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May, 10 2010 |  Download PDF |  Share

Illegal Firings and Death Threats at Alianza Fashion Garment Factory in Guatemala

Factory Robs Workers' Healthcare and Pension Payments

While undermining Government's Social Security Institute

Alianza Fashion, SA
Kilometer 52 ½ Carretera Interamericana
Chimaltenango, Guatemala

- Owner/Legal representative:  Mr. Bong Choon Park Seo
- General Manager: Mr. Rubén Enrique Rosales Ovalle

Phone:  (502) 849-0726 and 849-0730

* Alianza Fashion has been in operation since 2000.

* Number of workers:  Approximately 1,350.  Eighty percent of employees are women.

* Production/Labels:  Alianza Fashion is currently producing:
- Jackets and pants for Sag Harbor, Briggs New York and JM Collection
-
The Kim Rogers label was also being sewn until a month ago.

The jackets and pants, made of cotton and spandex, come in multiple colors:  black, blue, brown, khaka.  Some have pockets in front and back, some without pockets.

 

 

Attack on Workers' Severance Pay:

The Alianza Fashion factory has been operating since the year 2000.  However, in September 2009, management changed the factory name to Modas Alianza.  (See attached "Factory Production Report.")  The workers fear that the name change from Alianza Fashion to Modas Alianza is just a ploy so that management does not have to respect the legal severance pay due workers who leave the factory or who are fired without cause.  By law, workers must receive a severance package equal to one month's average wage for each year worked at the factory.

 

Death Threats Begin when the Center for Studies and Support for Local Development (CEADEL) Intervenes to assist workers illegally fired at the Alianza Fashion factory

 

February 2010:

First death threat is received by CEADEL's lawyer, Mr. Walter Felipe Pocop.  He receives a cell phone call telling him, "We're going to kill you."

February 10:

Alianza Fashion general manager, Mr. Enrique Rosales, enters CEADEL's office at 7:00 p.m. asking to see Walter Felipe Pocop.  Mr. Rosales is armed with a large pistol, clearly visible in the waist of his pants.  Two young CEADEL staff are terrified by the gun and his aggressive demeanor.

End of February:

A journalist for TV Cable Vision-the local station is called "Chimaltenango Hoy"--visits CEADEL's office to report on the illegal firing of a group of Alianza Fashion workers after they tried to organize an "Ad Hoc Committee" -a legal right guaranteed the workers-and to ask questions regarding management's apparent role in robbing the workers' Social Security Payments.  Ms. Gladis Marroquin, herself a former garment worker and now project coordinator for CEADEL tells the journalist that CEADEL is in the process of documenting the cases of the illegally fired workers, will help defend them legally, and if need be will launch an international campaign with the National Labor Committee.

Alianza factory's general manager, Mr. Rosales, sees the broadcast and requests a meeting with CEADEL.  When Mr. Rosales arrives at CEADEL's office, he is furious and begins shouting at Ms. Marroquin:  "You should shut your mouth and not go yelling to the media, speaking against the good name of the factory or else CEADEL will pay a price."  He continues, "As a woman you should avoid discrediting the company.  You speak too much."

March 30, 2010:

CEADEL's director, Mr. Jose Gabriel Zelada, receives his first death threat.  On the morning of March 30, he receives a call on his cell.  The caller tells him:  "You are going to die, son-of-a-bitch."

Early April, 2010:

Two men on motorcycles without license plates stop in front of CEADEL's headquarters and take pictures.

April 5:

A white Toyota Corolla with tinted windows, license plate # P-743DVY, pulls up in front of CEADEL's office and films a group of Alianza Fashion workers are standing in front of the building talking after a training seminar.

April 6:

On the morning of April 6, Mr. Jose Gabriel Zelada receives a second death threat on his cell phone on the morning.  The caller tells him, "You will see who we are."  Both this and the previous call are made from public telephones in Chimaltenango.

April:

The owner of the "Radio Satelite" station -where CEADEL has placed ads promoting respect for worker rights at Alianza Fashion and other factories-also receives death threats.  The anonymous caller orders him to immediately stop broadcasting CEADEL's radio spots and tell him:  "We know the movements of your wife, your children and you."

April 28:

Mr. Gabriel Zelada places an official denunciation of the threats against his life before the Public Ministry of Guatemala.

