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Reports Allege Workers Locked Out of ‘Closed’ Thai Factory

A factory in Thailand that made intimate apparel for companies such as Ann Taylor owner Ascena Group, Torrid and Victoria’s Secret allegedly shuttered without notice earlier this month, locking out 1,388 workers and leaving them without owed wages, bonuses and severance pay, labor advocates reported Tuesday.

IndustriALL Global Union, whose affiliates represent more than 50 million workers in the mining, energy and manufacturing sectors of 140 countries, said that workers arrived at Brilliant Alliance Thai Global for their night shift on March 10, only to find a notice on the factory gates announcing its permanent closure. The actions breach Thai labor law, which requires employers to provide a month’s notice and honor any outstanding financial commitments, including unpaid wages and unused annual leave. Redundancy payments are also mandatory.

But Brilliant, which was owned by Hong Kong’s Clover Group International, was already flouting regulations. When it took over the facility from Body Fashion in 2019, it failed to transfer employment conditions, indefinitely suspending bonus payments and providing workers with half their former medical coverage, IndustriALL said.

“It is unacceptable that the company unilaterally and unfairly laid-off workers without the legal notice of period and legal payments,” IndustriALL general secretary Valter Sanches wrote in a letter to Clover Group. “The behavior of the management clearly violates the labor laws in the country as well as the Universal Declaration of Human Rights, as workers’ compensation is a human right. It is clear that this violation also contradicts your customers’ codes of conduct, such as Victoria’s Secret, Torrid, Ascena Group and Triumph International.”

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Brilliant’s union, which was associated with IndustriALL through the Confederation of Industrial Labour of Thailand, had sought to discuss concerns about working conditions with the factory’s management on a number of conditions, but meetings were delayed because of the pandemic. In January, Clover Group executives told union representatives over Zoom that there were not enough orders to keep the factory afloat. Brilliant’s management warned the union on March 3 that a rash of canceled orders meant the factory could only continue if workers accepted a four-month furlough at half pay. Upon a vote, 88 percent of the workers rejected the offer, though the union said it remained open to negotiation. On March 6, the factory announced a four-day vacation it would never return from.

“We call on Clover Group International to act in full accordance with national labor law and international core labor standards and to respect workers’ rights immediately by establishing a constructive dialogue with the union and by paying legal compensations of the unfairly dismissed workers,” Sanches said.

Union-busting layoffs under the pretext of the pandemic have become a pattern over the past year, even as more brands acknowledge the importance of freedom of association in their supplier codes of conduct.

Gokaldas Exports, an Indian garment-factory owner that supplies to H&M, was recently compelled to reinstate 1,200 workers after illegally laying them off at its only unionized facility, claiming that the Swedish retailer had canceled its apparel orders. (H&M denied the allegation.) Last June, workers in Myanmar factories manufacturing clothing for Zara and Primark said they were fired after forming a union. The issue has become a systemic one: The Business & Human Rights Resource Centre published a report in August concluding that pandemic layoffs have “disproportionately target unionized workers and labor activists, suggesting that apparel factories are using the pandemic as a cover to attack workers’ freedom of association.”

A representative from Clover Group said the factory had continuously informed the employees about its situation in regular meetings with the management during which they were “updated on the fact that the factory had not been able to secure further production or order projection, and that raw materials were being removed from the factory.”

“Throughout, the company was open and transparent to the employees about its precarious financial situation,” the representative said. “Unfortunately the unions showed no intention to cooperate, all proposed elements of the agreement were rejected, no counter-proposals were made and there was no ground for starting a constructive dialogue.”

Clover Group also says it isn’t leaving the employees without paying owed wages, bonuses or severance pay but rather with acting in accordance with national labor law, international core labor standards and “respect to workers’ rights.” Brilliant will fulfill all legal obligations and settle all outstanding salaries, overtime, awards or bonuses through to March 11, along with severance pay, by monthly installments beginning April 30 “subject to agreement by all employees.”

The representative also took issue with IndustriALL’s characterization of the handover from Body Fashion, calling it an “absolute falsehood.”

“The company inherited not only the machines, but also the existing employees and financial obligations towards them, including unpaid salaries, bonuses, employee leaves, benefits and severance pay obligations from their previous employer,”  the representative said. “Despite the challenges of the transition period, low operational efficiency and the resentment towards managerial changes, the company immediately began making the payments (including those which remained unpaid from the previous owners), maintained on-time wages, and continued to pay bonuses in total amount[s] of approximately $20.4 million or 632 million Thai baht, without losing any production employee working days until March 2021.”

Neither is it Clover’s intention to walk away from the legal care and entitlement of the employees, the representative said.

“For several months the company has been working closely with the Labor Protection and Welfare Office, actively seeking legal guidelines and implementing the Office’s recommendations,” the representative said. “Apart from the Labour Protection and Welfare Office, the company has engaged with conciliation officers and the social welfare office to manage the situation and ensure that all the decisions and communication are in full compliance with the Thai legal requirements. The company is continuing to cooperate with the Labour Protection and Welfare Office, and the company is committed to establishing a constructive dialogue with the unions and employees on the payment of workers’ compensations.”

Triumph was never a client of Brilliant’s, Clover Group added.

Ascena Group, Torrid, Triumph and Victoria’s Secret did not immediately respond to requests for comment.

Editor’s note: The story was updated on March 23, 2021, with statements from Clover Group. A previous version of this article misstated the name of Body Fashion as Body Factory.