New Look

Download New Look's Submission Here (pdf)

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

An impressive project with wide scope and a clear plan for improvement to pay, but productivity improvements are still not delivering living wages.

Position on living wages

‘As ETI members, 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...’

New Look noted that a key factor for workers and management when thinking about iving wages this year was the economic crisis and uncertainty about the future. ‘A key element which has gained importance for workers is access to social security or savings schemes (where these exist) as well as a desire for a greater degree of permanency in their employment.’

New Look were keen to ‘stress once again that we acknowledge that our approach is one of incremental improvement towards a living wage.’

Position on freedom of association

‘As members of the ETI, we are committed to the principles of freedom of association and the right to collective bargaining. However, the penetration of trade unions in our supply base is relatively low. ....We believe that when workers are able to express their concerns to management, there is far less risk of significant labour rights abuses. For this reason, this year we prioritise the roll out of our worker committee model to factories where there is no active trade union present.’

New Look does acknowledge that workers committees are not the same as trade unions and that a functioning trade unions is by far the preference. However, it seems in practice that it relies on workers committees even where trade unions are active and able to operate, for example in the UK.

Work so far on living wages

New Look have been working for three years on a project with two factories in Bangladesh aimed at exploring ‘how far production efficiency and incentives for workers, together with better worker representation and better access to benefits, could increase wages towards a living wage.’ Outcomes included:

- Overtime limited to a maximum of two hours per day.
- Average take-home pay stabilised at 3,200 taka for Grade 7 workers (lowest paid) which is up 33% since the project began.
- Improved fringe benefits including a voluntary savings scheme sponsored by the factory where each premium is matched 1:1 for up to 8% of the basic wage.
-Worker committees established .

A pilot project started in Northern India found ‘casual and contract workers working long hours, with few rest days, low pay, and very high levels of absenteeism and worker turnover.’ The project took on two objectives:
- ‘Regularising employment terms’: It put in place a leave application system, held weekly worker clinics, transferred 320 tailors to formal contracts, and ensured payslips contained accurate information.
- ‘Incentivising workers to improve productivity and cut absenteeism’: A trial line was set up with higher productivity targets, set time off and a Rs 500 bonusif target was met. This proved sucessful and was repliated across the factory.

Plans on living wages

Other significant information

Our comments

New Look are carrying out very advanced work on increasing wages which is making genuine improvements to wages for workers on a large scale. It is starting to integrate purchasing practices improvements into all levels of the design and production process, and their projects are designed so that the improved package meets workers’ expressed needs (New Look are the only brand who have managed this). Furthermore, there is an obvious plan in place to roll all this out across the supply base.

To reiterate what was said last year however, the project has little hope of reaching living wage levels using merely productivity as a mechanism. The Asia Floor Wage calculation outputs a living wage in Bangladesh at over 10,000 Taka and the productivity improvements managed are taking pay, including benefits (which should be excluded from living wage calculations), to just over 4,000 Taka for the lowest paid worker. New Look needs to take this seriously and put other projects in place to raise costs paid and ensure that this filters through to workers.

One area of serious concern for us is New Look’s tendency to use workers’ committees over trade union organising. Although we recognise that only a small number of the world’s garment workers are members of unions it is important to note that this is in large part due to the considerable barriers workers face in choosing to organise. The establishment of workers’ committees even in countries where unions are an acknowledged can show a brand’s unwillingness to engage with union activity. We are unclear why New Look are using this approach in countries like the UK. In places where union organising is prohibited (e.g Vietnam and China), we agree, there is a role for workers’ committees, but they must be properly representative. If, as is the case for New Look’s Bangladesh factory, workers are appointed not elected, it is misleading to talk of them as ‘worker representatives.’

With New Look’s commitment to, and influence over, the factories in its project there is an opportunity to do interesting work around the promotion of freedom of association, working with unions on the ground to build respect for this important right.