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Daily Mirror
Daily Mirror
Business
Emma Munbodh

Coronavirus: Primark to pay wages of factory workers after cancelling all orders

Primark has set up a fund to help pay the wages of factory employees who worked on clothing orders that were later cancelled because of coronavirus.

The chain, owned by Associated British Foods (ABF), said it would cover the wages for staff in Bangladesh, India and more, for clothing orders that were scheduled for shipment but later temrinated.

The fund will also support workers in Cambodia, Myanmar, Sri Lanka and Vietnam.

Primark closed all its branches in the UK on March 22, just weeks after shutting down in Europe and America following the outbreak of the virus.

After the store closures, it asked all of its suppliers to halt production.

It later said the move will cost the business £650million in lost revenue a month.

Paul Lister, general counsel at Primark, said its in-country teams were already working to identify the factory staff who should benefit from the fund.

The move will cost Primark millions of pounds, he said.

The closure of Primark stores is set to cost owner Associated British Foods £650million in lost revenues a month (Bloomberg)

"We think we can do this very quickly. Accuracy is not the most important thing here, the most important thing is to make sure the workers get paid."

Payments to workers will be adjusted to reflect any government support packages provided in each of the countries.

Paul Marchant, CEO of Primark, said: "Every one of our stores around the world is closed. With a backlog of stock in stores, in depots and in transit, we have had to make the very difficult decision to cancel orders for future stock.

"Finding a way to ensure that workers in our supply chain in these countries are paid has been a priority over the past two weeks and we are pleased that this fund will provide relief to these workers.

"Our focus now is to work with the suppliers, factories, trade unions and NGOs in these countries to make sure wages for the orders we have cancelled are paid to the workers.”

Top bosses at Associated British Foods have temporarily cut their salaries by 50%, and will not receive dividends for the current financial year, in response to the fallout from the coronavirus crisis.

ABF chief executive George Weston, finance director John Bason and Primark chief executive Paul Marchant have all requested a temporary 50% reduction in their base pay.

ABF said: "The board, including the executive management team, believes that these steps are appropriate given its expectation that full-year earnings will now be much lower than envisaged at the start of the financial year.

"The board is acutely aware that many Primark employees will see their livelihoods affected by Covid-19."

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