SMETA Audit Type: 2-Pillar 4-Pillar - L Usine Fashion...

Audit Company: Bureau Veritas Report reference: 10163450261 Date: 31st December 2016 1

Supplier name: L Usine Fashion Ltd

Site country: Bangladesh

Site name: L Usine Fashion Ltd

Parent Company name (of the site): L Usine Fashion Ltd

SMETA Audit Type: 2-Pillar 4-Pillar

Date of Audit 31st December 2016


Audit Company Name:

BVCPS (BD) LTD.

Report Owner (payee):

L-Usine Fashion Ltd.

Sedex Company Reference: (only available on Sedex System)

S: Not provided ZC: ZC1012484

Sedex Site Reference: (only available on Sedex System)

P: Not provided ZS:ZS1058751

Audit Conducted By

Commercial Purchaser

NGO Retailer

Trade Union Brand Owner

Multi–stakeholder Combined Audit (select all that apply)

Auditor Reference Number: (If applicable) Nil

SMETA Declaration I declare that the audit underpinning the following report was conducted in accordance with SMETA Best Practice Guidance and SMETA Measurement Criteria. Any exceptions to this must be recorded here (e.g. different sample size): Nil Auditor Name(s) (please list all including all interviewers): Junaid Hassan, Bahlul Dana & Md. Zuiel Hossen Lead auditor: Bahlul Dana Team auditor: Junaid Hasan & Md. Zuiel Hossen Interviewers: Junaid Hasan & Md. Zuiel Hossen Date: 31st December 2016


Non–Compliance Table

Issue (please click on the issue title to go direct to

the appropriate audit results by clause)

Area of Non –Conformity (Only check box when there is a non–conformity, and only in the box/es where the non–conformity

can be found)

Record the number of issues by line*:

ETI Base Code Local Law

Additional Elements

(i.e. not part of ETI code )

NC Obs GE

0 Management systems and code implementation

2 0 0

1 Employment Freely Chosen 0 0 0

2 Freedom of Association 1 0 0

3 Safety and Hygienic Conditions 2 0 0

4 Child Labour 0 0 0

5 Wages and Benefits 0 0 1

6 Working Hours 0 0 0

7 Discrimination 0 0 0

8 Regular Employment 0 0 0

8A Sub–Contracting and Homeworking

0 0 0

9 Harsh or Inhumane Treatment 0 0 0

10A Entitlement to Work 0 0 0

10B2 Environment 2–Pillar 0 0 0

10B4 Environment 4–Pillar N/A N/A N/A

10C Business Ethics N/A N/A

*Please note the table above records the total number of Non compliances (NC), Observations (Obs) and Good Examples (GE). This gives the reviewer an indication of problem areas but does not detail severities of each issue – Reviewers need to check audit results by clause.


Summary of Findings

Summary of main findings: (positive and negative) (Please give a short summary of the main findings per clause)

Positive findings: 0: Management systems and code implementation

- Factory had updated fire license. 1: Employment is Freely Chosen

- There is no forced, bonded or involuntary labor. - Workers have a freedom to leave the factory during the workday (have meal breaks or end of work). - Workers were free to use toilet and drinking water. - During the factory tour, the workers did not appear to be under pressure.

2: Freedom of Association and Right to Collective B argaining are Respected Nil 3: Working Conditions are Safe and Hygienic

- Factory is well-lightened and well ventilated. - Existing toilets are sufficient in number and are hygienic and separated by gender. - Factory has sufficient well trained mechanics that back up smooth production and they have periodically maintenance schedule for each machine and keeping record accordingly. - Factory also provides suitable drinking water to their employees which test parameters meet the legal requirements. - The factory had posted evacuation plot plan in all required area. - Fire extinguishers were functional & unobstructed. - Machineries are found well maintained with safety devices except findings. - Employees are provided personal protective equipment (PPE).

4: Child Labor Shall Not Be Used

- No child labor is noted. 5: Living Wages are Paid

- The factory paid overtime wage to workers at the legal limit. - Attendance bonus Tk. 300 for all workers. - Employees were paid monthly wages at the end of each month in cash by the 7th working day following the

pay period. From workers interview, they were provided wages slip for every pay period. 6: Working Hours are not Excessive

- Maximum working hours found as 10 hours/day, 60 hours/week - Workers were getting one day off in seven days period.

7: No Discrimination is Practiced

- From worker interview, all confirmed that they are treated equally and receive wages at fair and appropriate rate in accordance with each worker’s qualification. They were not differently treated based on personal characteristics, gender, age, disability, sexual orientation, racial characteristics, cultural or religious beliefs of similar factors.

- No form of discrimination occurs during recruitment or employment.


- There is no pregnancy testing conducted at the hiring process. 8: Regular Employment Is Provided

- From personnel file review, it was observed that contracts have clearly defined period, employment date, wage information, worker signature etc. Workers are provided with continuous employment.

8A: Sub-Contracting and Homeworking Nil 9: No Harsh or Inhumane Treatment is Allowed

- No harassment, abuse or corporal punishment is found in the factory. From workers interview, no one is abused or harassed by the supervisor, management or co-worker. Further, they could report event of harassment or abuse through their supervisor or factory management that any time.

10. Other Issue areas: 10 A: Entitlement to Work an d Immigration Nil 10. Other Issue areas: 10 B: Environment

- All wastes were properly segregated and store in restrict area and entry is limited to authorize personnel only.

Negative findings: 5 non-compliances were found during the audit as below listed: Management System and Code Implementation 1. During workers interview, it was noted that sample population employees were not aware about ETI code and also were not aware, though it was posted in the factory in local language. 2. It was noted that Arcadia Group Supplier Code of Conduct (January 2007) not posted on factory notice board. Freedom of Association and Right to Collective Barg aining are Respected 1. It was noted that the factory had a workers participation committee which was not formed by election. Working Conditions are Safe and Hygienic 1. It was noted that factory does not installed handrail on both side of 1 of 2 staircases from ground floor to 6th floor of building#1. 2. It was noted that factory formed a safety committee but not as per law. Facility management had selected the member of safety committee by selection instead of the elected member by the WPC.

Audit Details

Audit Details

A: Report #: 10163450261

B: Time in and time out (SMETA Best Practice Guidance and

Day 1 Time in: 09:00 Day 2 Time in: NA Day 3 Time in: N/A


Measurement Criteria recommends 9.00–17.00 hrs. if any different please state why in the SMETA declaration )

am Day 1 Time out: 05:30 pm

Day 2 Time out: N/A

Day 3 Time out: N/A

C: Number of Auditor Days Used: (number of auditor x number of days)

3 Auditors x 1 Day

D: Audit type:

Full Initial Periodic Full Follow-up Partial Follow-Up Partial Other - Define

E: Was the audit announced? (AAG recommends a window of three weeks for semi–announced, this gives optimum results)

Announced Semi – announced: Window detail: 2 weeks Unannounced

F: Was the Sedex SAQ available for review?

Yes No

If No, why not? (Examples would be, site has not completed SAQ, site has not been asked to complete the SAQ.)

N/A

G: Any conflicting information SAQ/Pre-Audit Info to Audit findings?

Yes No

If Yes, please capture detail in appropriate audit by clause

H: Auditor name(s) and role(s): Lead Auditor : Bahlul Dana Team Auditor: Junaid Hasan & Md. Zuiel Hossen

I: Report written by: Junaid Hassan

J: Report reviewed by: Sourish Das

K: Report issue date: 4 Jan 2017

L: Supplier name: L Usine Fashion Ltd

M: Site name: L Usine Fashion Ltd

N: Site country: Bangladesh

O: Site contact and job title: Mr. Sazzad Hossain_ Asst. Manager (Compliance)

P: Site address: (Please include full address)

36, Gazipura, Rahmat Complex, Sataish, Tongi, Gazipur-1712, Gazipur, Bangladesh.

