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The “top-performing” CEO of Zara’s parent company has a wage theft problem

The “top-performing” CEO of Zara’s parent company has a wage theft problem
[Photo: MIGUEL RIOPA/AFP/Getty Images]

Every year, Harvard Business Review releases a list of top-performing CEOs using objective performance measures over a leader’s entire tenure. This year’s top-ranking status went to Pablo Isla, the CEO of Inditex, which owns Zara, Massimo Dutti, and Pull&Bear, among other eight brands. “Since becoming CEO, in 2005, Isla has led Inditex on a global expansion during which the company has opened, on average, one store a day,” the magazine says, explaining Isla’s position at the top of the list. “That growth has increased its market value sevenfold and made it Spain’s most valuable company.”

Yet, under his watch, workers making Zara garments in an Turkish factory called Bravo Tekstil allegedly had their wages stolen by the factory owner and were subsequently put out of work in July 2016. Inditex has yet to compensate them, even though Zara sold clothes made with their unpaid labor.

Related: “I didn’t get paid for it”–Zara workers put desperate notes in garments

Last week, a spotlight was thrown on this wage dispute when shoppers at a Zara store in Istanbul found tags attached to clothes saying, “I made this item you are going to buy, but I didn’t get paid for it.” It appears as if workers who had sewn those garments walked into the store and attached those messages in an attempt to draw attention to their plight. It worked: The Associated Press first reported about these tags in a story that swept through the internet.

In a story Fast Company published yesterday, we explained that 140 workers have been working for over a year through their union to get the money they are owed for their work at the factory. They explained that the clothes that they made for Zara, as well as other fashion labels like Mango and Next, ended up on shelves, generating profits for these brands. Yet an Inditex spokesperson confirmed that no money had yet been transferred from Inditex to these workers. Instead, the fashion companies had been dragging out the negotiations with counteroffers that amounted to just over a quarter of what the workers were asking for.

Related: The Real Story Behind Those Desperate Notes That Zara Workers Left In Clothes

The Inditex spokesperson provided the following statement to Fast Company:

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Inditex has met all of its contractual obligations to Bravo Tekstil and is currently working on a proposal with the local IndustriALL affiliate, Mango and Next to establish a hardship fund for the workers affected by the fraudulent disappearance of the Bravo factory’s over. This hardship fund would cover unpaid wages, notice indemnity, unused vacation and severance payments of workers that were employed at the time of the sudden shutdown of their factory in July 2016. We are committed to finding a swift solution for all of those impacted.

In Harvard Business Review‘s interview with Isla for this year’s list, Isla described the company culture in the following way: “It’s very people-focused, taking the decisions, really empowered. This is something which is essential for us.” He goes on to talk about the company’s values, saying, “It has to do with everything … everything which has to do with labor standards, everything which has to do with our people, with the working values, and also with the community investments.”
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