meant to suppress organizing

Dozens of former workers of garment manufacturer Faremo International launched a picket at the factory site to protest its closure which resulted in the laying off of over 1,000 workers. According to the union, the shutdown was not caused by the lack of orders as the company claims, but by anti-union motivations.

Business & Human Rights Resource Centre invited the companies named in the reports to respond. Provided below (alongside the relevant reports) are the responses of Gap, which was reported as one of Faremo's buyers, and Hansoll, the parent company of Faremo. Also provided is a rejoinder of the labour organization Partido Manggagawa to Gap's response, followed by Gap's reply to the rejoinder.

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Company response
17 November 2016

Hansoll Textile response

Author: Hansoll Textile

...Hansoll also wants to make it clear that there is no basis for any claim that the decision to close the factory has any connection to the FIIWA Union of Faremo, the Collective Bargaining Agreement (CBA) that has been signed, or industrial relations at the factory. Our factory management engaged in a number of rounds of negotiations, and reached a collective bargaining agreement in June, 2016 that had been submitted and accepted by the Department of Labor and Employment. Hansoll has a proud record of seeking positive relationships with the unions at its facilities and negotiating CBAs, and Hansoll would never close a plant for other than economic and commercial viability reasons. Any suggestion that we will seek to re-open the plant under different circumstances, including without the existing Union or CBA, are entirely incorrect.

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NGO rejoinder
16 November 2016

Gap does not confirm claim of lack of orders for Faremo’s closure

Author: Partido Manggagawa (Philippines)

(A rejoinder to Gap's response dated 10 November 2016)
 
10 Nov 2016
 
In Gap’s response regarding the labor dispute over the permanent closure of its supplier factory Faremo International Inc., it cites that the mother company Hansoll made such a “business decision” due to its “global business strategy.” This is in glaring contradiction to the allegation of Faremo management that it shutdown due to lack of orders from its buyers, among them Gap.
 
The legality of Faremo's closure is contingent on the veracity of its claim that it lacks orders from Gap, among others. In its notice of closure, in the mediation hearings, and in its meetings with the union, and even in Faremo general manager's letter to PM--they all say that Faremo lacks orders.
 
Now Hansoll says Faremo's closure is part of "global business strategy." This is in conflict with this claim of lack of orders. Gap is silent on the claim that they don't have any more orders from Faremo or Hansoll...

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Company response
15 November 2016

Gap response to Partido Manggagawa rejoinder

Author: Gap

(This is Gap's response to the article "Gap does not confirm lack of orders for Faremo's closure")

Gap Inc. has increased its orders with Hansoll from 2015 to 2016. For further inquiries on Faremo, we continue to recommend you reach out to Hansoll, as they have indicated their willingness to discuss this issue with concerned stakeholders directly.

Article
12 November 2016

1,000 workers cry rescue from layoff

Author: Nelson S. Badilla, Manila Times

23 Oct 2016

Around 1,000 workers, majority of them women, of a South Korean-owned factory in Cavite are hoping that the Department of Labor and Employment (DOLE) could change the mind of the firm’s management to save the workers from being jobless just as Christmas is fast approaching…

In a statement sent to The Manila Times…the union said Faremo International has decided to close the company immediately…

It supplies garments to global brands such as Gap, JCPenney and Kohl’s.

The union said the owners of Faremo International had chosen to shut the company down rather than grant demands of the workers.

Among the demands are recognition of the union that was formed last year, end of verbal abuse of workers, grant of due benefits and increase in the workers’ monthly salary as prescribed by the Minimum Wage Law…

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Article
12 November 2016

1,200 jobless as garments firm closes

Author: Maricar Cinco, Inquirer (Philippines)

29 Oct 2016

About 1,200 regular and contractual workers of a Korean-owned garments factory in Cavite province lost their jobs after the management claimed its clients had pulled out, prompting a company shutdown.

Faremo International Inc., one of the leading garments producer inside the Cavite Export Processing Zone in Rosario town, filed a notice of permanent closure on Oct. 21 in the Department of Labor and Employment…

 “[The company] said one of its major clients, [a popular clothing brand], had stopped issuing [purchase orders] so they did not have any reason to continue production,” Orihuela [director of the National Conciliation and Mediation Board in Calabarzon] said in a telephone interview…

But the Faremo workers’ union doubted this claim and suspected the shutdown was meant to suppress the recently formed union.

Jessel Autida, 42, a machine operator of eight years and union president, said talks of company losses only began after the union and the management sealed its collective bargaining agreement in June…

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Company response
11 November 2016

Gap response

Author: Gap

Hansoll made a business decision to close its Philippines facility, Faremo International Inc., in October 2016. This information was shared with Gap Inc. in September, during which time we implemented our facility closure protocol to ensure all aspects of the closure are in compliance with local laws and Gap Inc. policies. Hansoll has shown, with sufficient evidence, that this decision was driven by their global business strategy.

Hansoll has committed to adhere to the legal process of the factory closure, including all severance and wage payments. Further, Hansoll has committed to provide outplacement plan for impacted workers and help impacted workers find job placement in nearby factories. Hansoll has committed that this will be applied equally to both union and non-union members, and our field team will be working with Hansoll to oversee this effort...

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