- Prices paid to Boohoo suppliers called into question as potential barrier to legal wage payments and sustainable growth
- Activists say Boohoo workers could be owed £125 million in unpaid wages for former illegal pay cases
- Boohoo Group AGM taking place today will see key challenges raised
Activists are posing key questions [1] to the board of Boohoo Group at their AGM today concerning the prices Boohoo pays to suppliers, and debts owed to workers.
Representatives from the human rights campaign group Labour Behind the Label will raise concerns about the impact of Boohoo’s purchasing practices on the ability of Leicester factory owners to operate legally, turn a profit and invest in their factories.
Citing Boohoo’s statements on ‘fair pricing’ for suppliers, activists are requesting that Boohoo publish details of the benchmarks they are using, and whether these prices ensure the minimum wage, or indeed the living wage, is payable under the standards.
Questions follow clear evidence that illegal pay of £3.50 / £4 an hour was common in Boohoo suppliers, linked to prices [2]. Evidence is being requested from the board that this situation has been addressed, particularly with regard to aggressive downward pressure on supplier prices.
Historic debts owed to workers from Boohoo supplier factories following years of underpayment of the minimum wage are also being raised. Activists say Boohoo could owe over £125 million in illegal underpayment of wages to workers who made their goods over the past 5-year period. The estimate is based on calculations from the British Retail Consortium that garment workers in Leicester at the peak of the illegal pay exposes were collectively being denied £2.1m a week [3].
Kaenat Issufo from Labour Behind the Label said: “Mahmud Kamani and the Boohoo board of directors need to own up to truth that Boohoo’s business model has driven abusive practices in its supply chain. Owning up means changing its purchasing practices, and making right the past wrongs that its business has created. Boohoo should pay the workers making its clothes a living wage and payback the millions in underpaid wages it owes to the workers who created Boohoo’s profits over the past ten years. It’s current approach of giving charity is demeaning and the community where I live is suffering as a result. Workers need rights not handouts.”
Some further details being requested concerning the brand’s commitment to building sustainable relationships with Leicester suppliers in the light of recent withdrawals from over 100 suppliers in the city [4].
ENDS
Notes to editors:
- Labour Behind the Label is a campaign that works to improve conditions and empower workers in the global garment industry.
- The Boohoo Group PLC Annual General Meeting is being held at Boohoo’s factory at 301 Thurmaston Lane, Leicester, LE4 9UX on Friday, 17 June 2022 at 14:00
[1] https://labourbehindthelabel.org/boohoo-group-plc-agm-questions-2022
[2] Allison Levitt QC who was commissioned to conduct an internal investigation in allegations of illegal pay in Boohoo Group suppliers found illegally low rates of pay at £3.50/ £4 per hour to be substantiated, and that directors knew of the seriousness of the issues but failed to act. https://www.theguardian.com/business/2020/sep/25/boohoo-report-reveals-factory-fire-risk-among-supply-chain-failings
[3] In 2020, the British Retail Consortium calculated that workers in Leicester were being underpaid £2.1m a week. https://www.thebusinessdesk.com/eastmidlands/news/2041936-leicester-textile-workers-owed-over-27m-says-report.
This had grown from 2015 estimates, where Unversity of Leicester research put this underpayment at around £1m a week. https://amp.theguardian.com/sustainable-business/sustainable-fashion-blog/2015/feb/27/made-in-britain-uk-textile-workers-earning-3-per-hour
Boohoo was sourcing 50-80% of Leicester’s total output between 2015 and 2021. It is therefore a conservative estimate to assume that £50m in underpayment of wages per year, should result in Boohoo owing £125m in over a 5-year period.
[4] https://www.cityam.com/boohoo-cuts-ties-with-hundreds-of-suppliers-following-leicester-factory-scandal/
Media contacts:
- Dominique Muller, Policy Lead, Labour Behind the Label (at meeting), 07596 098 399, dominique@labourbehindthelabel.org
- Anna Bryher, Advocacy Lead, Labour Behind the Label, 07786 832 035, anna@labourbehindthelabel.org