Site phone: 880175560764


Site fax: 8802-9816126

Site e–mail: [email protected]

Q: Applicable business and other legally required licence numbers: for example, business license no, and liability insurance

Fire # DD/Dhaka/22276/2010 Certificate of Incorporation # C-71618(4125)/08 Factory License # 14719/ Gazipur

R: Products/Activities at site, for example, garment manufacture, electricals, toys, grower

All kinds of Sweater items.

S: Audit results reviewed with site management?

Yes

T: Who signed and agreed CAPR (Name and job title)

Mr. Sazzad Hossain_Asst. Manager (Compliance)

U: Did the person who signed the CAPR have authority to implement changes?

Yes

V: Present at closing meeting (Please state name and position, including any workers/union reps/worker reps):

Mr. Pulok Chandara Das _ General Manager, Mr. Mrinal Kanti Roy_ Asst. Manager, Mr. Sazzad Hossain_ Asst. Manager (Compliance), Mr. Parvez Hossain_ Executive, Ms. Sonya Akter_ Executive Mr. Sheikh Jahir Uddin_ Asst. Manager, Mr. Shyamol Roy_ Director.

W: What form of worker representation / union is there on site?

Union (name) Worker Committee Other (specify) None

X: Are any workers covered by Collective Bargaining Agreement (CBA)

Yes No N/A

Y: Previous audit date: N/A

Z: Previous audit type:

SMETA 2–pillar

SMETA 4–pillar

Other

Full Initial

Periodic

Full Follow–Up Audit


Partial Follow–Up

Partial Other*

*If other, please define: N/A

Audit Scope/Actual Results

Criteria Local Law (Please state legal

requirement)

Actual at the Site

(Record site results against the law)

Is this part of a Collective Bargaining

Agreement?

A: Standard/Contracted work hours: (Maximum legal and actual required working hours excluding overtime, please state if possible per day, week and month)

Legal maximum: 6 days a week (6 days X 8 hours= 48 hours)

6 days a week (6 days X 8 hours= 48 hours)

Yes No

N/A

B: Legal Overtime hours: (Maximum legal and actual overtime hours, please state if possible per day, week and month)

Legal maximum: Daily 4 hours/ weekly 24 hours (from 17 April’16 to 16 Oct’16)

Daily :2 hours/ weekly:12 hours

Yes No

N/A

C: Legal age of employment: (Minimum legal and actual minimum age at site)

Legal minimum: 14+ years with significant restriction.

19 years

D: Legal minimum wage for standard/contracted hours: (Minimum legal and actual minimum wage at site, please state if possible per hr, day, week and month)

Legal minimum: Monthly Tk-4180 (For trainee) & for normal Tk- 5300

Monthly Tk-5300/- for Helper

Yes No

N/A

E: Legal minimum overtime wage: (Minimum legal and actual minimum overtime wage at site, please state if possible per hr ,day, week and month)

Legal minimum: Double the basic.

Double the basic. (200% of basic wage)

Yes No

N/A

Audit Scope (Please select the code and additional requirements that were audited against during this audit)

2–Pillar Audit

10B4: Environment 4–Pillar

10C: Business Ethics


All groups of workers are included in the scope of this audit such as; Direct employees, Casual and agency workers, Workers employed by service providers such as security and catering staff as well as workers supplied by other contractors.

Factory had recruited all workers directly

Note: The main focus of this ethical audit is on the ETI Base Code and local law. The additional elements will not be audited in such depth or scope, but the audit process will still highlight any specific issues. This report provides a summary of the findings and other applicable information found/gathered during the social audit conducted on the above date only and does not officially confirm or certify compliance with any legal regulations or industry standards. The social audit process requires that information be gathered and considered from records review, worker interviews, management interviews and visual observation. More information is gathered during the social audit process than is provided here. The audit process is a sampling exercise only and does not guarantee that the audited site prior, during or post–audit, are in full compliance with the Code being audited against. The provisions of this Code constitute minimum and not maximum standards and this Code should not be used to prevent companies from exceeding these standards. Companies applying this Code are expected to comply with national and other applicable laws and where the provisions of law and this Code address the same subject, to apply that provision which affords the greater protection. The ownership of this report remains with the party who has paid for the audit. Release permission must be provided by the owner prior to release to any third parties.

Audit Overview

Audit Overview

Management Worker Representatives

Audit attendance Senior management Worker Committee representatives

Union representatives

A: Present at the opening meeting? Yes No Yes No Yes No

B: Present at the audit? Yes No Yes No Yes No

C: Present at the closing meeting? Yes No Yes No Yes No

D: If Worker Representatives were not present please explain reasons why (only complete if no worker reps present)

N/A

E: If Union Representatives were not present please explain reasons why: (only complete if no union reps present)

No trade union at the factory


F: Site description: (Include size, location and age of site. Also include structure and number of buildings)

L Usine Fashion Ltd is located in, address: 36, Gazipura, Rahmat Complex, Sataish, Tongi, Gazipur-1712, Gazipur, Bangladesh. It took approx. 60 minutes from Hazrat Shahjalal international airport to arrive at the factory. The factory was established on December 2010. The total land area occupied by the facility is about 98, 604 square feet of which there was about 75, 000 square feet for production areas. Ownership- Private Limited company. In view of facilities, the factory was made up of 3 buildings & 3 sheds. Floor and section wise factory lay out was as follows:

Production Building no 1

Description

Remark, if any

Ground floor

Jacquard, Child care, boiler room, assembly point, maintenance room and security post.

Nil

1st floor Auto knitting section, knitting inspection room, medical room and office.

Nil

2nd floor: Trimming section, mending section, linking section, overlock, button section.

Nil

3rd floor: Accessories store, sample section, & prayer room.

Nil

4th floor: Finishing section, mending & packing, spot removing room, inspection room and office.

Nil

5th floor: Yarn Store and office. Nil

6th floor: Yarn store, finished goods store, dining room, canteen, staff dining room and office.

Nil

Roof Top Water Tank & open space. Nil Production Building no 2

Description

Remark, if any

Ground floor Boiler room. Nil Production Building no 3

Description

Remark, if any

Ground floor Sample wash room and chemical room

Nil

Shed # 1

Generator room Nil

Shed # 2

Underground water reservoir for hydrant system, hydrant room, wastage room and auto placket room.

Nil

Shed # 3 Wash section Nil

Is this a shared building?

NO Nil


Production process included winding, knitting, jacquard, linking, trimming, mending, light check, washing, finishing and packing with a peak season from March to November. Production capacity of the factory is 120, 000 pcs per month. The factory’s major markets were the Europe-100% and its major customers were H&M, El corte Ingles, River Island, Auchan, Charles voguel & BHS etc.

A total of 801 employees (male- 481 and female-320) are currently working in the factory, which includes 653 production employees and 148 non-production employees. There are 801 local employees in this factory. Regular working hours from 8:00 am to 5:00 pm with 60 minutes lunch break in 2 shifts from 12:30 pm to 1:30 pm & from 1:00 pm to 2:00 pm except Jacquard section. The working hours for Jacquard section in 2 shifts from 8:00 am to 5:00 pm with 60 minutes lunch break from in 2 shifts from 12:30 pm to 1:30 pm & from 1:00pm to 2:00pm and from 8:00 pm to 5:00 am including 60 minutes break from 1:00 am to 2:00 am. Weekend of the factory was Friday. The factory used clocked punched time keeping system for all workers.

G: Site function: Agent Factory Processing/Manufacturer Finished Product Supplier Grower Homeworker Labour Provider Pack House Primary Producer Service Provider Sub–Contractor

H: Month(s) of peak season: (if applicable)

March to November

I: Process overview: (Include products being produced, main operations, number of production lines, main equipment used)

The production capacity of the factory is 120, 000 pieces per month. The factory specialized in the manufacture of all kinds of sweater. The main process such as winding, Jacquard, linking, Trimming, Mending, light check, washing, finishing & Packing etc. The factory had following machines: Winding machine-1pcs, Knitting (Manual) machines-33pcs, Jacquard machines-200 pcs, Linking machines-206 pcs, Sewing (Single needle) machines-12 pcs, Flat lock machines-2 pcs, Over lock machines-4 pcs, Button stitch machines-3 pcs, Button hole machines-3 pcs, Bartak machines-3 pcs, Needle detector machines-1 pcs, Dryer machines-4 pcs, Hydro Extractor machines-2 pcs, Washing machine-2 pcs, Pressing machines-26 pcs etc.

