The government should consider enforcing an embargo on goods made in factories that fail to pay workers the minimum wage, director of labour market enforcement Sir David Metcalf has said.
Speaking to a parliamentary inquiry into the recommendations of the Matthew Taylor review into zero-hours contracts, Metcalf cited the Leicester clothing manufacturing trade as an example of a place where non-compliance with employment law was “rife”.
Metcalf said if HMRC imposed an embargo on goods from factories that did not pay correct wages, retailers would wonder, “where’s my fast fashion, I need these things [for] the shop right now”, giving them a strong incentive to ensure they only operate with compliant supply chains.
Metcalf attended a garment trade summit in Leicester earlier this month. He noted retailers such as Next and Asos are “really very worried because they think they may get tarred with the non-compliance brush”, adding that the summit was a good example of a “potentially fruitful” effort between retailers, the government and local authorities to address the issue.
However, he said the UK should consider making the major companies at the head of the supply chain jointly liable for the behaviour of their manufacturers, which could involve “naming and shaming” them as well as potential embargos.
Metcalf is looking at measures to reduce workforce exploitation. The government appointed him earlier this year to set strategic priorities for the government’s three enforcement agencies: HMRC’s national minimum wage enforcement team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate.