UPDATE 1-Online retailers in Germany under fire over working conditions

* Amazon workers in Germany go on strike again

* Verdi union says more strikes to follow

* Report by undercover journalist slams Zalando

* Zalando denies allegations, sues journalist (Recasts, adds union comment, details on Zalando)

FRANKFURT, April 17 (Reuters) - Working practices at theGerman operations of two of Europe's largest online retailershave come under fire this week, with more strikes at Amazon and Zalando being forced to defend its warehouseoperations after a critical TV report.

Hundreds of workers walked off their jobs on Thursday atAmazon distribution centres in the German cities of Bad Hersfeldand Leipzig in a year-long pay dispute, and labour union Verdiwarned that more walkouts were to follow.

"We are here and will continue to strike," workers'representative Christian Kraehling told Reuters. "And there willbe more, bigger strikes."

Verdi wants Amazon to raise pay for workers at itsdistribution centres in accordance with collective bargainingagreements across the mail order and retail industry in Germany.

Amazon, however, has rejected the demand, arguing that itregards warehouse staff as logistics workers and says theyreceive above-average pay by the standards of that industry.

The workers have gone on strike repeatedly in the paydispute, which started around a year ago, including in therun-up to Christmas when online retailers rely on business fromcustomers buying gifts on the Internet.

Verdi also wants to gain more representation at Zalando,Europe's biggest online fashion retailer, which was the subjectthis week of a television report in which an undercover reportergot a job at one of its warehouses under a fake name and used ahidden camera to film working practices.

"We are working on organising colleagues at Zalando," StefanNajda, Verdi's representative for online and mail order, toldReuters on Thursday.

The TV report alleged that stock pickers - whose main taskis to gather from shelves goods ordered by customers - were notallowed to rest during their shifts, were encouraged to snoop oncolleagues and were poorly paid.

Zalando, whose biggest investor is Swedish firm Kinnevik, said the report "in no way reflects the companyculture and worker sentiment at our logistics sites" and haspressed charges against the journalist for disclosure of tradeand company secrets.

Prosecutors in the eastern German city of Erfurt, where thewarehouse is located, are investigating the complaint byZalando, which has long been seen as a possible share flotationcandidate.

Other companies are turning to automation when it comes tostock picking. Sportswear giant Adidas, for example, last year opened a new fully-automated distribution centre nearOsnabrueck in which it had invested over 100 million euros ($138million). Employees there do not do any of the stock pickingthemselves, a spokesman said.

In Britain, online retailer Ocado is known for itsstate-of-the-art distribution technology, where automatedsystems fill baskets from central depots according to shopper'sonline orders. That contrasts with other retailers offeringonline ordering such as Tesco or Sainsbury,which mostly pick orders in regular stores rather thancentralised warehouses. ($1 = 0.7243 Euros) (Reporting by Maria Sheahan and Victoria Bryan; Additionalreporting by Matthias Inverardi and Nikola Rotscheroth; editingby Greg Mahlich and Tom Pfeiffer)