Victoria’s Secret was one of several clothing retailers supplied by the factory in Thailand, which closed in 2021 after the company that owned it went bankrupt. Photo by Cezary Kowalski/SOPA Images/LightRocket via Getty Images
More than 1,000 workers who were sacked from a garment factory in Thailand are set to receive an $8.3 million payout financed by Victoria’s Secret, in the biggest ever settlement of its kind that could set a precedent for brands to better protect workers’ rights in the developing world.The multi-million dollar payout will be divided up among 1,250 workers who made bras at a factory owned by Brilliant Alliance Thai Global Co Ltd (BAT) in Samut Prakan province. The workers were laid off after BAT went bankrupt and shut down the factory in March 2021. At the time, the company and its Hong Kong-based owner, Clover Group, refused to pay their severance or outstanding wages.
More than a year later, Victoria’s Secret & Co.—the world’s most famous lingerie brand, and one of several clothing retailers that was supplied by the Samut Prakan factory—revealed that it would extend a loan to BAT’s owner to help the company settle the payout. David Welsh, the Thailand director for U.S.-based workers rights' advocacy group the Solidarity Center, hailed the potential impact of the deal. “It’s extremely unprecedented and represents a new model—the scale of severance and interest paid on it… as well as direct engagement by the brand,” he said.The Samut Prakan lingerie factory also produced underwear for plus-size American brands Lane Bryant and Torrid, but only Victoria’s Secret contributed to the settlement.“Over several months we had been in active communication with the factory owners to facilitate a resolution,” Victoria’s Secret said in a statement last week. “We regret they were not ultimately in a position to conclude this matter on their own, so to ensure the workers received their full severance amounts owed, Victoria’s Secret agreed to advance the severance funds to the factory owners.”
Advocates hope the historic payout could provide a long-needed shake-up to global supply chains, particularly the garment industry, which has faced criticism for its poor track record around workers rights in the developing world.“Global brands need to realise that they are not passive investors, but trend-setters in setting labour standards,” said Welsh.Although Victoria’s Secret did not disclose the amount involved in the agreement, a Thai labour ministry document seen by Reuters showed that the total payment amounted to 285.2 million baht ($8.36 million). For some workers, the payout ended up being the equivalent of more than four years’ wages, according to Worker Rights Consortium executive director Scott Nova.“It’s like the equivalent of a worker’s life savings… and it [was] simply stolen,” Nova said. “What it means to lose that and get it back is difficult to capture in words.”Jitnawatcharee Panad, a former worker at the factory who is also president of the Triumph International Workers’ Union of Thailand, told Agence France-Presse that more than a third of the sacked workers were women aged 45 and older. “If we hadn’t fought for fair compensation, we wouldn’t have received anything,” she said. “The doors of the labour ministry were locked when we went there to seek help and the minister didn’t seem to want to listen to our problem.”Follow Gavin Butler on Twitter.