UK rag trade forced to pay nearly £90,000 in minimum wage arrears UK rag trade forced to pay nearly £90,000 in minimum wage arrears

UK rag trade forced to pay nearly £90,000 in minimum wage arrears
08 Feb 2019

British clothing manufacturers have been forced to pay almost £90,000 (US$117,564) to employees after failing to give them the legally-mandated national minimum wage.

An investigation by Her Majesty’s Revenue & Customs (HMRC) found that 126 garment workers were owed wage arrears over a six-year period. HMRC, which is currently conducting 14 such probes, uncovered evidence of underpayment in one in every four inspections.

MP Mary Creagh, chairwoman of the Environmental Audit Committee, who reviewed HMRC’s data, said: "This [exploitation] must stop. It has been 20 years since the introduction of the minimum wage, but in our inquiry we heard that underpayment is rife and goes hand-in-hand with a culture of fear and intimidation in the UK's textile industry."

The Committee has been looking into the sustainability of the fashion industry. In October, it warned that fast fashion was damaging the planet and, in November, quizzed retail executives over how firms could justify selling clothes for £5 (US$6.53) or less.

According to Adam Mansell, chief executive of the UK Fashion and Textile Association, retailers have long been aware that problems exist with the exploitation of workers in Britain.

"There have been efforts in the past to shut down these factories, but unfortunately what happens is they operate under a phoenix system where they will close one day, and then open up under a different name the next day," he told the BBC.

Following attempts by retailers to quell exploitation by publicly terminating contracts with certain factories, some factory owners found other ways to disguise their sharp business practices.

"For instance, you place an order with Factory A, but they outsource that manufacturing to Factory B or C [which might be exploiting workers], so the retailer doesn't get to see the factory where the goods are actually being made," Mansell said.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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British clothing manufacturers have been forced to pay almost £90,000 (US$117,564) to employees after failing to give them the legally-mandated national minimum wage.

An investigation by Her Majesty’s Revenue & Customs (HMRC) found that 126 garment workers were owed wage arrears over a six-year period. HMRC, which is currently conducting 14 such probes, uncovered evidence of underpayment in one in every four inspections.

MP Mary Creagh, chairwoman of the Environmental Audit Committee, who reviewed HMRC’s data, said: "This [exploitation] must stop. It has been 20 years since the introduction of the minimum wage, but in our inquiry we heard that underpayment is rife and goes hand-in-hand with a culture of fear and intimidation in the UK's textile industry."

The Committee has been looking into the sustainability of the fashion industry. In October, it warned that fast fashion was damaging the planet and, in November, quizzed retail executives over how firms could justify selling clothes for £5 (US$6.53) or less.

According to Adam Mansell, chief executive of the UK Fashion and Textile Association, retailers have long been aware that problems exist with the exploitation of workers in Britain.

"There have been efforts in the past to shut down these factories, but unfortunately what happens is they operate under a phoenix system where they will close one day, and then open up under a different name the next day," he told the BBC.

Following attempts by retailers to quell exploitation by publicly terminating contracts with certain factories, some factory owners found other ways to disguise their sharp business practices.

"For instance, you place an order with Factory A, but they outsource that manufacturing to Factory B or C [which might be exploiting workers], so the retailer doesn't get to see the factory where the goods are actually being made," Mansell said.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER STORIES THAT MAY INTEREST YOU

Asda staff equity pay case win could cost UK supermarket sector £8bn

Tesco hit with potential £4bn potential legal challenge for equal pay in UK

UK supermarket chain Morrisons faces £100m equal pay claim

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