UK garment manufacturers fined £90k for underpayment of staff

UK-based garment factory owners have been forced to pay out almost £90,000 to employees for non-payment of minimum wage, figures from HMRC reveal.

The data was provided to the Environmental Audit Committee (EAC) as evidence for its on-going inquiry into the UK fashion industry's sustainability practices. Since 2012 an average of £900 has been paid out to 126 factory workers as compensation for underpayment.

The figures have been provided by Janet Alexander, Director, Individuals and Small Business Compliance, following the Committee’s request for further information about HMRC’s textile industry casework at the 18 December 2018 evidence session, staged by the EAC. The full contents of the letter can be read here.

It shows more than £1,350 has been paid in wage arrears to 10 workers following HMRC investigations. This is equivalent to more than three weeks’ pay at National Minimum Wage. One in four investigations by HMRC found non-payment of the National Minimum Wage. The Committee was also told that 14 investigations are ongoing.

Responding to the figures, chair of the Committee, Mary Creagh MP said: "'Made in the UK’ should mean workers are paid at least the minimum wage. It has been 20 years since the introduction of the minimum wage but in our inquiry we heard that under payment is rife and goes hand in hand with a culture of fear and intimidation in the UK’s textile industry.

“This letter adds to the scandalous and growing evidence of workers being criminally underpaid in the UK. This must stop. We need Government action to end these 19th century practices in 21st century Britain.”

Mary Creagh MP talks to The Industry's Lauretta Roberts

Speaking at The Industry's Fashion Futures Forum in partnership with Avery Dennison last October, Creagh recounted evidence provided by fast-fashion etailer Missguided, which claimed that its auditors had been beaten up when inspecting factories.

“Missguided came in and told us that their auditors got beaten up in Leicester when they tried to inspect the factory. If they are beating up the auditors from the company they want to work for then you’ve got to ask what is like for women working in those factories? This is Leicester, not Bangladesh. But this type of modern day slavery is taking place in plain sight and is the bedrock of some of these new upstart brands,” she told the audience.

The findings of the EAC's full report will be published during London Fashion Week next month.