3 April, 2022
by Sam Biden, Global Leadership Fellow
Dyson and ATA IMS
Dyson is perhaps the most well-known household appliance company in the world. Founded in 1991 by James Dyson, it focused on vacuums and more specifically, manufacturing in the UK. Over 20 years ago, Dyson decided to outsource their manufacturing process to Asia where one of its most controversial suppliers, ATA IMS, was located. ATA IMS is a leading electronics manufacturer in Malaysia, ranking 23rd in the world overall and providing services to over 80 countries. ATA IMS’ workforce is primarily made up of migrant workers from Bangladesh and Nepal. These individuals came to Malaysia to pursue a better life, yet they have been given far from it while employed with ATA IMS.
Allegations from migrant workers hailing from Bangladesh and Nepal have been made against Dyson concerning poor labour standards at a division of ATA IMS, known as ATA Industrial. Migrant workers mention forced labour and other dangerous working conditions at one of the ATA IMS factories. Employees supposedly lived in overcrowded accommodation alongside the constant threat of punishment and persecution by management. Between 2019-2021, whistle-blower and labour rights activist Andy Hall received a plethora of complaints from employees at this factory. In early 2021, evidence of these claims was sent to Dyson. Some of the allegations were so serious that the US Customs and Border Protection opened an investigation.
The ten men and women proceeding with these allegations have been working for between 3-9 years for ATA Industrial. They assert that Dyson is accountable for the actions of their supply chains, therefore, the actions taken against the employees are of vital importance to Dyson. The minimum daily shift for the claimants was 12 hours, yet they all argue that they were forced to work over this, sometimes 18 hours a day, 7 days a week. If they refused to do work overtime when ordered to, then their overtime privileges would be revoked. In the event of this, any additional hours they would want to do on their own time would not be possible, putting them in a very difficult financial situation. They were also refused annual leave and were forced in some cases to work every single day for 18 months straight. The employees who had worked there for 3 years would legally be entitled to 12 days per year holiday, for those working over 5 years they are entitled to 16 days a year, yet these employees received none. The claimants state that they were threatened with confiscation of the right to remain documents, such as visas and passports, eventually leading them to be essentially classed as illegal immigrants. This sparked fear in the claimants as if the police intervened at any stage, they could potentially be arrested and deported. Three of the claimants were arrested at one stage and held in custody for 12-14 days respectively. While in custody, they were beaten by not only the police but also a former worker who was brought to the police by management.
After these concerns were brought to Dyson, a series of audits into the conditions at ATA Industrial occurred. A Dyson representative stated that 6 audits had occurred between November 2019 and June 2021. The final audit was made by ELEVATE, a limited UK auditing firm. This final audit found major issues relating to forced labour. An ELEVATE representative stated that the ultimate end goal of the audit was the termination of the contract between Dyson and ATA.
Dyson claimed in their 2020 statement on Modern Slavery and Human Trafficking that they are sure to conduct risk assessments as recommended by Sedex, a British supply chain accountability firm. Dyson also conducts audits by themselves, stating that all who perform these are either qualified Responsible Business Alliance Lead Auditors or trusted auditors from third parties. The forms of audits Dyson perform are known as ‘social audits’. These audits are designed to review a company’s procedures, endeavours and code of conduct relating to social responsibility. Human rights advocates have raised concerns that these forms of audits do not easily highlight abuses in a supply chain such as forced labour. ELEVATE acknowledged that social audits are not designed to capture sensitive labour and human rights violations. Another firm, Impactt, highlights the issue of finding out whether migrant workers have been made to pay recruitment fees for work, such as a fee to begin a job. They state that this issue is equally difficult to find when conducting a social audit.
The claimants suing Dyson have claimed that Dyson knew of the forced labour and horrific conditions long before any official audit had taken place. They support this by saying that working conditions for migrant workers in Malaysia has been widely reported over the last decade, therefore, Dyson should be aware of this whether directly reported to them or not. These claims have been corroborated in legal literature, citing physical and mental torture, the seizing of passports, forced labour, sexual harassment and discrimination against migrant workers as commonplace in Malaysia’s employment network.
Dhan Kumar Limbu
Mr Limbu was an employee of ATA IMS, and he has told his story of the difficulties he faced while employed there. He had worked for ATA IMS since 2012 but was forced to flee Malaysia after what he alleges were a series of intimidations and violent acts made against him by the company and local police. Mr Limbu was arrested from his hostel where many of the employees stayed, his phone was then confiscated and he was taken to the local police station. He was interrogated and then beaten by plain-clothed officers for revealing information to the public about his experiences with his employer. ATA IMS called their Chief Operating Officer down to the police station to handle the situation. The COO threatened to put Mr Limbu in prison for life if he did not make a false statement that redacted the claims he had made. Under threat, Mr Limbu signed the confession, saying that he was paid to reveal false defamatory information about the company. He was then forced to tell this false information to a labour rights activist as to not raise any suspicion towards his employer. A month later, Mr Limbu fled the country and told his story to Channel4.
