Hermosa: History and Background information

At the Hermosa factory in San Salvador, violations of legally-required wage and benefit payments had been occurring repeatedly over the years, including illegal deduction of wages for illness, delaying of payments, failure to pay overtime salaries or maternity benefits. For example, the owner deducted quotas for credits and the social housing fund from workers’ salaries, but did not transfer the deductions to the banks and/or the fund, leading the housing fund to send eviction orders to the workers.

When workers asked the owner, Mr. Montalvo, to pay them regularly he told them he had no money. However at the same time he opened a second factory in Guazapa ("MB Knitting"), which is still producing today.

Around Christmas 2004 a group of workers decided to form a union at Hermosa. They registered their union at the Ministry of labour on April 3, 2005.

On April 18, 2005 the union applied for an investigation of the Hermosa factory at the Ministry of Labour. The workers informed the Ministry about the debts Hermosa had with them and about the labour rights violations.

In a meeting at the Ministry on May 2 the Hermosa owner admitted there were problems in Hermosa but asked for more time (until he had new orders) to pay outstanding wages. That same week he brought the raw materials from Hermosa to MB Knitting and also some of the machines. He told the workers that he was would be stopping production and suspending the workers for three months.

From May 11 to June 8, 2005, some Hermosa workers protested the suspension by occupying the factory’s cafeteria. The labour court ruled that their occupation was illegal and that they should return to work on June 10. But when workers came to the factory on June 10 they found a sign saying the factory would re-open on July 13. It never did.

Some workers (none of whom were members of the union) were rehired by the second plant owned by Mr. Montalvo. The remainder were discharged with the promise they would be rehired. None of them were rehired.

Since then, workers have been protesting the closure, demanding that the factory re-open and that their legal severance, pension fund money, outstanding wages and overtime payments be paid. The owner claims to have placed many of these employees on unpaid suspension, a legal status that enables an employer to delay payment of severance when a factory is temporarily closed, pending the resumption of operations. The time period allowed for this status however has elapsed.

In El Salvador several civil society groups formed a coordination to support the Hermosa workers. These include the women's organizations Las Melidas, Las Dignas, ORMUSA, MSM, the unions CSTS and FEASIS, FESPAD and La Mesa Sindical de la Maquila (Round union table of the Maquila). The workers have protested in front of the Hermosa factory for months, demonstrated at the Ministry of Labour, blocked the streets to the second factory owned by Mr. Montalvo, and demonstrated in front of a hotel where an adidas representative was staying.

There is strong evidence that Hermosa workers who supported the union have faced blacklisting by other garment factories in the area. This group of workers has also been subjected to acts of intimidation and threats of violence in response to their vocal criticism of Hermosa.

Not only did the Hermosa workers work for years in a factory that failed to respect national and international labour standards, they also lost their jobs due to organizing (which is their right), are blacklisted at other factories, and have not received the severance pay they are legally entitled to.

Other resources on the Hermosa case

Fair Labor Association materials on Hermosa [1]
Workers Rights Consortium materials on Hermosa [2]
Clean Clothes Campaign materials on Hermosa [3]
adidas group statement on Hermosa, January 2007 [4]