January 3, 2007

(January 2007) The Hermosa factory in El Salvador closed in May 2005 following an attempt by workers to organize a union. A determined group of 63 workers has since been campaigning to receive their legally-owed severance and other payments, and to end the blacklisting that prevents them from getting new jobs in other factories in the area.

Brands who sourced from Hermosa, including adidas, Nike, Russell Athletic and Wal-Mart, were asked to contribute to a fund to cover their legally outstanding wages, overtime payments and severance pay; as well as to require their suppliers to hire the former Hermosa workers on a priority basis and address the ongoing hiring discrimination. They were also asked to pressure the Salvadoran government to uphold its laws, ensure payment of all outstanding wages, overtime payments and severance pay; and ensure the right to organize a union is respected.

Emergency fund established, but amount insufficient

We are pleased to report that some progress has been made.

On December 22, 2006, the Fair Labor Association reported that they had established an emergency fund intended to “provide immediate and direct assistance to the workers while efforts continue to hold the government of El Salvador and the factory owner responsible for carrying out their legal obligations to workers”. The fund, set at an initial sum of US$36,000, is being administered by the Fundacion de Estudios para la Aplicacion del Derecho (FESPAD), who has cooperated closely with the group of organized workers and with the other organizations involved in the case. Former Hermosa workers who have not been able to find employment, particularly because of blacklisting, are eligible to receive the payments.

On December 29, 2006, FESPAD reported that 57 workers were identified as eligible for assistance (all of whom belong to the group of 63 organized workers) and have received and cashed their cheques. Representatives of the organized workers were present and report that the process went smoothly and transparently.

While happy that the organized workers have received some relief during the holiday season, we are disappointed that the fund the FLA established is not intended to reimburse workers what they are legally owed, but consciously framed as a humanitarian aid gesture. It does not acknowledge that brands share responsibility for the current situation, where workers who for years were making their clothes are owed large sums of money. We’re also very disappointed that the initial amount distributed (US$36,000) is small compared to the amount legally owed to the workers. The organized group of 63 workers are owed at least US$100,000 more. If the total group of ex-Hermosa workers are taken into account the amount due is over US$825,000. The way the FLA fund is set up it would be open to all dismissed workers. According to the FLA a second distribution may be made if additional funds become available, but none have been confirmed.

In a statement on December 20 the group of organized workers says that they are willing to accept the offer “although it does not reflect in any way the hardships we have lived during this period, and it is not an indication of the good will of the brands in supporting our struggle. Rather, it is a reaction to our pressure and struggle against so many injustices. The amount, in our view, is miserable compared to the profits that the brands make based on the sacrifice of workers and on violations of human and labor rights. We accept the amount, but nevertheless our struggle will continue to get the brands to guarantee in the near future the sustenance of our families though the opening of jobs in factories where work is done on products that the brands sell and on which they obtain profits of 300%.”

• Read MSN's Report on the FLA Emergency Fund and its effects (June 2007)