Next

Download Next's Submission Here (pdf)

Responded to survey: yes

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

Grade 3.5: Can offer examples of steps to develop and implement a living wage methodology in supplier base, and are making progress with a number of pilot projects. [what's this?]

Summary

Some transfer of learning between pilot projects but still no clear plan towards implementing a living wage across the supply base. However Next are working on a project to draw together learning which shows hope.

Position on living wages

‘We at Next continue to communicate our commitment to a living wage in both our code of practice and as an ETI member.’

Position on freedom of association

‘We have come to believe that less emphasis should be placed on finding a universal formula and more on how to ensure workers and employers engage in dialogue to enable mature systems of industrial relations to develop. Improvements in pay and working conditions have happened historically through collective bargaining between workers and employers and where fundamental rights such as freedom of association, are respected.’

Work so far on living wages

Next gave the following updates on its pilot projects:

• China: On a productivity programme, now in 17 factories: “To date, the factories engaged with this work have achieved between 10-20% reduction in total working hours and 20-30% increase in hourly wage rates over a 12 month period.”
  

• Sri Lanka: On a project to share expertise on productivity from Next’s own factory with others in the region: “We are now starting to add to these pilots the learning we have taken from our own work on purchasing practices.”
  

• Bangladesh: A wage study in a factory shared with Arcadia Group found “73% of workers were earning the living wage as defined by War on Want. In some cases this was only being achieved by overtime, but within legal limits.”
  

• Mauritius: A piece rate study introduced in a factory shared with Arcadia found ‘average earnings compared Jan-Dec 07 with Jan-Dec 08 have shown an increase of over 50% for all workers.’ Next have also been meeting with Government Ministers to discuss decent wage levels and have helped draw up guidelines for recruitment of migrant workers.
  

• Purchasing Practices: ‘In 2008 we commissioned a substantial piece of independent research into our purchasing practices...This has also led to a reassessment of our supplier sourcing strategy and a consolidation of our supply base.’
  
  
• Homeworkers: ‘We have completed initial wage studies [through ETI] for four elected supply chains of embellished product in India... We aim to build a sustainable mechanism which will transparently allow homeworkers to receive a fair rate for the work
  they do.’
  

Plans on living wages

‘During the second half of 2008 we initiated a significant piece of work... called ‘Auto Pilot’ which is about promoting better workplaces and we are working on this with an international NGO and trade union... This includes collective bargaining on working conditions and wages... We have identified 2 factories to run the pilot programmes with, and these pilots are scheduled to start in October 2009.’

In brief these pilots will:

• Enable workers and management to work together on issues

• Develop management systems

• Train workers at all levels in social compliance standards
  

Our comments

The lessons learnt from Next’s pilot projects are starting to build into a developed understanding of the issues. The pilot projects all seem to be researching different possibilities and strategies for moving forward which is positive, but we have yet to see any that are comprehensively working to increase wages for workers.

We also entirely agree with Next that freedom of association is a vital element to ensuring ongoing and sustainable wage increases but are disappointed that, so far, little seems to have been done to put this into practice, even in its own factories.

That said, it seems that the Auto Pilot scheme is intending to ‘draw together’ learning from the above pilots and freedom of association considerations, and shows some hope of becoming a coherent strategy. It is in its early days, but if it can use the learning gained to encourage informed discussion of the issues between workers and management and deliver partnerships with trade unions, such a scheme could go a
long way towards a robust living wage strategy.

We hope to see the Auto Pilot scheme develop into a project where workers are able bargain for their own rights and factory improvements are reached through genuine discussion.

We haven’t yet seen a plan for the project’s implementation on a wider scale and the details of the freedom of association measures being tested are unclear so we look forward to hearing more about this in the next stage.