J: Attitude of workers: (Include their attitude to management, workplace and the interview process. Both positive and negative information should be included) Note: Do not document any information that could put workers at risk


In general, attitude of the workers was favourable. They seem to be simple, open and comfortable to express their views, they were satisfied with the factory in regard to the facilities provided to them, payments and the management’s behaviour. 42 workers ( 25 males & 17 females) were interviewed 6 groups of 5 workers and 5 individual females and 7 individual male interview were conducted to evaluate compliance. During the workers interviews, the auditors observed that the workers are pleased with the management.

K: Attitude of workers committee/union reps: (Include their attitude to management, workplace and the interview process. Both positive and negative information should be included) Note: Do not document any information that could put workers at risk

The workers committee members were courteous and professional throughout the audit and informed that factory’s working condition is favourable as well as management attitude is very positive towards them.

L: Attitude of managers: (Include attitude to audit, and audit process. Both positive and negative information should be included)

The facility management team was very well cooperative and professional during the audit day. Auditor was permitted in full access to all required information, documents, worker interviews and facility tour. The facility was willing to take corrective action plan and implement.

Key Information

Key Informati on (click on the key information title to go to appropriate section of the report)

A: Do all workers (including migrant workers) have contracts of employment/employment agreements? (Go to clause 8 – Regular Employment)

Yes No

B: Are maximum standard/contracted working hours clearly defined in contract/employment agreements? (Go to clause 8 – Regular Employment)

Yes No

C: Were appropriate records available to verify hours of work and wages? (Go to clause 5 – Living Wage)

Yes No

D: Were any inconsistencies found? (if yes describe nature) (Go to Wages Table)

Yes Poor record keeping No Isolated incident

Repeated occurrence

E: For the lowest paid production workers, are wages paid for standard/contracted hours (excluding overtime) below or above the legal minimum? (Go to clause 5 – Living Wage)

Wages found: Please indicate the breakdown of workforce according to earnings:

Below legal min

Meet Above

____% of workforce earning under min wage 55 % of workforce earning min wage 45 % of workforce earning above min wage


F: % of piece rate workers: (if applicable)

35%

G: Do the standard/contracted hours stated in a contract/employment agreement exceed the law or 48 hours per week? (Go to clause 6 – Working hours)

Yes No

H: If yes, what are the standard/contracted hours per week as stated in the contract/employment agreement? (Go to clause 6 – Working hours)

_____ hrs/week Approx. ____% of ALL workers on these contacted hours N/A

I: Combined hours (standard/contracted plus overtime = total hours) over 60 per week found? (Go to Working Hours Analysis)

Yes No

J: Are workers provided with 1 day off in every 7-day-period, or 2 in 14-day-period (where the law allows)?

Yes No

If ‘No’, please explain:

K: Are the correct legal overtime premiums paid? (Go to Wages Table)

Yes No N/A – there is no legal requirement to OT premium

L: Please state what actual OT is paid. (As a percentage of the workers standard rate) (Go to Working Hours Analysis)

Please give details of overtime premium as a % of standard wages: 0% 1% – 115% 116% – 124% 125% – 199% 200%+

Please give details: As per factory provided payroll records, factory had provided overtime wage to the workers as per local law, i.e. 200% of basic wage.

M: Is there any night production work at the site?

Yes No

The working hours for Jacquard section in 2 shifts from 8:00 am to 5:00 pm with 60 minutes lunch break from in 2 shifts from 12:30 pm to 1:30 pm & from 1:00pm to 2:00pm and from 8:00 pm to 5:00 am including 60 minutes break from 1:00 am to 2:00 am.

N: % of workers living in site provided accommodation (if applicable):

No

O: Age of youngest worker found: (Go to clause 4 – Child labour)

19 years

P: Workers under 18 subject to hazardous work assignments?

Yes No


(Go to clause 3 – Health and Safety)

% of under 18’s at this site (of total workers) 0 %

Q: What form of worker representation/union is there on site? (Go to clause 2 – Freedom of Association)

Union (name) Worker Committee Other (specify) None

R: Is it a legal requirement to have a union? (Go to clause 2 – Freedom of Association)

Yes No

S: Is It a legal requirement to have a workers committee? (Go to clause 2 – Freedom of Association)

Yes No

T: Is there any other form of effective worker/management communication channel? (Other than union/worker committee) (Go to clause 2 – Freedom of Association)

Yes No

Describe: Suggestion box, Open door policy, Welfare Policy.

U: Are there any External Processes? (Go to clause 8A – Sub–contracting and Home working)

Sub–Contracting Homeworking Other External Process No external processes

Management Systems

Management Systems:

A: Nationality of Management Bangladeshi

B: Gender breakdown of Management + Supervisors (Include as one combined group)

Male: 90 % Female: 10 %

C: Majority nationality of workers 100% Bangladeshi

D: Number of workers leaving in last 12 months as a % of average total number of workers on site over the year (annual worker turnover)

4%

E: Were accurate records shown at the first request?

Yes No

F: If No, why not? Not Applicable

G: In the last 12 months, has the site been subject to any fines/prosecutions for non–

Yes No


compliance to any regulations? Please describe: N/A

H: Do policies and/or procedures exist that reduce the risk of forced labour, child labour, discrimination, harassment & abuse?

Yes No

Please describe: The factory established the policy on the reducing the risk of forced labour, child labour, discrimination, harassment and abuse.

I: If Yes, is there evidence (an indication) of effective implementation? Please give details.

Through documents review and workers interview, the written policies (No forced labour, No child labour, Non-discrimination, Anti-harassment and abuse) were communicated to the workers as much as factory mid level management & workers were informed by training.via notification board and training.

J: Have managers and workers received training in the standards for forced labour, child labour, discrimination, harassment & abuse?

Yes No

Please describe: Managers and workers were communicated the written standards for forced labour, child labour, discrimination, harassment & abuse by notification board and training.

K: If Yes, is there evidence (an indication) that training has been effective e.g. training records etc.? Please give details

Yes, factory had arranged training to reduce the risk of forced labour, child labour, discrimination, harassment & abuse for mid level management & workers. Last training was arranged on 9th November 2016.

L: Are there published, anonymous and/or open channels available for reporting any violations of Labour standards and H&S or any other grievances to a 3rd party?

Yes No

Please describe: Through direct supervisors, management, and suggestion box and worker committee.

M: If Yes, are workers aware of these channels? Please give details.

All workers were aware of these processes, suggestion box was known by the workers.

N: Have health and safety risks been identified e.g. through internal audits, formal risk analysis process, worker involvement etc.?

Yes No

Please describe: Factory performed risk analysis on their work process.

O: If Yes, has effective action been taken to reduce or eliminate these risks?

Yes, factory conducted training on safety machine operations, provide PPE.

P: Are accidents recorded? Yes No

Please describe: Safety officer in a responsible position to keep records of any accident.

Q: Has the auditor made a simple calculation to compare capacity with workers’ work load in order to identify possible unrecorded work hours?

Yes No

Please describe: Capacity did not over load to the workers. It was apparently in balance.

R: Does the site have all required land rights licenses and permissions (see SMETA

Yes


Measurement Criteria)?

S; Does the site have any internationally recognised system certifications e.g. ISO 9000, 14000, OHSAS 18000, SA8000 (or other social audits). Please detail (Number and date).

No

T: Is there a Human Resources manager/department? If Yes, please detail.

Yes No

Please describe: 6 concern people for human resources department. Mr. Pulok Chandara Das _ General Manager, Mr. Mrinal Kanti Roy_ Asst. Manager, Mr. Sazzad Hossain_ Asst. Manager (Compliance), Mr. Parvez Hossain_ Executive, Ms. Sonya Akter_ Executive Mr. Sheikh Jahir Uddin_ Asst. Manager.

