Burmese workers producing F+F jeans for Tesco in Thailand report being trapped in effective forced labour, working 99-hour weeks for illegally low pay in appalling conditions, a Guardian investigation has found.
Tesco is facing a landmark lawsuit in the UK from 130 former VK Garment Factory (VKG) workers, who are suing them for alleged negligence and unjust enrichment. The workers made jeans, denim jackets and other F&F clothing for adults and children for the Thai arm of Tesco’s business between 2017 and 2020.
Tesco said the garments were only sold in the Thai market, although The Guardian has seen images of labels written in English on clothes understood to be made there. Profits from sales in Thailand flowed back to the UK.
It is believed to be the first time a UK company has been threatened with litigation in the English courts over a foreign clothing factory in its supply chain that it does not own.
The factory is in Mae Sot, a town on the Myanmar border that depends on Burmese migrant labor and has developed a reputation as a “wild west” for workers’ rights over the past decade. The lawsuit argues that Tesco should have known the area was known for exploitation.
People on mopeds drive past the VKG clothing factory in Mae Sot, Thailand. Photograph: Jack Taylor/The Guardian
The Guardian has investigated allegations made by former factory workers and interviewed 21 of them in Mae Sot. They described:
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They are paid as little as £3 a day to work from 8am to 11pm with just one day off a month.
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Detailed records kept by supervisors seen by the Guardian show most workers on their lines were paid less than £4 a day and only according to how much they could earn. At the time, the Thai minimum wage was £7 for an 8 hour day.
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Having to work through the night for 24 hours at least once a month to fulfill large F&F orders, and being so tired that they fell asleep at their sewing tables.
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Some reported serious injuries; one man described ripping open his arm with a dangerously heavy interlocking machine, requiring 13 stitches. Another said he lost the tip of his index finger after cutting it on a button machine while making F&F denim jackets.
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Many said they were yelled at and threatened by factory managers if they did not continue to work overtime and meet targets.
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More than a dozen workers interviewed said the factory opened bank accounts for them and then confiscated their cards and passwords so they could make it look like they were making minimum wage while paying far less in cash.
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Most of the workers relied on VKG for their immigration status, and some said their immigration documents were held by the factory, leaving them in debt bondage.
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Factory accommodation within the compound consisted of overcrowded rooms with concrete floors for sleeping and dirty pond water in a bucket for washing. Workers say most of the rooms had no door, just a curtain.
Tesco said that protecting the rights of everyone in its supply chain was absolutely essential and that if it had identified serious issues like these at the time it would have ended its relationship with VKG immediately.
Tesco began using the factory in 2017, despite its own initial inspection which identified areas of non-compliance that experts say should have been red flags.
Workers outside the factory. Photo: supplied
Tesco was not involved in the day-to-day running of the factory beyond setting and checking standards and placing orders. However, in a ground-breaking move, Tesco’s supply chain workers are seeking to hold Tesco accountable for allegedly failing to protect them.
Tesco made profits of £2.2 billion in 2020, the last year its Thai business used VKG.
Win Win Mya, 53, who said she was paid around £3 a day to sweep up scraps of fabric from the factory, said: “They took that profit away from us. They already have it but we have nothing.” .
Labor experts say big clothing brands like F&F deliberately outsource clothing production and factory auditing to avoid liability and reputational damage while keeping prices cheap and protecting profits.
The case, which is being brought by Leigh Day, challenges the outsourcing structure. Oliver Holland, the workers’ lawyer, said: “Tesco is one of the most profitable companies in the UK and our clients allege that they are making huge profits by outsourcing production, through workers on wages very low, working excessive hours and under terrible conditions.
“It is argued that this is all purely for the benefit of UK businesses, and so that consumers can buy very cheap clothes. Clothes that cost as little as F&F clothes are likely to be causing harm somewhere in the supply chain and that’s what we saw in this case.”
