More than a thousand sacked Thai garment workers who made bras at a factory supplying lingerie giant Victoria's Secret have received a landmark $8.3 million (Sh969 million) settlement, labour rights activists said Saturday.
Brilliant Alliance Thai closed down its Samut Prakan factory in March 2021 after going bankrupt.
But the 1,250 laid-off workers -- many of whom had worked at the factory for over a decade -- did not receive severance payouts mandated under Thai law.
The factory also produced underwear for plus size American brands Lane Bryant and Torrid, owned by Sycamore Partners -- but only Victoria's Secret contributed to the settlement via a loan arrangement with the factory's owners.
Victoria's Secret confirmed in a statement that an agreement had been reached, but did not mention the amount involved.
"Over several months we had been in active communication with the factory owners to facilitate a resolution," the company said.
"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," it added.
Former worker Jitnawatcharee Panad had clocked up 25 years at the factory and said more than two thirds of the sacked workers were women aged 45 or older.
"If we hadn't fought for fair compensation, we wouldn't have received anything," Jitnawatcharee, who is also president of the Triumph International Workers' Union of Thailand, told AFP.
"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."
The agreement is the largest ever wage theft settlement at an individual garment factory, the international workers rights group Solidarity Centre said.
"I think 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," Solidarity Centre Thailand country director David Welsh told AFP.
For the past year, sacked workers and Thai union representatives have protested outside Government House in Bangkok calling for their pay.
Confederation of Industrial Labour of Thailand president Prasit Prasopsuk said some protesting workers had been charged with criminal offences, including violating public gathering rules 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 some portion of monthly profit for fair compensation when these companies cease domestic operations," he said.
A Worker Rights Consortium report from April last year said it had documented similar wage theft cases at 31 garment factories in nine countries.
Worker Rights Consortium executive director Scott Nova said those cases were just the "tip of the iceberg" and the issue of wage theft in the garment industry had exploded during the pandemic as clothing orders declined.
He estimated garment workers worldwide were owed $500 million as a result of factory closures and unpaid severance.
Some workers at the Samut Prakan factory had received the equivalent of more than four years' wages last week, he said.
"It's like the equivalent of a worker's life savings... and it's simply stolen. What it means to lose that and get it back is difficult to capture in words," Nova added.