JAKARTA - International lingerie brand Victoria's Secret paid compensation worth 8.3 million US dollars, or around Rp. 120,677,020, in compensation to more than 1,200 Thai garment workers who made bras at a factory that was hit by layoffs.
Brilliant Alliance Thai closed its factory in Samut Prakan, Thailand in March 2021 after going bankrupt. But the 1250 laid-off workers, many of whom had worked in the factory for more than a decade, did not receive the severance pay mandated by Thai law.
The factory also produces underwear for plus-size American brands Lane Bryant and Torrid, which are owned by Sycamore Partners. But only Victoria's Secret contributed to the settlement, through a loan agreement with the factory owner.
Victoria's Secret confirmed in a statement that an agreement had been reached, but did not specify the amount involved.
"For several months we have been in active communication with the factory owner to facilitate the settlement," the company said.
"We regret they are ultimately not in a position to resolve this issue themselves, so to ensure workers receive their full severance pay, Victoria's Secret agreed to provide severance pay to factory owners," he added.
Former Jitnawatcharee Panad, who has worked at the factory for 25 years, said more than a third of the laid-off workers were women aged 45 and over.
"If we don't fight for fair compensation, we won't receive anything," Jitnawatcharee, who is also president of Thailand's Triumph International Workers' Union, told AFP.
"The Ministry of Manpower door was locked when we went there to seek help and the minister didn't seem willing to listen to our concerns," he continued.
The agreement is the largest ever compensatory settlement for an individual garment factory, said international labor rights group Solidarity Center.
"I think this is quite unprecedented and represents a new model, the scale of the severance pay and interest paid on it, as well as direct involvement by the brand," said David Welsh, Country Director of Solidarity Center Thailand.
Over the past year, sacked workers and representatives of Thai trade unions have protested outside a government building in Bangkok, demanding their salaries.
Meanwhile, Thai Confederation of Industrial Workers President Prasit Prasopsuk said some of the protesting workers had been charged with criminal offences, including violating the rules for gathering in public places during the pandemic.
"This case serves as a lesson in the future for the government, to ensure that foreign companies doing business in Thailand allocate a portion of the monthly profits for fair compensation when these companies stop operating in the country," he explained.
A Labor Rights Consortium report from April last year said it had documented cases of similar compensation in 31 garment factories in nine countries. The group's executive director Scott Nova said the cases were only the 'tip of the iceberg', that similar problems in the garment industry had exploded during the pandemic as clothing orders declined.
He estimates garment workers worldwide owe $500 million as a result of factory closures and unpaid severance pay.
He revealed that some workers at the Samut Prakan factory had received wages equivalent to more than four years last week.
"It's like a worker's life savings and it's just stolen. What it means to lose it and get it back is difficult to put into words," concluded Nova.
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