Brands react to latest sub-minimum wage report as supply chains stay in spotlight

By

Nigel TAYLOR

Published
Dec 16, 2021

A host of major international fashion brands are defending themselves as claims surface that their suppliers are failing to pay minimum wages at clothing factories in Karnataka, India.

Nike, H&M, Gap, Tesco and Marks & Spencer are among major brands sourcing clothing from Karnataka saying they were committed to paying the legal minimum wage and expected their suppliers to comply with a high court order.

Marks & Spencer said it was working with the Ethical Trading Initiative  to “demand” that its suppliers paid the legal minimum wage. “We have engaged our suppliers in the state directly, making clear our expectation that these conditions be met with immediate effect,” an M&S spokesperson said.

A spokesperson for Tesco also said: “We are working with the Ethical Trading Initiative and other brands to ensure this issue is resolved and workers are paid in full.”

H&M also said: “We have made it clear to our suppliers in Karnataka that they must pay the workers legally mandated minimum wages, including all arrears. If they fail to do so, it will ultimately lead to serious business consequences.”

The denials follow reports that more than 400,000 garment workers in the major clothing production hub claim they have not been paid the state’s legal minimum wage since April 2020. That’s according to the international Workers Rights Consortium (WRC) that monitors working conditions in factories, reported The Guardian newspaper.

The WRC estimates a shortfall of 16.06 Indian rupees (16p) a day. It claims the the total amount of unpaid wages to add up to more than £41m. The monthly minimum wage for the garment sector is 417 rupees (£4.16) a month.

Scott Nova, executive director of the WRC, said that despite persistent demands from the WRC for the past two years, western brands had either refused to intervene or had not acted to ensure that workers making their clothes were paid in line with Indian law.

Garment suppliers argue that the Ministry of Labour & Employment issued a proclamation suspending the minimum wage increase shortly after it was implemented in April 2020 and that a legal complaint relating to the requirement to pay the increase was still progressing through the courts in Karnataka.

However, in September last year, the Karnataka high court ruled that the labour ministry’s proclamation was illegal and that the minimum wage, including all arrears, must be paid to workers regardless of any other court proceedings.