Thai Garment Workers Win Battle, But Global War Against Wage Theft Continues

In a landmark victory in the campaign against wage theft in the textile-apparel industry, American lingerie giant Victoria's Secret has had to cough up a US$8.3 million compensation settlement for the 1,388 workers fired without notice in March 2021 at its supplier factory in Thailand.

Long Story, Cut Short
  • This was the largest wage theft reportedly seen at an individual garment factory.
  • The backdrop to this case was typical of the hundreds of wage theft cases that have been documented since the start of the COVID-19 pandemic.
  • The US$8.3 million provided by Victoria’s Secret is the most any brand has ever contributed to help resolve a wage theft case.
A total of 1,388 workers were fired without notice in March 2021 at the Brilliant Alliance Thai Global (BAT) factory, which supplied lingerie brands Victoria’s Secret, Torrid and Lane Bryant, suddenly closed shop, using the pandemic and a lack of orders as ostensible reasons.
Fired at Will A total of 1,388 workers were fired without notice in March 2021 at the Brilliant Alliance Thai Global (BAT) factory, which supplied lingerie brands Victoria’s Secret, Torrid and Lane Bryant, suddenly closed shop, using the pandemic and a lack of orders as ostensible reasons. IndustriALL

The US$8.3 million compensation settlement by American lingerie giant Victoria's Secret for 1,388 Thai workers who were fired in 2021 without their legally mandated severance has been a landmark victory in the campaign against wage theft.

This was the largest wage theft reportedly seen at an individual garment factory, and the US$8.3 million provided by Victoria’s Secret is also the most any brand has ever contributed to help resolve a wage theft case.

The backdrop to this case was typical of the hundreds of wage theft cases that have been documented since the start of the COVID-19 pandemic. In this instance, 1,388 workers were fired without notice in March 2021 at the Brilliant Alliance Thai Global (BAT) factory, which supplied lingerie brands Victoria’s Secret, Torrid and Lane Bryant, suddenly closed shop, using the pandemic and a lack of orders as ostensible reasons.

The Thai labour inspector ordered the company to pay THB 242million (US$7.4 million) for violating the country’s labour laws. Hong Kong-based Clover Group International, which owns Brilliant Alliance, offered to pay workers in instalments over a 10-year period. When this was rejected by the Triumph International Thailand Labour Union (TITLU), the company went into liquidation.

As pressure mounted on both Clover and Victoria's Secret, the latter finally gave in and agreed to pay off the entire amount. Technically, Clover agreed to pay the workers and Victoria’s Secret committed to finance the payments, via a loan to Clover. Sycamore Partners, the parent company of Lane Bryant and Torrid, did not contribute to the compensation package. David Welsh, Thailand country director of the Solidarity Center summed up best: “Victoria’s Secret should be very proud of what it has done here. The people who run Sycamore Partners should hang their heads in shame.”

“Our organisation has documented hundreds of cases of wage theft in the apparel supply chain,” said Scott Nova, Executive Director of the Worker Rights Consortium (WRC). “This was the largest theft—and now the most back pay—we’ve ever seen at an individual garment factory. The $8.3 million provided by Victoria’s Secret is also the most any brand has ever contributed to help resolve a wage theft case.”

The report 'Hunger in the Apparel Supply Chain: Survey findings on workers’ access to nutrition during COVID-19' by the Worker Rights Consortium found an alarming pattern: garment workers’ declining incomes are leading to widespread hunger among workers and their families, as they are increasingly unable to obtain adequate food and nutrition.
Worker Rights The report 'Hunger in the Apparel Supply Chain: Survey findings on workers’ access to nutrition during COVID-19' by the Worker Rights Consortium found an alarming pattern: garment workers’ declining incomes are leading to widespread hunger among workers and their families, as they are increasingly unable to obtain adequate food and nutrition. ILO Asia-Pacific / Flickr CC 2.0

The problem of wage theft in apparel-producing countries

In July 2021, a report published by the Clean Clothes Campaign pointed out that in the first 13months of the COVID-19 pandemic, garment workers globally lost US$11.85 billion in income. The report was titled Still Un(der)paid.

The runup to this had also been well documented. A report, Hunger in the Apparel Supply Chain: Survey findings on workers’ access to nutrition during COVID-19 by the WRC found an alarming pattern: garment workers’ declining incomes are leading to widespread hunger among workers and their families, as they are increasingly unable to obtain adequate food and nutrition.

