PVH Corp, the owner of Tommy Hilfiger and Calvin Klein, is set to provide back pay to over a thousand garment workers in Haiti after one of its factories in the region abruptly closed last year.

The sudden closure left workers at the factory without severance and pension benefits, said the Worker Rights Consortium (WRC), a lobby group which managed to secure the deal.

Through the agreement, most workers will receive the equivalent of more than six months’ wages, while some are due to get more than a year's pay.

The factory in question was owned by US-based company Vald’or, which manufactured clothing for PVH’s licensee Centric, as well as several other brands.

In January 2022, the firm made the move to close its Port-au-Prince location, The Guardian said, arguably contributing to the ongoing suffering of Haiti’s garment industry, which has been further affected by rising violence in the country.

A rare outcome

Criticisms surrounding its closure were also raised by university labour standards in the US, which the WRC said had aided in the positive outcome of the case.

According to the organisation, while the factory did not make American university logo goods, connections to collegiate licensing in the fashion industry were still present.

In a statement, Scott Nova, WRC’s executive director, said: “By ensuring that licensees make workers whole when collegiate factories close without paying them, universities and the WRC have transformed expectations in the apparel industry.

“That is why non-collegiate brands like PVH, Gap and Victoria’s Secret can now be convinced to ensure workers receive the money they have earned.”

Nova further noted that the case set “a new precedent” as the first time a brand has directly compensated Haitian workers for unpaid pension benefits.

He continued: “Failure to pay pension and health benefits is a widespread problem in Haiti, affecting collegiate and non-collegiate factories alike. PVH’s action sends a message that buyers cannot ignore this problem—and, indeed, may end up paying for it in the end.

“This will help encourage all brands sourcing from Haiti, including university licensees, to ensure their suppliers pay pension and health benefits on time and in full.”