Adidas has left the workers in its supply chain without the payments they are owed during the pandemic and in the economic crisis that followed. Adidas claims that all is fine, but the workers in its supply chain beg to differ. In eight adidas supplier factories in Cambodia alone, Adidas owe their workers US$ 11.7 million in wages for just the first 14 months of the pandemic – that’s $387 per worker. Workers no longer making clothes for Adidas are also owed money. Workers of the Hulu Garment factory in Cambodia who were laid off at the beginning of the pandemic are still owed 3.6million USD. In May 2022, 5,600 workers at another Adidas supplier in Cambodia went on strike over unpaid wages – the factory responded by having union leaders arrested. This wage and severance theft stretches far beyond Cambodia across Adidas’ global supply chain. 

It is not that Adidas does not know that it carries responsibility to ensure that workers in its supply chain are paid what they are owed. In 2013, Adidas finally paid the PT Kizone workers in Indonesia who had fought for two years for the 1.8 million USD severance they were owed after losing their jobs.

It is time for Adidas to sign a binding agreement on wages, severance and the freedom to organise to ensure that workers in its supply chain never have to go without their full wages and severance again.

Trade unions and worker rights organizations, including the Clean Clothes Campaign, Labour behind the Label, Maquila Solidarity Network, War on Want and Workers United have written a letter expressing their solidarity with the people of Sri Lanka.

They’re calling on upon national governments, international financial institutions, private sector enterprises (including international brands and retailers sourcing garments from Sri Lanka), and other stakeholders to support a program of emergency relief, mid and long-term financial support, and a democratic political solution to the crisis.

Sri Lanka’s apparel and textile manufacturing industry is the most significant and dynamic contributor to Sri Lanka’s economy. The apparel industry employs about 350,000 workers. Sri Lanka’s 1,000 plus factories supply nearly half of all merchandise exports and contribute 6% of the island nation’s gross domestic product. Sri Lanka is among the top apparel-producing countries in the world relative to its population.

The rising cost of shipping and logistics has been a growth impediment factor in the apparel industry but the current crisis seems to be hurting the business the most. A loss of buyers’ confidence in the industry because of the “political instability” is a real risk. Small-to-medium scale apparel makers are being badly effected by the countries energy crisis and fuel shortages, affecting their ability to transport goods, provide staff transport, or generate power. Anti-Government protests across the country have also impacted workers ability to reach their factories because of lack of transportation.

In a statement released late last month, the Joint Apparel Association Forum (JAAF) warned of “serious negative consequences” if policymakers continue to drag their feet on the sweeping reforms required to put the island nation back on track. The crisis has brought about widespread food, fuel and medicine shortages, sky-rocketing inflation and mass protests calling for the president’s resignation.

Export earnings in Sri Lanka’s clothing sector for the June to August period are set to fall by 20-25%. Sri Lanka’s Joint Apparel Association Forum (JAAF) secretary-general Yohan Lawrence told Just Style in terms of the value, this is “nearly a loss of $125m per month for the next three months.”

In most of the apparel factories, the management is now forced to spend 400 per cent more on fuel and generator costs, compared to the same period last year, which has pushed up overheads. With fewer operating hours, workers are likely to get paid one-third less this month as they don’t work over-time.

Any strategy to stabilise the economy, JAAF secretary-general Yohan Lawrence says, must prioritise support to apparel manufacturers large and small.

Read the solidarity letter from Trade unions and worker rights organizations, including the Clean Clothes Campaign, Labour behind the Label, Maquila Solidarity Network, War on Want and Workers United here. 

When Ung Chanthoeun found that the factory she had worked at for 17 years had closed in July 2020 during the pandemic, it was a devastating blow. She said, “When I heard that Violet closed, I felt like I lost everything I ever thought possible. It’s hard to get money for my child’s schooling or to pay the bank, or for medical treatment when my family is sick.”

Virtually every worker has a family that depends on her income. Stealing compensation from workers is stealing from families.

Chanthoeun’s story is not unique. When the Violet Apparel factory, owned by Ramatex, closed over eighteen months ago, 1,200 workers were left without jobs.  The workers are owed $343.174 in unpaid compensation. Including damages that they are legally entitled to, this figure goes up to $1.4 million. Matalan was one of Violet Apparels biggest buyers. Both Matalan and Ramatex can afford to pay the workers what they are owed. Matalan’s operating profit increased by 371% from £7.4m to £34.8m in the third quarter of 2021 alone. Despite these profits, both companies are failing the workers who have stitched their clothes.

The compensation is critical to Cambodian garment workers, who in 2020, were only paid a basic wage of $192 per month. To put this into perspective, the Asia Floor Wage Alliance estimates the living wage in Cambodia to be $588 per month. This means that workers like Chanthoeun, had no realistic way to save for a crisis like Coronavirus, or sudden job loss due to factory closure – it was already a challenge to survive on such low wages from day to day.  The compensation owed to Ramatex workers like Chanthoeun is crucial, it is a lifeline for workers to support themselves and their families.

For years Matalan has positioned itself as a modern family brand. The brand itself says that “Matalan takes time to listen, understand and evolve to fit changing modern family needs…” However, withholding compensation from the 1,200 workers like Chanthoeun not only harms the workers, but cuts children and families off from the income they rely on.  

Many Ramatex workers are having to make difficult decisions, as they struggle to cover basic living costs. Keo Chenda, former union vice-president at Violet Apparel says, “My life at the moment is quite miserable. Back then when I had a job I made money to support my family. Now I only work as a daily wage worker, earning $1 per hour. It’s not a fulltime and regular job. My children are two and five years old. I have to pay for the bills of the children every month and my income is just not enough.”

Although the Ramatex workers are not direct employees of Matalan, the brand has a responsibility to ensure that workers in their supply chain are paid what they are owed. For decades, big brands like Matalan have adopted aggressive purchasing practices, which push wages down and incentivise the erosion of labour rights. The exploitation of workers around the world, is directly linked to how big brands buy from their suppliers. Cheap labour and poor working conditions mean that brands like Matalan can sell clothes at bargain prices, and keep their profits at the top of the supply chain.  Matalan is complicit in the sustained underpayment and exploitation of workers, now it must step in to ensure that workers receive their legal entitlements.

It is time for Matalan to put its family values into practice and make sure that Cambodian workers are paid what they are owed. As former Ramatex worker Oeun Kunthea says, “I expect Matalan to intervene and make sure I get the full compensation. With that money I can start a small business so I can support myself and my family.