In this context, the PayYourWorkers campaign coalition has repeatedly laid bare how easy it would be for brands to step in and ameliorate matters for garment workers on the brink of disaster: "It would take no more than ten cents per t-shirt for apparel brands to ensure that garment workers, who have earned them billions in profits, receive the economic relief necessary to survive the crisis and strengthen unemployment protections for the future."

The campaign has been urging brands and retailers to sign a legally binding agreement to:

  • Pay the workers who make their clothes their full wages for the duration of the pandemic;
  • Make sure workers are never again left penniless if their factory goes bankrupt, by signing onto a negotiated severance guarantee fund; and
  • Protect workers’ right to organise and bargain collectively.

Campaigns, in fact, have been afoot since almost the beginning of the pandemic, but there has been very little headway. The 2021 Remake Fashion Accountability Report released towards the end of last year found that only 8% of the brands it surveyed could show that at least some of their garment makers earned a living wage. The report said: "No fashion brand or retailer pays a majority of its workers a living wage. In most cases, companies do not appear to pay any of the workers, even in their Tier-1 factories, a living wage. We saw no real investments in worker-driven wellbeing efforts such as subsidised transportation or housing. Instead, most corporate wellbeing programs entailed one-off “empowerment” trainings that are a greenwashing exercise."

The PayYourWorkers campaign coalition has repeatedly laid bare how easy it would be for brands to step in and ameliorate matters for garment workers on the brink of disaster: "It would take no more than ten cents per t-shirt for apparel brands to ensure that garment workers, who have earned them billions in profits, receive the economic relief necessary to survive the crisis and strengthen unemployment protections for the future."
Unpaid Pandemic The PayYourWorkers campaign coalition has repeatedly laid bare how easy it would be for brands to step in and ameliorate matters for garment workers on the brink of disaster: "It would take no more than ten cents per t-shirt for apparel brands to ensure that garment workers, who have earned them billions in profits, receive the economic relief necessary to survive the crisis and strengthen unemployment protections for the future." UN Women / Flickr CC 2.0

The way out of this mess

Earlier this May, the New Conversations Project (NCP) at ILR School, Cornell University called for negotiations towards a fair and reliable alternative system that can deal with the costs for workers of coming dislocations, both expected and unexpected.

The paper, ‘Security for Apparel Workers: Alternative Models', was the outcome of and an evaluation carried out at the request of IndustriALL, the global union that represents apparel workers. Jason Judd, Executive Director of the NCP, underlined: “COVID was a stress test for systems—private ones run by fashion brands and public ones built by national governments—to protect workers in the global apparel industry. Most were found wanting."

The researchers identified elements from previous efforts that can be combined to create such a system. The paper said: "These elements are familiar to IndustriALL affiliates and, importantly, increasingly familiar to buyers and suppliers. The most important of these elements can be found in the seafarer’s agreement with vessel owners. Its appeal to and the parallels with the needs of apparel workers are obvious: the twenty-year old IBF [International Bargaining Forum] collective bargaining agreement is a global framework for national- and company- level agreements that includes binding and detailed obligations on lead firms and their managers/intermediaries.

“The terms include compensation levels across many countries and direct funding from vessel owners for a centrally administered ITF [International Transport Workers Federation] worker welfare fund. The arrangement includes extensive technical assistance from the ILO, including support for a global minimum wage-setting process, and regular re-openings of the agreement to update terms. This is not a wish-list but a list of must-haves that—together with the enabling conditions described above—an agreement must include in order to meet the goals of global unions including IndustriALL and its affiliates.”

The authors have recommended:

  • A global severance fund should be established with money provided as a result of an agreement between global unions and global brands.
  • A global governing body should be established for unions, suppliers and fashion brands with a small number of seats (voting or observing) reserved for national governments, a representative of an international financial institution, and NGOs which are active in the apparel supply chain sphere.
  • National level bodies to monitor the process of establishing, improving national social security systems, educating workers about the fund and its purpose, and, potentially, a role in disbursing funds nationally.
  • An “inspection function” that allows union participants across dozens of countries, supported by the global fund, to verify compliance with the terms of the agreement.

Whether such recommendations will cut ice with brands and retailers is a matter of speculation. But the Brilliant Alliance settlement by Victoria's Secret in the backdrop of supply chain traceability/transparency gathering momentum, it remains to be seen how long brands and retailers can turn a deaf ear to the clamour for change.

Meanwhile, the NCP paper had also noted: "In some of apparel’s favourite sourcing locations—Bangladesh, Cambodia, India, Indonesia, and so on—the national social protection systems are inadequate." Country laws are a different ballgame altogether.

 
 
  • Dated posted: May 26, 2022
  • Last modified: May 26, 2022