Forced labour claims dent image of London 2012

Official Olympic clothing sold by Next is claimed to have been produced in sweatshop conditions in Sri Lanka. The allegation comes days after the high street chain unveiled the formal outfits that Team GB will wear at the opening ceremony.

Workers at the company's factory in Sri Lanka allegedly receive poverty wages and are forced to work excessive overtime and to meet unrealistic, ever-increasing targets. Next denies the claims – which undermine pledges that the 2012 Games will be the most ethical yet – but has launched an investigation into conditions at the factory.

The claims emerged in a wider investigation into Olympic brands that found "widespread abuse of the human rights of workers" in eight factories around the world. Research by the Playfair 2012 campaign also cited allegations of mistreatment of staff working for the sportswear manufacturer Adidas in the Philippines and China.

Next's Sri Lanka factory employs 2,500 people making, among other items, London 2012-branded jackets, blazers, shorts and T-shirts. Employees claim they are routinely forced to work 60 hours of overtime a month.

Staff also claim they have no contracts and frequently face being laid off with no notice, with management threatening to sack them if they join a union. Workers who have protested were victimised, researchers found.

Typical wages for working 12-hour days were found to be about 12,000 Sri Lankan rupees a month (£58). Other abuses cited included agency staff made to work for 18 hours at a stretch – day shifts at the Next factory, followed by overnight shifts in a different factory next door. Such workers also say that their wages are often paid irregularly. Playfair says there is evidence that staff are deliberately recruited from poor areas to ensure an illiterate and compliant workforce.

Playfair's research into Olympic supply chains examined eight factories in Sri Lanka, the Philippines and China, with 175 workers interviewed.

In China, workers for Adidas in Guangdong province complained of regularly having to work overtime above the legal maximum, with 8am to 10pm shifts not uncommon. They reported not wearing the necessary safety masks to protect them from dust because they were so fearful of missing production targets.

Adidas employees in the Philippines said that pay rates were so low that at least half the workforce were forced to go to loan sharks in order to survive. They also said they were told that overtime was compulsory. In one Philippines factory, poor ventilation caused respiratory problems among garment workers.

None of the factories surveyed permitted union membership. At factories producing items for Adidas in China, workers were apparently told that agitating to improve conditions would result in immediate dismissal.

The report will add pressure on London 2012 organisers. Last month The Independent revealed claims that Adidas Olympic kit was manufactured in Indonesian sweatshops. Next is supplying outfits for the Games' opening and closing ceremonies as well as formal suits for Team GB and Paralympic GB. It will also supply 4,500 uniforms for officials, as well as soft furnishings and bed linen for the athletes' village.

Anna McMullen, of campaign group Labour Behind the Label, said: "When respected British brands like Next are supplying uniforms, you'd hope to see this respect mirrored in the production of the kit. Yet, paid £50 a month and exploited by labour contractors, these workers live in poverty. Next must take action to ensure workers have rights and wages that allow a life of dignity."

Anton Marcus, joint general secretary of the Free Trade Zones and General Services Union in Sri Lanka, said: "They don't pay a living wage and they set these terrible targets, which, when reached, are automatically increased. Similarly, overtime, which should be voluntary, is compulsory for 60 hours a month. This is forced labour."

A spokesman for Next rebutted the Playfair allegations. Next insisted they were "categorically not true" in the case of staff workers at the factory and "almost certainly not true in respect of any temporary worker, either". Next said those employed directly by the company were paid 50 per cent more than the Sri Lankan minimum wage, which stands at 6,750 rupees (£33) a month.

A spokeswoman for Adidas said: "The Adidas Group is fully committed to protecting worker rights and to ensuring fair and safe working conditions in factories throughout our global supply chain. As part of that commitment, Adidas Group has been engaging in an open and constructive dialogue with Playfair for the past 10 years."

Brendan Barber, the TUC general secretary, said: "It cannot be right that with the huge amounts of money to be made by the International Olympic Committee and the brands that secure the lucrative Olympic sponsorship deals, the people producing the goods to be worn by sports fans, athletes and Olympic officials are earning a pittance, working excessively long hours and can't even join a union to push for better conditions.

"We're presenting the IOC with clear evidence as to what is going wrong. Now it's over to them to act to prevent similar abuses happening in the run-up to Rio 2016."

A spokesman for LOCOG, the organising committee for the Games, said: "We have gone further than any other major event organiser in ethical sourcing and supply management, which has been recognised in this report."

He added: "We take these allegations extremely seriously and have asked our independent monitor to carry out a comprehensive investigation and review. The outcome of this will be made public as soon as it is concluded. We have also spoken to Adidas and Next, who have assured us that they have launched an immediate investigation into these claims."

Life in the factories

Kasun, 33, is employed in Next's Sri Lanka factory ironing clothes every day from 7am to 6pm. He has been working on Olympic-branded clothes.

"I have been working at this factory for the past 11 years. My salary is about 12,000 Sri Lankan rupees a month [£58], which is very difficult to manage on with a child, so I am compelled to work overtime. Due to the hardship of our economy, my wife is also working in a garment factory and our child is with his grandparents, far from the boarding house [200km away] where I and my wife are living. Most of the time we get the chance to see our child only once a month. We would like to live with our kid but our economy and this environment is not suitable for a child. I joined a strike over a wage increase in 2008 and the company suspended about 100 workers, including me. In that period I did some odd jobs to protect my family and after three months I was called back to work. But eight workers are still out of employment."

Sachini ,30, is a sewing machine operator in the same factory. She works from 7am to 7pm and produces Olympic-branded garments, among other items.

"I have been working in this factory for the past 12 years. In this company they set targets unilaterally, and sometimes it is difficult to reach them; we feel they are increasing them day to day. [When targets are not met, staff are forced to stay on and work overtime.]

"My village is in the dry zone of the country and I belong to an agricultural family. When my father died, I came to the [manufacturing] zone to give some support to my family, especially for the education of my younger sister.

"Once I came to the zone I fell in love and got married. We lived in a private boarding house with minimum facilities and privacy. After one year my husband eloped with another worker whose living space adjoined ours and I become helpless. I was not in a position to go back to my village.

"I am still helping my family and am now legally divorced. I feel so sad and intend to go back to my village soon."

Bhagya, 35, an ironing operator, works from 7am to 7pm.

"I came to this factory with my sister. Since our salary is not sufficient to manage on, we are compelled to work overtime. At the end of the day we feel so tired and only have time to cook our dinner and go to bed.

"Even though I have worked here for 12 years I don't have any savings – once I have spent money on food and lodging, nothing is left. This factory treats managers and workers in two different ways: they provide transport for managers but not for the workers."

Names have been changed to protect workers' identities