Responded to survey: yes

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

Grade 3: Can offer concrete examples of steps to develop and implement a living wage methodology in supplier base, but only in a few pilot projects. [what's this?]

Summary

Primark appears to be revising its trend for purely delivering productivity projects and has redesigned programmes with a strong productivity focus to incorporate other key aspects. Work on training and capacity building for workers and management is now its priority, but work falls short on programmes that promote freedom of association. Proposals seem promising and for this reason Primark scraped a grade 3 this year, but to maintain this grade in the future we will need to see more concrete work, especially on pricing. 

Position on living wages

Primark told us that, ‘The issue of wages continues to be a priority area’ and that it ‘agrees with the principle that a living wage should cover basic needs, provide for discretionary income and savings and cater for dependants.’ Primark also believes ‘the negotiated approach [to wage increases] remains the most practical and sustainable

Living wage benchmarks

We have used the Asia Floor Wage as an internationally-recognised benchmark in addition to wages research within our specific country programmes based upon calculations defined by workers.’

Position on freedom of association

Primark said, ‘We are conducting research into how freedom of association and worker representation can be effectively measured within our monitoring programme and have started discussions with a range of external stakeholders including trade unions, the ILO and NGOs.’ Primark hopes to have this completed by the end of 2011. 

Work so far on living wages

Bangladesh

• A capacity building programme in 16 factories, training over 500 managers and 1100 workers on legal wages and benefits, health and safety, workers’ committees.
• Work to establishing worker participation committees.

China

• A training and capacity building programme for management and workers on industrial relations, negotiation and communication skills.
• Baseline assessments and system improvements.

India

• A living wage analysis to develop a benchmark wage figure for a family of four and single people in 2 regions in India. This will be reference in living wage work along with the AFW figures.
• Worker education and monitoring, including a training course on labour laws and rights, trade union rights and history, role of the ILO, code of conduct, sexual harassment, state benefits, working hours and salary.

Work on purchasing practices was described, including: a prompt payment to suppliers scheme; the development of a sourcing department tasked with ensuring a consolidated and sustainable supply base; critical path research; long lead times and ‘off-cycle’ ordering to fill in lean periods; buyer training and support. Primark also stated that, ‘Following the Action Aid meeting convened by the ETI in June, we have started to conduct research on how wages are incorporated into our purchasing prices.’ Primark mentioned involvement in several ETI groups. A piece rate and homeworkers wage analysis was also cited. 

Plans on living wages

Primark plans to develop a program, using the AFW and other benchmarks in Bangladesh. In China it plans to foster engagement between management and workers, establish good communication mechanisms, carry out living wage analysis through worker dialogue, and use AFW benchmarks. Further research on living wages is planned in India 

Other significant information

Primark outlined a number of other projects that fall outside the scope of living wage programmes. These include: health education programmes for women workers in Bangladesh; a toolkit for addressing labour shortages in China; financial inclusion projects in India; and work with jewellery homeworkers in the Philippines. 

Our comments

Primark is one of two companies to raise doubts as to the effectiveness of productivity programmes. Feedback from stakeholders showed that other factors had an equal if not greater part to play in wage improvement. We agree with Primark that these programmes can only be effective as part of a wider collaborative scheme to support worker organising and improve purchasing practices. It’s good to hear this is supported by Primark’s experience. Their programmes are still getting properly under way and we hope to see more progress by this time next year.

Primark’s work on capacity building and training looks positive, but the success of this will depend on who is doing the training (Primark say NGO partners are involved) and how learning is fed back into its work. Primark itself notes feedback from training showed a high interest in joining a union, yet there is very little trade union representation in its work places. Primark therefore need to look at supporting the translation of this interest into reality through removing the barriers that prevent workers from joining a union.

Primark is also falling into the common trap of confusing workers’ committees and trade union representation. Although it acknowledges a trade union’s role in supporting workers even where workplace unions do not exist and its importance in negotiating regional and national wage rises, it seems to be focusing on strengthening workers’ committees rather than pushing for space for trade unions to enter a factory. This could undermine the good training work it is doing in the community. Primark acknowledges it has a lot to learn in terms of supporting freedom of association. We hope that over the next year Primark will focus on improving its understanding in this area and developing more proactive work in supporting workers’ rights to join a union.

It is important for Primark to start developing more structured collaboration; many of its fellow brands and retailers are involved in programmes that Primark could learn from. Its experience with workers’ rights training in India could also be interesting for others to look at. As members of the ETI we would expect to see Primark’s level of collaboration deepen.

Finally, as a fast-fashion leader, Primark’s work on purchasing practices is critical if it is to show that its business model doesn’t negatively impact on the ethical trading work it undertakes: it needs to prove that its retail model does not push wages down. The interest shown in examining price as part of its purchasing practices work is promising, and we hope to see much more work on this. This will be even more fundamental given Primark’s acknowledgement that productivity will not provide all the answers in resourcing living wage increases.