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Labour Behind the Label
Labour Behind the Label

Primark update

10

Dec 20

0

In November, we launched a campaign calling on Primark to commit to ensuring that all the workers in their supply chain were paid throughout the pandemic and beyond. Nearly 1300 of you joined the call and put pressure on Primark by signing our petition. Primark have since issued a response, published by the Business and Human Rights Resource Centre. Unfortunately, Primark have left fundamental questions about workers’ pay unanswered, and have still not committed to paying their workers throughout the pandemic and beyond.

 

Wage Fund: A misleading claim?

In April, Primark announced that it had created a fund to help pay the wages of workers linked to orders that were due for shipment in the month after they were cancelled in 7 countries: Bangladesh, Cambodia, India, Myanmar, Pakistan, Sri Lanka and Vietnam. However, they did not share how they ensured that the money reached workers, what measures were taken in other countries in which Primark produces,  how the brand calculated how much it had to pay and if all workers have been paid in full.

In their response, Primark said: “We established a wages fund to make sure workers were paid as soon as possible for Primark product in production.  Over £23m was paid out, which in effect became an advance on the wage component of the £370m of orders that were finished and/or in production.”

Our take: It seems as though Primark’s ‘wage fund’ has in effect acted as an advance on payment for their orders as opposed to a fund to ensure that all workers in the Primark supply chain were paid their normal wages. Not only is referring to an advance supplier payment as a ‘wage fund’ misleading, but questions remain about how Primark is ensuring that workers in their supply chain are paid. We want to know:

  • How did Primark calculate the wage fund, and what happened to workers who were outside of the 7 countries covered by the fund?
  • How did Primark monitor the payments to suppliers to ensure wages were paid in full (including normal bonuses) as opposed to covering supplier costs?
  • Did Primark institute some form of ring fencing which ensured labour costs/wages were paid? How did they ensure that the funds did not simply go towards the costs of suppliers impacted by their initial decision to cancel or suspend orders, for example costs caused by paying in advance for raw materials, overheads etc.?

Factory Cases: More questions for Primark to answer

Primark’s responded to allegations that we shared regarding three of their factories:

In Bangladesh, one of Primark’s suppliers (KAC Fashionwear Limited) which usually employs more than 6000 people, now only has 500 of them working now, while the rest of the workers are on ‘holiday’. Workers have stated that only workers who are currently working are being paid, while others are going without wages. The factory management has reported to have said that they are unable to pay salaries now due to lack of funds.

Primark’s response: “This factory is no longer an approved Primark supplier and the last order was handed over in September 2019.”

Our take: Despite Primark’s claim that KAC Fashionwear has not been a Primark supplier since 2019, this factory still appears on Primark’s 2020 supplier list. They appear to be a long-standing supplier and appear on supplier lists over several years.  We want to know whether the ending of orders was due to a lack of new orders or cancellations due to the crisis or for other reasons or for non-compliance?

 

In Cambodia, workers from another factory (New Best Global Textile Co Ltd) allegedly supplying Primark, staged a protest over wages and compensation owed after their employer fled. The workers are seeking eight days of owed wages, suspension benefits, severance pay and other compensation after the company closed.

Primark’s response: “This factory is no longer an approved Primark supplier and the last order was handed over in September 2019.” 

Our take: New Best Global Textile Co Ltd appear to be a long-standing supplier and appear on supplier lists over several years.  We want to know whether the ending of orders was due to a lack of new orders or cancellations due to the crisis or for other reasons or for non-compliance?

 

In Myanmar, a Primark supplier (Shinsung Tongsang International Co., Ltd) closed its factory in May, resulting in 2000 out of 2108 workers losing their jobs and receiving only partial payment.

Primark’s response: “This factory closed in May 2020 due to the pandemic, all workers were subsequently paid severance pay in line with the local regulations and we worked with SMART Myanmar, a recognised EU funded NGO, to verify the relevant documentation.”

Our take: We are currently monitoring the situation in this case and verifying payments, we will provide updates when we have more information. 

 

We have also asked Primark to respond to allegations concerning four other suppliers, which are included on Primark’s 2020 supplier list:

  • Doreen (Bangladesh) Around 4,000 workers from Doreen Apparels Ltd and Doreen Garments Ltd factories in Gazipur, Bangladesh, demonstrated for two consecutive days, demanding full salary for April, instead of the 60% accorded by the government, and for the factories to reopen, after they were closed for an indefinite period. The workers withdrew when management assured them that their factories would open. Can Primark confirm if all workers have been paid their full salaries and are currently being paid?

 

  • Fakir Knitwear (Bangladesh) Media reports state that, on the 15 June 2020, garment workers from Fakir Knitwear Ltd staged a demonstration to protest allegations of false cases against two of their colleagues and also to demand their reinstatement to work. The protesting workers said that they demonstrated for their full wages before Eid-ul-Fitr, which the factory management promised to clear in time, but, instead of doing that, the factory filed a false case of vandalism accusing 100-150 of its workers of damaging valuable factory property. As a result of these accusations, the police arrested two workers. Workers rejected accusations of vandalising factory equipment and premises, challenging the authorities to show proof of such misdeeds. Can Primark confirm if the full wages and bonuses have been paid and the false accusations withdrawn and workers reinstated?

 

  • Dipta Apparels Ltd (Bangladesh) Over 2000 garment workers from Dipta Apparels Ltd demonstrated, demanding the reopening of the factory, their salary for June and Eid bonus and for their salary for July, to be paid before Eid-ul-Azha. Workers explained that, on the 1st of July, factory management declared that the factory would be closed for three days due to the electricity line being cut off. Three days later, management said that the factory would remain closed until July 11th for the same reason, but when workers returned there was another notice saying the factory was closed for an indefinite period due. Workers were not paid their salary for the previous month. Can Primark confirm if all workers have been paid their full salaries and are currently being paid?

 

  • Rose Intimates (Bangladesh). There are reports of mass dismissals of 300 out of 900 workers from Rose Intimates Ltd in May. Workers were given a partial payment. Workers got retrenchment benefits only. Can Primark confirm that workers been paid their back pay and full compensation? Does Primark have any plans to help support in regard to severance pay?

 

Primark have stated that they believe that ensuring workers are paid is of paramount importance, and Covid-19 did not alter their commitment to that principle. This would suggest that Primark commits to ensuring all supply chain workers will be paid in full.

As such we reissue our calls to Primark to sign up to the wage assurance statement and #PayYourWorkers!