Four premium suppliers for Swedish clothing giant H&M have been called out by a local labour rights group for their continued use of short-term contracts, hampering employees’ ability to unionise and, in one case, allegedly paying workers less than the $140 monthly minimum wage.
In a report titled When ‘best’ is far from good enough and released on Friday, labour rights NGO Central surveyed 38 workers from four suppliers for H&M – three rated “platinum” and one “gold”, factory categories the multinational uses to rate supplier compliance to labour standards and laws.
Citing H&M’s own commitments to ensure workers are paid a fair living wage, the report says that even its “top ranked” and “preferred” factories were falling short of industry averages.
For instance, while the three platinum suppliers – Eastex Garment Co and Seduno Investment Cambo Fashion in Phnom Penh, and Vanco Industrial in Kandal – were found to be paying workers on average $172 a month, more than the minimum wage, the figure was still below the industry average of $178 per month.
However, starting this year, the fourth supplier – M&V International in Phnom Penh – was allegedly failing to even pay the $140 minimum stipulated by law. While it had been paying workers above the industry average as of mid-2015, work stoppages stemming from falling orders this year – during which workers were allegedly not paid, in violation of the Labour Law – forced average wages as low as $136 a month.
Carin Leffler, urgent appeals coordinator at Netherland-based Clean Clothes Campaign, which has long criticised brands’ management of their supply chains, called upon “H&M to immediately secure orders at M&V and take concrete steps to ensure considerably higher wages for workers in their Cambodian factories”.
The Central report also found other breaches of H&M’s commitments. Workers at the three platinum factories were docked from $2.50 to $15 for coming five to 10 minutes late to work – disciplinary measures that H&M supposedly does not permit. It found continued use of two- to six-month short-term contracts at Eastex and Vanco, despite H&M’s assurance that workers who had achieved two years of seniority would get undetermined duration contracts.
Neither the Labour Ministry nor the four factories could be reached for comment yesterday.
When presented with the findings, H&M did not address specific concerns raised by the report, instead only saying it was working with various stakeholders to improve its supply chain. “The report raises important issues which we work on every day and in all the markets we buy our products from,” a spokesperson for the company said via email.
Ath Thorn, president of Coalition of Cambodian Apparel Workers Democratic Union, said he hadn’t read the report, but that M&V should compensate workers if they were paid below the minimum wage.
He added that the prevalent use of short-term contracts “was not surprising”, and was a result of lax enforcement of the Labour Law.