For several weeks, H&M Group has been in close dialogue with the management of Gokaldas Export Ltd. and their unit Euro Clothing 2 (ECC2), as well as Garment and Textile Workers Union (GATWU) and its federation, Unions United... working to help them find a peaceful solution to the conflict.

After initial misinformation in various media and social media claiming that the closure of the factory was due to cancelled or reduced orders from H&M Group, we could confirm that this information was incorrect. Instead, we treated this case as a suspected non-compliance with our minimum requirement to respect workers’ right to freedom of association...

[W]e had several conversations with the involved parties, and repeatedly urged Gokaldas Export Ltd. to engage in good faith negotiations with the respective trade unions... Using all possible leverage, we made clear that meeting our requirements to respect the workers’ right to freedom of association and entering such good faith negotiations is the basis for the H&M Group to continue business not just with this particular factory, but all of the factories operated by Gokaldas...

While Gokaldas Export Ltd. agreed to join a number of... meetings, we could... unfortunately not yet see our expectations to a meaningful and good faith negotiation fulfilled, which ultimately forced us to follow through in using our ultimate leverage and gradually phase out the business relationship with Gokaldas Export Ltd due to non-compliance with our requirements to respect freedom. In order to minimize impacts on their business, this will, as part of our responsible phase out procedures, mean a gradual reduction of order volumes over a period of 18 months. We will re-evaluate our decision and consider placing orders with Gokaldas Export Ltd. again, in case we would see convincing signs and actions of remediation and credibly respecting workers’ rights to freedom of association...

[The full statement is attached and is in response to BHRRC's report on union busting and unfair dismissals of garment workers during COVID-19]