Boohoo’s assurances in July that its supplier non-compliance issues in Leicester were the “actions of a few” were undercut Friday after unearthed third-party audit reports revealed that at least 18 garment factories in the English city failed to prove they were paying their workers the legal minimum wage.
Four years’ worth of confidential reports, obtained by the Guardian, and dating from 2017 to a few months ago, warned of “critical issues” over record keeping, including discrepancies with logging work hours that made it impossible to determine if workers were receiving the minimum wage. Hours, which were sometimes tracked using informal handwritten notes rather than computerized timesheets, were often contradicted by workers during interviews. Auditors also found that workers did not always clock in and out for shifts, suggesting that they worked for longer than officially recorded and earned well below the 8.72 pounds ($11.66) mandated by law for those aged 25 and older. (Previous reports, including one by worker-rights group Labour Behind the Label in June, cite wages of as little as 3 pounds, or $4.01, per hour.)
Other concerns detailed in the reports from factories such as Bux Clothing, Ezili Dariyai, and Onyx Fashion included inadequate health and safety policies, fire safety issues, missing or expired “right to work” documents, non-payment of furlough wages and no records of holiday bonuses.
Whistleblowers, speaking on the condition of anonymity, told the newspaper that they saw “dozens more” reports, listing similar concerns, at other suppliers to the ultra-fast-fashion e-tailer, which built its empire on speedy turnarounds and razor-thin margins.
Related Stories
Boohoo, which also owns PrettyLittleThing, Nasty Gal, Oasis, Karen Millen and Warehouse, sources some 40 percent of its cut-price bodysuits, crop tops and other Instagram-popular get-ups in Leicester, which houses the second-highest concentration of textile manufacturers in the United Kingdom after Manchester, with 1,500 factories employing 10,000 textile workers. In turn, Boohoo pieces comprise 75 percent of the city’s garment output.
Though the Guardian says “there is no suggestion” that Boohoo had access to the reports, which were circulated among factory managers and other brands, their existence raises questions of how much the company knew and casts further doubt on its claims that it does not brook breaches of what it describes as its “strict” code of conduct.
The revelations look further askance at Boohoo’s previously sterling environmental, social and governance (ESG) rating. Just weeks before the imbroglio began, rating and index provider MSCI awarded the e-tailer a double-A score, its second-highest ranking, placing it above industry average as far as supply-chain labor practices were concerned. The ESG scoring system, its critics say, is unreliable because disclosures are voluntary, which means a company can skew its score simply by sharing only favorable information.
Claudia Webbe, Minister of Parliament for Leicester East, where many of Boohoo’s suppliers are located, told the Guardian that the allegations constituted “an unforgivable breakdown of our basic social contract” and urged the firm to disclose a full list of its suppliers in the city.
Boohoo, which commissioned an independent supply-chain review after Amazon, Asos and Zalando halted sales of its clothing after allegations came to a head, said the documentation seen by the Guardian “appears to be a selection of commentary from a limited number of the third-party audits that have been completed.”
It added, however, that its own investigations “have highlighted similar issues” in some of the factories identified by the Guardian and that it was holding off on working with them until its concerns were addressed.
“Due to the nature of the non-compliance that we have found in a small number of manufacturers…we have immediately suspended orders with a number of suppliers whilst they take the appropriate action to resolve the issues identified,” Boohoo said, though it did not name the offending facilities. “This includes some of the manufacturers identified by the Guardian.”
Eight of the 18 factories denied some or all of the claims set out in the audits, according to the Guardian, with some calling them historical or disputing that they represented typical standards. The remaining 10 did not respond to the outlet’s multiple requests for comment.