Sportswear giant Nike has agreed to pay $1m (£650,000) in compensation to about 4,500 workers at a factory in Indonesia over unpaid overtime. The settlement follows an 11-month dispute between the company and the Serikat Pekerja National (SPN) trade union.
The union claimed that 593,468 hours of overtime went unpaid over the past two years at the PT Nikomas plant in Serang, Banten. SPN national chairman Bambang Wirahyoso said the deal could 'send shock waves through the Indonesian labour movement' and set a precedent for other factories.
Nike stated it 'commends the factory on their action plan and efforts to correct inadequacies in current policies designed to protect the rights of workers'. The company also pledged to offer training programmes and set up a task force to address grievances.
Despite the settlement, the union said workers were owed much more, noting that forced unpaid overtime had allegedly been occurring for 18 years. Indonesian law, however, only allows redress for the past two years.
BBC Jakarta correspondent Karishma Vaswani said the symbolic value of the compensation was significant, and that the case may serve as a warning to other multinational companies operating in Indonesia. The unions have indicated they plan to take similar action against Adidas and Puma.
