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Former workers of Neo Trend remain empty-handed no thanks to NEXT

Former workers of Neo Trend remain empty-handed no thanks to NEXT

Former workers of Neo Trend remain empty-handed no thanks to NEXT 

Former workers of the Neo Trend factory in Turkey remain empty-handed after 14-month-long engagement with Ethical Trading Initiative and member brand Next. This is their case.

Turkish garment factory Neo Trend Textile closed officially on 1 July 2021 due to a loss of orders in the COVID-19 pandemic.

The factory had put workers on suspended leave in Spring 2020, and workers had been told that they would be paid for this leave as per government regulations. Workers were also protected from being dismissed during this period because the Turkish government had introduced a ban on dismissals for the duration of the COVID-19 lockdown. However, after the final order for the factory’s main buyer, Next had been completed by a small group of workers towards the end of August 2020, the factory owner emptied out the factory and sold all assets. When workers returned to work at the end of the lockdown in July 2021, the 104 workers of Neo Trend found the factory closed and were left empty-handed without their owed severance, notice and other allowances.

After finding that meetings between Next and worker representatives, and later with Clean Clothes Campaign member Labour Behind the Label, did not result in any offer from Next to compensate the workers, CCC members working on the case (CCC Turkey, Labour Behind the Label) decided to report this case to the Ethical Trading Initiative (ETI). The ETI is based in the UK and is what’s known as a multi-stakeholder initiative consisting of trade unions, NGOs and businesses, of which Next is a member. All businesses that have joined the ETI agree to adopt ETI’s Base Code, a set of common standards for labour conditions based on the International Labour Organisation conventions. Member brands commit to implementing these standards in their supply chains.

The ETI is one of several voluntary initiatives through which garment companies can commit to protecting the rights of workers who make their products, and, like most initiatives, the ETI also has a procedure through which breaches of those labour standards can be raised by members and addressed. CCC decided to report the Neo Trend case to the ETI in accordance with this procedure in July 2022 and requested the ETI member NGO Homeworkers Worldwide (HWW) initiate the process on behalf of the affected workers. Unfortunately, after a 14-month-long process, the ETI has not been able to ensure that the Neo Trend workers that produced for its member Next received their owed severance.

Bego Demir from CCC Turkey: “This case proves once more that if there are no binding laws to hold companies accountable, voluntary multi-stakeholder initiatives such as the Ethical Trading Initiative cannot be the solution to achieve real remedy for workers, especially because they are financially dependent on the brands themselves. The time and efforts spent engaging with the initiative’s complaints procedure ultimately hasn’t resulted in any tangible change for the workers, who are still owed severance to this day.”

This case shows that when an unscrupulous employer cheats dismissed workers of severance pay, it is all too easy for the brands previously sourcing from that supplier to wash their hands of responsibility despite their membership in a voluntary multi-stakeholder initiative. The case highlights the limitations of such voluntary initiatives in achieving remedies for workers, as previously shown by the MSI Integrity project, and underlines once more the importance of legally binding mechanisms.

What we did and what happened

Below, we explain in more detail the steps that were taken in this case as part of Ethical Trading Initiative’s (ETI) procedure.

Original complaint filed in July 2022
The complaint filed by Clean Clothes Campaign (CCC) members to the ETI’s procedure alleged that the lack of severance payments to the Neo Trends workers constituted a violation of ETI’s Base Code, specifically clause 5.1:

“Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event, wages should always be enough to meet basic needs and to provide some discretionary income.”

Homeworkers Worldwide (HWW) officially reported this violation to the ETI on 18 July 2022 on behalf of CCC and the affected workers. After two months, the ETI shared Next’s first response to the complaint. Next denied the allegations on the grounds that their company did not have a commercial relationship with Neo Trend in the 12 months prior to the factory closure. The company denied being the “main buyer” and listed 17 other companies that were customers “at the relevant time” – two of which are ETI members. Next said its order levels represented about 15% of the factory’s production capacity and requested the ETI to reach out to other member brands doing business with Neo Trend “in the period prior to the factory closing”.

Furthermore, Next argued that it was Neo Trend’s own decision to cease trading and that, for this reason, it had no responsibility to the workers beyond paying the invoices for their final orders. Unfortunately, international due diligence guidelines provide little direction on this matter.

CCC submitted its response the following month, explaining that the workers had testified that they were only making clothes for Next and no other brands in the last months of production. There was no production at the factory whatsoever after the final orders for Next were shipped off in August 2020. The factory closure was officially announced as soon as companies were allowed to dismiss workers again at the end of Turkey’s national lockdown in July 2021, making the 12-month period that Next referred to completely irrelevant.