Worker Analysis

Worker Analysis

Local Migrant Total

Permanent Temporary Agency Permanent Temporary Agency Home

workers

Worker numbers – male

481 0 0 0 0 0 0 481

Worker numbers –female

320 0 0 0 0 0 0 320

Total 801 0 0 0 0 0 0 801

Number of Workers interviewed

42 0 0 0 0 0 0 42

Contractors: (Individuals supplying workers to site with the workers paid by contractors, not by site)

A: Any contractors on site? Yes No

B: If Yes, how many workers supplied by contractors

Not applicable


C: Are all contractor workers paid according to law?

Yes No

Not applicable

If Yes, Please give evidence for contractor workers being paid according to law:

Not applicable

Migrant Workers: (Please see SMETA Best Practice Guidance and Measurement Criteria for definitions of migrant workers)

D: Originating Locations/Countries:

Not applicable

E: Type of work undertaken by migrant workers :

Not applicable

F: Were migrant workers recruited through an agency? If yes, please give details.

Yes No

Please describe: Not applicable

If Yes, is there a contract with the agency? Provide details of agencies and contractual arrangements including any fees lodged during the recruitment process.

Not applicable

G: Does the site have a system for checking labour standards of agencies? If yes, please give details.

Yes No

Please describe: Not applicable

H: Percentage of migrant workers in company provided accommodation:

Not applicable

Audit Results by Clause

0: Management systems and Code Implementation

0: Managements system and Code Implementation (click here to return to NC Table)

0.1 Suppliers are expected to implement and maintain systems for delivering compliance to this Code. 0.2 Suppliers shall appoint a senior member of management who shall be responsible for compliance with the Code. 0.3 Suppliers are expected to communicate this Code to all employees. 0.4 Suppliers should communicate this code to their own suppliers and, where reasonably practicable, extend the principles of this Ethical Code through their supply chain.


Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and record what controls and processes are currently in place e.g. record what policies are in place, what relevant

procedures are carried out, who is/are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to support the systems.

Current systems: Factory has a HR/compliance team to look after, obtain, implement and update the laws and regulations relevant for operating the factory and train up workers accordingly. Factory provided all required documents as well as full access to perform the audit. All business license documents are found updated except the below findings. Beside it was observed that management has a positive view towards compliance. Audited factory has displayed the ETI code. Mr. Sazzad Hossain_ Asst. Manager (Compliance), who shall be responsible for compliance with the Code. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations, business licenses & certificates etc.

Non–compliance:

1. Description of non–compliance:

NC against ETI/Additional Elements NC against Local Law During workers interview, it was noted that sample population employees were not aware about ETI code and also were not aware, though it was posted in the factory in local language. Client standard: In accordance with Client standard, suppliers shall communicate this Code to all employees. Recommended corrective action: It is recommended that all workers are made aware of the content of the ETI code and that it is additionally displayed in the workers canteen, for increased visibility. Action by: Mr. Sazzad Hossain_ Asst. Manager (Compliance) Timescale: 30 days 2. Description of non–compliance:

NC against ETI/Additional Elements NC against Local Law It was noted that Arcadia Group Supplier Code of Conduct (January 2007) not posted on factory notice board. Client standard: In accordance with Client standard, suppliers shall post and communicate the Code of Arcadia Group to all employees. Recommended corrective action: It is recommended that factory shall post that

Objective evidence observed: Workers Interview Objective evidence observed: Based on factory tour & management interview.


Arcadia Group Supplier Code of Conduct in the notice board. Action by: Mr. Sazzad Hossain_ Asst. Manager (Compliance) Timescale: 30 days

Observation :

Description of observation: Nothing to report Local law or ETI requirement: Not Applicable Comments: Not Applicable

Objective evidence observed: Not Applicable

Good Examples observed:

Description of Good Example (GE): Nothing to report


: Employment is Freely Chosen

1: Employment is Freely Chosen (Click here to return to NC–table)

ETI 1.1 There is no forced, bonded or involuntary prison labour. 1.2 Workers are not required to lodge “deposits” or their identity papers with their employer and are free to leave their employer after reasonable notice.

Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and record what controls and processes are currently in place e.g. record what policies are in place, what relevant procedures are carried out, who is/are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to

support the systems.

Current systems: All employees found working voluntarily during audit in the factory. Employees’ freedom of movement is not restricted as they can easily go to toilet or can drink water. Factory doesn’t require any monetary deposits during recruitment. Factory doesn’t have system to recruit employees from manpower agency. All employees are directly recruited by the factory. If any employees want to leave the job, he/she may leave giving 60 days’ notice prior to leave. There is no wages withholding practice observed in the factory. Security guards are not allowed in production floors. Thus, based on observation and employees interview during audit, it was noted that this factory was in compliance with this section. All interviewed employees reported that they have joined the organization (Factory) on their own will and agreed on the terms and conditions of the letter of appointment. It was further reported by all interviewed employees that they


have given a copy of letter of employment upon hiring. In addition, all interviewed employees reported that they are free to leave the work place at the end of the shift and there is no production quotas vested to them. Overtime work is voluntary. Furthermore, all interviewed employees reported that the facility does not ask any form of deposit upon hiring. It was also reported that the employees are having unrestricted access to restroom and water breaks as needed. None of the employees interviewed reported any form of involuntary or bonded labour on the day of the assessment. Further, the assessment team randomly selected 42 personal files of the employees for review. It was noted during the review of personal files that all personal files are provided with letter of employment duly acknowledged by the employees. In addition, it was noted that the terms and conditions of the employment is in accordance with the local regulations. During the review of payroll records it was noted that the facility does not provide long running loan or wage advance to the employees, compelling them to continue with their employment. Thus, there is no concern observed in regard to forced or involuntary labour. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations, employees’ personnel files, training records, management interview, workers interview, suggestion from workers etc.

Non–compliance:

1. Description of non -compliance: Nothing to report

NC against ETI/Additional Elements NC against Local Law Local law or ETI /Additional Elements requirement: Not Applicable Recommended corrective action: Not Applicable


Observation :



Good Examples observed :




2: Freedom of Association and Right to Collective B argaining are Respected

2: Freedom of Association and Right to Collective B argaining are Respected (Click here to return to NC–table)

(Click here to return to Key Information)

ETI 2.1 Workers, without distinction, have the right to join or form trade unions of their own choosing and to bargain collectively. 2.2 The employer adopts an open attitude towards the activities of trade unions and their organisational activities. 2.3 Workers’ representatives are not discriminated against and have access to carry out their representative functions in the workplace. 2.4 Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent and free association and bargaining.



Current systems: Management has no objection for trade union but employees have no intention to form any union as they seem comfortable to express their problems to management through welfare officers, HR officers & selected participation committee directly. Factory has a policy for communication with employee. Existing counselling system consisting of a designated welfare officers and HR personnel acts as worker representative who relay workers expression to top management as desired. As per employees and management interview, workers have access to reach the upper level authority. Thus, based on observation and employees interview during audit, it was noted that this factory is not fully in compliance with this section. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy on freedom of association, trade union registration certificate, meeting notice/register etc.

Non–compliance:

1. Description of non –compliance: NC against ETI NC against Local Law

It was noted that the factory had a workers participation committee which was not formed by election. Local law: In accordance with Bangladesh Labour Law, 2006, Chapter-13, Section-205, (1) the employer of every establishment in which fifty or more workers are employed shall, in the manner prescribed by rules, constitute a Participation Committee in his establishment with the direct involvement of the workers. (6) In an establishment where there is no trade union, representative of the workers in the Participation Committee of such establishment shall be elected in the manner prescribed by rules from amongst the workers engaged in the establishment. In accordance with The industrial Relations Rules, 1977, Chapter-

Objective evidence observed: Based on management, documents review and worker interview


3, Section-22, In an establishment where there is no collective bargaining agent, the employer within 15 days of receipt of the order under sub section (1) of 24 inform the Director of Labour to this effect and thereafter the Director of Labour shall direct the employer to hold election for choosing workmen’s representative on the Participation Committee within one month from the date of receipt of such direction. In accordance with The industrial Relations Ordinance 1969, 24 (1), The Director of Labour or any officer authorized by him in this behalf shall, by an order in writing, require the employer in any establishment in which fifty or more workmen are employed or were employed on any day in the preceding twelve months to constitute in the prescribed manner a participation committee consisting of representatives of the employer and the workmen so however that the representatives of the workmen is not less than the number of the representatives of the employer in the participation committee. Recommended corrective action: It is recommended that the management adopt practices and control to ensure that participation committee is formed by election. Action by: Mr. Sazzad Hossain_ Asst. Manager (Compliance) Timescale: 60 days

Observation :



A: Name of union and union representative, if applicable:

N/A Is there evidence of free elections? Yes No N/A

B: If no union what is parallel means of consultation with workers e.g. worker committees?

