2008-2009: Pierre Cardin: Not So Chic Underneath

Issue

Events at the PT Megariamas Sentosa factory (Megariamas) exploded in July 2008 after a relatively insignificant event that involved Megariamas refusing to allow Mr. Abidin, the local shoe, textile and garment workers’ union (SBGTS) representative to attend a training course organised by the Federation of Independent Indonesian Trade Unions (GSBI), to which his union is affiliated.

This despite the fact that Indonesian law mandates that employers offer “trade union leaders the opportunity to participate in trade union activities during their work time.” Abidin, attended anyway, feeling he was fully within his legal rights, but was summarily dismissed.

Workers at this 900-employee Indonesian factory had been manufacturing undergarments for Pierre Cardin for over a decade, when, in August 2008, they filed a report detailing serious workers rights violations at the factory.

When negotiations, workers went on strike. Management retaliated with written warnings to SBGTS member to dissuade them from participating in the strike.

Megariamas refused to negotiate or even meet with union representatives. When Megariamas prohibited striking workers from entering the factory’s premises, the union approached the Department of Labour (DoL), which supported the workers and ordered management to the negotiation tables.

This precipitated a second strike. The conflict reached a climax in November when police and Megariamas security guards violently dispersed 450 striking workers – mostly women – who were demanding that the DoL’s recommendations be enforced. Thirty demonstrators were injured and two were hospitalised.

Management blocked access to the factory and then fired the 450 strikers. They continued to strike, now demanding their reinstatement as well. Many were never reinstated or found new jobs. The DoL sided with the strikers and ordered Megariamas to pay back wages or severance pay as mandated by the law, but to no avail.

Some accepted the financial settlements offered by Megariamas, which were far below what current national legislation stipulated. But they had grown desperate, with unemployment entailing severe financial hardships, leaving them particularly vulnerable to a less than advantageous settlement.

In February 2009, the dismissed workers decided to take their case to court.

Action

On 16 June 2009, the CCC urged supporters to send a message to Pierre Cardin demanding that it ensure that Megariamas’ workers who produce undergarments for Cardin be treated in a dignified manner as per established national and international human and workers rights.

The CCC contacted Pierre Cardin’s headquarters in Paris and detailed a list of workers rights violations at Megariamas. The CCC also reminded Cardin of its numerous appeals to address the issues and live up to its corporate social responsibilities, which includes ensuring that its garments manufactured by subcontractors, via its licensees, be produced in conditions that respect basic human rights. Cardin initially argued that it had no direct contractual relationship with Megariamas and thus was not directly responsible for the poor working conditions.

But after Cardin received literally thousands of protest letters from concerned French consumers and citizens, Cardin contacted its licensee in Singapore and claimed that this intermediary had interceded on Cardin’s behalf, requesting that Megariamas resolve the conflict satisfactorily. However, several months later, workers had still not noticed any palpable progress. Megariamas claimed it was never contacted by anyone.

As the situation deteriorated, the CCC launched a new letter-writing appeal in 2009 to display international solidarity with the Megariamas workers and demanded that Cardin contact Megariamas to demand reinstatement the dismissed workers with back pay including Mr. Abidin and, for those not reinstated, provide a full severance package.

Background

Pierre Cardin has, since the company’s inception in 1950 in Paris, always been considered one of the world’s leading fashion houses. With an annual turnover exceeding $2 billion, and a workforce of 200,000 who work either directly or indirectly for Cardin, It is internationally renowned as one of the most successful fashion brands.

In 1960, Pierre Cardin introduced the novel concept of corporate licensing. The company has since issued some 900 licenses in no fewer than 140 countries, from which it derives millions of euros in royalties annually. Yet cardin refuses to take actions that will ensure that its licensed products are manufactured in decent working conditions as per by national and international standards?

Outcome

This case was successfully resolved.

In August 2009, the Industrial Relation Court’s decreed that Megariamas reinstate 412 of the workers to their former positions and pay the Idol Fitri Allowance as well as back wages.

However, Megariamas appealed the decision at the Supreme Court level. In October, 395 of the dismissed workers were still demanding reinstatement.

In February 2010, Rumours began circulating that Megariamas was planning to close the factory with 200 demonstrators still demanding reinstatement.

But a settlement was reached in June 2010, when workers signed a separation agreement with management withdrew their complaints, and managed agreed to drop its case against the workers.