Mexico: Harmon Hall-08/Mexico

Date Filed
14 Mar 2014
Status
Closed
Phase
Compliance
Country
Peru

Case Tracker

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

Complaint Overview

Complainant

Former Teacher

Concerns

Withheld benefits, compensation

Cross-Cutting Issues
Labor

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.

In March 2014, a former teacher of Harmon Hall Puerto Vallarta School lodged a complaint with CAO. The complainant argues that he was a full time employee (“nomina”) as opposed to being self-employed (“asimilados”) as Harmon Hall claimed.  As such, the complainant contends that Harmon Hall owes him benefits withheld for his two years’ service with the school.   

CAO Action

CAO found the complaint eligible in March 2014 and conducted an assessment of the issues with the relevant parties.  The parties did not agree to participate in a voluntary dispute resolution process and in accordance with CAO's Operational Guidelines, the case was transferred to CAO's Compliance function.  

For the purpose of the compliance appraisal, Harmon Hall complaints 02-06 were merged with complaint 08. 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)
    Harmon Hall-08 Assessment Report
    May 28, 2014
    English
    Harmon Hall-08 Assessment Report
    Harmon Hall-08_ IFC Formal Response
    May 14, 2014
    English
    Harmon Hall-08_ IFC Formal Response
  • Appraisal Report(s)
    Compliance Appraisal of IFC investment
    Apr 08, 2015
    English
    Compliance Appraisal of IFC investment