ETI concludes its investigation in March 2023
ETI went on to investigate the complaint in the ensuing 4.5 months, after which HWW received the investigation report. In its report, the ETI accepted Next’s argument, even though it said it had no way to validate if Next was right in claiming they were not the main buyer in the period leading up to the factory closure. In the ETI’s opinion, Next had no further obligation to ensure that workers were not harmed by Next’s business relationship with Neo Trend ending because it had been the decision of the factory to terminate the business. ETI did recommend that Next and the other buyers it had identified should consider “the merits of exploring collective options to achieve a resolution to the issue, including considering a financial goodwill gesture to affected workers.”

In our follow-up with ETI in April 2023, we asked for more details about the evidence provided by Next that they were not the main buyer at Neo Trend and the outcome of ETI’s follow-up with the other member brands that allegedly sourced from the factory in the relevant time period. The ETI then admitted Next hadn’t provided any hard evidence to support its claim. The CCC members then asked ETI to consult with the three other ETI member brands that Next had said were customers of Neo Trend, and only one had ever sourced from them, and that was several years ago.

On the ETI’s recommendation that Next consider “a financial goodwill gesture” to the former Neo Trend workers, we learned that the company declined to make a financial contribution out of concern that this might create a precedent. ETI was not willing to require members to comply with the recommendations of the review. NEXT ultimately refused to consider the recommendation as necessary and walked away.

Final outcome in October 2023
Through Homeworkers Worldwide, CCC submitted a formal request to appeal the ETI’s decision. In accordance with their procedure, ETI appointed a committee of its Board members to consider our appeal. This committee convened on 14 September 2023 to review all the evidence that was submitted, and the conclusions were shared on 2 October 2023. While the harm to workers was not contested, the committee stated that they decided to uphold the original investigation findings and reject the appeal. We learned on 11 October that Next’s position on making a financial contribution to the affected workers remained unchanged – the company maintains that they have acted ethically and responsibly. The former workers of Neo Trend thus remain empty-handed.

Garment workers deserve good jobs in Leicester

Garment workers deserve good jobs in Leicester

GARMENT WORKERS IN LEICESTER DESERVE GOOD JOBS 

Leicester’s garment sector is in crisis, as a growing number of fast-fashion brands are forcing through discounts, making last-minute cancellations and imposing financial penalties. 

The Guardian reported in June that brands including Boohoo and Frasers Group were forcing discounts on suppliers. Consequently, factories are closing down, resulting in workers losing jobs or having seriously reduced hours. We estimate that the number of factories in Leicester has halved since 2020, from 1,000 factories to now less than 500.

Generations of Leicester garment workers have made clothes for the world with skill and with pride.  

When times are tough, fashion brands use their power to demand lower prices and push factories to closure.  

Whether it’s Covid-19 or the cost of living crisis, it is garment workers who are left to pay the price.  

We all deserve safe conditions at work, job security and a wage that allows us to lead full lives and take good care of our families.  

By signing our petition for decent work for garment workers in Leicester, you join our call to UK fashion brands to take responsibility for the workers who make their profits.

There are no worker rights to fight for if there are no jobs. Brands must commit to proving sustainable jobs for workers in Leicester.   

Leicester workers deserve good jobs! 

No more race to the bottom – fashion brands must commit to their workers! 

Decent work and fair pay is our right. 

 

Garment workers deserve good jobs!

The fashion industry makes huge profits on the back of garment workers. Yet they are paid the least and have the least job security. In Leicester, fashion brands are asking suppliers for discounts and cancelling orders, which has led to closures and a drop in hours for hundreds of workers. When times are tough, fashion brands use their power to demand lower prices and push factories to closure.
Whether it’s Covid-19 or the cost of living crisis, it is garment workers who are left to pay the price.
We all deserve safe conditions at work, job security and a wage that allows us to lead full lives and take good care of our families.
We call on fashion brands to recognise the vital role Leicester’s workers play to build their profits, and commit to good sustainable jobs in Leicester.

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2,713 signatures

     

Are you a member of a trade union? Do you want to do more? Click here for our solidarity motion we’d love for you to take to your TU branch!

Paid NEXT to nothing

Paid NEXT to nothing

 Workers Paid NEXT 
 to nothing
in covid 
 factory closure 
 fight back 

When the pandemic hit, brands stopped ordering from factories and many shut down without paying workers. The Wai Full workers are continuing to fight for their pay and severance. This is their case. 

In January 2021, mid-pandemic, workers at Wai Full Textiles in Cambodia started to be laid off. The factory officially closed in May 2021, and workers were paid a small sum to cover their annual leave, but $500,000 was left outstanding.

