Minimum wage and other employment failures alleged at UK Primark suppliers

Monday, January 12th, 2009 - economics, Employer, Employment, Minimum Wage

This evenings BBC Ten O’Clock News will show the result of a five month joint investigation with The Observer into the UK supply chain of high-street retailer Primark, and specifically their Manchester based suppliers TNS Knitwear (which supplies 20,000 garments per week to Primark), and their sub-contractor Fashion Waves.

Following a 2007 Panorama investigation into Primark’s overseas supply chain, what will be shown will probably be looked back in some years as one of the most effective piece of investigative journalism that brings the UK economy out of the recession. Why? Because what it will remove from the economy jobs that exploit workers, and brings closer to the end of the day when the rest of economy is just subsidizing them through a combination of benefits, and insurance premiums to allow for  payout when these modern day workhouses suffer from a Health and Safety failure. The UK economy will only recover on producing products which sell, bought by people with real jobs and produced by people being properly paid in safe conditions.

From the early details, the investigation alleges that:

  • TNS employed workers below the National Minimum Wage of £5.75 per hour. They were paid circa £3.50/hr
  • TNS employed illegal workers. One employee admits his visa from Pakistan ran out 8 years ago. Breaches of the appropriate legislation managed by the UK Borders Agency could lead to fines of up to £10,000 for each illegal worker and potential prosecution for tax evasion and employment law abuses
  • The undercover journalist working at both units captures cash-in-hand payments being made, apparently paid without the knowledge of HM Revenue & Customs
  • The premises of both TNS and Fashion Waves were deemed illegal on investigation by the Health & Safety Executive

TNS workers were also asked to work 12 hours a day, seven days a week. Although workers have the option to opt out of the Working Time Directive, the fact the workers are either underpaid or illegal will remove any such opt-out from any legal judgement.

Primark announced on Saturday 10th January that it had launched an inquiry after the journalistic investigation. Primark also said it had handed material uncovered by the investigation to the UK Border Agency.

Primark also agreed on Friday 9th January to remove all references to the Ethical Trade Initiative, the trade body that monitors Britain’s top retailers, from its 140 storefronts across England, Scotland, Wales and Northern Ireland. It must also remove ethical branding from thousands of tills and its corporate website while investigations continue.

This case is personally, on a number of fronts, disappointing. Firstly, Ajiri has a policy not to operate in Gangmaster and minimum wage markets for concern for such exploitation of workers. Secondly, having investigated the delivery of non-UK cuisine skilled chefs to UK restaurants, we were stopped from doing so by the UK Borders Agency because of “over supply of labour” – so why have some of these workers been in the UK illegally for over eight years? Thirdly, economics and recovery will not be helped by the UK breaking its own reasonable laws on immigration, pay or working conditions.

We also asked our friend Ida Horner at Ethic Supplies/Let Them Help Themselves to comment on the ethical trade issues:

I am not surprised that Primark finds itself in this situation. As someone that works alongside textile and handicraft producers in the developing world I can safely say that there is no way a company can churn out that amount /number of garments without someone somewhere being exploited.

In order to comply or call yourself an ethical provider you have to “police” your suppliers to ensure that they subscribe to your ethical agenda. Here at Ethnic supplies we do not work with anyone we have not met and even when our producers are required to prove that the work is there own. We inspect their workshops annually to ensure that for instance child labour is not used.

As we say above, the UK economy will only recover on producing products which sell, bought by people with real jobs and produced by people being properly paid in safe conditions. Anything less is at worst exploitation, and at best false hope for an economic recovery.

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