UNIQLO UNPAID WORKER CASE

Case Summary

Opening

Uniqlo, a Japanese casual wear retailer headed by Tadashi Yanai, worked together with a clothing
factory in Indonesia named PT. Jaba Garmindo to produce their products. It is stated that Fast
Retailing Group (parent company of Uniqlo) worked with Jaba Garmindo from October 2012 to
October 2014.

Timeline and Problem

In it’s process, their partnership are said to be bumpy as the products produced by Jaba Garmindo
are considered to be problematic in terms of quality and delivery time. In the end, Fast Retailing said
that they are not able to maintain their business partnership with Jaba Garmindo and decided that
they will withdraw from their partnership as per October 2014. Here, they have fully paid all request
of order on time. Though the other party claims that Uniqlo suddenly withdraws their partnership
without clear explanation.

On April 2015, Jaba Garmindo was deemed bankrupt, this resulted in the termination of
approximately 2000 workers. Uniqlo admitted that they offered those workers to work with other
related company. Other than that, Fast Retailing also claimed that they lead talks with the people
from clothing industries to talk about solutions to protect industrial workers from similar cases in the
future.In the meantime, Fast Retailing said that they met with representatives of Jaba Garmindo
workers at Jakarta on July 2017 and November 2018. But, both sides are not obligated to share the
results of their deal.

Non-Governmental Organization named Clean Clothes Organization posted that two ex-workers of
Jaba Garmindo who made Uniqlo’s clothes are going to be in Copenhagen, Denmark on 2nd and 7th
of April 2019 for the global campaign ‘PayUp Uniqlo’. They demanded for Uniqlo to pay them what
were owed (wages) after the unexpected shutdown of their workplace back on 2015. Their visit to
Denmark are aligned with the opening of new Uniqlo shop on Denmark, where CEO Takashi Yanai
will be present.

The demanded amount are expected to be at least 5.5 million US Dollars (unpaid wages & severance
pay). “Fast Retailing has no legal obligation in this matter, including the responsibility of giving
financial compensation to ex-workers of Jaba Garmindo.”, said a representative from Fast Retailing.
The workers voiced that they earned this money by working overtime for Uniqlo, and to not pay the
expected amount is equal to wage theft. The difference between Uniqlo and Nike, Adidas, Disney,
Fruit the Loom, Hanesbrands, Walmart, H&M is that they all encountered similar cases but have
taken countermeasures so that the shutdown factories’ worker all got their severance pay.

Literature Review

1. Lalan Ruslani, Nurfajriah. Analisis Beban Kerja Fisiologi Dan Psikologi Karyawan Pembuatan
Baju Di PT Jaba Garmindo Majalengka. Dec 2015.
 Review : This research deepen the understanding of social sustainability challenges and
condition of workers in global supply chains. Directly related to how Jaba Garmindo workers’
mental and physical state which affects their work and in the end the company’s
sustainability.

2. Evelyn Bunga Marbun. Pemenuhan Hak Buruh Pada Perusahaan Yang Mengalamai Pailit.
2017.
Review : Just like how Jaba Garmindo went under, unable to sustain its business and the
workers got unpaid, this research discusses about the fulfillment of labor rights in the
bankrupt company. In this case, there are some companies which are bankrupt and the
labor rights either the wage or the separation pay cannot be fulfilled. This research focuses
on one problem that how to fulfill the labor rights in the bankrupt company.

3. Bin Shen. Sustainability Issues in Textile and Apparel Supply Chains. 2017.
Review : Incorporating sustainability into the supply chain is becoming a key priority for
many textile and apparel companies. For example, H&M, Patagonia, and The North Face
have incorporated various approaches to enhance their levels of sustainable supply chain
management. Typical approaches include sustainable product strategy, sustainable
investment, sustainable performance evaluation, corporate social responsibility, and
environmental management system adoption, which contribute to the development of
sustainable supply chain management in the textile and apparel industry. Just like how in
this case Uniqlo are under public scrunity, this research could be used to review their
corporate social responsibility.

Final Thoughts

Based on references, the claims that both side made were not matching so it was a bit hard to draw
conclusion (Uniqlo’s side stated that they have exited the relationship responsibly by gradually
decreasing its orders on 2014 due to Jaba Garmindo inability to solve the issue within a designated
timeframe, while the Jaba Garmindo side claimed that Uniqlo exited the relationship without
warning).

Uniqlo as a brand has a high standard for their products, and Jaba wasn’t able to fulfill that need of
high-quality poduct, there was an also and issue of delivery time delay. Wanting to pull out of their
partnership with Jaba after all that was logical in order to maintain their brand. They also claimed to
have paid for all orders made so exiting shouldn’t have been an issue.

When Jaba Garmindo closed down on 2015, Uniqlo shouldn’t have been the scapegoat for the
termination of the factory’s worker. I believe for whatever reason, Jaba Garmindo should be the
main suspect. The workers’ contract was with Jaba Garmindo and it is them who should be held
responsible with the workers’ livelyhood. Just because Uniqlo doesn’t buy products from Jaba
Garmindo, doesn’t mean that the factory can’t go on without them. They should have looked for
other alternatives to keep running.

Regarding the ‘slave’ contract, the workers should talk it out with their contractor, which is Jaba
Garmindo.
I also believed that the reason this case was blown up was because if it was Jaba Garmindo was the
main suspect, then the media wouldn’t have given this case as much exposure as when using Uniqlo,
a big retail brand as the main suspect.

Still, from a moral point of view, if other big brands could compensate workers with similar cases,
Uniqlo should too. Tadashi Yanai has a motto of “giving back to the local community”, their revenue
was also 13 billion US dollars in 2019, so paying 5.5 million dollars wouldn’t have mattered that
much.

In conclusion, the workers should have looked for representatives of Jaba Garmindo to compensate
them instead of Uniqlo. But if Uniqlo was moral, they would have helped pay off the workers.

Case Reference

https://cleanclothes.org/news/2019/04/02/former-uniqlo-garment-workers-attend-flagship-store-
opening-to-highlight-uniqlo2019s-wage-theft

https://apparelinsider.com/uniqlo-dispute-ngos-unpaid-workers/

https://www.equaltimes.org/indonesia-s-textile-workers-face-a?lang=en#.XLxk1-gzbIU

https://www.business-humanrights.org/en/indonesia-terminated-workers-of-uniqlos-jaba-
garmindo-factory-demand-payment-of-wages-company-responds

https://cleanclothes.org/jaba-garmindo

Literature Reference

https://ejournal.upnvj.ac.id/index.php/BinaTeknika/article/view/103

http://e-journal.uajy.ac.id/12346/1/JURNAL%20HK10319.pdf

https://www.mdpi.com/2071-1050/9/9/1592