In Milan, Italy, the fashion units of Dior and Armani have been placed under judicial administration for a year following allegations of severe labour violations. The raids, conducted in March and April, revealed severe worker mistreatment, with some labours paid as low as 2 to 3 euros ($2.17 – 3.25) per hour under hazardous conditions. This probe aims to enforce labour laws and ethical standards across the industry’s complex and fragmented supply chains.
Investigations revealed that Dior’s suppliers, involved in producing luxury handbags sold for up to $2,780, compensated their workers only $57 per bag, according to ‘Business Insider’. Similarly, Giorgio Armani was found to pay $99 for bags retailing over $1,900. ‘Reuters’ highlighted that these suppliers were not adequately monitored, leading to workers sleeping in production facilities to keep up with demand. The investigations led to judicial actions against some companies, with court-appointed administrators now overseeing them, typically a measure used against firms infiltrated by organised crime.
Judicial actions have targeted these high-profile companies due to their associations with Chinese-owned firms accused of exploiting migrant workers, some without proper documentation. This situation has not only raised concerns about worker exploitation but also about unfair competition that could push law-abiding companies out of the market, as stated by Fabio Roia, the president of the Milan Court.
The judicial scrutiny of Dior centre on a court ruling involving four Milan-area companies crucial to its supply chain, including two direct suppliers. A Wall Street Journal report revealed that these workshops employed at least two illegal immigrants and seven unregistered workers. Inspections by Italian police exposed poor working conditions with hygiene and health standards significantly below required ethical norms. Further investigations reveal severe safety breaches, with workers operating machines that lacked safety features to increase productivity. Additionally, workers were found living in the workshops under poor conditions, with their daily routines often extending from dawn to past 9 p.m., including weekends and holidays.
The court ruling against Armani highlighted labour issues within its subsidiary, GA Operations, which used two subcontractors that employed several Chinese-owned subcontractors in Italy. Investigations revealed that workers were paid just 2 to 3 euros per hour for long workdays, significantly below the wage standards set by collective bargaining agreements in the sector. The judiciary has appointed special administrators to oversee these companies and ensure compliance with labour standards. Armani has responded, stating that it has measures in place to minimise abuses and is cooperating with authorities.
The legal troubles extend to the top echelons of the luxury industry, which aims to rectify these labour practices and ensure compliance with ethical standards across the luxury fashion industry. This series of events has cast a shadow over Italy’s prestigious fashion industry, prompting calls for stricter oversight and a re-evaluation of the labour practices within these luxurious brands.