Social Audit Case Study

Social Audit Case Study
Dragon Sourcing
Your Tailored Approach to Emerging Markets

Table of Content
© 2015 Dragon Sourcing. All rights reserved.
1. Methodology
2. Executive Summary
3. Social Audit Result summary
4. Social Audit Answers
2

Methodology of the Social Audit
• The Social Audit Process is based on interviewing management and employees and checking key
documentation:
1. Number of employee per department
2. Social Document verification
3. On site Security indication and Equipment
4. Social and Safety places
5. Payroll worksheets and employment contracts
6. Management Interviews
7. Employee Interview including:
Child Labor
Gender Discrimination
Forced Labor
Harassment and Abuse
Freedom of association
Grievance Procedures
Discipline and Termination
Working Hours
Compensation and Benefits
Environment, Health and Safety
© 2015 Dragon Sourcing. All rights reserved. 3

Table of Content
1. Methodology
4

Executive Summary
 Our client is a luxurious brand company, leader oi its market.
 The objective of the Social Audit was to determine the workers and employees conditions at work.
 This audit was conducted in Vietnam
 As a result, client was satisfied by the working conditions in this factory.

Table of Content
1. Methodology
6

Social Audit Result summary
FINDINGS FACTORY FEEDBACK
Weight
(%)
Vendor
score
1. CHILD LABOR Yes - it is correct. We do not use child labour.
Workers are from 18Yrs or over
15% 4
No child labor in factory
2. DISCRIMINATION Follow government law and there is no
discrimination in factory
10% 4
No
3. FORCED LABOR Yes - All workers signed a contract with the
company and overtime voluntarily
10% 4
No
4. HARASSMENT AND ABUSE
Yes 10% 3
No
5. FREEDOM OF ASSOCIATIO
Yes 5% 4Yes, have labour Union in company and was voted by
workers
6. GRIEVANCE PROCEDURES
Yes 5% 4Good. All were solve by meeting, discussion to meet
requirment of workers and management
7. DISCIPLINE AND TERMINATION
Yes 5% 4
Good.
8. WORKING HOURS
Yes 5% 3
There's over time, but comply with law.
9. COMPENSATION AND BENEFITS
Yes 15% 4Good. Salary of worker is so high and have allowance for
Gasoline and working hard
10. ENVIROMENT, HEALTH AND SAFETY
Always to give the best working enviroment for
workers
15% 4The working enviroment is very good for workers. 4
interviewed employees are satisfied working in this factory
11. SUBCONTRACTORS
We do not have any subcontractor 5% 4
No
OVERALL RATING: 100% 96.25
Scoring
Level
Score
Excellent > 90
Good 70 - 90
Acceptable 50 - 70
Poor < 50

Social Audit Action Plan
Problems Action required Lead Completion date Update
Not all employees have social
insurance
Implement to all employees and
keep the record.
HR manager
Waste material is not managed
well.
Build waste management system
and have a training.
Factory Director
Some employees are paid by
cash.
All employee payment should be
paid by bank transfer.
Finance manager
Suppliers are not audited.
Need a system to evaluate
supplier’s social responsibility.
SQE manager

Table of Content
1. Methodology
9

1. Number of Employee per department
Department Male + Female Department Male + Female
Accounting 5 Repairing 26
Administration 6 Filing FB 47
Barreling 17 Polishing FB 42
Cleaning 19 Setting FB 94
Conformity 10 Soldering FB 47
Driver 7 Filing HVP 27
Finding 47 Recutting Stone & Stone 41
Finishing 46 Wax 135
Housekeeper +Guard 57 Quality Control 67
Import & Export 8 Polishing & Setting HVP 87
Laundry 12 Bridal 48
Maintenace 12 Factice 48
Material Control 73 Special Team 95
Medical + MIS IS&IT 5 Technical 3
Planning+ Production & Purchasing 18 Customer Desk 1
Refining 15 Stock 7

2. Social Documents verification
Labor Contract Working Time card record Payroll for Jan, 2012
Safety training record Employee handbook
Company Procedure
Daily information from Labor Union

3. On site Security indication and Equipments
Fire fighting evacuation map
Exit sign and fire fighting equipment
Exit Sign in Workshop Fire-fighting equipment
Exit sign & alarm Emergency lights

