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Domestic manufacturers hit by low pay report

Industry groups are uniting to address poor working practices in the Leicester garment and textile industry, following new research that claims the majority of workers are paid less than half the minimum wage.

The report by the Ethical Trading Initiative and the University of Leicester asserts that 75% to 90% of employees in the sector earn an average of £3 per hour, often receive wages cash-in-hand and do not have employment contracts.

While Leicester was the focus, many people reported these problems also occur in other key sourcing areas like Manchester, Bradford and east London. The research follows interviews with just 30 workers, supplier forums and an investigation into retailers’ supply chains.

A Freedom of Information request  by the researchers revealed garment and textile manufacturers issued with a civil penalty for employing illegal workers, which they have not yet paid, include SI Clothing, SN Clothing, Apex Designs, KTR Garments, Tanvir Fashions, Faiz Clothing, Traffic Fashion and House of Creation.

“We have been aware of irregular activities in Leicester and the east Midlands for some time,” said John Miln, chief executive of the UK Fashion & Textile Association. “We must address the problem because we work with authorised factories in Leicester who are continually undercut on price by firms employing these types of practices.”

Sources told Drapers the companies that underpay workers are supplying some high street retailers but buyers are often “blind” to what is going on due to complicated supply chains or manipulated audits.

Manufacturers warn these practices create a skewed playing field for firms that operate legally and ethically, and could damage the wider UK clothing manufacturing industry, which is undergoing a revival.

“The report didn’t come as a surprise, because it is a widespread problem and it is mainly down to work that is subcontracted time and time again – the problem is once it goes outside the original factory’s boundaries,” said one Leicester knitwear company director.

Female migrant workers are said to be the most vulnerable to the various issues, including excessive working hours, poor health and safety, and forced labour, with language difficulties meaning they often cannot seek work elsewhere.

“When buyers are offered goods from the UK, if the prices are too good to be true then they probably are,” said Mick Cheema, general manager at Leicester-based leisurewear supplier Basic Premier. “They need to look at standard minutes and auditors need to be more aware of what goes on – there should be more openness between manufacturers and store groups.”

Lorna Fitzsimons, director of The Alliance Project, which promotes UK textile and clothing manufacturing, said: “We need to be very careful that the well is not being polluted with a sample study so small. However, we need to make sure we reward good manufacturing processes.”

The ETI and Leicester council will hold a meeting on Monday with the UKFT, regional trade unions, the University of Leicester and other stakeholders to identify an action plan to tackle the issues.

@Tara_Hounslea

Readers' comments (6)

  • Buyers aren't "BLIND" to what is going on..they're fully aware of it but choose to turn a blind eye because they get garments manufactured for a cheap price and earn a better margin.

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  • Various factories have been caught and various more factories will be caught in the future employing illegal workers. But there is one thing that remains a constant and that is the BRANDS that these factories are producing for. Certain retailers will keep using middlemen to drive down the garment price so unscrupulous factory owners have to cut costs wherever they can and that almost always means the labour cost. This problem is not confined to Leicester and it's not confined to the UK either!

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  • Those retailers who's factories/suppliers are always getting caught know what's going on. The Americans call it plausible deniability!

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  • So name and shame!!!!!!!!

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  • Is it brands or retailers at fault? House of Fraser (and Debenhams last year) have both squeezed margin with unfair demands to suppliers.

    Labour is such a major cost, even more so in the UK.

    Retailers (including online retailers) should be fined the most in my opinion. That way, due diligence will be genuine, rather than a well positioned eye patch.

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  • Egg on the faces of the Brands who claim to support British manufacturing.

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