Bangkok--9 Nov--124 COMMUNICATIONS
The closure of this factory has been a difficult decision, and we have made every effort to meet our obligations in strict accordance with Thai law. A number of external parties have issued contradictory information. However, the following summary provides updated and accurate information.
Reasons behind the Closure
For the past ten years, the company has been under increasing financial pressure including an increased cost of labor (especially under the Collective Bargaining Agreement signed in 2003) and normal price pressure.
In light of the fact that Ginaform has experienced losses for the past six years, new management at the parent company made the difficult decision in mid-2006 to cease operations at the factory.
The closure has nothing to do with any other external factor — neither labor unions, political issues, nor any other reason proposed by opponents of the closure.
On numerous occasions throughout the past six years of losses, the company proposed cost control measures to the workers' union, including controls on wage increases, in order to return to profitability. However, these measures were rejected, leaving the company with no choice but to cease operations.
Transfer of Machinery
Before formally announcing the closure, the company moved out some of the machines that do not belong to Ginaform Bra. However, when workers asked the Labor Ministry to look into the reason for transfer, the company immediately complied with the request of the Labor Ministry and stopped the shipment.
The closure had not been announced at that time since planning for the announcement was still underway, including calculation and review of more than 1,000 staff members' severance entitlements.
Closure Announcement
The company decided to announce on September 4, 2006, that the facility would cease operations by October 31, 2006.
As of that time, many details were still unavailable, such as the individual amounts of severance packages (individually calculated for each of more than 1,400 staff).
Internal Communications
Following the initial announcement of the closure date, the company maintained complete transparency with the workers about the decisions that had been made and the closure process. These included:
Six separate manager meetings on the topic
Three verbal announcements through our in-house paging system
Five written announcements and sets of Frequently Asked Questions, posted on boards located not only in the canteen and rest areas, but also on every working floor
Three face-to-face announcements on each of the seven factory floors
Suggestion boxes open during all working hours
In all these announcements, the workers were given the opportunity to provide their feedback. On every occasion, the workers were informed that they would receive severance payments in strict accordance in Thai law. The company demonstrated proof of funds reserved for the payments.
Furthermore, staff were informed the date of the payment would be on October 31, 2006, or the next day of the last shipment has completed. Regardless the date of last working day, the salary of October would be paid up to October 31, 2006.
Source of Funds
Given the financial difficulties of Ginaform Bra, the parent company was asked to remit the funds, approximately USD 2.3 million, to a Bank of America account in Bangkok on September 11, 2006, and held in reserve for the severance payments.
Extra 30-days' Wages
To express the company's appreciation to those staff who demonstrated their intention to support a smooth closure process, the company offered an extra payment equivalent to 30-days' wage for anyone who voluntarily resigned. As of today, 400 workers have submitted their resignation. The first group to resign received these funds on October 9, 2006.
Severance Pay Day
The last shipment was completed on October 19, 2006, thanks to the workers dedication and hard work. As promised, the company paid all of the workers on October 20, 2006. The payment consisted of severance payment, the payment for unused vacation, and payroll for October, up to and including October 31, 2006.
The money was remitted to the salary account of each worker by Siam Commercial Bank.
Situation on Last Operating Day
After the floor-by-floor announcement and thank you speech, the workers were encourage to pick up the documents — containing details about the severance payment and tax deduction form — at the exits. Along the walk way, posters highlighting key messages such as ‘those who have queries can continue to address the designated person at the office until October 31’ and ‘the offer of 30-day bonus is still available until Oct. 31’ and ‘today is the last working day’ were posted.
However, since some of workers refused to exit the factory. Not knowing why, the management feared for the safety of everyone present, and asked police officers from Bang Kean District to be present outside the facility. Contrary to some claims, at no time did any police officer, let alone any military personnel, enter the factory.
Closure Announcement
The company decided to announce the factory closure on September 4, 2006 that the facility would be closed down since October 31, 2006 onwards or earlier if the last order could been ship off before October 31, 2006.
Nevertheless, as of the announcing date, the company could not yet reach many conclusions such as details of the severance payment for the detail information and working process to be done by legal and HR consultants were not ready. However, the company has communicating with the workers to keep them abreast with updates all along.
Internal Communications
To create a flow of information, the company has updated all the staff and workers through many communications channels such as Manager Meetings; Voice on Line; Posting Announcement and Frequently Asked Questions on boards which located not only in canteen and resting area, but also on every working floor; and floor-by-floor announcement to facilitate two-way communications, in addition to suggestion boxes and asking questions through their managers.
Key messages conveyed includes amount of fund remitting by Clover to Bank of America as a fund for Ginaform Bra’s worker compensation. The company has made it so clear that all the workers would received all entitlements as mentioned in Thai labour law. The date of payment would be on October 31, 2006 or the next day of the last shipment has completed. Regardless the date of last working day, the salary of October would be paid up to October 31, 2006.
Source of Fund
Even though the financial status of Ginaform Bra has been in red, the company has intention to pay for severance payment to help support the workers as much as it can be. Therefore, the company has asked the fund from parent company —Clover International- to remit the fund thereby USD 2.3 million was injected into Bank of America account in Bangkok on September 11, 2006.
Extra 30-day Wages
To express an appreciation to the smooth closure process, the company has offered an extra money equivalent to 1 month or 30-day wage to those who resign. Currently, 400 workers submitted the resignation. The first batch received the money on October 9, 2006.
Severance Pay Day
The last shipment has been completed on October 19, 2006 due to the dedication of the workers. As promised, the company has paid all the workers on October 20, 2006. The payment consists of severance payment, the payment for unused vacation and payroll of October which is paid up to October 31, 2006.
The money was remitted to salary account of each worker by Siam Commercial Banks.
Situation on Last Operating Day
After the floor-by-floor announcement and thank you speech, the workers were encourage to pick up the documents —containing details about severance payment and tax deducting form- at the exits. Along the walk way, posters highlighting key messages such as ‘those who have queries can still come to designated person at the office until October 31’ and ‘the offer of 30-day extra money is still last until Oct. 31’ and ‘today is the last working day’ were posted.
However, since some of workers refused to go out of the factory. Not knowing why, management is feared for safety of every party, police officers from Bang Kean District were asked to station around the facility.
Meeting to find Resolutions for Workers
Even though the company has already paid the statutory entitlements to every worker on October 20, 2006, the company would sincerely like to listen to the requests from the workers. On October 7, 2006, the company had sent representatives to join a meeting with those from labour union to settle the requests in addition to statutory entitlement, in which the labour union has requested as follow:
1. Proportional bonus
2. Annual Perfect Attendance Gold
3. Seniority Gold
4. Extra 6-month payment
5. Extra 45-day compensation for pregnant woman
6. Severance payment which some of the workers did not receive at the amount they should have received. The list of the workers will be provided by the labour union later on.
The representatives of the company notified that if any of the workers believed that they have not received the right amount of payment could inform the company along with proof stated otherwise at the office. After rechecking the document and found that the document is valid, the company would complete the case within three days.
In regard with the additional requests from the Labour Union, although the employees did not work until the end of the year as stated in the Collective Bargaining Agreement and therefore the employees are not entitled to receive them, the company will consider special offer as follow:
1. Annual Perfect Attendance Gold —calculated proportionally
2. Compensation for the pregnant women which will help complete the amount equivalent to the total 45 days
3. Extra relief compensation equivalent to 30-day wages
Nevertheless, such offer is under the condition that the worker union will have a written agreement that the company will cease any activities that obstruct or jeopardize the reputation of the company and/or that of its customers, and the written agreement must be done by November 16, 2006. The offer stated above is final.
The official schedules another meeting on November 16, 2006.
Nevertheless, despite the offers made by the company before the Labour Ministry officials, the labour union refused to sign the memo and did not agree no let the mob go out of the Ministry;s building. This resulted in another memo written by the officials omitting the company’s offer in addressing the labour union’s requests and stating merely that both parties ‘could not reach conclusion’ and will thus schedule a ‘next discussion on November 16, 2006.’
Conclusion
The company has done its best throughout this process, despite its financial difficulties, to ensure that all obligations are met. We appreciate your support and apologize for any misunderstanding
For more information, please contact:
Sopawadee Chanthaworn
Cell phone # 089 967 8967
Email: [email protected]