BANGKOK (Reuters) – More than a thousand laid-off Thai garment workers who made bras at a factory supplying lingerie giant Victoria’s Secret have received a landmark $8.3 million settlement, officials said workers’ rights activists on Saturday. Brilliant Alliance Thai closed its factory in Samut Prakan in March 2021 after going bankrupt.
But the 1,250 laid off workers – many of whom had worked at the plant for more than a decade – did not receive severance pay mandated by Thai law. The factory also produced underwear for major US brands Lane Bryant and Torrid, owned by Sycamore Partners, but only Victoria’s Secret contributed to the settlement through a loan agreement with the owners of the factory.
Victoria’s Secret confirmed in a statement that an agreement had been reached, but did not mention the amount involved. “For several months we have been in active communication with the owners of the plant to facilitate a resolution,” the company said.
“We regret that they were ultimately unable to complete this deal on their own. To ensure the workers receive their full severance packages, Victoria’s Secret has agreed to advance severance packages departure to the owners of the factory,” he added.
Former worker Jitnawatcharee Panad had 25 years at the factory and said more than two-thirds of laid-off workers were women aged 45 or older.
“If we hadn’t fought for fair compensation, we wouldn’t have received anything,” Jitnawatcharee, also president of the Triumph International Workers’ Union of Thailand, told AFP.
“The doors of the Ministry of Labor were locked when we went there for help and the minister didn’t seem to want to listen to our problem.
The deal is the largest ever wage theft deal at a one-man garment factory, international workers’ rights group Solidarity Center said.
“I think this is extremely unprecedented and represents a new model – the scale of the compensation and interest paid on it…as well as the direct brand engagement,” the national director of the company told AFP. Solidarity Center Thailand, David Welsh.
Over the past year, sacked workers and Thai union representatives have demonstrated outside Government House in Bangkok demanding their wages.
Chairman of the Industrial Labor Confederation of Thailand, Prasit Prasopsuk, said some protesting workers had been charged with criminal offenses including breaking public assembly rules during the pandemic.
“This case serves as a lesson for the future for the government (…) to ensure that foreign companies doing business in Thailand allocate a portion of their monthly profits for fair compensation when these companies cease domestic operations” , did he declare.
A Worker Rights Consortium report from April last year said it had documented similar cases of wage theft at 31 garment factories in nine countries.
Worker Rights Consortium executive director Scott Nova said the cases were just the “tip of the iceberg” and that the problem of wage theft in the garment industry had exploded during the pandemic as clothing orders were dwindling.
He estimated garment workers around the world owed $500 million as a result of factory closures and unpaid severance pay.
Some workers at the Samut Prakan factory received the equivalent of more than four years’ salary last week, he said.
“It’s like the equivalent of a worker’s life savings…and it’s just stolen. What it means to lose this and get it back is hard to capture in words,” Nova added.