JAKARTA, Indonesia (AP) - Sporting-goods giant Nike Inc. says a decision to give Indonesian workers $1 million in unpaid overtime demonstrates a commitment to fighting workplace misconduct.
A national trade union representing nearly 4,500 employees from the PT Nikomas plant, which makes shoes for Nike, said they worked more than 600,000 hours over a two-year period without pay.
After 11 months of negotiations, the plant in Banten province agreed to reimburse the workers.
"Nike commends the factory," said Mary Remuzzi, a spokeswoman for the Beaverton, Oregon-based company, saying the $1 million settlement demonstrate how seriously they are taking allegations of workplace misconduct.
The money will be distributed early next month.
Nike, which came under heavy criticism a decade ago for its use of foreign sweatshops and child labor, has taken steps since then to improve conditions at its 1,000 overseas factories. More than 40 are under contract in Indonesia.
Bambang Wirahyoso, the union's chairman, said he hopes the case will set a precedent in a country where factory employees often work seven day weeks without overtime or proper benefits.
"This has the potential to send shockwaves through the Indonesian labor movement," Wirahyoso said in a statement, adding that his union is gearing up to fight for other workers. "We have only just begun."
Jim Keady, director of Educating for Justice, a U.S.-based group that has been working with Indonesian Nike factory workers for more than a decade, said he was pleased with the latest development.