Matalan

Responded to survey: yes

MSI involvement: no [what's this?]

Grade 2: Acknowledges that minimum and industry benchmark wages are not sufficient standards, but no real efforts to apply living wage. [what's this?]

Summary

Matalan is clearly making more effort than before to respond to criticisms levelled against it in previous years, including ensuring freedom of association and collective bargaining are included in its supplier code. However, its submission shows it has a limited understanding of complex issues and Matalan has a long way to go to
convince us that efforts are genuinely improving wages.

Position on living wages

‘Matalan fully agrees with and supports the need for workers to be paid a reasonable living wage and continuously monitors the progress made through an ethical audit process.’

Position on freedom of association

 ‘An agreement with each factory is to be made to introduce and display the Matalan corporate and socially responsibility policy on all factory notice boards both in English and in local language. This includes the payment of living wages and freedom of association.’

It seems, though, that Matalan’s audits are still mostly based on a tick box approach so it is unclear how simply displaying notices is expected to improve access to these important rights.

Work so far on living wages

Plans on living wages

‘Over the coming year a pilot bonus scheme will be implemented into 2 factories within each of our strategic hubs of Bangladesh, China and Turkey. If successful, we will be looking to roll it out into other countries within our supply base. This bonus scheme has to be linked
to product output and its succession through the supply chain and is paid to the workers at all levels.’

Matalan later corrected this saying ‘The bonus scheme is based upon quality not output. I apologise if this was not made clear enough.’

Matalan also added a further plan to ‘place securely locked boxes for employee comments that can only be accessed by Matalan auditors within our Model factories in China, Bangladesh and India.’

Other significant information

Matalan’s failure to engage adequately with complex issues can be seen in clearly in its approach to “outworkers” (or homeworkers).

‘In most cases outworkers have now been moved into the factory environment where [wage structure] can be controlled in the same way.’

Trying to eliminate outworking from supply chains is not only damaging to the women who rely on home working as a vital source of income, but risks making such work even less visible. Matalan’s approach to monitoring the outworking that does exist is inadequate.

Our comments

The proposed wage progression structure which Matalan is adopting starts far too low. A living wage in China according to the Asia Floor Wage calculation is RMB 1638, and the national minimum RMB 960. A Chinese garment worker under the Matalan scheme would have to work for two years before progressing to a level suitable to earn a living wage. Matalan offers no guarantee that it will retain suppliers for that amount of time, and it is quite possible that worker turnover would prevent workers ever reaching this level. Matalan’s code states that ‘living wages will be paid to all employees’ and this should apply from the start of their working life. As workers increase in skill and experience, of course, salaries should increase, but this is no excuse for poor wages for the young, unskilled women that make up a good
proportion of Matalan’s workforce (they estimate 10% but it could be more).

The proposed bonus project is of the kind that offers to pay workers more in return for working harder. This is the worst kind of productivity programme. Workers aren’t in poverty because they don’t work hard enough. They are in poverty because they don’t get paid adequately for the work that they do. Bonus schemes often increase stress and pressure, and promise pay increases that they are unable to deliver.
Matalan’s later correction to their submission, stating that the scheme is based on quality not output, is not only a clear contradiction to what was submitted previously, but we’re unsure how ‘quality’ could be linked to worker bonuses in an objective way.

With the wage structure changes and the proposed bonus project, the key point we must make is that a living wage is a basic right and shouldn’t be awarded merely as a prize for hard work. If the pilot bonus project is to be a success then workers need to be involved in the design and planning of the concept from the beginning.

Matalan acknowledged in its submission that it is unable to do effective work on wages alone. We agree. If Matalan is serious about starting to address these issues then it needs to start engaging properly through credible multi stakeholder initiatives such as the ETI.