NPR: The $4 Million Severance Payout That Almost Didn't Happen
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This post first appeared on NPR.
In late November, a group of laid-off garment industry workers in Indonesia collected more than $4 million in severance pay owed to them by their employer.
It was a rare victory, won with the help of local labor unions, international advocacy groups and major retailers like Nike. But it may not happen again: The government there is moving forward with a controversial plan to roll back labor protections in the hope of attracting more foreign investment.
In November 2018, a factory in West Java that was producing sportswear for Nike and other international retailers shut down, leaving 2,000 workers without a job. Under Indonesia's generous severance laws, most of the workers should have been eligible for 18 months worth of severance pay, equal to about $4,000 dollars each.
Instead, Hojeon, the Korean company that operated the factory, paid out only half that amount, according to an April report by the Washington-based advocacy group Workers Rights Consortium (WRC), which was contacted by the unions for the factory workers to investigate the situation.
That report kicked off months of negotiations between labor unions, WRC, the Korean company Hojeon, Nike and other retailers that purchased apparel from the factory. (The government was not involved because unions made a decision not to pursue legal action against Hojeon, which they feared would result in a lengthy court battle, according to the WRC report).