4. Social and Safety places
Canteen Changing Room Washing Uniform Dept
Suggestion Box Labor Union Room Infirmary

5. Payroll worksheet
Employee
Attendance (unit:
hour)
OT (unit: hour) Salary (VND) Allowance (VND) Total Deductions Total
Name
Dept and
Position
Entry Leave
OT on
working
days
OT on
Weekends
OT on
Public
holiday
Regular
Pay / hr
Regular
pay
OT
Pay / hr
OT
pay
Perfect
attendance
Bonus
Gross
Pay
Taxes
Social+
health
+unemploy
ment
Insurance
(8.5%)
Net Pay
1
Nguyen Cong
Hoanh
Finishing 208 0 0 0 10,817 2,249,936 0 400,000 2,649,936
225,750
2,424,186
2 Nguyen Tien Duy Finding Making 208 0 0 0 10,817 2,249,936 0 400,000 2,649,936
225,750
2,424,186
3 Do Hai Dang Setting FB 208 0 0 0 10,817 2,249,936 0 2,249,936
225,750
2,024,186
4 Tran Ngoc Uyen
Production
Office
208 28 0 0 13,702 2,850,016 20,553.0 575,484.0 480,000 3,905,500
238,500
3,667,000
5 Ly Van Hoa Setting Factice 208 0 0 0 10,817 2,249,936 0 170,000 2,419,936
225,750
2,194,186
6 Lam Thi Tu Trinh Wax 208 0 0 0 10,817 2,249,936 0 400,000 2,649,936
226,950
2,422,986
7
Nguyen T. Hong
Thi
Filing Special
Team
208 0 0 0 10,817 2,249,936 0 400,000 2,649,936
225,750
2,424,186
8 Huynh Tan Loc Refining 208 18 0 0 12,019 2,499,952 18,028.5 324,513.0 400,000 3,224,465
230,500
2,993,965
9
Huynh Thanh
Tung
Finding Making 208 0 0 0 10,817 2,249,936 0 2,249,936
218,538
2,031,398
10 Nguyen Minh Thy
Polishing
Factice
208 0 0 0 12,173 2,531,984 0 400,000 2,931,984
230,500
2,701,484

6. Management Interview
General Information
1
2
3
4
Workforce Profile
5
6
7
8
Child Labor
9
10
11
12
13
Discrimination
11
12
13
14
15
NoAny seasonal/ temporary/ part-time employees? Using any recruitment agent ?
If yes, please specify audit date, customer, who done the audit?
Who is responsible for overall compliance of the factory? (Name and position)
PART I: MANAGEMENT INTERVIEW
Does the factory have its own social policy? If yes, obtain a copy. Yes (to be shown on site)
Mr Lo Quoc Thanh - HR& Admin Manager
No
What percent of employees have you brought in from other countries/ provinces?
What are the criteria for promoting workers?
Yes
if yes, how to identify their age is in line with the labor law?
9 people from France and 1 person from Hong Kong
What is the age of the youngest person you would hire?
Yes
Worker continues to work at their position
Is equal salary for equal work for male and female workers implemented at the
factory?
via the ID card and CV
If the factory employs juvenile workers who require protective restrictions, what
shifts and tasks do these workers perform?
18 years old
Is there any employees between 16 and 18 years of age (young workers)?
Any mandatory physical health check is carried for workers at recruitment or
employment stage?
4.7%
Does the factory experience any social compliance audit previously?
What rate of employee turnover does the factory experience yearly?
Which countries/ provinces do they come from?
No
Does the factory obtain any labor law exemptions from its local government? If so,
obtain a copy of the exemption.
Around 1 %
No
Does factory keep copies or records of ID document of workers?
Are women permitted to return to their position and paid at the same rate after
their maternity leave?
Skill and fair performance
How does the factory verify age during recruitment?
Yes
What actions are taken if a worker is discovered to be pregnant?
No. Just based on the health certificate from the medical
centre or hospital.
Management interview
included:
-Child Labor
-Gender Discrimination
-Forced Labor
-Harassment and Abuse
-Freedom of association
-Grievance Procedures
-Discipline and Termination
-Working Hours
-Compensation and Benefits
-Environment

