Trade unions and labor rights organizations in Pakistan – Human Rights Commission of Pakistan (HRCP), National Trade Union Federation (NTUF), and Pakistan Institute of Labour Education and Research (PILER)– are filing a Public Interest Litigation (PIL) at the High Court of Sindh on 21st October, 2021, demanding that there should be an enquiry into the non-payment of workers’ wages in 23 garment suppliers factories in Karachi during the Covid-19 pandemic. They are also demanding that the brands* sourcing from these factories be held legally liable as “joint employers” for the wage theft of workers in these factories under the national laws of Pakistan and that the exploitative purchasing practices of these brands, which is the basis of such wage theft, be deemed illegal and unconstitutional.
As per a study conducted by the Asia Floor Wage Alliance (AFWA), 1,39,200 workers in these 23 factories suffered wage theft of approximately USD 54,660,525 in 2020 during the Covid-19 pandemic, as the global fashion brands and retailers sourcing from these factories cancelled orders or demanded retroactive price reductions, for goods which were already in production.
According to AFWA’s research, 81% of garment workers fell below the poverty line between March and May 2020, and household debt increased by around 113% during the same period. All workers surveyed at AFWA experienced employment shocks either in the form of layoffs or terminations, and workers with an average 5 years of work experience did not have enough savings to tide over even a one-month layoff period, without reducing consumption, incurring debt or selling assets.
“Between April and May, 2020, the factory laid off all workers and did not provide any financial support for laid-off workers, even if they were pregnant or had young children to feed at home. I removed my children from school, as I could not pay for their books or their school fees. I also sold our mobile phone, refrigerator, mixer and a fan to meet daily expenses. I have never seen such difficult times.” – a garment worker from a H&M supplier factory in Karachi
“During the Covid-19 crisis, the plight of garment workers, women in particular, significantly worsened as suppliers under financial distress resorted to wage theft through widespread layoffs and terminations, cuts in social security benefits, and forced unpaid or underpaid overtime work. As prices of essential items, including food and medicines, soared due to high inflation, workers were pushed below the poverty line.” – Zulfiqar Shah, Joint Director, PILER
Garment supply chains are unregulated and extremely asymmetrical with brands being the most powerful actors. Brands control consumer markets in the developed economies, where they sell garments at high prices. At the same time, they control labour markets in developing economies or production countries where they push down labour costs through wage theft. Brands falsely project themselves as ‘buyers’ rather than as employers of workers in their supply chains, creating intense competition among suppliers and governments to push down labour costs to retain the businesses of the brands, while brands do not face any legal liability for labour violations in their supply chains.
“The plight of garment workers during the pandemic-induced recession was an extension and aggravation of the asymmetrical power relations in global garment supply chains.As brands adjusted their businesses to respond to the impact of the pandemic on their markets through predatory purchasing practices, suppliers were forced to take on production at even lower costs, accepting order fluctuations, lower prices and delayed payments, resulting in greater wage theft for garment workers over extended periods o ftime.” – Aabida Ali, Pakistan Coordinator, AFWA
Pakistan has labor laws meant for protecting workers, including their wages and benefits. Labor organizations filing this PIL are stating that brands, whose practices determine the wages and terms of employment of workers in Pakistan, cannot be exempt from liability under these laws. They have argued that brands act as joint employers of workers, and are therefore, jointly liable along with the supplier, for labor rights violations in their supplier factories.
“The purchasing practices of global fashion brands, and their relentless drive to maximize profit by shrinking costs are directly responsible for the wage theft of our workers. Brands and retailers have avoided liability for systemic abuse by creating layers of subcontracting, enabling them to avoid liability for the egregious wage violations in their supply chains. Until brands are held legally liability for labor and human rights violations in their supply chains, the problem of wage theft and poor working conditions in the Pakistani garment industry will continue.” – Nasir Mansoor, Deputy General Secretary, NTUF
Garment suppliers are completely economically dependent on the brands for running their operations, and for their ability to pay workers’ wages. The brands have major economic control over the production process of the supplier, including how workers perform their work and whether they get paid. In reality, the supplier acts as an agent or contractor of the brand, including of labour, for producing the products that are owned and marketed by the brand. It is through this concealed relationship of control that brands make profits, while refusing to fulfil their responsibilities towards workers.
“Most often, fashion brands, implicated in human rights abuses, have not had to face actual legal consequences in garment production countries, for their failure to respect human rights. This encourages brands to continue their abuse with impunity, as seen during the Covid-19 pandemic. By demanding that brands be held liable as joint employers for the wage theft of garment workers during Covid-19, we are trying to ensure workers can exercise their human rights and have access to justice when abuses occur.”
Asad Iqbal Butt, Vice Chairman Sindh, HRCP said, the textile and garment industry in Pakistan is the second largest employer in Pakistan, accounting for around 8.5% of GDP and almost 70% of the country’s exports. Despite this, Pakistan’s garment workers are some of the worst paid in the world, with extremely poor wages and low social security coverage. Holding fashion brands legally liable as joint employers under national laws will ensure that the Pakistani garment workers are protected from wage theft and poverty, and they have access to both human rights and environmental protections.
“Pakistan cannot achieve social or economic justice without addressing the wage theft of global fashion brands, which disproportionately impacts low-income workers and has only worsened throughout the pandemic. For workers who suffer wage theft, the resulting loss of income forces them to rely more heavily on public assistance programs, unduly straining safety net programs and hamstringing efforts to reduce poverty.” – Qazi Khizar, Vice-Chairperson, HRCP
“Holding brands legally liable for wage theft is not a new concept, as the Governor of California recently signed the Senate Bill 62 (SB 62), which will also hold brands liable for wage theft in their supply chains in California, including when third-party contractors are involved. We must demand legal liability from fashion brands, under our laws, for human rights violations, so that another factory fire like in Ali Enterprises or the poverty that our workers faced during the Covid-19 crisis, does not happen again.” – Karamat Ali, Executive Director, PILER
List of brands
GAP, H&M, Kontoor Brands, Levis, Inditex, Marks and Spencers, Amazon, Arcadia Group, Bestseller, Primark, Mango, American Eagle (Retail Ventures), Adidas, Espirit, HEMA, Lindex, Lidl, Reformation, Target, Tom Tailor, Callaway Golf, Aldi and Springfield.