Burmese migrant families set off fireworks outside their homes as they celebrated the Tazaungdaing festival in Mae Sot last month. Photograph: Jack Taylor/The Guardian
A claim has been lodged in the high court and is expected to be heard in the new year. Also facing legal action is Ek Chai, which had been the Thai branch of the Tesco business until it was sold to Charoen Pokphand Group in December 2020.
The suit has also been filed against the auditors, Intertek. Lawyers believe it is the first time a social auditor has faced this type of lawsuit.
Intertek Thailand inspected the factory regularly but did not identify serious problems until July 2020, when workers say they complained about their conditions. Workers said the factory was tipped off about the audits and that VKG managers coached them to lie.
The damning audit report found that nine out of 26 workers interviewed said they were not paid the minimum wage or minimum wage, worked on Sundays and were afraid to speak out.
He also said that a worker reported that their ATM card had been taken, and concluded that he could not verify whether the factory was meeting schedules, wages and benefits due to inconsistencies in VKG’s records.
A protest by workers outside the factory. Photo: supplied
Tesco received the audit package in August 2020, but VKG remained a supplier until it sold Ek-Chai in December 2020. Tesco said it immediately launched an investigation and decided to drop the supplier, but he failed to do so before the business was sold.
In August 2020, 136 VKG workers were laid off, which they said happened after they demanded better pay and conditions in the wake of the audit. They tried to get compensation from the factory directly.
In October of that year, the workers filed a case with the Thai Department of Labor Protection and Welfare. They claimed they were entitled to unpaid wages consisting of two years’ full wages; wages for working traditional holidays; overtime pay; holiday pay and weekly rest days. But the department only ordered payment of severance pay and notice.
The case then went to the Thai Labor Court, which reached the same conclusion. Nothing has been paid and it is expected that an appeal will be filed by the workers shortly. Most are now pinning their hopes on the English case.
Thai labor experts and lawyers believe the Thai case failed in part because VKG relied on audit reports produced by Intertek that they consider deficient, as it reported up until 2020 that VKG had complied with labor laws.
Burmese migrant workers play volleyball on their day off from work in Mae Sot. Photograph: Jack Taylor/The Guardian
David Welsh, the Thailand Solidarity Center’s country director, said the courts tended to side with businessmen and that Mae Sot was “very much the Wild West of the global supply chain”.
Welsh said Mae Sot was characterized by a weak rule of law, poor wages and working conditions, no access to unions and a migrant workforce “with little or no legal protection”.
Charit Meesit, a lawyer who represented workers in Thai courts, has been fighting labor cases in court for 42 years. He said: “The authorities know what’s going on, but they’re turning a blind eye. The courts in Thailand need to step up and do more. What I’ve seen for a long, long time is business people abusing the system.”
A Tesco spokesperson said: “Protecting the rights of everyone working in our supply chain is absolutely essential to how we do business. In order to maintain our high human rights standards, we have an audit process in place solid in our supply chain and the communities in which we operate.
“Any risk of human rights abuses is completely unacceptable, but on the rare occasions that they are identified, we take great care to ensure that they are dealt with appropriately and that their human rights and freedoms are respected.
“The allegations highlighted in this report are incredibly serious, and had we identified issues like this at the time they occurred, we would have ended our relationship with this supplier immediately.
“We understand that the Thai labor court has awarded compensation to those involved and we will continue to urge the supplier to reimburse the employees for the wages they are owed.”
Sirikul Tatiyawongpaibul, the managing director of VKG, called the allegations “hearsay” and said they would have to go to court and could not be commented on, given that there is an ongoing case in Thai labor courts.
He said: “The rules and regulations of the company are in line with the labor law of Thailand, with the working and working conditions in accordance with the conditions set by the department of labor protection and welfare and customers… the company has defended the case with facts and does not. plans to close operations. It is necessary for the company to seek justice under Thailand’s judicial process.”
An Intertek spokesman said: “As a responsible company, we take the matters raised in your correspondence very seriously.
“We also note that these matters are currently the subject of Thai and English legal proceedings and we are therefore unable to comment…