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Anthony Fashion Corporation, S.A. de C.V.

Anthony Fashions, a textile factory in the San Bartolo Free Trade Zone that employed more than seven hundred workers, closed operations on December 23, 2002, and, as of this writing, has yet to reopen.²⁴⁴ Since that time, workers have attempted unsuccessfully, through labor courts and the Labor Ministry, to gain redress for alleged violations of Salvadoran law governing social security and pension payments, year-end bonuses, worker suspensions, wage payments, and severance pay.²⁴⁵ The Labor Ministry, however, has declined to rule on matters within its jurisdiction, failed to report to social security authorities evidence of social security law violations, and refused to provide workers with critical inspection results. Meanwhile, labor court proceedings against the company have stalled because employer representatives have fled and are nowhere to be found.

Anthony Fashions workers assert that the company deducted social security and pension payments from their salaries without transferring the funds to the government—a claim later verified through a labor inspection.²⁴⁶ Because Anthony Fashions’ payments to the Salvadoran Social Security Institute were delinquent, workers and their children were unable to access free public healthcare.²⁴⁷ Without free treatment at the social security hospitals and clinics, workers, including pregnant women seeking prenatal care, and their children were forced to go to private clinics and hospitals, if they could afford to, at their own expense.²⁴⁸ Workers also claim that the company failed to pay required maternity benefits for roughly thirty women.²⁴⁹ They say that when they complained, Jorge Paz, an owner and legal representative of the company, verbally abused them—using “bad words,” calling them “worthless,” telling them to “go to hell,” and explaining, in the words of one worker, that “in my house, no one is going to fuck with me.”²⁵⁰ Carla Cabrera, an Anthony Fashions worker, explained that when workers threatened to denounce Jorge Paz to the Ministry of Labor, “he [Paz] said, ‘Denounce me. Go! I’ve already bought off the Ministry of Labor, and they won’t act against me.’”²⁵¹

On November 15, 2002, Anthony Fashions reportedly commenced phased-in worker suspensions, completing the suspension of all production line workers through a series of suspensions on December 7, 10, and 20.²⁵² On December 23, the company suspended all operations.²⁵³ On December 26, Anthony Fashions workers sent a written request to the leadership of the Union of Textile Industry Workers (STIT) asking that a union leader be designated to “represent us in the legal procedures of special labor inspections before the Labor Inspectorate of the Ministry of Labor and Social Welfare, for the serious violation of the right to Social Security, year-end bonuses, and for the illegal suspension of our individual labor contracts.”²⁵⁴

On January 6, 2003, suspended and fired workers gathered outside the factory in hopes of receiving their overdue mandatory annual bonuses, since Jorge Paz had reportedly told them that, on that day, he would pay them.²⁵⁵ No bonuses were paid.²⁵⁶ One worker explained, however, that “a security guard told us that they were going to take out the machinery,”²⁵⁷ thereby removing assets that could eventually be sold to pay workers the money owed. The workers reportedly protested and blocked the doors of the factory to prevent Jorge Paz and other management representatives from leaving.²⁵⁸ Learning of the protest and threat to remove the machinery, a STIT representative reportedly called the Labor Ministry on behalf of the workers to request a labor inspection to inventory the machinery and prevent its removal,²⁵⁹ which was reportedly granted.²⁶⁰

On January 7, 2003, through the general secretary of STIT, workers also requested that the Labor Inspectorate conduct an inspection to verify the illegality of their suspensions; the violation of their right, under Salvadoran law, to social security and pension payments; and employer failure to pay mandatory annual bonuses due in December 2002.²⁶¹ That same day, Ada Cecilia Lazo Gutiérrez, a supervisor of labor inspectors for the Department of Industry and Business Inspection, and a labor inspector visited the worksite to “verify the suspension of workers or the closure of the company” and “payments to the Salvadoran Social Security Institute and AFP [Administrator of Pension Funds].”²⁶²

According to the inspection report, Anthony Fashions’ head of human resources and Jorge Paz told the inspectors that the suspensions were implemented because Leslie Fay Company, Inc., had cancelled a production contract with Anthony Fashions and that the company would resume operations once a replacement contract was signed.²⁶³ The inspectors failed to rule, however, on whether this justification was sufficient to make the suspensions legal. According to the workers’ lawyer, when he pressed Ada Cecilia Lazo Gutiérrez for a ruling on the issue, she told him that such a declaration was not within her jurisdiction and that she, therefore, could not legally rule on the matter.²⁶⁴ Under different circumstances, however, Lazo demonstrated that, in fact, she correctly understands the law. When Human Rights Watch asked Lazo, generally, whether inspectors could rule on the legality of a suspension, she answered affirmatively, saying, “We can go to verify the facts. . . . We can verify that it is illegal.”²⁶⁵

The January 7, 2003, inspection also made preliminary observations regarding social security and pension payments, without issuing a final ruling. Another inspection conducted on the issue on January 9, 2003, found that the company owed social security and pension payments and that the most recent payments had been made more than a year previously, in November 2001. The report calculated that the company owed approximately U.S. $120,000 to the AFP and U.S. $260,000 to the ISSS.²⁶⁶ The inspectors thus confirmed that Anthony Fashions had violated laws governing social security and pension payments for at least thirteen months.

