Topy Top SA, Peru

On August 10, 2015, the Fair Labor Association (FLA) received a Third Party Complaint from the Sindicato de Trabajadores Obreros de Topy Top S.A. (SINTOTTSA) in Peru.  The union alleged a series of violations of worker rights, principally freedom of association and anti-union discrimination, at the factory Topy Top S.A.  HUGO BOSS, a Participating Company of the FLA, and Life is Good, a Category B Licensee, source from Topy Top.

The complaint from the union alleged that since January 1, 2015, 40 officials and members of SINTOTTSA were dismissed by Topy Top management.  According to the union’s complaint, one of the dismissed workers was a union official, whose dismissal should have followed a special procedure, which was not followed by the factory. A second worker allegedly was dismissed improperly for excessive absences, which were consistent with his role as a union officer.  Overall, the complaint alleged that union members have been systematically discriminated against and dismissed – in some cases by not renewing their temporary contracts – as a way to weaken the union. The factory practice of keeping workers with many years of service on short-term contracts may also violate FLA standards on excessive use of temporary contracts, despite being legal in Peru.

An independent consultant engaged by HUGO BOSS to investigate the complaint reached the following conclusions:

• There is a high level of mistrust between SINTOTTSA and Topy Top management.  There is a tendency for each side to take issues of disagreement to the Ministry of Labor or to the court system rather than to try to work out differences through dialogue.
• Over the years, the lack of dialogue between management and the union manifested itself in different ways: some supervisors demonstrated behavior that discriminated against union members, while union leaders publicly criticized Topy Top, actions that management felt affected the company’s sales and image.
• Factory management has not developed objective criteria that have been communicated to workers to govern the short-term contracts that are renewed or not renewed to adjust to changes in production.
• The practice of keeping workers with many years of service on short-term contracts places a burden on workers, and violates the FLA Workplace Code of Conduct, despite being legal in Peru. It also places a burden on management, which has to spend resources on renewing contracts, resources that would be better used in improving labor-management relations.
• Topy Top’s actions in not implementing a recent decision by Peruvian authorities to regularize the work contracts of some workers, arguing that the appeal process is ongoing, fall short of best practices in corporate social responsibility.
• Stakeholders consulted during the investigation overwhelmingly expressed the view that they had a genuine interest in seeing the labor-management relationship at Topy Top improve and the factory continue to operate in Peru and offer jobs to local workers.

The report details recommendations resulting from the investigation, the remediation plan devised by Topy Top with the support of HUGO BOSS, and the status of this plan as of August 2017.