More than £4bn in wages has been withheld from millions of garment workers making clothes for Western clothing brands over the past 15 years, according to new estimates of redundancy ‘wage theft’ in the global fashion industry. ing.
of Labor Rights Consortium Work Rights Research Group (WRC) says garment workers are being denied billions of pounds in statutory severance pay they are entitled to after being made redundant or losing their jobs due to brands canceling orders or closing factories. Stated.
Severance pay is financial compensation that a worker is legally entitled to if their employment is terminated or their business is closed.
“This may not make headlines, but when a worker loses their job and is denied the retirement benefits they have worked so hard to earn, it has a devastating impact on them and their families,” the WRC said. Executive Director Scott Nova said.
Nova says that the problem of retirement pension ‘theft’ is a ‘hidden crime’ in the global fashion industry that receives little attention despite costing millions of workers around the world. He said no.
“Apparel brands have known about retirement theft for years but have done nothing to stop it. Their voluntary labor standards allow them to do so with impunity. I was able to ignore the problem,” Nova said.
WRC is taking up an ongoing case involving workers at a factory manufacturing Disney products in El Salvador, alleging that 250 workers must be paid a total of £1.4 million in severance pay. For some, their share of the total is equivalent to more than two years’ worth of wages.
Style Avenue, the factory that made the brand’s sportswear, ceased production in February 2023 and closed in May, leaving hundreds of workers unemployed.
Disney had licensed Outerstaff, an American designer and manufacturer of licensed children’s sports clothing, to manufacture Disney children’s clothing. Clothing was made at the factory and co-branded with the logos of US National Football League (NFL) and National Basketball Association (NBA) teams.
According to WRC, one of the factory owners temporarily Jailed for failing to pay medical insurance premiums and pension insurance premiums For employees. WRC said Style Avenue employees were paid around £45, less than 1% of their statutory entitlement, in lieu of back pay.
The WRC said that by not paying workers in the past, Outerstaff has become an outcast in the industry, and that companies that make clothing for certain brands, including the NFL and NBA, are subject to forced labor standards and are subject to stolen and stolen clothing. The company claims that it is obligated to repay severance pay. pay.
In response to WRC’s claims, Outerstaff argues that WRC’s analysis is as follows. factually inaccurate and deny the obligation to pay What about retirement allowance? However, when the Guardian contacted Outerstaff for comment, the company confirmed it would pay nearly $1 million.
In a statement to the Guardian, Outerstaff said: “We take workers’ rights very seriously and always have.” We manage a structured global compliance program that outlines and requires a code of conduct for all of our suppliers. At this time, even though we feel strongly that we have met all licensing requirements, Outerstuff is working on a systematic plan to get her nearly $1 million in funding to workers as quickly as possible. Masu. ”
Nova said, “In addition to Outer Stuff, there’s Disney with $89 billion in annual revenue, the NFL and its teams with $18 billion, and the NBA with $11 billion.If the combined revenue is $120 billion, these brands… You would think they could scrape together $1.8 million and pay the workers who sew the dresses the money they earned.”
Disney, the National Football League, and the NBA have also been contacted by the WRC to intervene in the dispute. The Guardian did not respond to requests for comment.
One former employee of the factory said he had worked at Style Avenue for 12 years, but was now unemployed, without severance pay and facing extreme poverty.
“They never told us the factory was going to close, but they knew they would have to pay us severance if it did,” she said. “We owed a total of $7,700. The factory said they would pay us 50% of the amount owed, but they never did. We have debts to pay that we can’t pay and are just accumulating interest. I had to borrow money for electricity and water. I couldn’t even buy clothes and shoes for my children.”
Another worker, who had worked at Style Avenue for more than 10 years, said when he went to the Department of Labor to calculate his severance pay after the factory closed, he was told he was owed $12,000 (£9,500). said.
“My monthly salary at the factory was $360 (£282), but it wasn’t enough to cover my living expenses. Not getting any severance pay had a big impact. Our house has a tin roof, so there’s no water. I come in, but I don’t have the money to fix it. I can’t buy food or get medicine for my stomach infection.”
The WRC has revealed that there has been a spike in redundancy ‘theft’ since the high street closed due to coronavirus, leading to clothing brands canceling millions of pounds worth of clothing orders from overseas suppliers. It is said that As a result, hundreds of thousands of garment workers lost their jobs as factories closed and brands continued to cancel or reduce orders in an effort to recoup losses.
Immediately after the pandemic, a WRC investigation found that workers had been denied nearly $1 billion in severance and other unpaid wages from 2020 to 2022.
In 2022, a coalition of more than 200 rights organizations will sign a binding agreement with trade unions to create a global retirement fund to support workers who have lost their jobs and been underpaid. It asked brands to sign an agreement.
