New Look

Responded to survey: yes, and replied to questions

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

Grade 3.0: Can offer concrete examples of steps to increase wages in the supplier base, but there are either significant omissions or there is no clear plan to move beyond pilot projects. [what's this?]

Summary

An approach that is more ambitious in terms of scope and further advanced than most others, but lacks a clear plan to pay workers a living wage.

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. However, this objective seems more challenging than ever in the context of rapid food price inflation around the world."

Work so far on living wages

"The project we launched last year in Bangladesh, with one of our top 5 suppliers who is responsible for around 8% of our production, to explore how far production efficiency and incentives for workers could increase wages towards a living wage has now almost concluded, with very positive results. Working with [consultancy firm] Impactt, the factory has worked hard to improve productivity has raised wages and reduced working hours, whilst also supporting the development of a more active Workers Committee and introducing better procedures for workers to take paid time off.

"By May of this year, workers at the lowest wage grade (Grade 7) were earning 16% more than a year previously, for 27% fewer overtime hours. The average take-home pay of these workers had increased to Taka 2,924, a significant step towards a living wage. However, we are very aware that, against the background of rapid food inflation, the bar for what constitutes a living wage keeps on rising, and we continue to work hard with the factory to keep on improving."

We note that average take-home pay is a figure that includes overtime earnings, which are excluded from the definition of a living wage.

In response to a clarification question, New Look told us that the workers' committee, “is currently made up of nominated representatives. However, elections, to be scrutinised by members of the now disbanded ILO garment industry team in Bangladesh, are planned.”

Plans on living wages

New Look is the only retailer to have reached the rolling-out stage following a pilot project:

"We are currently selecting a group of suppliers in a range of countries, each of whom will nominate up to 5 factories in which to roll out this methodology. We are looking at Turkey, Moldova, Vietnam and India to establish where this model has most chance of being successful...We hope that this will result in a broad selection of case studies showing how this model works in a number of contexts, which we can then use to support a wider roll-out...We hope that in 12 months time, we will be able to report take-up and positive results across a significant tranche of our supply base."

We asked about the project's focus on productivity, and whether it would also examine New Look's own buying practices:

"We are very aware that productivity is part, but only part, of the answer. In order to be successful, we believe that any approach to increasing wages towards a living wage must include more responsible buying practices by the retailer and also a genuine commitment by factory management to pay a decent wage. In terms of responsible buying practices, specifically on the Bangladesh project, we are have identified room for improvement in planning and forecasting to smooth the flow of orders. More generally we are participating in the ETI Purchasing Practices Project, working with our major Turkish supplier and the NGO WIEGO to identify where our purchasing practices are causing issues and work out how to improve them. We are also working on ways to incentivise our suppliers to provide better jobs for workers, so, for example, we are in the process of reviewing commercial terms with our Bangladesh supplier to provide an incentive for continued improvement."

Other significant information

On freedom of association, New Look said that,

"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 are prioritising the roll out 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."

And it gave some detail on its monitoring and verification to answer the concerns we raised last year. In particular:

the choice of auditors and worker interviewers,
the fact that, “worker interviewers always leave their contact details with the workers they have spoken to and workers often telephone to add further information or updates.”
“We also regularly use unannounced assessments with offsite worker interviews in situations where we are suspicious about conditions at a particular site or where we have received intelligence about problems. We know that this approach uncovers issues in factories that have been ‘passed’ by other retailers and audit companies. “

Our comments

New Look is the furthest advanced in work to increase wages, with a project that appears to have genuinely improved wages and working conditions, involved worker organising, and encompassed a (limited) examination of purchasing practices, all along with a genuine plan to roll this learning out across its supply base. This is consistent with the broader approach on ethical trading provided by New Look. While far from perfect, it seems this is considerably more sophisticated than many others. We note, for example, New Look's recognition that the global food crisis compounds wage problems.

The existing project is not a living wages project by our definition, however. It lacks a multi-stakeholder and multi-retailer approach, but more importantly it remains focused on productivity improvements which, as New Look's own evidence demonstrates, have yet to deliver anything close to a living wage. New Look did acknowledge this:

"We wouldn't claim that the project delivers a living wage within standard hours, but we do think it makes an interesting contribution to the debate on how better salaries can be achieved sustainably."

As well as rolling out the project, New Look should continue to develop it to incorporate multi-stakeholder collaboration, favour trade unions over workers' committees wherever possible, and plot a route towards attaining a living wage, as opposed to simply raising wages.

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