A hidden world of exploitation is revealed as the Gate Gourmet case unravels

The charity claims the Gate Gourmet case, where 670 people were sacked last week, reveals a forgotten underclass of workers - predominantly women from ethnic minorities - who work long hours for low wages, with little or no job security, sick pay or other basic employment rights.

Talks at Gate Gourmet to reach a settlement with the unions broke down last night and the company - which is already financially crippled and facing a loss of £25m this year - warned it was facing bankruptcy.

A spokesman for Gate Gourmet said: "The formal mediation process has broken down, but we are continuing to talk to the unions and still hope we can reach a settlement. Without it, the company has no other option than to go in to administration and this could happen very soon."

The Transport and General Workers' Union, which represents employees, said the company had threatened bankruptcy before, adding: "We know the financial situation of the company is very serious, but we do not know how close it is to administration."

Both Gate Gourmet and the T&G blame British Airways for making unreasonable demands which have forced managers to squeeze more out of their already overworked staff.

"It is our belief that BA cannot do a Pontius Pilate on this issue. It is [BA's] 'cost down' [attitude] that has led to the sacking of our people. BA must now play a part in the resolution," Tony Woodley of the T&G said.

Oxfam, too, says many of Britain's big businesses are guilty of putting pressure on suppliers to deliver the cheapest goods as quickly as possible so that workers at the end of the supply chain, like those at Gate Gourmet, end up exploited.

Amy Barry of Oxfam said: "People think sweatshops only exist in Asia and the developing world. But there are still sweatshops in the clothing trade in the East End of London, and hundreds of homeworkers in Britain suffer terrible conditions.

"There is an underclass in the UK who are so desperate for jobs that they will take them on at any price. Companies are not considering the workers who have to bear the brunt of their demands and end up in intolerable conditions."

Unions agree. The Community Union, for example, says it still encounters poor working practices in the catering industry, and intimidation of staff who fight for change.

Michael Leahy, the general secretary, said: "While there is no doubt we should be glad that Britain has more people in work than ever before, the Gate Gourmet dispute highlights the fact that there are many British workers who endure terrible conditions.

"British people are enjoying low-cost goods and services, but these are often delivered at the expense of their fellow citizens."

Gate Gourmet's talks with T&G ended after the company refused to reinstate all 670 workers, who were sacked in the car park of the company's Heathrow factory by megaphone.

Their dismissal, after a long-running dispute with management over pay and conditions, led to a sympathy walk-out by BA staff. Heathrow ground to a halt, leaving more than 100,000 passengers stranded.

'I came here for a different life. This is worse than India'

PIRTHIPAL SINGH

Mr Singh, a former driver-loader who worked at the company for nine years, is a single parent with three children. "I don't know how I'm going to pay my mortgage, which is £925 a month, or look after my children without a job. I was already struggling on my wage, which was £1,200 a month without overtime."

SUKHMINDER HUNDAL

Indian-born Mr Hundal joined Gate Gourmet in 1997 as a driver. Married with three children, he said: "Every day, the company would ask us something new, something more demanding than the last thing. My future is uncertain. I have a mortgage and bills to worry about. I find it hard enough to live on my weekly wage."

PARVINDER THAPAR

Parvinder Thapar, a driver for four years, said his 30-minute unpaid lunch slot was sometimes squeezed so he could finish his work. He came from India in 1994 to get married and now has two children. "I need a job for my family. I imagined life was different in the West but my work had awful conditions. It's worse than India."

KULWINDER KAUR

Mrs Kaur, 40, who worked in the reserves store, said: "We were living with threats that they would cut our benefits, cut our lieu days, tea breaks; I was very stressed." Mrs Kaur, who came to Britain at 18, is married to a builder and has three children"I earned £220 a month and I never saved anything from that."

GURCHARAN KAUR BASRA

The 57-year-old was a shop steward for three of the five years that she worked at Gate Gourmet. She said: "They assembled us in the canteen and gave us three minutes to go back to work or we would be dismissed. We didn't go and the staff said they wanted to talk to a senior shop steward. Just a few minutes later, we were dismissed."

WARYEM SINGH KHANEJA

An Afghan Sikh, Mr Khaneja fled the Taliban, leaving behind his two children and wife, to seek asylum in Britain five years ago. He lives in one room and sends money to his family in Kabul. He said: "I saw injustices at the company before they got rid of me. I am not sure what I will do and how my family will survive now."

FATEH SINGH ARORA

Mr Arora, 22, was put on short-term contracts despite working as a "general hand" for 18 months. "They wouldn't give me a long-term contract," he said. "They kept extending and extending it." Mr Arora, who came from India in 2001, said: "I was treated like a slave. The managers wanted to cut our breaks and our salary."

BEAUT GILL

Ms Gill was on holiday - after a five-week break to India to visit relatives - when she heard she had been dismissed. "I returned and went in that day because there were things I needed to sort out. When I arrived, I was told I couldn't go in and they wanted me to give them back my work ID card. I was shocked and upset."

PARMJIT BAIMS

Mrs Baims, 42, a former tray setter, said she felt she could never work fast enough. "We were giving them more and still they weren't happy." Mrs Baims, who has one child and worked at the company for 11 years, said conditions had worsened in the past two years. "The company got really strict. They have kicked us out with nothing."

SHAMSHER DUSANJH

Mrs Dusanjh, 49, a catering assistant for six years, claimed she suffered daily indignities. "It's not nice when you have to tell someone when you want to go to the toilet," she said. She came to Britain from the Punjab at the age of 17. "They told us to do extra work but I couldn't do it," she said. "I told them I had tried my best."