Legally binding employee relationships

We require that our production partners comply with their obligations to employees under labor or social security laws and regulations arising from the regular employment relationship. These regulations shall not be avoided through the use of labor-only contracting arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment. Younger workers shall be given the opportunity to participate in education and training programs.

This is regularly reviewed by our employees on-site as well as by the Fair Wear Foundation (FWF)

In 2015, there were some findings regarding legally binding employee relationships.

• If a production facility in Vietnam hires seasonal workers, it is obliged to pay out social security contributions directly to the workers. In this case, our producer did not pay this.
• Not all workers are covered by social insurance.
• Employment contracts do not contain all the necessary information.

VAUDE immediately discussed all findings with the relevant producer and together a Corrective Action Plan was worked out to remedy the situation.

There are a variety of reasons why some workers do not have social security.

There are cases in which workers forego social security in order to directly receive the employee’s share. This is often due to lack of awareness – the workers are not aware of the benefits that social insurance provides. In order to draw attention to this, we require our producers to inform its employees fully about social security, benefits, the various elements of insurance and the amount payable. Moreover, the workers are informed in the Fair Wear Foundation WEP training regarding social security as well.

There are isolated cases of workers (in China, for example) who decide not to participate in social security despite their knowledge of it. This applies primarily to insurance policies to which the employee must pay contributions. Many workers are migrant workers who are usually registered in their home village. In China, it is not yet possible to transfer social insurance to all provinces. Therefore, migrant workers often have no benefits from social security if they are registered in the province in which they work. Nevertheless, we are working intensively with our producers on the issue of social security, as it is very important to us that the workers have a safety net.

Since there are no figures collected for new recruitments or the number of terminations in FWF audits, we have no data for performance indicators of our producers. However, to get an idea about the issue, our production managers pay special attention to how many workers return after major holidays during their visits.