To assess how companies that are covered by the new German law implement their new due diligence obligations, a survey was conducted among workers in Pakistan who produce for such global garment brands and retailers.
For this, more than 350 garment workers in different factories in Sindh province were interviewed over six months between January and June 2023.
The study’s results indicate that, so far, effective measures have yet to be taken by apparel brands and retailers to prevent withholding an adequate living wage in the surveyed factories.
Of the over 350 workers interviewed, 97 percent of the respondents did not have a written employment contract, and 80 percent still needed to receive a pay slip. In contrast, 29 percent of workers reported being employed through third parties.
Factories in Pakistan often hire only a small proportion of the workers directly, as many are hired through third parties who act as intermediaries between the factories and workers.
“Often, these workers do not even receive the legal minimum wage nominally and are not registered and insured in the social security system,” the study added.
“This so-called contracting system is a way to get rid of workers flexibly and makes it difficult to trace labor rights violations and the affiliation of workers to factories,” the study observed.
The study pointed out that these practices are well known to anyone working in the Pakistani garment industry, including brands and retailers who produce in Pakistan.
In the factories where employment through third parties was reported particularly frequently, this was also accompanied by severe labor law violations, including withholding appropriate wages.
Approximately 28 percent of workers still need to receive the legal minimum wage for unskilled workers of rupees 25,000 per month.
In 94 percent of these cases, no trade union was active, and 84 percent of those not receiving the legal minimum wage were employed through third parties or received piecework wages.