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7 Mär 2022

Jasmin Malik Chua, Sourcing Journal

India: Labour group finds factories supplying global brands falling behind on minimum-wage increase commitments

"Karnataka Garment Workers Win Half the $59 Million They’re Owed", 7 March 2022

The Worker Rights Consortium (WRC) revealed last week that 14 major garment manufacturers in the southern Indian state of Karnataka have agreed to honor a minimum-wage increase that has gone unacknowledged and unpaid since April 2020. They have also promised to dole out $28.6 million in arrears, a sum that accounts for roughly half of the $58.7 million that the Washington, D.C. think tank says has been denied to hundreds of thousands of workers since the dispute’s inception...

Together, the 14 manufacturers employ more than 205,000 of the 400,000 workers that the organization estimates have been affected by the wage theft...

The WRC identified at least two major suppliers—FFI Global, which makes jeans for G-Star Raw, Wrangler owner Kontoor Brands and The North Face parent VF Corp., and Creative Group, which provides garments to C&A and Matalan. Neither manufacturer, it said, has committed to paying the minimum-wage hike or any amount of back wages.

C&A told Sourcing Journal that all three of its suppliers in Karnataka—Arvind, Creative Group and Shahi Exports—have already paid the so-called “variable dearness allowance,” which is based on inflation, for 2021, and that they have promised to do so retrospectively for 2020. The Belgium- and Germany-based retailer said that it is monitoring developments “closely and regularly” and has so far found “no irregularities.”

“We expect all of our suppliers, and the factories that they use, to meet our high standards and comply with all regulatory and legal requirements in the countries and regions where they operate,” a spokesperson from Matalan said. The company noted that while Creative Group hasn’t been one of its suppliers since Aug. 2020, it has received confirmation that the manufacturer will comply with all legal obligations. “We are aware of an ongoing review into the variable dearness allowance in Karnataka and appreciate that a quick conclusion to this review would provide clarity for everyone concerned,” the spokesperson added.

VF Corp. said that it has also confirmed that all payments will comply with the increased minim-wage hike. “We have been in communication with the WRC to share this update as well,” a representative told Sourcing Journal.

Sanjay Pillai, director of CSR at FFI Global, said that the supplier has “always pegged” worker wages “far higher” than the minimum wage stipulated by the state. “In light of the current verdict we have initiated an additional audit of our back wages,” he added. “We do not anticipate any impact for us. We further would like to reiterate that information given to your organization by [the] Workers [sic] Rights Consortium might not be based on facts.”

Creative Global, G-Star Raw, and Kontoor Brands did not respond to requests for comment.

The WRC also flagged Go Go International, which supplies to Ann Taylor, Bestseller and George by Asda, for only committing to pay any back wages in full after mid-2023. Go Go International, Asda and Ann Taylor did not return emails seeking a statement.

Bestseller said it’s engaging in an “ongoing dialogue” with Go Go International to truncate the timeframe. “As per our code of conduct, Bestseller requires suppliers to respect the laws concerning compensation for work,” a spokesperson told Sourcing Journal. “Failure to pay legal wages is a zero-tolerance issue in our supply chain and Bestseller does offboard suppliers that show no willingness to remediate…violations.”...