Workers' rights advocates claimed that more than 1000 Thai workers at a bra factory that supplied Victoria's Secret in America were dismissed and received compensation of 8.3 million dollars (7.3 millions euros).
After going bankrupt, Brilliant Alliance Thai shut down its Samut Prakan factory, south of Bangkok in March 2021. The 1,250 workers who were laid off, many of them having worked in the factory for over a decade, did not receive the severance payment required by Thai law.
Although the Sycamore Partners fund owned the factory, only Victoria's Secret contributed financially.
The lingerie brand announced that it had signed an agreement. It did not disclose the amount. "For many months, we have been in touch with the factory's owners to find a solution."
"We are sorry that they could not resolve this matter themselves. Victoria's Secret agreed to transfer the funds to the factory owners in order to ensure workers get the full severance package," the brand stated.
Sycamore Partners declined comment when Sycamore Partners was contacted by AFP.
According to Solidarity Centre, this settlement represents the largest ever made by a garment factory in non-payment of work performed.
These workers were fired and Thai union members have protested for over a year in front of Bangkok's government headquarters to demand the rightful compensation.
According to a report from Worker Rights Consortium in April 2021, similar cases of nonpayment of wages were reported at 31 garment factories in nine different countries.
Scott Nova, executive director of Worker Rights Consortium, said that these cases were only the tip of the iceberg and that the problem has grown during the pandemic because of a drop in garment orders. As a result factory closings and unpaid severance payments, he estimated that around $500 million is owed by garment workers worldwide.
He said that some workers at Samut Prakan received more than four years' worth of wages last week.