Press Release: Walt Disney Co. refuses to comment on the unlawful one-tenth severance compensation

Mizutani (Shenzhen) Toy Factory Co. Ltd., is a Hong Kong registered enterprise established in 1997, its major orders used to come from Tokyo Disneyland. In June 2015, Mizutani suddenly announced to close its plant in Shenzhen and relocate it to the Philippines. According to China’s Labour Contract Law and Social Insurance Law, Mizutani still owes its 196 employees a total of some 9 million Yuan of social insurance contribution, economic compensation (severance compensation) and housing provident fund and etc. In September 2015, Mizutani workers traveled to Hong Kong to stage a protest and after numerous demanding, Mizutani finally restarted to talk with its workers in March 2016. However, Mizutani offered to settle the dispute with one tenth of compensation which workers are entitled to and workers refused to accept such an unlawful compensation.

Worker Zōu yú

Representatives from Walt Disney Co. met with Worker Empowerment (WE) and Hong Kong Confederation of Trade Unions (HKCTU) “symbolically” in mid July 2015 once only, nothing have been heard from them since then. After then workers, HKCTU, WE and SEIU Workers United Local 50 from the USA repeatedly wrote to ask Walt Dinsey Co. and Tokyo Disneyland to intervene, but both of them declined to reply. The report, “Suppliers Escaped: Disney Abandoned Mizutani Toy Makers Viciously” is jointly published by WE and HKCTU, to investigate and discuss the labour rights violations in Mizutani and how Walt Disney Co. betrays its frontline workers. The major findings are listed as follows:

1. By underpaying social insurance contribution, severance compensation and unlawfully dismissing workers, Mizutani has violated China’s Labour Contract Law and Social Insurance Law.

2. The livelihood of 196 Mizutani workers has been severely affected by the sudden factory closure. Most of these middle-aged workers have served in Mizutani between 10 and 20 years and seeking new jobs would be a big challenge for them. Missing social insurance contribution would leave them no pension and this would create serious trouble when they retire.

3. Walt Disney Co.’s International Labour Standards Programme requires all its suppliers to follow local laws, they are specifically required not to threaten workers and respect freedom of association (including rights to organize and collective bargaining). However, it has ignored Mizutani’s grave violations of the above-mentioned labour rights. Those include:

a) Violations of Chinese labour legislations: Mizutani is moving to the Philippines and is financially sound. Yet, it deliberately violates Labour Contract Law and Social Insurance law and owes workers some 9 million Yuan.
Rejection of collective negotiation: since the announcement of the closure of the factory, workers had requested to negotiate with Mizutani but it refused.

b) Denial of workers’ rights to organize: out of desperate, workers launched a strike and road blockage. They were violently taken away by riot police and 23 workers were detained.
c) Refusal of paying severance compensation and threatening workers to “voluntarily resign”: when it announced to close its Shenzhen plant in June 2015, it forced workers to sign “voluntary resignation agreements”

d) Walt Disney Co. has been informed of these labour rights violations and the dispute at Mizutani through formal complaint and media exposure, yet it has only reacted to this dispute through emails, phone calls and a non-constructive meeting. Until now, no formal investigation has been seen and no solution has been provided to these violations. 

Walt Disney Co. claims that its labour standards are in line with the standards of International Labour Organization. Yet the Mizutani case illustrates that Walt Disney Co. does not respect China’s labour legislations and freedom of association, a fundamental labour right. Workers at Mizutani has repeatedly sought help from Walt Disney Co. and even delivered a letter to its Hong Kong office in person. Furthermore, labour organizations also reached out to ask for its intervention, but Walt Disney Co. distanced itself from the dispute. Each year, Walt Disney Co. receives a large sum of revenue from Tokyo Disneyland, but it turns a blind eye to the SOS signal from the 196 workers, who have worked at its supplier for years. In short, the so-called corporate social responsibility of Walt Disney Co. is simply an empty promise.

Apart from this report, WE and HKCTU will launch a phone-call campaign in Hong Kong, the USA, Japan and the Philippines, aiming to expose the cruel reality that Walt Disney Co., though claiming to create happiness and dreams for children, is an accomplice when it comes to labour exploitation.

A full report, Mizutani workers’ photos and a worker’s story are included in this press release.

Our recommendations:

1. Disney must investigate the case and fulfil its commitment to workers’ rights across the supply chain and help the Mizutani workers reclaim their missing compensation in the wake of the company’s abrupt factory closure in June 2015.

2. Mizutani unilaterally terminated workers’ labour contracts. By law, it should pay double severance compensation and Disney should pay the missing part of the compensation, which should be calculated by wages payable.

3. Mizutani must pay the missing premiums of workers’ social insurance and housing provident fund since their dates of commencement.

4. Disney should urge Mizutani to compensate workers as recommended above. If Mizutani fails to do so, Disney should bear the responsibility of failing to supervise its supplier attentively and compensate workers directly.

Released by: Worker Empowerment, Hong Kong Confederation of Trade Unions