Female-led union, CATU from Cambodia, contacted members in the factory and launched a campaign for justice, calling for the workers to get their pay outs. Wai Full Garments, the company, went bankrupt and dissolved all its assets and, after some months, its parent company in Hong Kong also dissolved. The workers decided their only option was to reach out to the brands. 

Superdry, NEXT and ASOS were contacted by LBL on behalf of the workers in Autumn 2021. A long discussion ensued, with meetings with the brands to verify the facts, to hear from the union, to explore legal options. By winter 2022, the brands asked for a confidential sum at which workers would settle and discussed how to get this to workers. This option was discussed also at length. Yet as a final kick in the teeth, at the end of this long process, NEXT and Superdry turned around to say they didn’t think it was their duty to pay. 

We are now launching a campaign to call on NEXT and Superdry to change their minds and contribute towards the sum that Wai Full workers are owed.

While this campaign may be about one small group of workers and their fight for justice, this underdog struggle is also emblematic of the huge COVID injustice that left women of colour at the bottom of supply chains globally, owed billions in wages and legal pay outs. While fashion minimised its losses and moved on, workers were left to pay the cost. This small case is symptomatic of the wider struggle for covid justice. 

Why should brands pay?

Fashion companies choose to make clothes at arms length – in factories where they aren’t the employer but do get all the benefits of cheap labour and low regulations. So when things go wrong, can they simply wash their hands of the issues? Human rights guiding principles for business suggest that brands need to show that they have made every effort to protect people who make their goods from human rights violations, and take steps to remedy issues where their business has caused or contributed towards that harm. Here is the difficult part – as there isn’t financial transparency the workers don’t have the financial data to show that by pulling out of a factory, the group of brands in this case ’caused or contributed’ towards the factory closing.

To us it is fairly clear that in the pandemic when they stopped ordering this contributed towards the factory’s decision to close and to not pay its workers. But because we can’t show it, brands say they don’t have a duty to provide remedy to the workers. Yet why should the workers be left with nothing? We believe the brands should at the very least contribute towards the money owed to the workers as a statement of principle. Workers should be paid their legally owed pay and severance for the duration of their employment. 

In the end, if the brands don’t pay, the workers will be left with nothing, and this isn’t right. They should pay because it is the right thing to do.

Statement on the crisis faced by garment workers in Sri Lanka

Statement on the crisis faced by garment workers in Sri Lanka

Labour Behind the Label stands in solidarity with workers in Sri Lanka against the government’s reckless plans to drastically reduce labour law protections. Read our statement below.

Sri Lanka’s garment workers have been bearing the brunt of the financial and political crisis that has haunted the country for over 1.5 years, with high inflation and currency devaluation pushing workers into poverty while the government and employers repress their right to organise. With the government now rushing through procedurally unsound changes to labour laws, and domestic debt restructuring measures targeting workers’ social security funds, garment workers in Sri Lanka will be deprived of even more basic rights and protections against precarity. National and international labour rights organisations appeal to the government of Sri Lanka to respect tripartite processes and refrain from targeting workers’ social security funds as part of debt restructuring measures.

Labour law

The government’s attempt to overhaul existing labour laws into a unified labour code has from the outset ignored established tripartite consultation mechanisms and bypassed other existing democratic processes. Draft legislation, for example, has not been made available in all the country’s official languages. Beyond the problematic process, which disregards the rights of trade unions as well as minorities, we are concerned that the proposed unified labour law seeks to eliminate the rights and protection of workers in the interests of creating a more exploitable labour force. By removing international minimum standards such as the eight hour working day, paid overtime entitlements and protections against arbitrary dismissal, allowing employers to force employees to work for four weeks straight without days off, reducing annual leave entitlements, and weakening freedom of association and collective bargaining rights, this legislation will increasingly leave workers at the mercy of their employers, without any recourse.

We believe that any revision of Sri Lanka’s labour laws requires a thorough consultative process, in which the voices of workers and their elected trade union representatives are heard. This could be realised by the government appointing a credible independent commission with the participation of experts such as the International Labour Organisation. Any consultation process must include the four trade unions which were unlawfully removed from the National Labour Advisory Council in June 2023.

Anton Marcus, joint secretary of the Free Trade Zones & General Service Employees Union in Sri Lanka says:

The government’s proposals and process for the overhaul of the labour law violate international norms for decent work and threaten to unleash a race to the bottom on labour rights. Only an inclusive, transparent, and democratic process of engagement with the participation of all relevant tripartite stakeholders can lead to results that are acceptable to workers and meet international norms. 