Forced Labour Convention
While not broad, this Convention gives us the legal definition of forced or compulsory labour that can then be applied to the current scenario. Article 2 (1) of the Convention states:
- “For the purposes of this Convention, the term forced or compulsory labour shall mean all work or service which is exacted from any person under the menace of any penalty and for which said person has not offered himself freely.”
While the contractual obligations of the employees with ATA IMS were given and accepted voluntarily, even with due regard to any hiring fees, this does not mean that the gratuitous amounts of forced overtime are. Reports claim that many staff members were having to work 18 hours a day for up to 7 days a week. They were forced to do this as a method of control, given that the other option was to deny to do the overtime and be sanctioned from completing any in the future.
International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families (Migrant Workers Convention)
This status specific Convention only applies to ‘migrant workers’, therefore any conclusions about rights violations from native Malaysians cannot be made but can be made about the foreign workers. There are a number of key Articles that have been violated by ATA IMS, namely Articles 10, 11, 16 and 21.
- Article 10 – No migrant worker or member of his family shall be subject to torture or to cruel, inhuman or degrading treatment or punishment.
- Article 11 – No migrant worker or member of his family shall be compelled to do forced or compulsory labour.
- Article 16 (1, 2) – Migrant workers and members of their families shall have the right to liberty and security of person; and Migrant workers and members of their families shall be entitled to effective protection by the state against violence, physical injury, threats and intimidation, whether by the state or otherwise.
- Article 21 – It shall be unlawful for anyone, other than a public official duly authorized by law, to confiscate, destroy or attempt to destroy identity documents, documents authorizing entry to or stay, residence or establishment in the national territory or work permits. In no case shall it be permitted to destroy the passport or equivalent document of a migrant worker or a member of his or her family.
Regarding Article 10, not only does this collaborate with forced labour under the Forced Labour Convention and therefore constitute a breach, but also the fear the employees live in regarding threats of physical violence and persecution at the hands of management. If these claims are proven on a wider scale, such as further instances similar to Mr Limbu, then there could be a claim that the corporate practice of ATA IMS in relation to employee discipline could amount to torture, inhuman or degrading treatment. Article 11 is a mere echo of the forced labour definition. The most basic understanding of the circumstances leads to the only conclusion that forced overtime amounts to forced labour, regardless of contractual arrangements. Article 16 is perhaps the most important of the four. The security of the employee must be of utmost importance in any corporate structure. It is clear that employees who spoke out about the conditions such as Mr Limbu have suffered serious violations to their physical and mental security. This issue is exacerbated when leading members of ATA IMS, such as the COO, were indirectly and comfortably involved in the infliction of this suffering. The combination of the fear of physical repercussions and overcrowded and unhygienic accommodation raises serious red flags as to the integrity of claims ATA IMS make over their supposed positive treatment of their employees. In this case, Article 21 relates to the confiscation and potential destruction of employee passports. As has been seen, this has occurred within the company and has been used as effective bargaining power by ATA IMS against their employees as leverage to either keep their employees quiet or keep them complacent. The act of confiscating the passport is enough to engage the Article, however, this also caused employees to live in fear of the police finding they no longer have sufficient documents to prove they have either right to work or remain in Malaysia. Because of this fear, the mental security of the employees was violated such that they lived in constant fear of being potentially deported, further substantiating any claims made in conjunction with Article 16.
Equal Remuneration Convention
Article 1 defines remuneration as any ordinary, basic or minimum wage or salary and any additional emoluments, whether paid indirectly or not, in cash or in-kind made by an employer to employee. ATA IMS had a contractual obligation to pay the workers at least the Malaysian minimum wage which is 1200RM a month. Evidence suggests that many workers were paid around 50RM a day, the equivalent of £9. Assuming a normal shift was 8 hours, this equates to 6.25RM or £1.14 an hour. An average workweek in Malaysia is roughly 44 hours, totalling 176 hours a month. This would equate to 1100RM a month on average and using normal work hours. This is the best-case scenario and even then these employees are being paid below what they are legally entitled to.
Once we equate for the overtime, for example, against the claims of 18 hours and 7-day weeks for over a year on end then we have a major issue. This is a total of 6570 hours within a single year, which should leave the employees a salary of over 41000RM. This is roughly 40 times more due to be paid than what they have reportedly received. This highlights that the remuneration they should have been guaranteed (accounting for contractual limits with overtime hours) is far from what they actually received. This scenario only enhances the arguments of the claimants against Dyson regarding forced labour.
With all matters considered, if the claims against ATA IMS are proven true then they certainly took advantage and treated their employees in a way that not only amounts to forced labour but also to violations of their human security in employment. Any efforts from the employees to iron out corporate exploitation were alleged to have been quashed and those who did speak out were supposedly tortured and shunned by the most prominent figures at ATA IMS. Dyson has thankfully ended their contract with ATA IMS, however, the damage is already done. They certainly would have known something in the supply chain was suspicious, yet they relied on poor audits to push back against the fair criticism they received.
Image: Public domain