Severance Theft

Severance theft refers to the situation when employers fail to pay employees enough severance pay. It is a common phenomenon in the garment industry when there are factory closures or workers lose their jobs. Workers may need to wait for years until they receive the money that is owed to them or some may never receive what they are owed by law. If a factory has gone bankrupt or claims to be in a dire financial situation it can be very difficult to claim the money back, even using legal channels. It is crucial that global brands pitch in and ensure the full severance pay owed is given to workers when they lose their jobs. An example of severance theft is an ongoing case involving Japanese retail giant Uniqlo and 2,000 Indonesian garment workers. In 2014, numerous labour violations, including unpaid overtime and unlawful termination of pregnant workers, were reported at the Indonesian factory, Jaba Garmindo, supplying Uniqlo. As a result, Uniqlo decided to withdraw production from the factory, citing ‘quality issues’. In January 2015, workers were no longer being paid their full wages on time. Three months later the factory unexpectedly closed, declaring bankruptcy, leaving 4000 workers unemployed and owed millions in unpaid wages and severance payments. They managed to retrieve their back pay but now, over seven years later, 2,000 former workers continue to campaign for the $5.5 million legally owed to them in severance pay. Uniqo continues to refuse to pay up.