Financial Times: Shenzhen sweatshop allegations force Gucci to act

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

By Rahul Jacob in Hong Kong
12 October 2011

Gucci announced it was replacing managers at its flagship store in the booming southern Chinese city of Shenzhen after allegations by five former employees they had been working in sweatshop conditions.

The former employees at the three-floor store in the Chinese city across the border from Hong Kong alleged they had been on their feet 12 hours a day and needed permission to drink water and for toilet breaks, which were limited to five minutes.

The former employees alleged that a pregnant employee had been warned for eating an apple during the work day. “It was a kind of torture for us,” they alleged in the letter. “Short rest, water or food was [denied] even for a pregnant employee.”

In a statement, Gucci did not respond to the specific allegations but said it had conducted “thorough investigations” and in addition to replacing concerned senior staff at the store, it had hired external consultants to conduct a comprehensive review of the organisation’s “business practices in China”.

Geoffrey Crothall, from labour advocacy group China Labour Bulletin, said the incident illustrated that “the pressures being put on service workers are just as bad as those in factories. Service workers are actually falling behind those in factories on pay and conditions.”

Last year, after a wave of suicides at Foxconn, the Taiwanese manufacturer for Apple and other electronics manufacturers, and strikes at factories in southern China, manufacturing employees in the region have seen double-digit increases in their salaries. However, earlier this year, two Hong Kong based NGOs that conducted interviews with workers alleged employees at Foxconn plants in Chengdu in south-western China and Shenzhen had been pressured not to take days off. Foxconn said the overtime was voluntary.

The allegations prompted Zou Zhen of the government-backed All China Federation of Trade Unions (ACFTU), which has traditionally sided with the management of foreign enterprises, to warn that luxury companies should treat their employees in a humane way because they sell high-priced, quality products. Officials at the Shenzhen Trade Union said that because multinationals did not have trade unions, it was difficult for employees to make their voices heard and promised that the trade union would make its lawyers available.

At Gucci’s store flagship, the former employees allege, they had to count and sort inventory until 2am. When products went missing, the store’s managers deducted a total of Rmb70,000 from shop assistants’ salaries even as the company received compensation from insurance, the former employees told Xinhua, the Chinese news agency.

The allegations quickly went viral on the internet and seem likely to hurt Gucci’s reputation in China, the fastest-growing market for luxury goods in the world. Gucci in Hong Kong and Shanghai did not return calls seeking comment on the specific allegations of the employees.

With reporting by Zhou Ping in Hong Kong
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