Zara Links Highlighted Over Unpaid Wages

A garment factory that has owed wages and severance pay to workers since closing five months ago had been manufacturing clothes for major global fashion label Zara, a labor rights group said on Monday, as former employees gathered at the shuttered plant.

About 60 workers assembled at Phnom Penh’s Co-Seek Garment in Russei Keo district’s Tuol Sangke commune as court officials took inventory of equipment and other abandoned property that could eventually be sold for restitution.

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Clothes hangers in a Zara store in central Barcelona (Reuters)

Han Senghorn, a representative for the workers, said the Chinese-owned Co-Seek—which made pants for Zara, U.S.-founded Esprit and Japanese label Edwin—began moving its valuable machinery out of the factory in August, but had assured employees it was not shuttering. In September, however, the factory gates abruptly closed and the owner offered $160 to each employee, including some who had worked there since 2012 and were entitled to $800, she said.

More than 300 of the factory’s 400 workers accepted the money, while the remaining 98, who asked for $200 each—still about $50 less than what even the newest workers were owed—received nothing, Ms. Senghorn said. “We demanded only $200, but the company refused.”

The group’s lawyer, Hong Sambath, said he was not sure when or if the factory’s remaining equipment would be processed by the court.

Zara is the flagship brand of Spanish multinational clothing company Inditex, which is one of the largest fashion groups in the world. According to the Inditex website, it has more than 7,000 stores worldwide and is “inspired by a responsible passion for fashion.”

In May, U.S. business magazine Forbes valued the Zara brand at $10.7 billion.

William Conklin, country director for the U.S.-based labor rights group Solidarity Center, said his organization had recently attempted to contact Inditex, as well as Co-Seek’s other major buyers, as Inditex was a signatory to a global framework agreement. Such agreements are signed between an international brand and a global union federation to ensure that the company respects workers’ rights.

Solidarity Center will “make the case to buyers that they have an obligation to workers,” Mr. Conklin said. He added, however, that they may try to wash their hands of any liability if tracking the supply chain proved difficult.

“Sometimes it’s not straightforward,” he said. “Factories can be subcontracted, and buyers say they’re not their suppliers.”

Inditex did not respond to requests for comment.

(Additional reporting by Buth Kimsay)

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