6. Management Interview
Forced Labor
16
17
18
19
20
21
22
23
Freedom of Association
24
25
26
27
28
29
30
If yes, please show copy?
31
32
33
PART I: MANAGEMENT INTERVIEW
Yes. Following the vienamese labour law
If contract workers are employed, what is the length of time of the contract (in
years)?
Is there any abuse occurred or has been reported at this facility?
What actions have been taken to correct such incidents?
Is there a recognized union in this facility?
Yes
Yes
How do the factory employees bring work-related issues and grievances to
management’s attention if there is no union?
Are workers free to quit their job within legal framework? Yes
( Company regulation ) - Company will give new worker Policy
book
Yes
Through their Supervisor or can go direct to the HR dept.
Yes
1 year, 3 years and then, inlimited contract
No
No
Can the contract be ended early? If yes, under what circumstances?
Do all workers receive paid leave according to statutory regulations (including
statutory and / or religious holiday)
Yes
NAIf yes, why, for how long?
Yes
Does the factory hold employees original documents, such as ID card, passport,
work permit?
Are workers assigned overtime on a voluntary basis?
Are workers in this facility covered by a collective agreement?
Are the union representatives chosen by management? No
Meeting - Discuss - Agree solution - Action
Are the disciplinary rules align with local government authority? Yes
Does the company keep record of fines / disciplinary action?
Is there a rule of the disciplinary and termination policy in the factory?
If there is a union in this facility, do union workers get same treatment as non-
union workers?
Yes
What is the procedure for management to follow-up an issue or grievance?
How does the factory communicate the disciplinary rules to workers? Hand book - Notice board - Face to face meeting
Working Hours
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
Subcontractors
71
72
Yes
Have workers been trained to use PPE? Yes
Are there fire extinguishers in all sections? Yes
Does the factory have a fire alarm? Yes
Are all emergency exits unblocked and unlocked at all time? No
Yes
Are workers trained for fire precaution and evacuation? Yes
Are evacuation drills practiced? Yes
Yes
Yes
Does factory have MSDS displayed for each chemical and flammable
products?
Yes
Does factory have assigned area to store these chemical and flammable
products?
3 hours per day maximum
What are the maximum working days per week at this factory?
Do any employees perform work at home?
System to record the time spent per worker
48h
1 shift
8 hours/ shift
What are the standard employee working hours per week?
How many shifts does the factory work?
What are the hours for each shift?
When are your peak months of production?
What is the minimum wage rate paid for regular time work?
March - April -October - November - December
depend on order
Does worker have at least one day off in every 7 days of working?
2,250,000 vnd
Are any workers excluded from receiving benefits?
Does the factory have written policy on compensation, compensation
methods and benefits that is communicated to workers?
Are there any legally required employee benefits for which the factory pays?
Please specify.
Does this factory use subcontractors for any operation?
Does factory have proper sign boards on the area of operations?
Are all workers provided social insurance as per local legal requirement?
Are workers provided appropriate PPE by factory?
Are any chemicals and flammable products used in the production?
Does factory provide access to basic sanitary and hygienic needs, such as
drinking water and properly maintained bathroom facilities?
Does factory have first aid kits?
Does factory have dormitories?
Are there emergency exits on all floors? Yes
Yes
No
If yes, are dormitories separated from production building / warehouse?
Is there any control over the subcontractors to ensure they are comply to
the local labor practice?
No
If yes, which ones?
Mainly by ATM , some case by cash
No
Yes
Are any amounts withheld from employees' wages?
How are they paid? (By cash/ ATM/ cheque/ Others)
Is the employee given a payslip which has information to allow them to
check their wages and see all deductions and bonus?
What day of the month / week do workers receive their pay?
If yes, for what reason and how much?
Yes
on the fifth of each month
Yes
Yes
No
NoIs any workers paid less than the legal minimum as their base wage?
If yes, describe:
No
If home work is performed, how are employees paid?
Yes
Are all workers paid overtime at the legal rate?
Does the factory have written policy on working hours, rest and vacations?
Yes
Yes
What is the maximum working hours per week at this factory?
What are the average overtime working hours per week?
How are working hours tracked (e.g. time card)?
6 days