WPC (Workers participation committee)

Is there evidence of free elections? Yes No N/A

C: Were worker representatives/union representatives interviewed

Yes No If Yes, please state how many: 2 persons from WPC.

D: State any evidence that union/workers committee is effective? Specify date of last meeting; topics covered; how minutes were communicated etc.

Last meeting conducted on 11th December 2016

E: Are any workers covered by Collective Bargaining Agreement (CBA)

Yes No N/A


F: If Yes what percentage by trade Union/worker representation

_0___% workers covered by Union CBA N/A

_0___% workers covered by Union CBA N/A

G: If Yes, does the Collective Bargaining Agreement (CBA) include rates of pay

Yes No

N/A



Objective evidence observed: N/A

3: Working Conditions are Safe and Hygienic

3: Working Conditions are Safe and Hygienic (Click here to return to NC–table)


ETI 3.1 A safe and hygienic working environment shall be provided, bearing in mind the prevailing knowledge of the industry and of any specific hazards. Adequate steps shall be taken to prevent accidents and injury to health arising out of, associated with, or occurring in the course of work, by minimising, so far as is reasonably practicable, the causes of hazards inherent in the working environment. 3.2 Workers shall receive regular and recorded Health & Safety training, and such training shall be repeated for new or reassigned workers. 3.3 Access to clean toilet facilities and to potable water, and, if appropriate, sanitary facilities for food storage shall be provided. 3.4 Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers. 3.5 The company observing the code shall assign responsibility for Health & Safety to a senior management representative.



Current systems: Current status details are given below Through factory tour, it was noted that: - Factory is well-lightened and well ventilated.

- Existing toilets are sufficient in number and are hygienic and separated by gender.

- Factory has sufficient well trained mechanics that back up smooth production and they have periodically maintenance schedule for each machine and keeping record accordingly.

- Factory also provides suitable drinking water to their employees which test parameters meet the legal requirements.


- Factory had sufficient in number of firefighting equipment.

- The factory had posted evacuation plot plan. - Fire extinguishers were functional & unobstructed. - Factory had installed central fire alarm system throughout the factory. - Machineries are found well maintained with safety devices. - Employees are provided personal protective equipment (PPE). Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Health & Safety, fire safety, chemical safety training records, policy, fire drill register, accident/injury/broken needle register and machines maintenance log, occupational health and safety committee minutes, fire equipment maintenance records, building structure safety certificate, first Aid training records, chemical list and MSDS for each chemical, potable water testing certificates etc.

Non–compliance:

1. Description of non –compliance:

NC against ETI NC against Local Law It was noted that factory does not installed handrail on both side of 1 of 2 staircases from ground floor to 6th floor of building#1. Local law: In accordance with The Labour Rules, 2015, Chapter-6, Section-54 (4), Each staircase to be used for coming out in case of fire should be with durable hand rail and the said staircase and its rail will be made with non-conducting and fire-resistant materials and the staircase will be rough. In accordance with Bangladesh Labor Law 2006, Section–72, In every factory, all floors, stairs, passages and gangways shall be of sound construction and properly maintained and where it is necessary to ensure safety, steps, stairs, passages and gang shall be provided with substantial handrails. Recommended corrective action: It is recommended that management adopt practices and controls to ensure that handrails are installed in all staircases. Action by: Mr. Sazzad Hossain_ Asst. Manager (Compliance) Timescale: 90 days 2. Description of non–compliance:

NC against ETI NC against Local Law It was noted that factory formed a safety committee but not as per law. Facility management had selected the member of safety committee by selection instead of the elected member by the WPC. Local law: In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (1), As per Section 90 (a), the Owners of the institute where 50 or more workers are employed

Objective evidence observed: Based on factory tour. Please refer to NC photo form #1 Objective evidence observed: Based on documents review, workers & management interview.


or were employed in certain period of time in the year shall form Safety Committee. However, Safety Committee must be formed within 6 (six) months of the application of this Code in the present factories/institutes or within 9 (nine) months of the application of this Code in the newly established factories/institutes. In addition, as per Section 183 if the institutes of a business group remains scattered in more than one sub-district/upazila or if the Owners work region-wise, then upazila/sub district wise Safety Committee must be formed. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (2), Total number of members in the Safety Committee shall not be less than 6 (six) or more than 12 (twelve) and there shall be equal number of representatives in it from the Owner Party and the Worker Party. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (3), There shall be a President, a Vice President and a Member Secretary and other members in the committee. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (4), All members shall unanimously select a Member Secretary in the first meeting of the committee. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (5), The committee can distribute the responsibility of different departments, sections and the responsibility related with occupational health and safety upon its members. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (6), The committee shall nominate its President. On the other hand, the Owner of the factory or Managing Director of the industry unit shall nominate their representative for the committee. In addition, Vice President and the Representative on behalf of the workers shall be nominated through joint bargaining or Collective Bargaining Agent (CBA) or by the representatives of the workers. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (7), The ratio of the members in the Safety Committee shall be determined by the number of employees in following ways: a) Total number of Members in the Safety Committee shall be 6 (six) in case of 50 to 500 workers employed in any factory/industry unit. b) Total number of Members in the Safety Committee shall be 8 (eight) in case of 501 to 1000 workers employed in any factory/industry unit. c) Total number of Members in the Safety Committee shall be 10 (ten) in case of 1001 to 3000 workers employed in any factory/industry unit. d) Total number of Members in the Safety Committee shall be 12 (twelve) in case of 3001 or more workers employed in any factory/industry unit. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (8), The Representative for joint bargaining shall nominate Workers’ Representative from the workers working in each section, department, floor, storehouse and unit separately. Then, the nominated/elected Representative shall be included in the Safety Committee. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (9), If there is no Representative for joint bargaining in any institute/factory, the Representatives included in the committee on behalf of the workers shall nominate the Workers’ Representative (joint bargaining) for the Safety Committee, from the workers who are employed in various sections, departments, floor, storehouse and units. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (10), If there was no initiative for arranging the nomination of Workers’ Representative in the Safety Committee due to inevitable reasons or as per Subsection (8) and (9), the Inspector General or the Inspector authorized by him/her, after being informed about the issue, shall arrange election among the employed workers for electing the workers’ Representative. However, in this case, the Representative for joint bargaining or the committee shall nominate the Workers’ Representative within 30 (thirty) days’ of formation of the committee as per Sub-section (8) and (9).


