How NEXT removed its only unionised workforce in Sri Lanka

What happened

"On the 19th of May [2025], we reported to work as usual and met our production targets… A few hours later, we received a message on WhatsApp stating that the factory had been closed. We were shocked. None of us could believe what we were reading." – former NEXT worker

Last year, NEXT dismissed 1,416 of 1,676 workers (85%) at its Katunayake factory in Sri Lanka – via a WhatsApp message. The staff had no warning and no consultation.

NEXT’s decision had profound impacts – not only for the 1,416 people who lost their jobs, but for the rights of garment workers across Sri Lanka – because this was the only unionised garment factory with a collective bargaining agreement in the country. 

A collective bargaining agreement is a deal between a trade union and an employer. It gives workers the right – and employers the responsibility – to negotiate on pay, terms of employment and health and safety at work. 

In 2021, workers at the Katunayake factory formed a branch of the FTZ&GSE Union despite intimidation from management. Soon after, NEXT agreed to a collective bargaining agreement. The agreement enabled workers to negotiate better pay and working conditions – which was all lost when NEXT dismissed the workers in 2025. The agreement also meant that NEXT had to consult the union before making redundancies. NEXT knowingly ignored this obligation.

The dismissed workers received some compensation from NEXT – but compensation runs out.

Why did NEXT dismiss its workers? 

NEXT claims that the higher wages at its only unionised factory made it too expensive to operate. But does this add up?

Workers at the factory had successfully negotiated modest wage increases – around £10 more a month for some workers – bringing the basic wage to around £100 a month. This is still less than one-third of the Sri Lankan living wage of LKR 158,353 (around £376).

While NEXT told its workforce these wages were unsustainable, it awarded its UK Chief Executive Lord Simon Wolfson a £3,560,000 bonus, and paid out £839 million to shareholders. A corporation boasting profits over £1 billion should be able to absorb an additional £10 per month for some of its lowest paid workers. 

NEXT has the power to order enough from the Katunayake factory to sustain better paid jobs. Instead it decided to divert orders to its two non-unionised factories where wages are lower. 

This is union-busting. NEXT brazenly removed a unionised workforce and sent a chilling message to garment workers – and employers – across Sri Lanka: that unions will not be tolerated, and garment workers must accept poverty wages. 

“We have all lost our jobs…not because we did anything wrong, but because we stood together as a trade union to fight for workers’ rights and speak out against injustice.” – former NEXT worker

What must happen now?

NEXT must fix the damage it has caused – both to the workers at Katunayake – and to workers’ rights in the Sri Lankan garment industry. 

While the dismissed workers received compensation, there has been no real remediation (action to restore what was lost) for the long-term damage NEXT caused – the loss of good, unionised jobs. For NEXT to meet its own commitments to workers’ rights, it must, at the very least:

1. Restart production at the factory – with enough orders, at a fair price, to bring back the jobs it removed
2. Reinstate the collective bargaining agreement at Katunayake
3. Commit publicly to respect the right to organise and negotiate collectively at all NEXT owned and operated factories in Sri Lanka

How fast fashion works

Our political and economic system is rigged: it’s built on centuries of colonial relationships, where Global North governments and corporations plunder resources and exploit people in the Global South for profit. 

That’s exactly what happens in the fashion industry. 300,000 to 400,000 workers, the vast majority young women, work long hours, in unsafe working conditions for low wages in Sri Lanka’s garment factories.

Sri Lanka has faced long periods of wage stagnation and hyperinflation  – almost 50% in 2022 – massively raising the price of food and other essentials. This has caused a severe decline in the living standards for low-wage workers.  

Fashion brands like NEXT sell the clothes that Sri Lankan workers’ produce and hoard the profits at the top of the supply chain.

NEXT’s Chief Executive makes more than 219 times what a UK retail assistant at NEXT makes annually, and around 4449 times as much as a garment worker in Sri Lanka. 

The importance of trade unions

Workers deserve fair and equal treatment across the supply chain – from the CEO, to the shop floor to the garment factory. 

Workers cannot push for better, safer conditions, or a just transition to fairer societies and economies, if trade unions are pushed aside. That is why this case matters, not only for workers in Sri Lanka, but for everyone challenging the human and environmental cost of fast fashion.

Will NEXT honour its commitments?  

NEXT has publicly committed to ethical standards. As a member of the Ethical Trading Initiative – an alliance of non-governmental organisations, trade unions and businesses – NEXT has committed to following best practice on labour rights. 

NEXT has also pledged to support freedom of association (including the right to join a union), collective bargaining and progress to living wages through its membership of the global union federation IndustriAll’s ACT Initiative. 

The question is whether NEXT will honour these commitments when they matter, or whether – as with its workers at the Katunayake factory – NEXT will simply set them aside when it wants to. 

By fixing the damage it caused in Sri Lanka, NEXT can still show that its commitments are meaningful, rather than just window dressing for shoppers and investors.