BANGKOK (Reuters) - Thai workers who were sacked last year from a factory supplying global lingerie brands including Victoria's Secret will receive $8.3 million, in what labour activists say is the biggest settlement of its kind in the global garment industry.
About 1,200 workers were laid off without severance pay and wages owed to them by Brilliant Alliance Thai Global Co Ltd (BAT (LON:BATS)) after it went bankrupt and shut down its factory in Samut Prakan province in March 2021.
The incident was one of "hundreds of cases of wage theft" that labour activists say took place in the garment industry during the COVID-19 pandemic. The settlement, financed by Victoria's Secret in a loan arrangement with BAT's owner, could set a precedent for global brands to better protect the rights of workers in their supply chains, according to Scott Nova, Executive Director of the Worker Rights Consortium, an international labour advocacy group.
"Global brands need to realise that they are not passive investors, but trend-setters in setting labour standards," said David Welsh, the Thailand director for the Solidarity Center, a U.S.-based workers rights' advocacy group.
More than a year after BAT and its Hong Kong-based owner Clover Group refused to pay the laid-off Thai workers, Victoria's Secret & Co said this week in an emailed statement. It will extend a loan to the owners of Clover to finance the settlement.
It was unclear how much of the settlement Victoria's Secret would cover, saying in the statement that BAT's owner were not "in a position to conclude this matter on their own" so the company "agreed to advance the severance funds to factory owners," without revealing the amount.
A Thai labour ministry document seen by Reuters showed the total payment to the workers including related costs was in a total of 285.2 million baht ($8.36 million).
Clover had initially said the workers should agree to wait 10 years to be paid in full.
Emily Lau, an executive of Clover and a board member of the bankrupt BAT said on Friday the payment will be made with "the personal resources of owners, Angie and Emily Lau" but did not mention the loan from Victoria's Secret.
($1 = 34.1500 baht)