It is the largest individual compensation factory solution ever, says an international group of workers’ rights.
Underwear brand Victoria’s Secret will pay more than $ 8.3 million (about € 7.7 million) in compensation to more than a thousand laid-off Thai workers, labor law activists said on Saturday, according to news agency AFP.
The Brilliant Alliance Thailand plant in Samut Prakan, near Bangkok, went bankrupt in March 2021. In addition to Victoria’s Secret, the plant made underwear for American brands owned by Sycamore Partners, Lane Bryant, and Torrid.
The closure of the plant laid off 1,250 workers who did not receive severance pay under Thai law, AFP said.
Of the three brands, only Victoria’s Secret participated in the agreement on severance pay. The final compensation was successful through a loan arrangement with the plant owners.
Victoria’s Secret confirmed that it had reached an agreement on compensation, but did not mention the exact amount, AFP says.
At issue is the largest-ever redress solution for a single garment factory, says the international workers’ rights group Solidarity Center AFP.
“I think the agreement is extremely unprecedented and represents a new model: the amount of severance pay and interest paid on it … and the direct commitment of the brand,” Solidarity Center Thailand Country Director David Welsh said to AFP.
Problems with payroll in the clothing industry have only increased during the interest rate pandemic, says another Worker Rights Consortium, which focuses on workers’ rights.
The organization’s report from April last year says similar payroll problems had been recorded in 31 clothing factories in nine countries.
Even these cases are believed to be just the tip of the iceberg. Executive Director of the Worker Rights Consortium Scott Nova estimates to AFP that $ 500 million is owed to clothing workers worldwide.