Five former employees at the Gucci Store in Guangdong Province have just fired accusations at the company over inhuman working conditions. In an open letter, the employees disclosed that the company imposed about 100 regulations on employee behavior. Many of these rules were considered harsh and inappropriate. For example, associates were required to ask permission before getting a drink or using the toilet, and they were not allowed to spend more than five minutes in the restroom.
The employees also protested about working long hours without pay. Associates had to stand for more than 14 hours a day. After 12 hours of customer service, the employees still had to stay behind to take inventory. This even applied to pregnant employees, which eventually lead two employees to have abortions and leave without compensation. Other employees developed occupational diseases, such as stomach and urinary illnesses, from these working conditions. The employees also never received their discount cards because they were told my management that they would be too poor to afford the merchandise anyway.
A former Gucci Manager at Beijing’s office admitted that the mistreatment of employees commonly occurs in mainland stores. But these problems are not associated with the brand, but instead with the mismanagement of Gucci’s China branch.
Gucci China says that it is currently investigating the claims and will deal with the problems as soon as possible. But reportedly, Gucci’s HR has already refused the employee’s salary money in arrears because the two sides cannot agree how to calculate the overtime pay. This has led the employees to seek labor arbitration against Gucci, with each employee demanding an average of 100,000 yuan, or $15,550, for overtime wages for the past two years.
Lin Xinqi, a professor at the School of Labor and Human Resources at Renmin University says that labor disputes have increase with China’s booming economy. In the past few years, there already have been several unfair employment related uprisings in China. Just earlier this year, Apple was accused by dozens of Chinese environmental groups for neglecting safety standards and labor abuses among its mainland subcontractors. If not dealt with properly, this predicament can pose as a threat to Gucci’s image in China.
This situation offers an interesting insight into luxury’s labor challenge. Many luxury brands claim that they face a lot of difficultly when it comes to hiring suitable managers and associates. Luxury brands are expanding rapidly in China, but they need to keep in mind the quality of their services and the way they treat and manage their employees. It’s a basic management principle that if employees are happy with the way they are treated and managed at work, they in turn will perform better and serve customers better. Content employees will also decrease the rate of employee turnover, which would save companies the time, trouble, and money of the hiring process. And in China, foreign brands must remember to consider the culture and social differences when managing their workers.