In accordance with The Labour Rules, 2015, Chapter -8, Section -81 (11), Within 7 (seven) days of the nomination of Workers’ Representative, the Owner shall nominate his/her representative. Within 15 (fifteen) days of this type of nomination, the President shall call the first meeting of the Safety Committee, having discussion with the Vice-President and other members. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (12), The President shall inform the Inspector General about the formation of Safety Committee through written form within 10 (ten) days of holding the first meeting. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (13), If there are at least one-third of female workers in any institute, at least one third of the Workers’ Representative must be nominated from female. In accordance with The Labour Rules, 2015, Chapter-8, Section-81 (14), If the Safety Committee thinks that there is a need for taking expert help regarding the safety of the factory; the committee can implement the same type of views. In accordance with The Labour Rules, 2015, Chapter-8, Section-82 (1), After the formation of the committee, if there is an announcement of vacancy in the Member posts due to resignation, retirement, termination of jobs, death of a Member, the vacancies can be filled up, having support from minimum two-third Members of the Safety Committee; Provided that the Workers’ Representative shall be nominated from the workers and the Owner’s Representative shall be nominated by the Owner. In accordance with The Labour Rules, 2015, Chapter-8, Section-82 (1), The Inspector General or the Inspector authorized by him/her must be informed if any change occurs in the posts of Safety Committee. In accordance with The Labour Rules, 2015, Chapter-8, Section-83, the term of Safety Committee shall last for 2 (two) years after holding the first meeting. Recommended corrective action: It is recommended that the management adopt practices and controls to ensure that factory shall elected safety committee as per law. Action by: Mr. Sazzad Hossain_ Asst. Manager (Compliance) Timescale: 30 days

Observation :






4: Child Labour Shall Not Be Used

4: Child Labour Shall Not Be Used


(Click here to return to NC–table) (Click here to return to Key Information)

ETI 4.1 There shall be no new recruitment of child labour. 4.2 Companies shall develop or participate in and contribute to policies and programmes which provide for the transition of any child found to be performing child labour to enable her or him to attend and remain in quality education until no longer a child. 4.3 Children and young persons under 18 shall not be employed at night or in hazardous conditions. 4.4 These policies and procedures shall conform to the provisions of the relevant ILO Standards.



Current systems: Factory follows own policy that ensures there are no under aged employees in production and all are above 19 years which was confirmed by appearance and interview. When production workers come for service at factory that time factory certify by factory registered doctor to employees depending on interview and physically checked the biological growth. 42 personnel files were reviewed where employees have job application, age documentation, contract based on listed terms and conditions signed by parties, educational certificate (if available) etc. During interview, employees stated they never seen any under aged worker in this factory. Thus, based on observation, reviewing the documents and interview during audit, it was noted that this factory is compliant with this section. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations, employees’ personnel files (medical certificate, job application, age documentation, contract paper) etc.

Non–compliance:

1. Description of non –compliance: Nothing to report

NC against ETI NC against Local Law Local law and/or ETI requirement: Not Applicable Recommended corrective action: Not Applicable


Observation :






Objective Evidence Observed: Not Applicable

5: Living Wages are paid

5: Living Wages are Paid (Click here to return to NC–table)

(Click here to return to Key information)

ETI 5.1 Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income. 5.2 All workers shall be provided with written and understandable information about their employment conditions in respect to wages before they enter employment and about the particulars of their wages for the pay period concerned each time that they are paid. 5.3 Deductions from wages as a disciplinary measure shall not be permitted nor shall any deductions from wages not provided for by national law be permitted without the expressed permission of the worker concerned. All disciplinary measures should be recorded.



Current systems: Factory has policy to provide all kinds of compensation and benefits to the employees. Based on document review, workers interview and management interview, it was found that factory provides all kinds of compensation and benefits to the workers. Monthly wages is paid on time. Factory gives monthly wage slip to employees. Employees who can’t read, welfare officer/ HR executive educate them regarding wage and OT calculation wherein all deduction has been mentioned. According to the documents which were provided by the HR department and accounts department, it was noted that factory provides all kinds of leave. Maternity leave benefit, earn leave benefit, etc. are provided to the employees as per law. Social insurance and payment receipts from the local Labor department. Labor contracts for all employees. Pay slips of all workers interviewed. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Employee’s salary sheets, pay slip, leave register, maternity register etc.

Non–compliance:


NC against ETI/Additional Elements NC against Local Law



Local law or ETI /Additional Elements requirement: Not Applicable Recommended corrective action: Not Applicable

Observation :




Description of Good Example (GE): 1. Attendance bonus BDT 300/- for all workers.

Objec tive Evidence Observed: By management and workers interview; documents review.

Wages analysis:

Wages analysis: (Click here to return to Key Information)

A: Sample Size Checked (State number of worker records checked and from which weeks/months – should be current, peak and random/low. Please see SMETA Best Practice Guidance and Measurement Criteria)

126 numbers of attendance and payroll records (42 From November 2016, 42 from July 2016 and 42 from January 2016)

B: Are there different legal minimum wage grades? If Yes, please specify all.

Yes No

If Yes, please give details: If yes, please give details: Grade -1=Tk.13000; Grade-2=Tk.10900; Grade-3=Tk.6805; Grade-4=6420; Grade-5=Tk.6042; Grade-6=Tk.5678; Grade-7=5300 & trainee Tk. 4180.

C: If there are different legal minimum grades, are all workers graded correctly?

Yes No N/A

If No, please give details:

D: What deductions are required by law e.g. social insurance? Please state all types:

Absent deduction, advance deduction, etc.

E: Have all of these deductions been made? Please list all deductions that have/have not been made.

Yes No

If Yes, Please list all deductions that have been made: Absent deduction.

If No, please give details on any deductions which have not been made:


F: Industry norm for this region: (please include time period e.g. hour/week/month)

Nil

Wages table

Wages tabl e (Click here to return to Key information)

Worker Type Process Operator (Lowest paid)

Process Operator (Average paid)

Process Operator (Highest paid)

Select from individual worker records one worker from, lowest, average and highest wages and populate the boxes. Ensure comparison is made for same pay period and only uses full–time workers. See SMETA Best

Practice Guidance and Measurement Criteria for completing this:

A: Pay period: (State month selected)

November 2016 November 2016 November 2016

B: Anonymous Employee Reference/Dept.

Worker A / Mending (Fixed salary worker)

Worker B / Jacquard (Fixed salary worker)

Worker C / Pressing (Production based salary

worker)

C: Employee Gender Female Male Male

D: Contracted/Standard working hours: (excluding OT – please include time period e.g. hour/week/month)

208 Hours/ Month 208 Hours/ Month 208 Hours/ Month

E: Contracted /Standard work pay rate: (excluding OT – please include time period e.g. hour/week/month)

BD. Tk. - 5908/ Month

BD. Tk. -7322/ Month

BD. Tk. - 6290/ Month But earn

BD. Tk. - 17243/ Month (Piece rate worker and

earn by production)

F: Standard day overtime – hours: (please include time period e.g. hour/week/month)

40 hours / Month 52 hours / Month 26 hours / Month

G: Standard day overtime – wage: (please include time period e.g. hour/week/month)




H: Rest day overtime – hours: (please include time period e.g. hour/week/month)

-/- -/- -/-

I: Rest day overtime – wage: (please include time period e.g. hour/week/month)

-/- -/- -/-


J: Statutory Holiday overtime – hours: (please include time period e.g. hour/week/month)

-/- -/- -/-

K: Statutory holiday OT – wages: (please include time period e.g. hour/week/month)

-/- -/- -/-

L: Total overtime hours: (please include time period e.g. hour/week/month)

40 hours / Month 52 hours / Month 26 hours / Month

M: Incentives/Bonus/ Allowances etc.: (please include time period e.g. hour/week/month)

BD. Tk. - 300/ Month (As attendance bonus)

BD. Tk. - 300/ Month (As attendance bonus)

BD. Tk. - 4311/ Month (As production bonus)

N: Gross wages: (please include time period e.g. hour/week/month)




O: Social insurance and other deductions; please list which and amount.

BD. Tk. - 0/- Month

BD. Tk. - 0/- Month

BD. Tk. - 0/- Month

P: Actual wage paid after deduction: (please include time period e.g. hour/week/month)




Comments: (Please state here any specific reasons/circumstances that explain the lowest and highest gross wages)

Nil

Q: Is there a defined living wage: This is not normally minimum legal wage. If answered Yes please state amount and source of info: Please see SMETA Best Practice Guidance and Measurement Criteria.

Yes No

Please specify amount/time period:

R: Are workers paid in a timely manner in line with local law?

Yes No

S: Is there evidence that equal rates are being paid for equal work:

Yes No

Details: Male workers of same grade receive same as female workers doing the same job.