Guatemala continues to be racked with violence, which almost always goes unpunished, since police are overwhelmed and unprepared due to lack of resources and training.  There is no adequate governmental response to counter such death threats.  The situation is extremely serious and will require immediate international intervention to protect the lives of the Alianza workers and the staff of the nongovernmental human rights organization, CEADEL.

 

Serious Problems at Alianza Fashion began to surface in January 2010:

The highly respected independent local human rights organization the Center for Studies and Support for Local Development, CEADEL (Centro de Estudios y Apoyo al Desarrollo Local) began a series of educational training sessions with groups of Alianza workers so they could learn their legal labor rights under Guatemalan law.  The more the workers learned, the clearer it became that there were serious, ongoing human and worker rights violations at the factory.

In January, a group of 20 Alianza workers who were receiving training from CEADEL regarding Guatemalan labor law, were fired.  The illegally fired workers were also denied their severance pay.  It was only after CEADEL pressured management, that all 20 workers at least received 100 percent of the severance pay due them. 

The workers were fired once they began taking steps to organize an "Ad Hoc Committee," a first step toward organizing which is legally protected under Guatemalan law.

At the same time, it became clear that management was failing to pay all its legal obligations to the Social Security Institute, while robbing and pocketing the Social Security deductions taken out of the workers' wages.  By law, 4.87 percent of the workers' wages must be deducted and remitted to the Social Security Institute, while management is required to pay 10.67 percent of the workers' wages to IGSS.  The total wage deductions and management contribution to Social Security amount to 15.54 percent of the workers' wages.

In March 2010 a group of 35 Alianza workers who participated in human rights trainings at CEADEL decided to again try to form an "Ad Hoc Committee" to better defend their legal rights.  The Ad Hoc Committee then requested that the Ministry of Labor undertake an investigation of management's failure to make proper payments to the Social Security Institute. 

 

Management responded by illegally firing all 35 members of the Ad Hoc Committee.

CEADEL is now supporting the workers in their fight for reinstatement.  (Thirty workers are fighting to return to their jobs, while-in fear-five have accepted severance pay and fled the factory.)

CEADEL publicly denounced the violations in the local and national press, and threatened to launch a joint international campaign with the National Labor Committee.

Alianza management reacted with fury to the negative press coverage, and especially to the threat of an international campaign.

At present, conditions at the Alianza factory-and respect for the country's labor laws-are seriously deteriorating, with management using the loud speaker system to threaten workers not cooperate or even go near CEADEL's office.

Anonymous death threats are now targeting CEADEL's leaders and even local press people.  We judge the current situation to be very dangerous, and tensions are escalating.  Given Guatemala's violent history, these threats against local human rights activists must be taken very seriously and acted upon immediately.  If managed correctly, it might be possible to quickly diffuse the escalating threats and restore a dialogue among the workers, CEADEL, Alianza Fashion management, the Guatemalan Government and the U.S. labels involved.

Alianza Fashion illegally robs its workers and the government's Social Security Institute;  fires workers exercising their legal right to organize;  followed by anonymous death threats against local human rights organization and even journalists daring to report the violations at the factory.

Something is seriously wrong.  Five years into the U.S.-Central American Free Trade Agreement, it appears that the Alianza Fashion garment factory in Guatemala has, in broad daylight over the course of years and with complete impunity robbed both its workers and the Guatemalan government's Social Security Institute.  It appears that management pocketed many of the workers' wage deductions that were supposed to be passed along to the Social Security Institute, while also failing to pay the mandatory contribution required of the company.

Consider the concrete case of Ms. Wilma Marina Socop Toma, who worked in the cutting section of the Alianza Fashion factory for more than eight years before being illegally fired along with other workers for daring to exercise their legal right to organize an Ad Hoc committee, which is the first step toward forming a union.  Ms. Socop began working at Alianza Fashion on January 2, 2002 and was illegally fired on March 26, 2010.

When Ms. Socop obtained her records from the Social Security Institute, it was clear that management had cheated her-and the Institute-of at least 75 percent of the legal wage deductions/contributions due Social Security for pension and health care.  Ms. Socop worked at Alianza for 99 months, yet Social Security records show factory management making just 23 monthly contributions.  Management had robbed her of the Social Security  deductions taken out of her wages-which they apparently pocketed-while also failing to pay the Social Security contributions legally required from factory management.

