Adidas Faces Demands Over Unpaid Severance for 500 Cambodian Workers
Adidas faces demands from Cambodian workers and labour rights groups over unpaid severance. The issue stems from the company's termination of its contract with the Hulu Garment Factory in 2020, leaving around 500 workers without their rightful severance pay.
The Union INTUFE initially requested Adidas to use funds from Yeezy product sales to settle the unpaid severance. The Yeezy brand, co-founded by Kanye West, has generated substantial revenue for Adidas, with 2023 Yeezy product drops alone bringing in approximately 150 million euros (around $162 million).
Workers at the Hulu Garment Factory were effectively dismissed when they were asked to sign payslips for suspension pay, accompanied by a resignation notice. This action, taken in August 2020, accounted for 5% of the factory's total production the previous year. The termination left many workers, like former employee Chhorpesal Chhom, struggling financially. Chhom fell into debt after losing his income.
The Cambodian union president, Sithyneth Ry, has demanded that Adidas pay the severance to the affected workers. The Workers Rights Consortium and the Pay Your Workers campaign have also backed the Hulu workers' cause. The Workers' Rights Association estimates that 456 workers are owed a total of around $1.1 million in unpaid benefits. Despite these demands, Adidas has rejected allegations that they owe the workers severance pay.
The Clean Clothes Campaign has reached out to Adidas investors regarding the case, but responses have been non-committal or silent. There is currently no public information on which specific investors the nonprofit has approached.
The unpaid severance issue at the Hulu Garment Factory remains unresolved, with Adidas maintaining its position that it does not owe the workers severance pay. Labour rights groups continue to push for justice, with the affected workers and their families still awaiting the compensation they are legally entitled to.
