Worker exploitation in UK clothing supply chains

Daniel Ferguson

On Saturday (4 July), the Government imposed a local lockdown in Leicester following a significant rise in the number of Covid-19 cases in the area. Campaign groups argued that poor working conditions in garment factories contributed to the spread of the virus.

This has re-ignited a debate about worker exploitation in the garment sector. According to the Sunday Times, the Government has asked the National Crime Agency to investigate for modern slavery in certain Leicester garment factories. However, commentators argue such exploitation was revealed over three years ago and have criticised the Government for failing to take up reforms.

This Insight discusses exploitation in UK garment factories, how workers’ rights are enforced, and the calls to make companies responsible for rights violations in their supply chains.

Exploitation in garment factories

Worker exploitation in clothing supply chains is not a new issue. A global response was triggered however in 2013, when the collapse of the Rana Plaza garment factory in Bangladesh, that made clothes for brands like Primark, killed over 1,100 workers.

Problems in UK garment factories came to public attention more recently. In 2019, the Environmental Audit Committee found that many brands were moving production from Asia back to the UK, especially to Leicester. Earlier investigations by Channel 4 and Financial Times journalist Sarah O’Connor exposed exploitation in small Leicester factories. They found that many workers were being significantly underpaid, often as little as £3 or £4 an hour, and that working environments were often unsafe with a number of fire hazards.

The investigations showed that cost and time pressures placed on suppliers by leading brands were a major contributor to these exploitative working conditions. Campaign group Labour Behind the Label has shown that a large proportion of workers in Leicester garment factories were born outside of the UK and that many came from South Asia. They argued that a worker’s limited English language skills or issues with their immigration status can make them particularly vulnerable to exploitation.

This problem is not confined to Leicester or to garment factories. The charity Focus on Labour Exploitation (FLEX) argues that exploitation occurs in various supply chain arrangements, including outsourcing, subcontracting and offshoring.

How are employment rights enforced?

In the UK, employment rights are normally enforced by individual workers bringing action against their employer in a court or tribunal. In 2018 the Trades Union Congress argued that many workers were unaware of their rights and lacked union representation. It also noted that the ‘hostile environment’ immigration policy deterred many migrant workers from bringing claims.

Some employment rights are enforced by the state. This includes the minimum wage, which is enforced by HMRC, and health and safety, which is enforced by the Health and Safety Executive. The Gangmaster and Labour Abuse Authority investigates cases of serious exploitation, including modern slavery.

There are limitations here too. In the 2018/19 Labour Market Enforcement Strategy, the Director of Labour Market Enforcement (DLME) found that state enforcement bodies lacked resources, couldn’t always impose sufficient penalties and didn’t work together enough.

In the December 2019 Queen’s Speech the Government committed to set up a single enforcement body for employment rights.

What responsibility should companies have for their supply chains?

Workers in the UK can normally only bring claims against their direct employer. Groups like FLEX have argued this means companies can often avoid responsibility for conditions in their suppliers’ factories, even if they are contributing to it by insisting on extremely low costs.

Under the Modern Slavery Act 2015, companies with a turnover of more than £36 million must publish an annual statement on transparency in its supply chains. This can include information about its modern slavery policies and due diligence processes. However, this only applies to modern slavery, which includes slavery, forced labour and human trafficking but not to other forms of exploitation like underpayment. A Government-commissioned independent review found that publication of these statements is not monitored and there are no penalties for not doing so.

In the 2018/19 Labour Market Enforcement Strategy the DLME said UK employment law was failing to keep up with increasing use of supply chains. This was contrasted with countries like Germany and Italy where companies at the head of a supply chain can be jointly liable for workers’ rights violations.

The DLME rejected the argument for joint liability but proposed a model of joint responsibility. Under this proposal, companies at the head of a supply chain would be notified about breaches by suppliers and would be publicly named if they failed to rectify it. Only the direct employer would face sanctions. The DLME also proposed a ‘hot goods’ model, which exists in the USA, where products can be temporarily embargoed if workers’ rights were violated in their production.

The Government’s response agreed that companies should take responsibility for exploitation in their supply chains but suggested enforcement bodies should work with companies privately. It also said it would consider ‘hot goods’ rules. The Government sought views on these issues in its consultation on the single enforcement body.

Other models for supply chain liability

There have been a number of other recent proposals for protecting workers’ rights in supply chains.

FLEX has called for a worker-driven social responsibility model. In this, companies enter binding contracts with workers’ organisations to only source products from suppliers that respect employment rights.

In a recent book Criminality at Work, law professors Alan Bogg and Paul Davies highlight an Australian model of ‘accessory liability’ where companies can face penalties if they cause or influence a breach of employment rights by a supplier.

Sandhya Drew, a barrister and law lecturer, noted on the Oxford Human Rights Hub blog that French law requires companies to be transparent about any human rights violations in their supply chains. It also requires companies to publish detailed plans for how they will address such issues.

Exploitation in garment factories

How are employment rights enforced?

What responsibility should companies have for their supply chains?

Other models for supply chain liability

Further Reading