Gildan Star, Honduras

On July 8, 2019, the Fair Labor Association received a Third Party Complaint (TPC) from the union Sindicato de Trabajadores de Star (SITRASTAR) with respect to the then-pending closure of the Star S.A. facility in El Progreso, Yoro Department, Honduras, a facility owned and operated by the FLA-affiliated company Gildan. The TPC followed on prior communications from SITRASTAR providing information and raising concerns about the plans for the facility’s closure.

Pursuant to that communication, further information gathering by FLA staff, and subsequent additional information provided by the union, including in connection with meetings held with Gildan management concerning the pending closure, the FLA on July 23 accepted the Complaint and initiated this TPC investigation.  Shortly thereafter, and following consultations with Gildan officials, the FLA commissioned independent external investigators Ena Nuñez O´Brien and Katya Castillo to conduct an investigation of the Complaint allegations pursuant to agreed-upon terms of reference, which are summarized in the first section (“Context and Scope of the Investigation”) of the investigators’ Final Report that today is posted in Spanish and English on the FLA website.  The investigators conducted their onsite field investigation from July 29-August 2, and their Report describes the scope and methodology and then details the results and findings, before turning to a series of conclusions and finally recommendations.

The investigators’ Report outlines the Star facility closure process based on information provided by both SITRASTAR and Gildan, including a timeline of events beginning with the closure announcement on June 26, and it includes a breakdown of the status of the 1126 workers employed at Star as of the start of the closure process through the time of the onsite investigation at the end of July.  It also provides a summary, based on the information made available to the investigators, of information exchanges between Gildan and SITRASTAR in the days and weeks following the June 26 announcement, and includes a detailed summary chart of the proposals made by both sides to address the range of issues affecting Star employees in the wake of the closure announcement.

The FLA commends the investigators for their thorough review of the materials provided and subsequent analysis, particularly under the circumstances of undertaking their work during a closure process that was still very much ongoing at the time of their site visit.  The FLA takes note both of the constraints that this imposed on the investigation, as described in Section III of the Report (including shortcomings with respect to the information provided and access to certain important records).  At the same time, the FLA recognizes the efforts made by both Gildan and SITRASTAR officials, given the challenges presented by the narrow timeframe and need for the investigators to conduct and complete a timely investigation and move forward without delay.

The report’s conclusions are based upon the investigators’ expert analysis and interpretation of the applicable legal and policy framework with respect to factory closure and termination of employment contracts, including Honduran law and FLA Compliance Benchmarks.  The Recommendations then map out a series of specific actions that the investigators call upon Gildan to undertake.

It is certainly possible for different parties to reach divergent conclusions concerning how specific provisions may apply to a given set of events.  This often has been true in the past with respect to the application of national law or various FLA Compliance Benchmarks.  And there may also be some disagreement over the characterization of how certain events transpired – in this case, pertaining to what occurred both before and subsequent to the June 26 closure announcement.

Yet what cannot be disputed is the degree to which the Report’s set of Recommendations ultimately focus squarely on the interests of the workers impacted by the Star closure – ranging from compensation to new job opportunities to the exercise of their legal rights to having more transparent and clear information about policies and procedures.  In that regard, the FLA also takes note of Recommendation #14 calling for a review/examination six months after the Report’s publication concerning several of the outstanding issues highlighted in the Report – including some where determinations of worker benefits remain to be made.

To that end, the FLA looks forward to working with Gildan and the Complainants in order to ensure that there is a suitable process moving forward to address those and other matters in a manner that, above all, is beneficial to the former Star workers.

UPDATE: On October 28, 2020, the FLA published the detailed Verification of Remediation assessment report prepared by independent third party consultant Francisco Chicas, which sets out findings, conclusions, and recommendations concerning the remediation measures taken by Gildan in the wake of the TPC Report’s recommended corrective actions.

The new report assesses Gildan’s actions pursuant to its commitment to implement each of the remediation measures described in that corrective action plan, as well as those made in an agreement reached in November 2019 with the SITRASTAR union.