Dispatches Investigation

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An investigation by Channel 4’s Dispatches has revealed that UK-based textile factories that have been supplying clothing to leading high-street brands, including the likes of River Island and New Look, have been paying workers a pittance of around £3 an hour.

That’s less than half of the legal minimum wage, which is currently £7.20 an hour for workers aged 25 and over.

Deana Bates, Solicitor in Employment Law, takes a closer look at the investigation.

Best known for offering customers access to cheap and fast fashion, online retailers Boohoo and Missguided are also among the retailers receiving products from these factories.

“If we pay everyone £10 or £6 then we will make a loss”

Posing as a worker, an undercover reporter joined the ranks of Fashion Square Ltd, which has been labelling clothing for River Island. Whilst discussing his wages with his boss, including the rate of £7.20 per hour that he usually received, the reporter was told:

“You won’t get that here. That’s what I’m telling you. We don’t get paid much for our clothes, and we need to compete with China and Bangladesh. They can get it cheap there. How will they get it made cheaper here? If we pay everyone £10 or £6 then we will make a loss.”

According to Dispatches, the reporter earned around £3 an hour whilst working in the factory, performing tasks such as labelling River Island products.

The reporter had no better luck securing anything close to the legal minimum wage whilst working in another factory that produced clothing for New Look, and was only able to earn a measly £3.50 an hour.

Moving on to a third textile factory, United Creations, the reporter was paid a disheartening £3.25 an hour to package clothing for Boohoo and work on clothing for Missguided.

Cutting all ties with Fashion Square Ltd and United Creations

Speaking to Dispatches, River Island said that Fashion Square Ltd had been taken off its approved factory list in February 2016, and added:

“Suppliers were informed not to use this factory for any further orders. Subcontracting without River Island’s approval is a serious breach of our terms and conditions.”

New Look revealed that one of its suppliers had subcontracted the factory without its knowledge, and that it was “extremely concerned” by the results of the Dispatches investigation. Regular audits are conducted on its suppliers, according to New Look.

Boohoo stated that it didn’t know that United Creations was working for one of its suppliers, adding that it would “not tolerate suppliers paying less than the national minimum wage” and that a member of its compliance team had visited the factory recently.

Responding to the Dispatches programme, Missguided said:

“We take the allegations…very seriously and demand the highest standards of safety, working conditions and pay from all of our suppliers and subcontractors.”

“We are committed to achieving the standards set by the Ethical Trading Initiative and conduct regular audits ad spot-checks of our supply chain. We have begun an internal investigation…we will also ensure those matters are addressed urgently by the supplier in the best interests of the workers.”

Both Fashion Square Ltd and United Creations rejected the claims that anyone at their factories was earning less than the national minimum wage.

Deana comments:

“Paying workers anything less than the national minimum wage is completely unacceptable, as is making excuses that having to pay the legal requirement prevents a business from making a profit.”

“When using a variety of subcontractors and suppliers, it’s essential for employers – especially large chains like River Island – to take an active role in ensuring that they are complying with the law. This could involve, for example, conducting regular audits and even speaking to workers in person about their working conditions.”

“Any non-compliance can have serious consequences on the reputation of their businesses and the well-being of their staff. In addition to this, companies can face fines of up to £20,000.00 per worker for non-payment of the national minimum wage.”

“It can often be difficult for workers to come forward in situations like this as they might be afraid of losing their job, but the law is there to protect them. If you are not being paid at least the national minimum wage and are not sure what action you can take, please get in touch with me or another member of our team of Employment Law solicitors as soon as possible.”

Written by Deana Bates.

For more information on employment law and the services offered by Simpson Millar, please call:

0808 129 3304

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