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Shamed Leicester clothing factory directors faced no legal action and are still in business

Two directors of clothes manufacturers in Leicester were filmed by an undercover reporter in 2017 saying they would pay him less than half the minimum wage, yet they have not been prosecuted or disqualified

Undercover reporter Belal Malek spent seven weeks working in several “nightmare” clothing factories in Leicester for an investigation in 2017. After his footage was aired on Channel 4’s Dispatches, Malek “thought that all these factories will be shut down”. 

In fact, i has found that two of the companies were only dissolved this year and their directors are still running businesses in the city.

The discovery came during our investigation into continued allegations of exploitation in Leicester’s textile manufacturing industry, which has also found that Operation Tacit – the taskforce set up last year to inspect factories – has led to no prosecutions for minimum wage, health and safety or modern slavery offences.

At United Creations Ltd, Malek was paid £3.25 an hour, less than half the legal minimum at the time. The firm’s director, Abdussamad Dookanwala, was filmed working out on a calculator how much Malek was owed: £47.93 for around 14.75 hours. Two other workers were recorded saying they were paid £3 an hour. 

Dookanwala was also filmed smoking on the factory floor – where fire exits were blocked. The firm said an independent fire risk assessment had been conducted – but a safety expert called his behaviour an “absolute disgrace”.   

United Creations Ltd was dissolved in April this year, four years after the investigation. Companies House records show that Dookanwala is still a director, now running another business in Leicester: UCL Holdings Ltd

Another company that Malek worked for, Fashion Square Ltd, was also dissolved this year. Its director, Shakil Patel, was filmed telling Malek he would be paid £3 an hour. The reporter received £110 for 36 hours for packing and pressing dresses. Patel is now the director of two other clothing firms: Unique Kids Wear and Exclusive Wardrobe

There is no suggestion that the two men’s new companies have done anything wrong. 

However, it is understood that before they were dissolved, nobody from Fashion Square nor United Creations – which both denied that any employees were paid below the minimum wage – faced legal proceedings despite the evidence that was caught on camera. 

Charlie Thompson, a partner in employment law at Stewarts, says the footage “looks like a straightforward case of the employer setting an hourly rate of pay that is lower than the national minimum wage”. 

If employers are found guilty of deliberately not complying with the minimum wage, they can be disqualified from being a company director for up to 15 years, barring them from forming, marketing or running a company. Sanctions also include “penalties, prosecutions and naming and shaming the most exploitative employers”.  The Government has said: “There is no excuse for employers flouting minimum wage rules.”  

“There’s no enforcement,” says Kristin Hadland, who produced and directed the Dispatches show. “If exposing them on TV and in newspapers doesn’t make any difference, it’s very depressing. If they’re not prosecuted and closed down, of course they’ll keep going.” Malek agrees, saying: “I don’t think anything has changed.”

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Dookanwala and Patel did not respond to invitations to comment.

A spokesperson for HM Revenue and Customs (HMRC) said: “We cannot comment on identifiable businesses or individuals. Speaking generally, we review all national minimum wage complaints we receive so as to take appropriate action in each case.” 

On HMRC’s strategy more broadly, an official explained that it focuses on “the most cost-effective way to recover money”, meaning criminal investigations are reserved for “the most severe cases, those where we need to send a strong deterrent message and those where civil sanctions alone won’t work”.

Leicester’s years of scandal

2010 

Workers being paid £2 an hour in a Leicester factory to make clothes sold by New Look are filmed undercover by Channel 4’s Dispatches. The retailer says the order had been subcontracted without its approval. 

2015 

Thousands of textile workers in the city are paid just £3 an hour, with only 20 per cent taking home the minimum wage, warns a report by the University of Leicester. It identifies “gross health and safety violations, and limited enforcement of labour regulations and standards”. 

Clothing factories stand among residential housing in the North Evington area of Leicester (Photo: Darren Staples/Bloomberg via Getty Images)
Clothing factories stand among residential housing in the North Evington area of Leicester (Photo: Darren Staples/Bloomberg via Getty Images)

2017 

An undercover Dispatches reporter is paid £3.50 an hour or less in three factories making clothes sold by Boohoo, Missguided, River Island and New Look. The retailers all tell say their orders have been subcontracted without their permission or knowledge.

2018 

The Government’s Director of Labour Market Enforcement, David Metcalf, warns of a “perceived culture of impunity” in Leicester. The average wage in the city’s “dark factories” is £4.25 an hour, a manufacturer tells a Financial Times investigation.

2019 

A quarter of all textile factories caught failing to pay the minimum wage are based in Leicester, HMRC reveals. Meanwhile a BBC investigation finds that local factories are hiring workers for £5.50 per hour with no contracts.

2020

Poor pay and conditions “exist across the best part, if not the entirety, of Boohoo’s Leicester supply chain”, a damning independent review by Alison Levitt QC confirms.

It was revealed last year that more than 50 directors of clothing manufacturers in Leicester had been banned from running companies for between three and 14 years. This represented about 40 per cent of all disqualified directors linked to firms headquartered in Leicester, despite textile and clothing manufacturers making up only 2.5 per cent of the cities businesses, The Guardian reported. People caught acting as “shadow directors”, who secretly continue to control a business with others listed as the managers, can have their bans extended. 

Describing what it can be like for workers in Leicester’s sweatshops, Malek says: “It’s hot inside because of the machines and so many people working. There were no windows, no ventilation – you wouldn’t know if it’s day or night unless you see the clock.” Many work six or seven days a week, with just two 15-minute breaks in a 10-hour shift. 

“Some of the regular terraced houses have got factories inside. There are eight to 10 people sewing inside a house,” says Malek. He remembers a 15-year-old boy who lived next door to a factory and “missed school because he was sewing clothes”. He adds: “When they pay £3 an hour, this is why you see 20 people staying in one house, sharing beds”.

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