High-tech home appliance maker Dyson Ltd has sent on Wednesday notices of termination of contract to its Malaysian supplier ATA IMS Bhd following the audit of its labour practices and allegations by a whistleblower that has caused ATA shares to plunge 30% to their lowest since April 2020.
After learning of the whistleblower’s allegations about “unacceptable actions” by ATA staff and commissioning a law firm to investigate them in early October, Dyson said it had terminated the contract with six months of contractual notice.
Data shows that Dyson accounts for almost 80% of the revenue of ATA, which makes parts for Dyson’s vacuum cleaners and air purifiers.
The company is already being investigated by the United States over forced labour allegations, but previously denied allegations of labour abuse.
ATA confirmed in a filing with Bursa Malaysia that its subsidiary ATA Industrial (M) Sdn Bhd (ATAIM) received the notices of termination from Dyson Operations and Dyson Manufacturing, noting it has been in talks with Dyson over the audit findings
It noted that both companies had issued the notices of termination without cause pursuant to the terms of the respective contracts and pointed they shall continue to fully perform their respective obligations under the contracts until June 1, 2022 as an effective date of termination.
This will also hit a significant blow to Malaysia, which has already faced scrutiny this year over accusations of subjecting migrant workers to abusive working and living conditions.
Dyson’s investigation listed seven current and former ATA employees’ testimonies of working more overtime hours than Malaysian law allows and paying recruitment fees to labour brokers in their home countries – a practice criticized as a form of debt bondage.
While Malaysian law allows for up to 104 hours of overtime in a month, one ATA worker’s payslip showed he had worked 126 hours in May.
Payslips also showed that employees at the ATA plant also worked public holidays and on what were supposed to be rest days.