T: How are workers paid: Cash Cheque


Bank Transfer Other

If other explain:

6: Working Hours are not Excessive

6: Working Hours are not Excessive (Click here to return to NC–table)


ETI 6.1 Working hours must comply with national laws, collective agreements, and the provisions of 6.2 to 6.6 below, whichever affords the greater protection for workers. Sub–clauses 6.2 to 6.6 are based on international labour standards. 6.2 Working hours, excluding overtime, shall be defined by contract, and shall not exceed 48 hours per week. 6.3 All overtime shall be voluntary. Overtime shall be used responsibly, taking into account all the following: the extent, frequency and hours worked by individual workers and the workforce as a whole. It shall not be used to replace regular employment. Overtime shall always be compensated at a premium rate, which is recommended to be not less than 125% of the regular rate of pay. 6.4 The total hours worked in any 7 day period shall not exceed 60 hours, except where covered by clause 6.5 below. 6.5 Working hours may exceed 60 hours in any 7 day period only in exceptional circumstances where all of the following are met:

– this is allowed by national law; – this is allowed by a collective agreement freely negotiated with a workers’ organisation representing a significant portion of the workforce; – appropriate safeguards are taken to protect the workers’ health and safety; and – The employer can demonstrate that exceptional circumstances apply such as unexpected production peaks, accidents or emergencies.

6.6 Workers shall be provided with at least one day off in every 7 day period or, where allowed by national law, 2 days off in every 14 day period.



Current systems: Factory has a policy to follow the working hours as per law. According to the documents provided by the factory, it was noted that factory provided sufficient rest days to the employees. Factory did not allow any excessive work, weekend work or rest day work. As per the provided attendance records of 126 numbers of attendance and payroll records (42 From November 2016, 42 from July 2016 & 42 from January 2016) maximum working hours found as 10 hours/day, 60 hours/week. All sample employees were received one rest day in a week. Thus, based on the observations, documents review and employee’s interview during the audit, this factory is in compliance with this section. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations, official notice copies, attendance


& payroll records, production records etc.

Non–compliance:




Observation :






Working hours analysis

Working hours analysis Please include time period e.g. hour/week/month

(Go back to Key information)

Systems & Processes

A. What timekeeping systems are used: time card etc.

Automatic (Clock punched card) time recording system

B: Sample Size Checked (State number of worker records checked and from which weeks/months and type – should be current, peak and random/low: See SMETA Best Practice Guidance and Measurement Criteria)

126 numbers of attendance and payroll records (42 From November 2016, 42 from July 2016 & 42 from January 2016)

C: Do ALL workers have contracts/employment agreements?

Yes No

If NO, state which type of workers do NOT have contracts/employment agreements:


NA

D: Are standard/contracted working hours defined in all contracts/employment agreements?

Yes No

If NO, please state which type of workers NOT standard hours have defined in contracts/employment agreements.

NA

E: Are there any other types of contracts/employment agreements used?

Yes No

If YES, Please complete as appropriate:

0 hrs NA 0 hrs NA

If “Other”, Please define:

NA

Standa rd/Contracted Hours worked

F: Do standard/contracted standard hours ever exceed the law or 48 hours per week?

Yes No

If YES give details and comparison (local law/48 hrs week)

NA

G: What are the actual standard/contracted hours worked in sample (State per week/month)

Highest hours: 8 hours/day and 48 hours/week

Lowest hours: 8 hours/day and 48 hours/week

H: Any local waivers/local law or permissions which allow averaging/annualised hours for this site?

Yes No

If YES, Please give details

4 hours/day and 24 hours/week (17th October 2016 to 16th April 2017)

Overtime Hours

I: Actual overtime hours worked in sample (State per day/week/month)

Highest OT hours:

12 hours/week

Lowest OT hours:

2 hours/week

J: Range of overtime hours over all workers/or as large a sample as possible. (State per week/month and details)

2-12 hours in a week for the month of November 2016 (Week) 2-12 hours in a week for the month of July 2016 (Week) 2-12 hours in a week for the month of January 2016 (Week)

K: Approximate percentage of workers on highest overtime hours

12%

L: Is overtime voluntary? Yes No Conflicting

Please detail evidence e.g. Wording of contract/employment agreement/handbook/worker interviews/refusal arrangements:


Information All employees found working voluntarily during audit in the factory.

Overtime Premiums

M: Is overtime paid at a premium? Yes No

Please give details of normal day overtime premium as a % of standard wages:

0%

1 – 115%

116 – 124%

125 – 149%

150 –199%

200%+

Any other comments: Overtime wage double to basic as required by local law which is paid on time with monthly wage.

N: ETI Code requires a prevailing standard to give greatest worker protection. If a site pays less than 125% OT premium and this is allowed under local law, are there other considerations? Please complete the boxes where relevant. Multi select is possible.

No Consolidated pay (May be standard wages above minimum legal wage, with

no/low overtime premium) Collective Bargaining agreements Other

Please explain any checked boxes in N above e.g. detail of consolidated pay CBA or Other.

N/A (Factory provided 200% of basic wages as overtime rate)

Rest Days

O: Are workers provided with 1 day off in every 7–day–period, or 2 in 14–day–period (where the law allows)?

Yes No

Maximum number of days worked without a day off (in sample):

- 1 day off every 7 day period - According to the documents provided by the factory, documents collected directly from the production floors and worker’s interview, it was noted that factory provided sufficient rest days to the employees as per law.

Total Hours

P: Range of total hours: (Quote highest and lowest please include time period e.g. hour/week/month)

Highest total hours

50 hours/week

Lowest total hours

60 hours/week

R: If more than 60 total hours per week and this is legally allowed, are there other considerations? Please complete the boxes where relevant.

Overtime is voluntary Onsite Collective bargaining allows 60+ hours/week Safeguards are in place to protect worker’s health and safety Site can demonstrate exceptional circumstances


Multi select is possible.

Other reasons

Please explain any checked boxes in R above

As per the provided attendance records of 126 numbers of attendance and payroll records (42 From November 2016, 42 from July 2016 & 42 from January 2016) maximum working hours found as 10 hours/day, 60 hours/week.

Comments: (please state here any specific reasons/circumstances that explain the highest working hours)

Please add details of examples where the site has demonstrated “exceptional circumstances”. Please give details of any appropriate safeguards in place at the time of the 60+ hours working. Nil Any other comments: Nil

7: No Discrimination is practiced

7: No Discrimination is Practiced (Click here to return to NC–table)

ETI 7.1 There is no discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union membership or political affiliation.



Current systems: Based on audit process (interviewing, documentation, factory tour), no discrimination practice observed in hiring, compensation, access to training, promotion, caste, national origin, religion, age, gender, marital status etc. in this factory. No pregnancy testing conducted at the hiring process. The factory provides the same pay to male/female employees as well as to local/migrant employees. Discrimination policy has been established and posted in workplace, so did in the employment contracts. There was no evidence of sexual harassment. Factory follows local law to prohibit the discrimination practice. Thus, this factory is compliant with this section. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory p olicy, rules and regulations, employees’ personnel files, training records, etc.


Non–compliance:




Observation :






8: Regular Employment Is Provided

8: Regular Employment Is Provided (Click here to return to NC–table)


ETI 8.1 To every extent possible work performed must be on the basis of recognised employment relationship established through national law and practice. 8.2 Obligations to employees under labour or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labour–only contracting, sub–contracting, or home–working arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment, nor shall any such obligations be avoided through the excessive use of fixed–term contracts of employment.



Current systems: Factory maintains personal files with details of all employees. Workers are provided appointment letter which is found in workers personal file. Workers are provided with an identity card as proof of


employment. Factory has policy to provide all kinds of compensation and benefits to the employees. Monthly wages and overtime allowances were paid by 7th day of the following pay period. If any employees want to leave the job, he/she may leave giving 60 days notice prior to leave. All employees were recruited by the factory directly. No labor agency was used to hire workers. No temporary worker, apprenticeship schemes or home worker was identified by the auditor. There is no wages withholding practice observed in the factory. Thus, this factory is compliant with this section. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations, employees’ personnel files, employees’ ID card, pay slips etc.