The workers fear that it is not just Ms. Socop who has been cheated for years.  Management may have also cheated scores, if not the majority, of workers, who now find themselves without access to healthcare and a small pension, despite the fact that they paid for it.

A thorough and independent investigation must be immediately initiated into the Alianza Fashion factory's contributions-or lack of-to the Guatemalan Social Security Institute.  (See attached Social Security records for Ms. Vilma Marina Socop Toma.)

 

Working Conditions at Alianza Fashion

 

Hours:

The legal regular workweek in Guatemala is 44 hours.  At Alianza the regular shift runs from 7:30 a.m. to 4:10 p.m. Monday through Friday, with one 40 minute break for lunch, with a four hour shift on Saturday, from 7:30 to 11:30 a.m.

Forced overtime--Illegally, all overtime at Alianza Fashions is obligatory:

The actual working hours at the Alianza factory are from 7:30 a.m. to 7:10 p.m. or 8:40 p.m. for an 11.7 to 13.2 hour shift Monday through Friday.  On Saturdays, there is an obligatory shift of five to eight hours, from 7:30 a.m. to 12:30 p.m. or 4:00 p.m.

On the low end, assuming that they work from 7:30 a.m. only to 7:10 p.m. on weekdays plus five hours on Saturdays, the workers are at the factory 63.3 hours a week, while working 60 hours, including 16 hours of obligatory overtime. 

Under Guatemalan law, all overtime must be voluntary.

At the high end, assuming work from 7:30 a.m. to 8:40 p.m. five days a week and a mandatory 8 ½ hour shift on Saturday, the workers are at the factory 74.5 hours a week, while toiling 70.3 hours, including 26.3 hours of obligatory overtime.

(Note:  Guatemala's labor laws regarding permissible overtime hours appear confusing and contradictory.)

 

Excessive Production Goals:

There are 16 production modules at the Alianza Fashion factory, with 40 to 50 sewers in each module, depending on the complexity of the garment being made.  The most complicated jackets and pants-with multiple pockets-require 50 workers in the module.

The 50 workers in the complex module must complete 6,000 jackets or pants, working a regular eight-hour shift, Monday through Friday.  This means they must finish 1,200 garments a day.  In effect, the workers are given just 20 minutes to sew each garment, for which they are paid a mere 27 to 46 cents.

The workers say the mandatory production goals are excessive, and arbitrarily set by management, who constantly pressure the sewers to work faster.  The atmosphere is very tense, as the workers are constantly harassed to meet the excessive production goals.

Supervisors tell the workers:  "It's up to you.  You decide your own schedules.  If you want to go home early to take care of your family, then eat quickly and work faster."

 

Workers daily production report. See that the workers start reporting production at 8:30 a.m. and the format ends at 8:10 p.m. Notice that at the bottom it reads "Modas Alianza S.A." although workers are from Alianza Fashion. This document was smuggled by the workers.  

 

 

 

Wages:

As of 2010, the legal minimum in Guatemala was 51.75 Quetzales ($6.46) per day for the regular eight-hour shift, which comes to 81 cents an hour.  This wage comes nowhere near meeting even the workers most basic subsistence level needs.  Overtime hours are to be paid at 125 percent of the base rate, or $1.01 an hour.

Across Central America, it is traditional for the workers to be paid the minimum wage for seven days a week and not the five-and-a-half days they work.  This "Seventh Day's" pay acts as a kind of attendance bonus, since workers who miss a day or arrive late for their shift will lose the "Seventh Day."  In addition, due to the constantly rising cost of living, the Guatemalan government has decreed a 250-quetzal ($31.25) per month bonus which must be paid by management. 

Wages

(Base wage including 7th Day and Q250 bonus))

$1.18 per hour

$9.45 a day (8 hours)

$51.99 a week (44 hours)

$225.31 a month

The Alianza Fashion workers report earning 1,060 quetzals ($132.33) every two weeks, or $66.17 a week for working 60 hours a week, including 16 hours of mandatory overtime.