The government had been on notice of the company’s delinquency in social security and pension payments. Roughly one year earlier, on January 22, 2002, a supervisor of labor inspectors for the Department of Industry and Business Inspection had identified Anthony Fashions as a company that, at the time, owed “three months of ISSS and AFP payments.” The memorandum stated, “With respect to the companies that are behind in payments of Social Security and AFP quotas, it is necessary to communicate said situation to the relevant Institutions.”²⁶⁷ The supervisor who prepared the memorandum explained to Human Rights Watch that, despite his findings and recommendation, his superiors “did nothing with the report.”²⁶⁸

Anthony Fashions workers were provided a copy of the January 9 inspection report and shared it with journalists. Apparently, this upset Jorge Paz, who wrote a letter to the Minister of Labor on January 10, 2003, stating that “unscrupulous people” who were “supposed trade unionists” were “using the media to generate negative propaganda against me.” He then requested that the minister of labor “order your assistants to use appropriate discretion with respect to information that this company gives to this ministry” because if it fell into “evil hands,” it could complicate the situation and adversely affect Anthony Fashions financially.²⁶⁹

On January 10, the Labor Ministry conducted a third inspection, reportedly in response to the workers’ January 7 inspection request to investigate employer failure to pay mandatory annual year-end bonuses.²⁷⁰ Neither the union representative who submitted the inspection request nor the workers’ lawyer was informed that the inspection would take place, even though both had specifically requested such notification.²⁷¹ Moreover, no workers were interviewed.²⁷² Unlike the prior inspection, the workers did not receive a copy of the report and have not been informed of the inspection’s findings.²⁷³

On January 13, 2003, Anthony Fashions workers filed a request with the local prosecutor to initiate an investigation and criminal proceedings against Anthony Fashions’ legal representatives—Anthony Iurato and Jorge Paz. The request alleged that, since December 2001, the two men had illegally retained the social security and pension payments of seven hundred workers.²⁷⁴ A second complaint added the allegation of illegal failure to turn over property belonging to workers—the mandatory year-end bonuses to which they became entitled on December 12, eleven days prior to factory closure.²⁷⁵ The former crime is punished with a fine, the latter with a prison term of between two and four years.²⁷⁶ The prosecutor declined to pursue the more serious charges, however, reportedly because the workers could not provide a copy of the January 10 inspectors’ report indicating whether year-end bonuses were, in fact, owed to workers and, if so, in what amount. Absent these more serious charges, the prosecutor also reportedly argued that he could not pursue a “migration restriction” against the legal representatives of Anthony Fashions to bar them from leaving the country.²⁷⁷ As discussed below, a migration restriction would have greatly increased the chance that workers’ labor court cases, currently dismissed without prejudice for inability to locate the defendants, could proceed. At this writing, the criminal case is still pending on the lesser charge.²⁷⁸

On January 17, 2003, an estimated 150 Anthony Fashions workers went to the Ministry of Labor to request copies of the January 10, 2003, inspection results. They occupied the first floor of the building, while a few of the workers went to the Inspectorate with their lawyer and unsuccessfully asked for the report.²⁷⁹ Riot police reportedly surrounded the building. Later in the afternoon, a delegate from the Human Rights Ombudsman’s Office and Antonio Aguilar Martínez, the associate ombudsman for labor rights, arrived. Aguilar explained to Human Rights Watch, “The police were already there. . . . The ministry had told the police that there were hostages and that [workers] had broken doors, but that was not the case.” Aguilar recounted that he met with the vice-minister of labor, Luis Fernando Avelar, to encourage him to meet with workers. After asserting that this was “a political question” and that the workers just “wanted to give the image that maquilas violate rights, when this was an isolated case,” Avelar reportedly agreed to speak with a group of five workers.²⁸⁰

According to Anthony Fashions workers, the vice-minister told the workers that he would not give them the report, that they “had no right to the inspection results,” and that such documents were never provided.²⁸¹ When they showed him inspection reports on Anthony Fashions and other facilities, he reportedly said he would have to investigate why workers were given those reports, suggesting, according to Aguilar, that the official(s) who did so would face penalties. Aguilar explained that the Human Rights Ombudsman’s Office felt that this was an inappropriate response and that the vice-minister should have given workers the requested documents.²⁸²

Over 320 worker complaints were reportedly filed in 2003 against Anthony Fashions in the labor courts, seeking severance pay, year-end bonuses, unpaid vacations, and, in some cases, salaries due.²⁸³ Almost all have now been discontinuedwithout prejudice, due to the inability to locate the defendants.²⁸⁴ According to the national coordinator of the Unit for the Defense of Labor Rights for National Legal Aid, “The workers can’t find them, much less [can we]. This is the problem with Anthony Fashions. . . . If we can’t find them, . . . the process can’t go forward.”²⁸⁵ To date, workers have not received any of the money they are reportedly owed.²⁸⁶

Not only have workers not received any compensation from Anthony Fashions, but they claim that they are unable to find jobs at other factories, as they are reportedly blacklisted.²⁸⁷ Several workers told Human Rights Watch that Anthony Fashions workers had also been fired from other maquilas, once management learned of their previous employer. One worker asserted, “They don’t hire us in other maquilas for fighting for our rights.”²⁸⁸

Human Rights Watch was unable to find a legal representative of Anthony Fashions in El Salvador with whom to discuss alleged workers’ human rights abuses at the company. After returning from El Salvador, Human Rights Watch unsuccessfully attempted to locate Anthony Iurato at Metrix Computer Cutting, where he was president, in Clifton, New Jersey. After contacting numerous Clifton, New Jersey, municipal offices and New Jersey state agencies, however, Human Rights Watch learned that Metrix Computer Cutting declared Chapter 11 bankruptcy on December 6, 2001, and on August 16, 2002, was granted Chapter 7 bankruptcy.²⁸⁹ The Chapter 11 bankruptcy papers contain Iurato’s home address, to which Human Rights Watch mailed a certified letter on June 30, 2003, with questions regarding the above-described events at Anthony Fashions. Iurato signed for the letter on July 17, 2003. At this writing, we have received no response.