Fashion brands urged to fix 'broken industry' with pledge on workers' pay

Fashion brands should fix their “broken industry” by ensuring millions of pandemic-hit workers receive their full wages and by guaranteeing severance pay if jobs are cut, a coalition of more than 200 rights groups said on Monday.

The #PayYourWorkers campaign said brands and retailers that made a profit in 2020 - like Nike, Amazon and Next - could stop garment workers “going hungry” and set up a severance fund by paying manufacturers the equivalent of $0.10 more per t-shirt.

“This is the minimum brands should do on the way to the living wages which must become the standard of a post-pandemic recovery,” said Ineke Zeldenrust from the Clean Clothes Campaign, a coalition member. “This proposal is achievable.”

Although manufacturers in some countries do pay workers severance if they lose their jobs, factory owners often come under pressure when a brand suddenly withdraws orders, which ultimately affects the worker, researchers say.

Fashion companies cancelled orders worth billions of dollars in the first three months of the pandemic as COVID-19 shuttered stores worldwide, leading to wage losses estimated at at least $3.2 billion.

While orders picked up in the second half of 2020, some Western brands demanded price cuts and delayed payments to suppliers desperate for any orders to survive, campaigners said.

Amazon said in an emailed statement that it had honoured all orders for its “U.S. and EU private-label apparel businesses” and created a $1.3 million fund last year to invest in organisations that supported workers impacted by the pandemic.

Nike, meanwhile, told the Thomson Reuters Foundation it had paid in full for finished products, and was also working with institutions to support suppliers with financing opportunities and explore solutions to support workers in the supply chain.

Next was not immediately available for comment.

About 60 million people work in the textile, clothing and footwear sector globally and industry experts say falling sales have left workers, many of whom either lost their jobs or are being paid less than before, vulnerable to exploitation.

Nearly 10,000 workers from eight factories supplying to 16 fashion brands, which made a total of $10 billion in profit last year, are still owed wages, rights group the Business & Human Rights Resource Centre said in a study last week.

The coalition, which called on brands to publicly announce their support for its appeal, is made up of groups from 40 nations - including garment-producing nations such as Bangladesh and Cambodia - and international organisations like Oxfam.

In Cambodia, Sophorn Yang, president of the national trade union alliance, said workers there had lost millions of dollars in wages during the pandemic because of “brands’ actions”.

“It’s time for brands to recognise the crucial position they hold,” Yang said.