(By law, workers are also paid two additional bonuses, a "13th month" Christmas bonus and "14th month" paid in July, each equal to 30 days' base wages.  Counting these bonuses, the workers wages rise to the equivalent of $1.38 per hour, 3,154.34 a year--still not even close to lifting the average sized family out of poverty.)

 

Corporate Factory Audits are a Sham:

To prepare for corporate audits, small groups of workers are brought together where they are threatened by the general manager, Mr. Ruben Enrique Rosales, and other supervisors.  The workers are warned:  "You should value your jobs, and you should speak well of Alianza, because Alianza is in danger if you speak badly about the factory.  The factory could go into bankruptcy because our finances aren't going well, so you have to work hard.  Mr. Park [the owner] is a Christian and he is poor.  He never made any profit from the Alianza factory, so you can't speak badly about Alianza or Mr. Park."

Management chooses the workers who will speak with the gullible corporate auditors.  The auditors never say which company they are working for.

 

Worker Demands:

  • Management arbitrarily sets production goals at levels which are excessive and impossible to reach.  Supervisors constantly hound and press the workers to toil faster to reach the impossible goals.  Production goals must be reasonable and the constant harassment and pressure must cease.
  • All overtime must be voluntary and not forced.
  • Workers must have the right to go to the Social Security clinic if they or their children are ill or need medical care.   As things stand now, factory management must grant special permission for a worker to go to the Social Security Clinic, even though the workers pay for coverage through deductions from their wages.
  • The workers are asking for a serious independent investigation of Alianza Fashion's records regarding management's legal payment to the Guatemalan Social Security Institute.  Management deducts Social Security fees from the workers' wages each month, but there are indications and fear that management has not only failed to pay the factory's fees to the Social Security Institute, but may also be deducting the workers' fees and pocketing the month and not passing it to the Institute.
  • The Guatemalan Institute for Social Security covers health care and pensions for the workers.  Workers must pay 4.87 percent of their wages (based on the minimum wage not including the Government decreed Q250 bonus), while management is to pay 10.67 percent of the workers wages.  The combined 15.54 percent of workers' wages covers healthcare and pension.
  • Regarding the workers' pension, by law, after completing 15 years of work, a worker is entitled to a modest retirement pension of $145.54 a month, which is set by the Social Security Institute at 75 percent of the legal minimum wage, not counting the Government decreed bonus. 
  • The workers are terrified that management may be cheating many of them of their right to healthcare and a pension, both by management's failure to pay its own 10.67 percent of wages in fees to Social Security and by pocketing the 4.87 percent deduction from the workers' wages.

 

Attachments:

* Guatemalan Social Security Institute (IGSS) records for Ms. Wilma Marina Socop Toma

* Termination Letter of Ms. Wilma Marina Socop Toma

 

 

Labels Currently Produced in Alianza Fashion

(As of April 2010)

 

 

Sun Capital Partners took Kellwood private in 2008

Kellwood bought Briggs New York in 2003:

Kellwood owns:

  1. Briggs New York (sold in BonTon and other places)
  2. Pantology (registered by Briggs, owned by Kellwood)
  3. The Slimming Solution (registered by Briggs, owned by Kellwood)

Kellwood owns or at least produces:

  1. JM Collection (label registered to "Jordan Marsh Stores")
  2. RN 102803 (RN owned by Kellwood; sold in Macy's)

*when Jordan Marsh went bankrupt, a number of their stores were replaced by Macy's, owned by Federated.

 

Belk Stores-"the nation's largest privately owned department store, with 306 stores in 16 Southern States"

 

Belk's owns:                

  1. Kim Rogers
  2. RN 31104

 

 

Key Contacts

Centro de Estudios y Apoyo al Desarrollo Local (CEADEL)         
1 Av. 4-76 Zona 4, Chimaltenango, Guatemala.                              
Tel:   502  7839-3349
Email: ceadel@intelnet.net.gt

Gabriel Zelada, director;                                                       
Gladis Marroquin, project coordinator

 

Institute for Global Labour and Human Rights
5 Gateway Center
Pittsburgh, PA 15222
Tel: 412-562-2406
Email:  bbriggs@glhr.org

Charles Kernaghan, Director
Barbara Briggs, Assistant Director

 

Guatemalan Embassy

2220 R Street, NW
Washington, DC 20008
Tel: 202-745-4952
Email: info@guatemala-embassy.org