Workers in Thailand making F&F jeans for Tesco ‘caught in forced labour’ | Tesco | Popgen Tech
A Guardian investigation revealed that Burmese workers making F+F jeans for Tesco in Thailand were trapped in what was effectively forced labour, working 99 hours a week for illegally low pay in appalling conditions.
In the UK, Tesco is facing a landmark lawsuit from 130 former VK ( VKG ) garment factory workers who are suing them for alleged negligence and unjust enrichment. Between 2017 and 2020, the workers produced jeans, denim jackets and other clothing for adults and children for Tesco’s Thailand branch.
Tesco said the clothes were only sold in the Thai market, although the Guardian has seen images of labels written in English on clothes believed to be made there. Profits from sales in Thailand flowed back to the UK.
It is believed to be the first time a British company has been threatened with legal action in the English courts over a foreign garment factory in its supply chain that it does not own.
The factory is located in Mae Sot, a town on the Myanmar border that relies on migrant labor from Burma and has earned a reputation as a “wild west” for workers’ rights over the past decade. The lawsuit alleges that Tesco should have known that the area was notorious for exploitation.
The Guardian investigated the allegations of former factory workers and interviewed 21 of them in Mae Sot. They described:
You are paid just £3 a day for working from 8am to 11pm with one day off a month.
Detailed records kept by managers seen by the Guardian show that most workers on their lines were paid less than £4 a day and only based on how much they could earn. The minimum wage in Thailand back then was £7 for an 8 hour day.
At least once a month, they had to work all night for 24 hours to fulfill large orders for food and food, and they were so exhausted that they fell asleep at the sewing tables.
Some reported serious injuries; one man described cutting his arm while carrying a dangerously heavy machine, requiring 13 stitches. Another said he lost the tip of his index finger after cutting it on a button machine while making F&F denim jackets.
Many said they were yelled at and threatened by factory managers if they didn’t continue to work overtime and complete assigned tasks.
More than a dozen workers interviewed said the factory opened bank accounts for them, then confiscated their cards and passwords so they could make it appear they were being paid minimum wage and paid much less in cash.
Most of the workers relied on the VKG for immigration status, and some said their immigration papers were held at the factory, leaving them in debt.
The factory premises in the complex consisted of overcrowded rooms with concrete floors for sleeping and dirty pond water in buckets for washing. Workers say most of the rooms had no doors, only curtains.
Tesco said that protecting the rights of everyone in its supply chain was absolutely essential and that if it had discovered such serious problems at the time, it would have ended its relationship with VKG immediately.
Tesco began using the factory in 2017 despite its own initial inspection, which found areas of non-compliance that experts said should have been of concern.
Tesco was not involved in the day-to-day running of the factory, other than setting and checking standards and placing orders. However, in a ground-breaking move, workers in Tesco’s supply chain are trying to take Tesco to task for allegedly failing to protect them.
Tesco made £2.2 billion in profits in 2020, the last year its Thai business used VKG.
Win Win Maya, 53, who said she was paid around £3 a day to sweep scraps of cloth from the factory, said: “They have taken that profit from us. They already have it, but we don’t have anything.”
Labor experts say big clothing brands like F&F deliberately outsource garment production and factory audits to avoid liability and reputational damage while keeping prices low and protecting profits.
The case brought by Lee Day challenges the outsourcing structure. Oliver Holland, a lawyer for the workers, said: “Tesco is one of the UK’s most profitable companies and our clients claim that they are making huge profits by outsourcing production, by paying workers very low wages, overworking hours and terrible conditions.
“It is alleged that this is all done purely for the profit of companies in the UK and so that consumers can buy very cheap clothes. Clothing that costs as little as food-to-food clothing is likely to cause harm somewhere in the supply chain, and that’s what we saw in this case.”
The lawsuit has been filed in the high court and is expected to be filed in the new year. Ek Chai, which was the Thai arm of Tesco’s business until it was sold to Charoen Pokphand Group in December 2020, is also facing legal action.
The lawsuit was also brought by the auditor – the Intertek company. Lawyers believe that this is the first case when a social auditor is involved in this kind of legal proceedings.
Intertek Thailand regularly inspected the factory but found no major problems until July 2020, when workers said they came forward about their conditions. The workers said the factory had been warned about the inspections and that VKG managers had trained them to lie.
A damning audit report found that nine out of 26 workers interviewed said they were not paid the daily or minimum wage, that they worked on Sundays and were afraid to talk about it.
It also said one worker reported his ATM card had been taken and concluded he could not verify whether the factory was complying with hours, wages and benefits requirements because of discrepancies in VKG’s records.
Tesco received an audit package in August 2020, but VKG remained a supplier until it sold Ek-Chai in December 2020. Tesco said it immediately carried out an investigation and decided to withdraw from the supplier, but failed to do so before the business was sold.
In August 2020, 136 VKG workers were fired, which they said was after they asked for higher pay and conditions following the audit. They tried to get compensation directly from the factory.
In October of the same year, the workers filed a complaint with the Department of Labor and Social Security of Thailand. They claimed they were entitled to back wages consisting of two years’ full salary; payment of work on holidays; payment of overtime; vacation pay and weekly rest. But the agency ordered to pay only severance pay and early retirement benefits.
The case was then referred to the Thai Labor Court, which reached the same conclusion. Nothing has been paid and the workers are due to appeal soon. The majority is now pinning their hopes on the English case.
Thai labor experts and lawyers believe the Thai case failed in part because VKG relied on audit reports prepared by Intertek, which they say are insufficient, as VKG was reported to be in compliance with labor laws until 2020.
David Welsh, head of the Thailand Solidarity Center, said the courts tend to side with employers and that Mae Sot is “pretty much the Wild West of the global supply chain”.
Welsh said Mae Sot was characterized by weak rule of law, poor wages and working conditions, lack of access to unions and a migrant workforce “with little legal protection”.
Charit Mezit, a lawyer representing workers in the Thai courts, has been fighting labor cases in the courts for 42 years. He said: “The authorities know what is going on but are turning a blind eye. The courts in Thailand need to step up and do more. What I’ve seen for a long time is employers abusing the system.”
A Tesco spokesman said: “Protecting the rights of everyone who works in our supply chain is absolutely essential to the way we do business. To meet our high human rights standards, we have a robust audit process in place across our supply chain and in the communities where we operate.
“Any risk of human rights abuses is completely unacceptable, but in the very rare cases where they do come to light, we take great care to ensure that they are dealt with appropriately and that workers’ rights and freedoms are respected.
“The allegations made in this report are incredibly serious, and if we had discovered similar issues at the time they occurred, we would have ended our relationship with this supplier immediately.
“We understand that the Thai Labor Court has awarded compensation to those involved and we will continue to call on the supplier to compensate the employees for any wages they are owed.”
Sirikul Tatiyawongpaibul, managing director of VKG, called the allegations “hearsay” and said they had to be presented in court and could not be commented on given the ongoing case in Thailand’s labor courts.
She said: “The company’s rules and regulations are in accordance with Thai labor laws, and the employment and working conditions are in accordance with the terms and conditions set by the Department of Labor and Social Security and customers … the company has dealt with the facts and has no plans to stop operations. It is necessary for the company to demand justice in the Thai legal process.”
An Intertek spokesperson said: “As a responsible company, we take the issues raised in your correspondence very seriously.
“We also note that these matters are currently the subject of Thai and English legal proceedings and therefore we cannot comment while these proceedings are ongoing.”