New report published on working conditions in Leicester garment sector

Posted by er134 at Feb 18, 2015 02:35 PM |
Study led by Dr Nik Hammer of University of Leicester’s Centre for Sustainable Work and Employment Futures

Statement by the University of Leicester Press Office on 18 February 2015

University of Leicester Lecturer in Employment Studies, Dr Nik Hammer, has authored a new report into Leicester’s garment and textile industry.  It is commissioned by the Ethical Trading Initiative (ETI) and produced by the University of Leicester’s Centre for Sustainable Work and Employment Futures.

The report, A New Industry on a Skewed Playing Field: Supply Chain Relations and Working Conditions in UK Garment Manufacturing, with a case study on Leicester.

The 57-page report is based on 6 months research, comprising interviews with a wide range of stakeholders in UK garment and textiles sector; brands, retailers, suppliers, manufacturers, trade unions, community groups and workers.

Dr Hammer said: “The Ethical Trading Initiative – a UK based alliance that promotes respect for workers’ rights – commissioned this piece of research to look into working conditions in UK apparel manufacturing in order to establish a firm evidence base on working conditions. The University of Leicester’s Centre for Sustainable Work and Employment Futures is well placed as an independent research facility at the same time as being well embedded with links to industry, trade unions as well local authority and NGOs.”

The report highlights:

  • Apparel manufacturing in the UK has seen a striking revival since 2007. Between 2008-2012 the industry has grown by almost 11% mainly concentrated in major sourcing hubs such as the East Midlands, Manchester, and London.
  • The majority of workers in Leicester’s garment sector earn around £3 per hour (compared to a National Minimum Wage rate of £6.50), receive wages cash in hand, and do not hold an employment contract.
  • Some workers also complain about health problems, inadequate health and safety standards, verbal abuse, bullying, threats and humiliation.
  • Many employers only declare part of the hours worked and informally consider wages as a composite made of different parts: officially recorded hours at NMW rates; not recorded hours at around £3 per hour; and, at times, workers’ benefits are considered as part of the ‘package’.
  • In-work poverty is high: data from a small-scale survey conducted as part of the research point to an average monthly wage of £584 and a weekly household income of £229 (and these figures are likely to overstate actual wages and incomes across the Leicester garment sector).
  • Evidence collected as part of the research suggests that the underpaid wage sum for the East Midlands alone amounts to an estimated £1 million per week; in other words, the underpaid wages constitute 20% of the approximate gross value added of the industry.
  • These report findings do not apply to all workers across the board in the same way - the largest segment working under these conditions is made up by female workers who have been in the UK for more than 10 years, who either hold British citizenship or have a leave to remain and right to work status
  • The main reason many workers feel they must continue working in the garment sector is due to poor language, which are a barrier to them applying for jobs elsewhere. 70% of the small scale survey report they speak English only with difficulties and many do not have sufficient knowledge of their employment rights.
  • Another segment of workers is considered even more vulnerable than the majority of the workforce. These workers often have no or insufficient rights to work full-time, and work at lower wage rates and under conditions worse than the core group of workers.  Evidence suggests this group work in factories that have not been subject to social audits, producing garments that have been subcontracted without the knowledge of the lead firm or brand.

Dr Hammer said: “The findings of the research suggest widespread and severe violations of work and employment laws. For example, it seems that the majority of the workforce earn around £3 pounds per hour (compared to a National Minimum Wage rate of 6.50), are paid cash in hand, and have no employment contract. This is compounded by working conditions where workers have complained about health problems, inadequate health and safety standards, verbal abuse, bullying, threats and humiliation.

“Probably unsurprisingly, the largest segment working under these conditions is made up by female workers. What is more surprising is that the majority of them have been in the UK for more than 10 years, hold either British citizenship or have leave to remain and right to work status. We have conducted a small scale survey amongst garment workers and had 70% of them saying that they speak English only with difficulties. This explains why they work in this sector - language skills are not central, and amongst other reasons, it also explains why they find it difficult to switch to other sectors.

“It is important to say that such working conditions pull many workers and their families into in-work poverty. At the same time, such working conditions are threatening the existence of manufacturers who want to comply with existing corporate and employment laws. These firms face big problems as they find themselves undercut by competitors who can produce at less than half the legal wage rate, and we know that wages constitute the key cost in apparel manufacturing.”

Dr Hammer added that the landscape of the industry is not comparable to what it used to be: “In the past we had large, iconic firms that were unionised – now we have just under 4,000 small and micro firms at an average employment size of 8.6 employees.

“In terms of drivers, on the one hand, these working conditions exist because manufacturers are confronted with the considerable market power of global brands, who can source globally, allow only low margins in lean supply chain systems, and operate purchasing practices that are too often focused on the lowest possible price.

“On the other hand, authorities have found it difficult to enforce the relevant laws in this industry. Of course this is a difficult terrain where firms are registered and wound up again at astonishing speed but when it comes to corporate taxes, employers’ national insurance contributions, minimum wages, right to work permits, health and safety, trading standards, etc the relevant authorities generally have only insufficiently been able to enforce the law.

“Any solution needs to be based on at least three elements. First, government needs to recognise that today’s supply chains are not driven by ‘normal’ firms and legislate that such lead firms or brands have a responsibility that goes beyond their immediate contractual relations.

“Second, wages need to be taken out of competition: wage rates are to be determined by minimum wage regulation and collective bargaining rather than by pure market power.

“Finally, any enforcement of work and employment regulations will remain problematic unless trade unions as well as workers at factory level have a voice.”

“The Ethical Trading Initiative (ETI) has launched a credible programme which outlines how it will work with brands, trade unions, NGOs, suppliers, manufacturers, workers and other stakeholders to tackle the labour rights issues identified in the research. This is a considerable task that requires sustained collaboration of all stakeholders involved. As far as the University of Leicester and the Centre for Sustainable Work and Employment Futures are concerned, we are committed to support this programme wherever we can.”

Ends

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