Non–compliance:




Observation :






8A: Sub–Contracting and Homeworking:

8A: Sub–Contracting a nd Homeworking (Click here to return to NC–table)


8A.1. There should be no sub–contracting unless previously agreed with the main client. 8A.2. Systems and processes should be in place to manage sub–contracting, homeworking and external

processing. Note to auditor on homeworking:

Report on whether it is direct or via agents. How many workers, relationship with site and what control systems are in place.




Current systems: According to factory management, no process sub-contracting is required. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): N/A If any processes are sub–contracted – please popula te below boxes N/A

Non–compliance:




Observation :






Summary of sub–contracting – if applicable

Summary of sub –contracting – if applicable

A: If sub–contractors are used, is there evidence this has been agreed with the main client?

Yes No

If Yes, summarise details: N/A


B: Number of sub–contractors/agents used

N/A

C: Is there a site policy on sub–contracting?

Yes No

If Yes, summarise details: N/A

D: What checks are in place to ensure no child labour is being used and work is safe?

N/A

E: What processes are sub–contracted?

N/A

Summary of home working – if applicable : Not applicable

F: If homeworking is being used, is there evidence this has been agreed with the main client?

Yes No

If Yes, summarise details: Not Applicable

G: Number of homeworkers Male: Not Applicable Female: Not Applicable

Total: Not Applicable

H: Are homeworkers employed direct or through agents?

Directly Through Agents

Not Applicable

I: If through agents, number of agents

Not Applicable

J: Is there a site policy on homeworking?

Yes No

Not Applicable

K: How does site ensure worker hours and pay meet local laws for homeworkers?

Not Applicable

L: What processes are carried out by homeworkers?

Not Applicable

M: Are written agreements in place for homeworkers that include regular employment?

Yes No

Not Applicable

N: Are full records available at the site?

Yes No

Not Applicable


9: No Harsh or Inhumane Treatment is allowed

9: No Harsh or Inhumane Treatment is Allowed (Click here to return to NC–table)

ETI 9.1 Physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other forms of intimidation shall be prohibited.

Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and

record what controls and processes are currently in place e.g. record what policies are in place, what relevant procedures are carried out, who is /are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to


Current systems: Factory is free of harassment or abuse or any kind of physical or mental punishment. It was revealed by talking with the employees that they are treated with dignity and respect. It has a policy to prohibit harassment or abuse practice. There are sufficient suggestion boxes (12) to express freely for the employees. Thus, based on observations and employees interview during the audit, this factory is compliant with this section. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations, employees’ personnel files, workers participation committee meeting register, complain drop register, training records etc.

Non–compliance:




Observation :





Objectiv e evidence observed:


Not Applicable

10 A: Entitlement to Work and Immigration

10. Other Issue areas: 10 A: Entitlement to Work and Immigration (Click here to return to NC–table)

Additional Elements 10A1 Only workers with a legal right to work shall be employed or used by the supplier. 10A2 All workers, including employment agency staff, must be validated by the supplier for their legal right to work by reviewing original documentation. 10A3 Employment agencies must only supply workers registered with them. 10A4 The supplier shall implement processes to enable adequate control over agencies with regards the above points and related legislation.



Current systems: Factory doesn’t have system to recruit employees from manpower agency. The factory has no foreign workers. All are local workers and no permission is required for working from one district to another district. Thus, the factory is compliant with this section. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations, employees’ personnel files etc

Non–compliance:

1. Description of non –complianc e: Nothing to report



Observation :




Good examples observed :



10 B 2: Environment 2–pillar

10. Other issue areas 10 B 2: Environment 2 –pillar (Click here to return to NC–table)

To be completed for a 2–Pillar SMETA Audit, and remove the following page which is 10B4 environment 4 pillar

10B2. 1 Suppliers must comply with the requirements of local and international laws and regulations including having necessary permits. 10B2. 2 The supplier should be aware of and comply with their end clients’ environmental requirements. Note for auditors and readers, This is not a full environmental assessment but a check on basic systems and management approach.

Current Systems and Evidence Examined To complete ‘current systems’ Auditors examine policies and written procedures in conjunction with relevant managers, to understand, and

record what controls and processes are currently in place e.g. record what policies are in place, what relevant procedures are carried out, who is /are responsible for the management of this item of the code. Evidence checked should detail any documentary or verbal evidence shown to


Current systems: As per documents review & management interview, it was noted the factory has policy of environment. Evidence examined – to support system description ( Documents examined & relevant comments. Include renewal/expiry date where appropriate): Factory policy, rules and regulations etc.

Non–compliance:


NC against ETI/Additional Elements NC against Local Law Local law or ETI /Additional Elements requirement: Not Applicable Recommended corrective action: Not Applicable

1. Objective evidence observed: Not Applicable

Observation :


Objecti ve evidence observed: Not Applicable


Good examples observed:



Environment 4nalysisC: Business Ethics – 4–Pillar Au

Worker Interview Summary Worker Interview Summary

Worker Interview Summary

A: Were workers aware of the audit? Yes No

B: Were workers aware of the code? Yes No

C: Number of group interviews: (Please specify number and size of groups. Please see SMETA Best Practice Guidance and Measurement Criteria)

6 groups of 5

D: Number of individual interviews (Please see SMETA Best Practice Guidance and Measurement Criteria)

Male: 7 Female: 5

E: Total number of interviewed workers (Please see SMETA Best Practice Guidance and Measurement Criteria)

Male: 25 Female: 17

F: Interviews were done in private and the confidentiality of the interview process was communicated to the workers?

Yes No

G: In general, what was the attitude of the workers towards their workplace?

Favourable Non–favourable Indifferent

H: What was the most common worker complaint?

Nothing to report

I: What did the workers like the most about working at this site?

Nothing to report

J: Any additional comment(s) regarding interviews:

Nothing to report


K: Attitude of workers to hours worked:

Nothing to report

Agency Workers

Agency Workers (if applicable) (workers sourced from a local agent who are not directly paid by the site)

A: Number of agencies used (average):

And names if available: N/A

B: Were agency workers’ age/pay/hours included within scope of this audit

Yes No

N/A

C: Were sufficient documents for agency workers available for review?

Yes No

N/A

Other findings

Other Finding s Outside the Scope of the Code

Nothing to report

Community Benefits (Please list below any specific community benefits that the site management stated that they were involved in, for example, HIV

programme, education, sports facilities)

Nothing to report

Photo Form

Photo#1 Photo#2 Photo#3

Factory name sign Factory main gate Factory building overview


Photo#4

Photo#5

Photo#6

Jacquard section (Auto Knitting) Linking Section Trimming section

Photo#7

Photo#8

Photo#9

Mending section Washing section Pressing section


Finishing section Packing section Risk assessment poster posted



Fire detection control panel Fire alarm test in the factory Fire hose system test in the factory

Photo#16

Photo#17 Photo#18

Evacuation plan Fire extinguisher Fire fighting equipments

Photo#19

Photo#20 Photo#21

Fire hose system

Fire alarm Fire alarm switch


Photo#22

Photo#23 Photo#24

First aid box

Child care room

Medical facility

Photo#25

Photo#26 Photo#27

PA system

No smoking sign Centralized smoke alarm.

Photo#28

Photo#29 Photo#30

Complain box

Inside of toilet Notice board


Photo#31

Photo#32 Photo#32

Drinking water facility

Dining hall Finished goods store

Photo#34

Photo#35 Photo#36

Safety instruction posted

MSDS Emergency light & Exit sign.

Photo#37

Photo#38 Photo#39

Yarn store

Eye wash station Canteen


Non Compliance

NC Photo No # 1

Nil Nil

H & S NC # 1: Factory does not installed handrail on both side of 1 of 2 staircases from ground floor to 6th floor of building#1.

Nil End

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You can leave feedback by following the appropriate link to our questionnaire:

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http://www.surveymonkey.com/s.aspx?sm=riPsbE0PQ52ehCo3lnq5Iw_3d_3d

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Date post:	28-Feb-2018
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