Business

Textile sector 'rife' with exploitation and underpayment

A seamstress sewing a garment in a factory Image copyright Getty Images

British clothing manufacturers have been forced to pay almost £90,000 to employees for non-payment of the minimum wage.

An HM Revenue & Customs investigation found that over a six-year period 126 garment workers were paid wage arrears.

MP Mary Creagh, who reviewed the HMRC data, said it showed exploitation in the industry was still "rife".

HMRC has 14 ongoing investigations, and it found underpayment in one in every four inspections.

"This [exploitation] must stop," said Ms Creagh, chairwoman of the Environmental Audit Committee. "We need government action to end these 19th century practices in 21st century Britain.

"It has been 20 years since the introduction of the minimum wage but in our inquiry we heard that underpayment is rife and goes hand-in-hand with a culture of fear and intimidation in the UK's textile industry."

The committee has been looking into the sustainability of the fashion industry.

In October, it warned that fast fashion is damaging the planet, and in November MPs quizzed retail executives on how firms could justify selling clothes for £5 or less.

According to Adam Mansell, chief executive of the UK Fashion and Textile Association (UKFTA), retailers have long been aware that problems exist with exploitation of workers in Britain, but the problems are numerous and difficult to solve.

Evasion

"There have been efforts in the past to shut down these factories, but unfortunately what happens is they operate under a phoenix system where they will close one day, and then open up under a different name the next day," he told the BBC.

And following attempts by retailers to quell exploitation by publicly terminating contracts with certain factories, some factory owners have found other ways to evade detection of their business practices.

"For instance, you place an order with Factory A, but they outsource that manufacturing to Factory B or C [which might be exploiting workers], so the retailer doesn't get to see the factory where the goods are actually being made," said Mr Mansell.

Image copyright Getty Images
Image caption Some illegal practices persist because exploited workers choose not to report employers

The trade body has also received anecdotal evidence that many of the exploited workers claim state benefits, which makes them more likely to accept being paid below minimum wage.

"The retailers and government enforcement agencies are aware of this and they don't want to put people who are being exploited in an even worse position," he added.

UKFTA is working with the government and retailers to try to prevent exploitation.

"In London, there are 13,500 people employed making clothes for high-end fashion brands. Quite often these brands pay a London living wage," said Mr Mansell.

"If you can afford to operate in London, make a profit and still pay a living wage, then there's no reason you can't do this anywhere else in the country."

More on this story