WRC Factory Investigation

Hulu Garment Co. Ltd.

Factory: Hulu Garment Co. Ltd.

Key Buyers: adidas, Amazon, LT Apparel Group, Macy's, Walmart

Last Updated: 2023

Case Summary

The apparel industry’s chronically low wages left most garment workers with no savings on the eve of the Covid-19 crisis. Since most governments in apparel exporting countries provide little or no unemployment benefits, the only thing standing between an out-of-work garment worker and immediate poverty for her family in early 2020 were the legally mandated severance benefits that most garment workers are due upon termination.

Research by the Worker Rights Consortium (WRC) revealed that many garment workers who were fired during the pandemic were denied some or all of this essential compensation, in violation of the law and the labor rights obligations of the brands and retailers whose clothes they sewed.

Hulu Garment Co. Ltd., a sewing facility in Phnom Penh, Cambodia, owned by Taipei-based Win Garments, is one of the 31 export garment factories identified in the WRC’s report Fired, Then Robbed: Fashion brands’ complicity in wage theft during Covid-19, issued in April of 2021. Two years later, Hulu Garment still owes workers more than a million dollars in legally mandated compensation.

In response to declining customer orders in the early months of the pandemic, Hulu Garment, which employed approximately 1000 workers at the time, suspended employees for a period two months, from March 2 to April 30, 2020, on a reduced income of 40% of their monthly wage.

On April 21, as the end of the suspension period neared, Hulu Garment management told workers to come to the factory the following day. When workers arrived at the factory on April 22, management presented each worker with a sheet of paper, with a pay slip clipped to the front of it. The pay slip itemized a forthcoming payment, including the worker’s accrued suspension pay and other benefits.

Management told workers that they had to sign the form in order to be paid. Workers did so, appending a thumb print for identification, per management request. Based on management’s statements, workers understood that the only purpose of the form was to confirm acceptance of the pending payments. After signing, workers left the factory, expecting to be recalled to work at the end of the suspension period, nine days later.

In fact, the document workers were told to sign was not a mere confirmation of wage and leave payments. Unbeknownst to them, what workers had signed was a resignation form.

As word of the truth spread among the workforce later that day, workers were outraged. They swiftly organized a protest, which took place the following day, April 23. Three hundred workers joined the demonstration, denouncing management’s trickery and demanding to be reinstated. Workers continued to protest in front of the factory for days.

Workers suspected, correctly, that management had tricked them into resigning, rather than firing them, in order to cheat them out of severance pay. Under Cambodian law, terminated workers must be provided notice pay and, in most cases, a payment to help address the economic damages resulting from job loss (in Cambodia, as in most apparel exporting countries, there is no public unemployment insurance).

When Hulu refused to reinstate the workers and failed to provide them notice pay and damages, the workers complained to the Cambodia labor authorities and to the Cambodian Arbitration Council. The Arbitration Council is a body that adjudicates labor disputes; prior to the late 2010s, it was a rare example in the global apparel industry of a government entity that acted even-handedly, and in accordance with the law, and regularly issued rulings protective of workers’ rights. However, the body has since become a casualty of the Cambodian government’s encompassing leap to autocracy in recent years, which has involved a broad crackdown on independent civil society and the transformation of all governmental and quasi-governmental bodies into appendages of the ruling party and of the country’s small economic elite. The corruption of the Arbitration Council, which was evident before the pandemic, resulted during the pandemic in a series of rulings that ignored both the law and the relevant facts in order to justify patently illegal actions by employers-including, and especially, the refusal to pay legally mandated benefits to terminated workers. The Hulu workers were victimized in June of 2020 by another corrupt decision when the Arbitration Council sided against them and gave Hulu management’s chicanery and theft of workers’ severance an official seal of approval.

The WRC has investigated the events at Hulu Garment, identifying illegal dismissal and non-payment of three categories of legally mandated terminal compensation: notice pay, seniority indemnity, and economic damages. The WRC notified several of Hulu’s customers at the time, including Amazon and adidas and urged corrective action (other buyers include Walmart and Macy’s). To date, no corrective action has been taken. Adidas told the WRC that it ended its business relationship with Hulu in August 2020, after the violations occurred. Both adidas and Amazon have stated that they do not consider there to be outstanding violations at Hulu, given the Arbitration Council’s finding in favor of the employer. In defending Hulu’s claim that the workers all knowingly and intentionally resigned, neither Amazon nor adidas (nor any other buyer) has explained why hundreds of workers would voluntarily quit their jobs one day and then be moved, less than 24 hours later, to organize a mass protest claiming they were tricked and demanding their jobs back.

The WRC has identified 456 Hulu workers who are legally owed an estimated total of US$1.1 million in unpaid benefits. Hulu remains in operation, currently employing more than 400 workers, and presumably possesses the resources to pay workers the full severance benefits it legally owes them. It is important to note that among the 400 are some of the workers unlawfully fired in April 2020; but, rather than reinstating them, Hulu treated these workers as new hires with no seniority and failed to pay them the severance it owes. It is also important to note that none of the workers who led the protests against Hulu’s trickery, roughly 20 in number, are among those who were rehired.

Note: The WRC updated this page on April 10, 2023, to reflect the latest available information on the number of workers owed terminal compensation and the amounts owed, which represents an update to information originally published by the WRC in April 2021 in Fired, Then Robbed.

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