Boohoo has promised to investigate supplier over claims it paid workers less than €4 an hour
The factory was allegedly paying their workers just £3.50 an hour.
Boohoo has promised to investigate one of its suppliers over claims that staff were being made to work for less than the minimum wage. The factory in Leicester, England, which seems to be owned by Jaswal Fashions, had people working for just £3.50 (€3.88) an hour when the hourly minimum wage for over 25s in the UK is £8.72 (€9.66).
The site continued to operate during lockdown and has also been accused of not following appropriate safety measures.
Boohoo said that they were "very grateful" that these supposed conditions had been reported and said that it was "totally unacceptable". They told investors yesterday that they will end their relationship with any supplier they find to have broken their code of conduct.
In a statement to the stock market, Boohoo said:
"We will not hesitate to immediately terminate relationships with any supplier who is found to not be acting within both the letter and spirit of our supplier code of conduct.
"This includes very clear expectations on transparency about second-tier suppliers."
Despite their reassurances to the market, however, shares plummeted during early trading.
Sarah Riding, a partner specialising in retail supply chain management at Gowling WLG law firm, said:
"The fact that there are not proactive checks in place already at Boohoo is disappointing, given their prominent place in the market and claims of high ethical commercial standards.
"Their immediate steps to investigate should have already been built into their core supply chain management process and robust continual audits on their suppliers should have been in place."
Speaking to Sky News at the weekend, British Health Secretary Matt Hancock said that there are "quite significant concerns" about the employment practices at clothing factories in Leicester. He warned these factories that the government has the power to shut them down if they are seen to not be following proper coronavirus guidelines.
Boohoo also owns online clothing brands Pretty Little Thing, Nasty Gal, and MissPap. It was valued last year at just under €950M