Social security

Workers are additionally concerned about their rights and livelihoods now that the government, in response to the ongoing international debt crisis, has announced a restructuring of domestic debt. The restructuring targets superannuation or pension funds, with the largest among them, the Employees Provident Fund (EPF), representing 2.5 million workers. Workers pay into this fund through deductions from already meagre wages throughout their working lives. Their laboriously built-up retirement funds are now being targeted without any consultation. Moreover, such restructuring does not apply to other treasury bond holders. If workers’ social security funds are not included, the government has threatened to ensure these funds pay the price through other means, such as a tax increase from 14 to 30%.

Singling out superannuation funds, and thereby forcing Sri Lankan workers to foot the bill for a debt crisis for which they are not responsible, is arbitrary and unfair. We support the position of the major trade unions who have requested the Governor of the Central Bank to halt all decision-making and call for a trade union forum to discuss this matter. 

The Clean Clothes Campaign, the Free Trade Zone & General Services Employees Union, the International Union Educational League, Labour behind the Label, Maquila Solidarity Network, and War on Want stand in solidarity with the garment workers of Sri Lanka, a majority of whom are women and migrant workers. Workers took to the streets in protest on 19, 20 and 25 July and we stand with them as they continue to protest and resist the government’s attacks on their basic labour rights and hard-earned social security funds. We urge the government of Sri Lanka and all stakeholders involved, such as employers associations, the IMF and the Central Bank, to ensure workers are not forced to pay the price for the country’s ongoing crisis by

  • Immediately halting the existing labour reform process; 
  • Devising specific, transparent, and consensus-based “terms of reference” for the process of reforms with the participation of all relevant tripartite stakeholders of the world of work such as International Labour Organisation, to come to a reform process that ensures local Labour laws are made consistent with norms of International Labour Standards and Decent Work;
  • Ensuring that international standards are not violated and that such a reform process is carried by a tripartite and democratic process with participation from trade unions, the National Labour Advisory Council (NLAC) and other key stakeholders. 
  • Reinstating the four trade unions which were unlawfully removed from the National Labour Advisory Council in June 2023; 
  • Halting the targeting of EPF/ETF (pension funds) for debt restructuring without adequate engagement with the workers and their representatives. 
  • Ensuring that workers do not have to bear a ‘disproportionate’ burden of the economic crisis and that their rights are respected.

Bangladeshi garment workers need a wage hike

Bangladeshi garment workers need a wage hike

 Bangladeshi   garment workers   need a significant 
 wage hike 

 

Labour Behind the Label is campaigning in support of a wage increase in Bangladesh and the Bangladeshi unions’ 23,000 taka minimum wage demand.

For the first time in five years, the Bangladeshi government has formed a Wage Board to revise the minimum wage for the country’s ready made garment sector, which employs roughly 4 million workers.

The current minimum wage of 8,000 taka (roughly £57 a month) was already insufficient for a decent living when it came into force in 2019. Since then, workers have had to endure the additional pressure of the Covid-19 pandemic and the subsequent high inflation without seeing their wages increase at all.

A new monthly minimum wage demand of 23,000 taka (£164 approximately) has been calculated based on an extensive cost of living study done by the Bangladesh Institute for Labour Studies and has been unanimously supported by trade unions in the country as well as the IndustriALL global union. Clean Clothes Campaign partners in Bangladesh do not hold seats in the Wage Board, and neither do any other independent trade unions, but they will organise local campaign actions to voice this demand.

This year’s minimum wage revision takes place at a difficult time for the Bangladeshi labour rights movement. The recent murder of trade unionist Shahidul Islam is a stark reminder of the incredibly repressive environment in which wage negotiations take place. In the past, the minimum wage revisions led to a shocking amount of turmoil. In 2018 one worker was killed, dozens were left injured and thousands lost their jobs.

Labour Behind the Label stands in solidarity with unions in Bangladesh fighting for a higher and more just minimum wage. We urge all involved parties to respect the right of trade unions to peacefully and collectively campaign for their wage demands.

Why are wages so low?

 The Bangladesh textile industry has long marketed itself based on its low pricing. Fierce competition with other Asian economies, and downward pressure from brands’ purchasing practices, have suppressed wages in Bangladesh year on year. The Bangladesh labour law only requires the wage board to convene once every 5 years. This has led to very slow wage growth. Unionisation rates are also low due to the active suppression of freedom of association, by employers and by state actors. So when unions come to the table their power to achieve change is limited.

A new wage is desperately needed. Official Consumer Price Index inflation rates show an increase in recent months of than 9%. Unofficial predictions however are much more abnormal. Some of the main food prices have increased by nearly 100%. Current average take home pay (around 12800 taka, including overtime) is more than 10% less than the national poverty line.