Tod’s: Three executives under investigation over labour exploitation

The Milan public prosecutor’s office is investigating three executives of luxury shoe brand Tod’s, as well as the company itself, over alleged labour exploitation, according to court documents seen by AFP on Thursday.

Milan prosecutor Paolo Storari had previously requested that the company be banned from advertising for six months.

A hearing on the matter will be held on December 3, according to a decision by Judge Domenico Santoro dated November 14 and reviewed by AFP.

Prosecutors allege that the brand, known for its loafers, was fully aware of exploitation involving Chinese subcontractors, which included violations relating to working hours, pay, health and safety, as well as “degrading” living conditions.

According to prosecutors, the company was “devoid of organisational models” to prevent the exploitation of subcontracted workers, the court document states.

“In particular, it outsourced the audit function to external providers and then failed to take into account, even minimally, the results of those inspections, which revealed numerous signs of exploitation,” the document says.

The Tod’s executives under investigation are responsible for operations, supply chain matters and compliance. The individuals allegedly exploited were 53 workers, mostly Chinese, employed by six different Tod’s subcontractors, according to the document.

In an October 29 motion seeking to suspend Tod’s advertising, prosecutors state that “the unlawful system described generated enormous profits through the exploitation of (severely underpaid) Chinese labour and was made possible by serious organisational deficiencies.”

The 144-page court document includes the accusations of a Chinese worker who claims that, at one subcontractor, his boss beat him with his fists and a long plastic-and-aluminium tube in a dispute over €10,000 in unpaid wages.

Despite a four-hour-a-day contract, the employee said he worked from 9am until 10pm, with two half-hour breaks for lunch and dinner, and no days off.

Beyond negligence

The investigation revealed “a phenomenon where two worlds… that of luxury on the one hand and that of Chinese workshops on the other, come together for a single objective: cost reduction and profit maximisation through non-compliance with labour law provisions,” the document goes on to say.

Prosecutors said Tod’s “organisational shortcomings and lack of controls” went beyond negligence, characterising them as displaying “malice.”

The Milan public prosecutor’s office had previously requested that Tod’s be temporarily placed under judicial administration for failing to carry out checks on its production chain.

In a statement on Thursday, the company said it was currently examining the additional elements with the same care, highlighting their “worrying timing”, coming the day after the request to place the company under judicial administration was rejected.

Tod’s founder Diego Della Valle defended his company last month, telling journalists that Tod’s was respected worldwide and stood for “ethical values”.

He also warned that such investigations could harm “Made in Italy” brands.

Several high-end brands have been placed under judicial administration in Italy due to concerns about the working conditions of subcontractors, the latest being cashmere specialist Loro Piana.