In Brief
Global South workers at the supplier and sub-supplier levels are going unpaid as unprofitable, Australian-based fashion brands close their doors. Despite industry best practices highlighting clear steps to protect these workers, fashion brands have been reluctant to adapt their business models. Stronger legislative action and industry collaboration can remediate risks for these already vulnerable workers and protect them from future harm.
What is the Australian responsibility when clothing brands collapse, leaving overseas workers and suppliers unpaid? Since October 2024, Mosaic Brands, Jeanswest and Ally Fashion have all entered administration. While the focus is often on money owed to Australian workers and creditors, many creditors are workers in these brands’ Global South supply chains. Australia has a responsibility to strengthen both mitigation and remediation processes to protect the rights of domestic and international workers.
Fashion retail group Mosaic Brands collapsed after entering into voluntary administration in October 2024 and no buyer has since been found. The group collectively owned nine brands, which could lead to the closure of over 800 stores, affecting 2700 Australian workers. In February 2025, the Australian government announced early access to the Fair Entitlements Guarantee for impacted workers.
The collapse of Mosaic Brands also impacts a network of approximately 23 Bangladeshi suppliers, who are owed as much as US$15 million. Since Mosaic sales contracts dictate 120-day payment terms — double what sustainable industry initiatives recommend — the majority of this debt is for work completed and delivered months prior to the collapse. If the US$15 million debt goes unpaid, Bangladeshi suppliers will need to shut down factories, leaving thousands of already vulnerable workers at higher risks of poverty, exploitation and modern slavery.
Since Global South garment workers are commonly paid a poverty wage as opposed to a living wage, workers cannot build a safety net to deal with unemployment. While there has been an industry-wide push for fashion companies to support living wages, fashion brands have been painfully slow in acting on this call.
Mosaic was no exception. The retail group published its Living Wage Roadmap in 2021, with the first step of verifying a living wage benchmark requiring two years, despite this standard already being well-established by existing NGOs like Asia Floor Wage. By 2024, Mosaic had hoped to engage in open dialogue with its suppliers.
This painfully slow timeline is characteristic of the retailer group’s dismal progress on mitigating modern slavery. Since 2020, Mosaic has published mandatory modern slavery statements under Australia’s Modern Slavery Act (MSA). This disclosure regulation requires companies with a consolidated annual revenue of over AU$100 million (US$65 million) to describe their actions taken to mitigate identified modern slavery risks in their supply chain.
Mosaic’s FY2023 Modern Slavery Statement describes the risk of modern slavery in Bangladesh as low, justifying this on the basis that Bangladesh is an International Accord country and Mosaic is an Accord signatory.
This argument misconstrues health and safety indicators as reliable modern slavery mitigators — unlike, for example, paying a living wage. Mosaic also justified this rating because its team visited supplier factories, a paternalistic example of Global North companies assuming they — rather than the workers themselves or union representatives — are qualified to approve of garment worker working conditions.
While Mosaic’s modern slavery statement disclosed a list of anti-slavery tools that dictate how suppliers are required to comply with brand standards, it largely failed to reflect on how brand practices contribute to modern slavery risks.Mosaic’s decisions to keep 120-day payment terms and continue to place orders while invoices went unpaid indicate a significant failure to recognise how its practices might exacerbate exploitative conditions.
Research suggests that Mosaic is not alone, with most Australian-based fashion brands regulated under the MSA demonstrating a propensity to ignore how their own practices contribute to the risk of modern slavery. This highlights the foreseeable conclusion that, as the oversaturated Australian fashion market squeezes out redundant companies, garment workers in the Global South will ultimately pay the price.
While the MSA has brought some reform, the fashion industry is built on a fundamentally unsustainable business model. Australia imports 1.4 billion items of clothing (56 items per person) annually, feeding an insatiable corporate and consumer appetite for cheap clothing that foregoes quality, ethics and the environment.
MSA’s impact proves that voluntary corporate efforts alone are insufficient in stemming this unsustainable model. Mandatory due diligence is necessary to ensure that brands and retailers are not only held accountable for the harm they cause, but responsible for mitigating future risks to people and the environment.
To mitigate risks for garment workers, industry initiatives such as the Sustainable Terms of Trade Initiative have called on fashion brands to improve their purchasing practices by shortening payment terms, agreeing to penalties for late payments and aligning order scheduling with supplier needs.
Voluntary initiatives such as Seamless have seen the Australian fashion industry come together to collectively act on clothing waste. The same must be done to see the industry tackle major social issues such as living wages and unpaid wages. One proposal is the establishment of an industry-funded trust fund for garment workers in Australian supply chains to collectively finance worker training, living wages and remediation costs.
Australia has a duty to both mitigate and remediate harm. Looking forward, if Australia establishes mandatory due diligence obligations in global supply chains and works collectively to establish an industry trust fund for garment workers, companies will compete in a race to the top on social sustainability, rather than a race to the bottom on price.

Justine Coneybeer is Postdoctoral Research Fellow at the School of International Relations and Government, Griffith University.
Alice Payne is Professor and Dean of the School of Fashion and Textiles, RMIT University.

Source: eastasiaforum.org