7. Employee Interview
1
2
Yes No
3
> 16Y 16 - 18Y 18 - 20Y > 20Y
4
5
Yes No
6
Yes No
7
Yes No
8
Yes No
9
Yes No
10
Yes No
11
12
Yes No
13
Yes No
14
Yes No
15
16
Yes No
Meeting, Dissuss, Remind with The Supervisor or HR Department
Child Labor
Discrimination
Forced Labor
Is equal salary for equal work for male and female workers?
X
Mandatory leave
Freedom of Association
X
Do union workers get same treatment as non-union workers?
Is there any penalty if resign within the contract period?
does not know since her dept is only female
Are you carried mandatory physical check at recruitment or employment stage?
X - just check health one time per year
Did you sign any contract with the factory? How long? Any copy with you?
Is OT voluntary?
X
What actions are taken by factory if you are pregnant? (if applicable)
Free to resignatePosition stand
X
X
Are you permitted to return to the position and paid at the same rate after maternity leave? (if applicable)
X
X
Any workers' representative or workers' committee in this factory?
X
What is the grievance procedure in this factory?
Do you need to pay any deposit or (training/ tools) fee when you first joined the factory?
If he/she was born on 1993 to 1995, does physical check free carried for the juvenile by factory? (if applicable)
X
Yes - unlimited contract - Keeping a copy
What is the youngest age working in this factory?
Which year you were born? Did the factory check your ID card when you first joined?
Depending on the mistake ,factory will remind, advise and if it is very heavy mistake, I will be fired
She was born in 1978 - Yes
X
Does your supervisor/line-leader yelling or abusing to you?
What happened if you broke the factory rules?
Employee interview included:
-Child Labor
-Gender Discrimination
-Forced Labor
-Harassment and Abuse
-Freedom of association
-Grievance Procedures
-Discipline and Termination
-Working Hours
-Compensation and Benefits
-Environment

17
0 - 3Y 3 - 6Y 6 - 10Y > 10Y
18
< 40H 40 - 48H 48 - 56H > 56H
19
0 - 6H 6 - 9H 9 - 12H > 12H
20
21
< 4D 4 - 6D 6 - 8D > 8D
22
0 - 5D 5 - 7D 7 - 10D > 10D
23
24
0 - 3D 3 - 5D 5 - 7D > 7D
25
X
26
Yes No
27
15 - 20D 20 - 30D 30 - 45D > 45D
28
Cash Card Cheque
29
Yes No
30
Yes No
31
v 18 DAYS
How many annual leave do you have per year?
max 18 hrs/week
How many rest day per month?
The supervisor record and time record machine
X
working 19 Yrs
X
How to tracking the regular and OT hours??
How is the OT salary calculated?
Is OT salary also paid at the same day as regular pay?
X
How long you have been working in this factory?
48h/ week
X
When did you receive your last month salary? How much you received ? Any deduction?
5/3/2012 - insurance
What is the standard working hours per week?
What is the average OT hours per week?
Working Hours
Do you have payslip given?
How many day off for the last public holidays? Any holiday pay?
Do you have basic salary? Any other allowance/incentive received?
X
Follow government law (150% basic salary on normal day, 200% basic salary on weekend, 300% on holidays)
How often are you paid? On which day? On time?
Piecely-rate Daily-rate Hourly-rate Monthly-rate
Yes - Allowance for Gasoline+ quality of the work
Are you paid by cash/card/cheque?
5th of each
month
Are you paid by piece rate? daily-rate? hourly-rate? monthly-rate?
The Employee interview is done
by a native speaker and in a
separated room to ensure the
confidentiality of the information

32
Yes No
33
Yes No
34
2 - 4P 4 - 6P 6 - 8P > 8P
35
Yes No
36
Yes No
37
Yes No
38
Yes No
39
Yes No
40
X
41
Yes No
42
Yes No
Bad Poor Acceptable Good
Are you free access to the water and toilet at anytime during work?
Is dormitory clean? (if applicable)
N/A
X
Do you stay in the dormitory?
How many people per room? (if applicable)
Is dormitory free of charge? (if applicable)
Is canteen free of charge? (if applicable)
Do you eat in the canteen?
X
Is canteen sanitary and clean? (if applicable)
X
Did you experience any fire drill? When was the last time?
What do you think about the working condition here?
X
X
X
Are you provided any PPE by factory free of charge? (if applicable)
X
N/A

Social Audit Case Study

More Related Content

What's hot

Similar to Social Audit Case Study

More from Dragon Sourcing

Recently uploaded

Social Audit Case Study