Tesco, Britain’s biggest retailer, is among a group of companies facing legal action from Burmese migrant workers alleging forced labor conditions at a factory in Thailand that mades clothes for its F&F range.
Between 2017 and 2020, V.K. Garment, a facility in the western city of Mae Sot, inflicted punishing hours and poverty wages on its employees, “trapping them in a cycle of forced labor and debt bondage,” according to a letter before action that law firm Leigh Day sent on behalf of 130 workers and one child. The claim, a first step before legal proceedings, has also been dispatched to London’s High Court.
The complaint, which the Guardian first reported on Sunday, alleges that the pressure to fulfill large F&F orders was so “intense” that workers had to toil 99-hour workweeks that started at 8 a.m. and ended at 11 p.m. from Monday to Saturday and 5 p.m. on Sunday unless they were behind schedule. They were frequently unable to take breaks to eat, drink or use the bathroom, the migrants alleged. They also received only one day off each month, with no holidays.
The working environment was equally dire, according to the letter. Rooms where cutting, sewing and packing took place were overcrowded and unventilated, with poor lighting and exposed electrical wiring. There was no clean water, let alone personal protective equipment. These “unlawful” conditions led to one worker accidentally slicing his arm when he moved heavy machinery in preparation for a planned audit. Another worker had to be taken to the hospital to be rehydrated by drip.
The complainants said that they earned between 3 to 4 pounds ($3.65 to $4.87) a day, sans overtime pay, in contravention of the 7-pound ($8.52) minimum that Thai law mandates for every eight-hour cycle of work, plus another 1.34 pounds ($1.63) an hour for overtime. Workers in Thailand are also legally entitled to holiday rest and severance pay.
V.K. Garment housed the migrants in “tiny” dormitories, where they slept on cement floors with no locks, walls or ceilings, the letter said. The housing was so “unsafe and unsecure,” it added, that a seven-year-old girl was raped by an employee of the factory in 2018. The child was alone at the time of the incident because her mother, also an employee, had to work overtime and could not leave. The mother couldn’t afford childcare because she was being paid “illegally low wages.”
Charges for rent and immigration documents were deducted from wages, often leaving the workers so short of cash that they had to turn to loan sharks, the claim said. This, it added, left them with “no alternative” but to remain working at the factory in order to pay off their debts.
The complainants said they were unable to bring up their concerns with the factory or object to the conditions because of fears they would lose their job or be blacklisted from working in other factories. Because of this, Leigh Day’s letter said, many of the migrants continue to suffer from psychological harm.
Besides Tesco, action is being brought against Ek-Chai Distribution System Company Limited, which was owned by Tesco until 2020, and auditing firms Intertek Group and Intertek Testing Services, which gave V.K. Garments’ working conditions and Tesco’s F&F products their seal of approval.
Tesco and Intertek’s audits at the factory failed to identify, report or adequately remediate the “unlawful activities” that harmed workers both on the production floor and in its housing, the complaint said.
When V.K. Garment’s workers filed a complaint with the Thai Department of Labor Protection and Welfare in 2020 about the factory’s failure to pay two years’ worth of full wages, including overtime, holiday pay, severance pay, and severance pay in lieu of advance notice, totaling 765,000 pounds ($931,324), the agency reportedly used an Intertek audit to find it only liable for severance pay.
Tesco, which sold off its Asia business to C.P. Retail Development Company, in March 2020, described the assault as a “horrific” incident. Had it been alerted to it and the other issues at the time they took place, it would have ended its relationship with the supplier immediately, the retailer told Sourcing Journal. “Unfortunately we were not made aware until earlier this year, more than a year after the sale of our business in Asia,” a spokesperson said.
Tesco said it was not responsible for running the factory and that there is no systemic complaint in relation to its procedures in Leigh Day’s complaint. Rather, it said, the complaint is that the third-party audits carried out did not identify the failings of V.K. Garment.
“Protecting the rights of everyone working in our supply chain is absolutely essential to how we do business. In order to uphold our stringent human rights standards, we have a robust auditing process in place across our supply chain and the communities where we operate,” the spokesperson said. “Any risk of human rights abuses is completely unacceptable, but on the very rare occasions where they are identified, we take great care to ensure they are dealt with appropriately, and that workers have their human rights and freedoms respected.”
Ek-Chai, Tesco’s Thai subsidiary until 2020, also denied liability primarily on the basis that it was not involved in V.K. Garment’s employment conditions.
Intertek told Sourcing Journal that it was unable to comment while legal proceedings are underway, but that “as a responsible business,” it takes the matters that have been raised “very seriously.”
A call to a number for V.K. Garment failed to connect, while an email to an address listed on its Facebook page, which has not been updated since 2021, was not returned. Sirikul Tatiyawongpaibul, the factory’s managing director, told the Guardian, however, that the allegations were “hearsay” and that its rules and regulations have been in line with Thai law.
The legal case alleges that Tesco “consistently” sourced F&F clothing from the factory until 2020 and was aware of the origin of the clothing. The retailer, it argues, was also aware or reasonably ought to have been aware, of the unlawful housing conditions and factory working conditions and practices. The claim accuses both Tesco and Ek-Chai of “negligence” for “permitting, facilitating and/or failing” to prevent those unlawful working and housing conditions. Instead, they were “unjustly enriched” at the expense of the employees and should therefore be liable for restitution under Thai law.
Similarly, it fingers Intertek for “negligence” for failing to identify and/or report conditions that caused injury to workers. If Tesco and Intertek won’t settle the migrants’ complaint, they will consider escalating the issue to the High Court, Leigh Day said.
“The alleged treatment of vulnerable migrant workers in the way they have described to us is totally contrary to the ethical image that Tesco seeks to portray in the U.K.—a company of this size should be taking steps to ensure that workers producing their products are not mistreated,” Oliver Holland, a partner at Leigh Day, said. “The social auditing industry is seriously broken and the garment industry’s reliance on social auditors like Intertek should end now and they should start to take greater responsibility for their supply chains to ensure endemic issues like forced labor are wiped out.”
This isn’t the first time in recent months that social audits have come under fire.
Ben Skinner, founder and president of nonprofit watchdog group Transparentem, told Sourcing Journal last month that such inspections are “so effectively and so systematically gamed” that the industry needs to “fundamentally revisit” how they are being conducted. Recent reports by Human Rights Watch and IndustriALL Global Union have also taken aim at the current approach to human rights due diligence, which they say cannot be considered credible without the full involvement of workers and trade unions to protect freedom of association, collective bargaining and health and safety.
Deeper, higher-quality assessments are possible, said Kate Larsen, director of SupplyESChange, an ESG consultancy. Unannounced offsite worker interviews are a must, as are helpline monitoring programs that provide grievance channels for workers. “It appears [these] likely did not happen in this case,” she told Sourcing Journal.
Something the lawsuit doesn’t bring up either is the knock-on effect poor purchasing practices can have on labor conditions. It’s unclear, she said, whether Tesco is incentivizing suppliers for transparency and delivering actual improvements for workers.
“A comment that ‘we would have ended business if we knew about this issues’ does not indicate a supply chain human rights due-diligence program of working to influence and support improvements needed for workers, and reward suppliers who deliver these, including with fairer pricing and business terms,” Larsen said.