New Look

Responded to survey: yes

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

Grade 3.0: Can offer concrete examples of steps to develop and implement a living wage methodology in the supplier base, but there are either significant omissions or no clear plans to move beyond pilot projects. [what's this?]

Summary

Some complex work being carried out on fringe benefits, and worker management dialogue, in collaboration with other retailers, but work on freedom of association, which underpins all sustainable wage improvements, is limited in scope. 

Position on living wages

‘We endorse the principle of living wages for all workers in our supply chain, including those on piece rate, sub-contracted workers, informal and home workers. We note that certainty surrounding jobs and the future in general continues to be a key factor for workers and management which thinking about the concept of living wages. This includes access to social security or savings schemes (where these exist), access to the banking system and greater permanency of employment.’

‘Our approach is one of incremental improvement towards a living wage.’

Living wage benchmarks

None given.

Position on freedom of association

New Look told us that: ‘We are committed to the principles of freedom of association and the right to collective bargaining.’

New Look acknowledge that ‘The penetration of trade unions in our supply base is relatively low’ and that ‘for this reason, this year we prioritise the roll our of our worker committee model to factories where there is no active trade union present. Whilst this is not ideal, we believe that an empowered workers’ committee can go some way to supporting workers to be able to negotiate with managers on key workplace issues.’ 

Work so far on living wages

A project New Look started in 2006 with three Bangladeshi suppliers has been working to increase wages and fringe benefits (a savings scheme and free lunches) while reducing overtime. ‘Taking fringe benefits into account, the average grade 7 worker’s monthly package is now consistently worth around 5,712 taka (take-home wage, plus employers contribution to Provident Fund, plus cost of lunches) and the average grade 3 worker’s monthly package is consistently worth around 7,508 taka. These wages have increased by 112% and 88% respectively since the project began.’

Workers’ committees exist in the factories but, ‘Sadly the factories are not yet comfortable holding elections for representatives’.

Work with a further supplier in India focused on contract labour issues, access to state benefits, and wages. All tailors are now on contracts, all contract workers are eligible for benefits, and the use of daily contract workers has been eliminated. ‘Tailors’ wages are now Rs 7,410 for standard time, with total take home of around Rs 9,410, up from Rs 4,888 at the start of the project, an increase of 93%. Workers are now very close to the newly calculated India AFW level of Rs 7,967 within standard time.’

On purchasing practices New Look told us that: ‘Our project work has strongly indicated that continuity of orders and relationship is a key determinant of ability to deliver good labour standards. For this reason we have signed contracts with our top 5 suppliers, responsible for 42% of our business intake cost. Contracts range from 2 to 5 years.’ 

Plans on living wages

Working with Arcadia, M&S, Mothercare, Tesco, Sainsbury’s and Impactt, New Look is taking part in a government sponsored programme called ‘Benefits for Business and Workers’ targeting 110 factories in India and Bangladesh. The project aims to improve factory management and efficiency, human resources, and worker management communication systems.

A ‘supply base enhancement initiative’ was also mentioned to disseminate learning from New Look’s pilot projects ‘to reach 450 factories supplying New Look across the world by March 2015’.

Other significant information

A 60% increase in ethical trading staff in country was mentioned, and New Look’s ‘ethical champions’ programme where 31 staff in design, buying, merchandising and technical departments have volunteered to champion ethical trading across the business.

Our comments

 New Look’s detailed work on wages in Bangladesh and India is showing good results having increased by over 80% in all cases; the Indian project is coming close to achieving the Asia Floor Wage figure. We are pleased to see a retailer also taking steps to address one of the pressing barriers to wage projects: casual and contract labour. Learning from these projects also looks set to be rolled out to other factories.

A sustained effort over 5 years has brought only incremental progress in these pilot projects which raises concerns about their suitability for roll out. New Look state themselves that, ‘factories need considerable technical support on human resources management, business management and productivity techniques to be able to reap these gains’. We are concerned that this top-down change approach will be resource-heavy to roll out to 450 factories by 2015. New Look clarified that it is now working on a lighter touch model for roll out as part of its RAGS funded project. We look forward to seeing if this can be done and still achieve the same results.

Some work on purchasing practices was demonstrated and New Look’s long term commitment to key suppliers is a good step forward. One area not addressed was the issue of price paid by buyers. As these wage projects seek to close the gap between wages paid and the living wage, some work needs to be done to address this issue. New Look should now look at working out how it can ensure its prices allow for a living wage.

To reiterate what was said last year, New Look’s tendency to champion workers’ committees is a serious area of concern. New Look can provide evidence that it supports trade unions ‘where they exist,’ citing work done with the ITGLWF and the ILO in Cambodia. However, where this isn’t the case New Look is supporting workers’ committees rather than taking steps to enable freedom of association and trade union organising. The use of these committees often undermines the real and sustainable empowerment offered by the trade union movement. New Look admits that the factories are reluctant to allow workers to elect their own representatives, leading us to wonder if the attitude of management towards their employees has really changed through this programme. We recognise that supporting genuine freedom of association is complex, but we expect companies to demonstrate their commitment by taking concrete steps.

Neither in the pilot projects in Bangladesh and India, or the ‘Benefits for Business and Workers’ scheme was any mention made of work with local NGOs, civil society groups or, most importantly, trade unions. Although collaboration with other brands is important, and laudable, collaboration with these groups is equally vital if New Look’s work is to become sustainable.

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