Mexico: Harmon Hall-03-06/Mexico

Date Filed
14 Oct 2013
Status
Closed
Phase
Compliance
Country
Mexico

Case Tracker

Eligibility
Eligibility
Assessment
Transferred
Assessment
Dispute Resolution
Mediation
Monitoring
Closed
Compliance
Appraisal
Closed
CURRENT Status
Appraisal (COMPLIANCE)
Closed

Complaint Overview

Complainant

Current and Former Employees

Concerns

Unfair treatment, lack of management engagement, poor management systems and withheld benefits

Cross-Cutting Issues
Labor Land Loss of Livelihoods

Project Information

Region
Latin America & the Caribbean
Institution
IFC
Name & Number
Harmon Hall 29753
Company
Harmon Hall Holding, S.A. de C.V.
Sector
Health and Education
Department
Other
Category
B
Commitment

$7.9 million equity

Synopsis

Complaint

Harmon Hall is a large English language school chain in Mexico, with a network of 110 English schools in 63 cities and over 40,000 students in the entire system. Harmon Hall also has two K-12 schools and plans to grow this business line. The International Finance Corporation (IFC) provides Harmon Hall with an equity investment that consists of two components: (i) the purchase of a selling shareholder’s shares and (ii) a capital increase in Harmon Hall to finance the expansion plans of the company over a period of 18 months. IFC will provide a $7.9 million equity investment. 

On October 14, 19, 22 and November 6, 2013, CAO received four complaints regarding Harmon Hall: 

 Harmon Hall-03/Puerto Vallarta: A current teacher at Harmon Hall lodged the complaint with CAO. The complainant raised concerns about fair treatment of teachers, inadequate wages and lack of compensation for extensive working hours. The complaint also alleged that several of the agreements made in response to the first complaint were not being implemented at the school.

• Harmon Hall-04/Puerto Vallarta: The complaint was filed by a current sales representative at Harmon Hall. The complainant raised concerns about withheld compensation and changes made to work schedules without prior notification or consultation.

• Harmon Hall-05/Puerto Vallarta: The complaint was filed by a current teacher. The complainant raised concerns about inadequate wages and lack of compensation for extensive working hours. Furthermore, the complaint also alleged that several of the agreements made in response to the first complaint were not being implemented at the school.

• Harmon Hall-06/Merida Campestre: A former teacher at Harmon Hall lodged the complaint with CAO. The complainant raised concerns about general unfair treatment and non-payment of social security. 

CAO Action

CAO had determined the Harmon Hall-02 complaint eligible in October 2013 and initiated an assessment to explore options for addressing the issues by the complainant.  This assessment was conducted jointly with the assessment on Harmon Hall complaints 03 – 06, that were determined eligible in November 2013. However, as the complainants and Harmon Hall could not agree to engage in a collaborative dispute resolution process, CAO concluded the assessment of the complaints and the cases were transferred to CAO's Compliance function for appraisal, as per CAO’s Operational Guidelines.

For the purpose of the compliance appraisal, Harmon Hall complaints 02-06 were merged with complaint 08, that was deemed eligible in March 2014. CAO completed a compliance appraisal with regard to the Harmon Hall 02-06 and 08 complaints in April 2015. On the basis of this appraisal, CAO concluded that absent aggravating circumstances, disputes between an employer and individual employees around issues of pay and benefits do not raise substantial concerns regarding the E&S outcomes of an IFC investment such that would merit a CAO compliance investigation. While CAO has identified questions as to IFC’s appraisal and supervision of its investment in the company, CAO also notes that IFC is supervising this investment with a focus on the implementation of Performance Standard 2 (Labor and Working Conditions). Given the nature of the complaints, and considering IFC’s ongoing engagement with the company in relation to the implementation of Performance Standard 2, CAO found that a compliance investigation was not the appropriate response in this instance. As a result, in accordance with its Operational Guidelines, CAO has decided to close this case.

Status

CAO's appraisal report, providing a full description of CAO's decision with regard to this case, is available under "View Documents" below. As of April 13, 2015, CAO has closed the case with no further action.

Status as of April 13, 2015

 

Case Documents

  • Dispute Resolution

    Assessment Report(s)
    CAO Assessment Report
    Mar 18, 2014
    English
    CAO Assessment Report
    CAO Assessment Report
    Mar 18, 2014
    Spanish
    CAO Assessment Report
  • Audit Report(s)
    Compliance Appraisal of IFC investment
    Apr 08, 2015
    English
    Compliance Appraisal of IFC investment