Responded to survey: Yes.

MSI involvement: yes, Ethical Trading Initiative [what's this?]

Grade 3.5: Can offer concrete examples of steps to develop and implement a living wage methodology in the supplier base, with clear plans to move beyond pilot projects. [what's this?]

Summary

M&S has taken a leadership role on the issue of the living wage by making a commitment to deliver this to workers on a large scale by 2015. It is, however, dragging its heels over publishing figures which give its ‘fair living wage’ promise a concrete benchmark. 

Position on living wages

‘Our publicly published Plan A commitment states that we will: Implement a process to ensure our clothing suppliers are able to pay workers a fair living wage in the least developed countries we source from, starting with Bangladesh, India and Sri Lanka by 2015. We will achieve this by ensuring that the cost prices we pay to our suppliers are adequate to pay a living wage and by rolling out our ethical model factory programme.’

Living wage benchmarks

No benchmark provided, but the process for settling on one was outlined.

The process includes: analysis of actual wages paid currently; establishing transparent costings with suppliers; identification of the labour cost within product cost prices; setting key performance indicators in factories; comparison of all theoretical models on wages; establishing wage ladders; assessment of the wage gap and implementation of programmes to fill it.

Position on freedom of association

‘...We are committed to the principles of freedom of association and the right to collective bargaining. We reiterate the necessity of respecting labour laws, international labour standards and the right to organise and bargain collectively in our global sourcing principles, which have been updated this year and re-published to all suppliers to reinforce this.’

Work on promoting the business case for FOA at supplier conferences, a DVD of rights information, and training for workers on dialogue with management was also mentioned.

‘The DVD addresses workplace representation... It explains in detail how to set up a workers committee effectively as well as the alternative forms of representation such as Trade Unions & through a case study at one of our suppliers, demonstrates the benefits this has given to workers.’ 

Work so far on living wages

M&S’s Ethical Model Factory programme in Bangladesh ‘is now being implemented in 11 factories with a further 9 starting the programme throughout 2011/12.’ The programme covers 3 elements: worker rights training, HR management systems, and productivity training.

Results so far have seen basic pay, without overtime, increase by 12% - 54%.

‘Recent wage analysis in the original 3 factories has shown, that in the best performing of the factories 67% of the workers are now paid over 6000tk per month excluding overtime and the lowest paid worker received on average over 4900tk per month excluding overtime.’ Assessment of living wage figures in key sourcing countries, including academic and field research, was mentioned. M&S says it has ‘created wage ladders for several countries/regions’ based on this research, but no figures were provided.

M&S is using the monitoring of key performance indicators to encourage and reward suppliers who implement mature industrial relations. On FOA, the criteria states that a site must have: a freely elected Trade union or Worker Committee; worker representatives must reflect the workforce re nationality, gender and temporary workers; all representatives receive training on negotiation, representation and communication skills; monthly meetings take place with management; minutes show action points are taken forward; evidence of collective bargaining on pay and conditions is shown.

M&S is also monitoring a high number of key performance indicators in factories on wages paid, cost prices, absenteeism and staff turn over among others.

On purchasing practices M&S said: ‘All senior executive staff including the board and buying teams have a specific ethical trading performance objective in their annual appraisals and are held to account for delivery. 100% of buyers attend Ethical Trading training sessions within the first few weeks of joining the company...’ and ‘In addition, buyers in the UK and our regional offices have been trained in the use of the cost model referred to above including explanation of the provision of the direct % labour cost included in our cost prices.’

M&S’s work on labour standards for homeworkers has included participation in the ETI group, a database for tracking homework, and the setting up of sourcing relationships with homeworker co-ops in the Philippines and India. 

Plans on living wages

M&S plans to roll out the Ethical Model Factory programme in India to 25 factories in 2011/12. As stated in the Plan A commitment, M&S will also work on the calculation of the cost of a living wage within all products by 2015.

Other significant information

M&S has shared the learning from its projects at a number of multi-stakeholder meetings in order to collaborate and upscale learnings.

M&S is also taking part in the ‘Benefits for Business and Workers’ programme with a number of other brands. 

M&S has increased the number of staff in ‘regional teams who are deployed locally and regionally and who provide close support for suppliers at a factory level...’

Our comments

M&S has made some impressive commitments to the living wage since the publication of our last report. We welcome its published aim to pay a fair living wage to workers by 2015, and to increase if necessary the costs that it pays itself for the production of each garment to cover the wage gap. A clear route map towards achieving a living wage is demonstrated by this. No other retailer has taken leadership on the living wage issue in this way.

Our reservations about M&S’s work are centred on the definition, still not published, as to what a ‘fair living wage’ really means for the company. The process for defining the living wage as outlined seems to depend heavily on what is already being paid and what is feasible, rather than, as we’d hope, the actual figure needed by a worker to live a decent quality of life and provide for her family. Without the figure being clarified the commitment to pay the living wage is meaningless. We are unclear what stage the setting of these figures has reached, as M&S reports that wage ladders have been created, but NGO partners, such as ActionAid, who M&S ‘have worked closely with’ on this, have yet to hear about them or be consulted. It is vitally important that M&S stops dragging its heels over this as its leadership position has an effect on the progress of other companies.

A further reservation centres around capacity to deliver this resource-heavy, top down programme on the scale that M&S are proposing. We note that M&S have boosted their regional teams in order to sustain the volume of site visits required, but we still maintain doubts about further capacity needed to keep this sustainable. If more trade unions and local/regional stakeholders were involved, of which there so far have been few, this type of mass training and monitoring could be handled more effectively.

M&S’s work on freedom of association is, furthermore, thin. Although attempts to monitor and reward positive industrial relations is a good step, more needs to be done beyond trainings to involve both local and international stakeholders such as the trade union movement. M&S also continues to promote workers’ committees in places where trade union representation is legal, which acts as a barrier to organising and true worker representation. This needs to be addressed.

M&S has been awarded a grade in the top bracket and we’d expect to see it move up the grades next year if it can demonstrate significant work on freedom of association, and publish its benchmarks.