Living Wage

Initiatives
An overview
February 2016

Name Project Living Wage initiatives – an overview

Presented to (staff Jos Huber, Ministry of Foreign Affairs of the Netherlands
member in charge)
Presented by Tamar Hoek, Solidaridad
In close collaboration with Edwin Koster, Interim Consultant,
Made By

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 1
Index

1. Introduction ..............................................................................................................3

2. Overview of the Living Wage Initiatives .........................................................................4

2.1 Action, Collaboration, Transformation (ACT) ...............................................................6
2.2 The Asia Floor Wage Alliance (AFWA) .........................................................................9
2.3 Ethical Trading Initiative (ETI) ................................................................................. 11
2.4 Fair Wear Foundation (FWF) ................................................................................... 13
2.5 Fair Wage Network (FWN) ...................................................................................... 15
2.6 Global Living Wage Coalition ................................................................................... 17
2.7 Fair Compensation Workplan by the Fair Labor Association (FLA) ................................. 19
2.8 Clean Clothes Campaign ......................................................................................... 21
2.9 The Wage Indicator ............................................................................................... 22

3. Best practices ................................................................................................................ 24

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 2
1. Introduction
Living Wage has been high on agenda of governments as well as business since 2013. Specifically
for the Textile sector, several initiatives can be mentioned here: H&M Roadmap on Living Wages
with yearly progress, the signing of the ACT Group principles and the FairWear Foundations’ launch
of the Living Wage portal. During the ETI Conference in 2015 a report ‘Living wages in global
supply chains, a new agenda for businesses’ was published. This report describes the progress on
understanding and addressing the issue and highlights some best practices, in the textile and other
sectors. Building further on this, this report project will provide an overview of relevant initiatives
(objective, scope, ambition, progress high level) and will do an in-depth analysis on a short listed
number of initiatives.

This project is executed through desk research (literature and internet review) and stakeholder and
expert interviews, in close coordination with the Dutch Ministry of Foreign Affairs.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 3
2. Overview of the Living Wage Initiatives
Identified Living Wage Initiatives

We compiled the below long list of living wage initiatives. The list is based on desk research and was made in November 2015.
Long List
- Living Wage Calculator MIT - http://livingwage.mit.edu/

- Asian Floor Wage Alliance - http://asia.floorwage.org/about

- Wage Indicator - http://www.wageindicator.org/main

- ACT (Action Collaborate Transformation) - http://www.hiil.org/project/act-towards-living-wages-in-global-supply-

chains

- Worker Rights Consortium (WRC) living wage project (on Alta Gracia factory)
http://www.workersrights.org/verification/Living%20Wage.asp

- Ethical Trading Initiative(s) - http://www.ethicaltrade.org/sites/default/files/resources/living-wages-in-global-supply-

chains.pdf

- London Living Wage Foundation - http://www.livingwage.org.uk/calculation

- Living Wage NYC - http://www.livingwagenyc.org/

- CCC Stitched Up Report (on wages in Eastern Europe and Turkey)

https://www.cleanclothes.org/resources/publications/stitched-up-1

- Fair Wear Foundation - https://www2.fairwear.org/living-wage-portal/?forceIntro=true

- Fair Wage Network - http://www.fair-wage.com/en/who-we-are-menu/introduction.html

- Oxfam and ETP collaboration on wages in the tea sector

http://policy-practice.oxfam.org.uk/publications/understanding-wage-issues-in-the-tea-industry-287930

- World Banana Forum/Banana Link Initiative - http://www.bananalink.org.uk/world-banana-forum-wg02 and

http://www.fao.org/wbf/en/#.VlWn3oddGUk

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 4
 - Global Living Wage Coalition - http://www.isealalliance.org/our-work/improving-effectiveness/global-living-wage-
coalition

- Fair Compensation Workplan by the FLA - http://www.fairlabor.org/report/beyond-minimum-wages-corporate-codes-

conduct

- Crea Purchasing Power Index - http://crea.org/sustainable-living-wage-and-income/sustainable-living-wage-

introduction/

It was however decided to describe the below mentioned initiatives on a high level. They were selected on their relevance for
Short List
the garment sector, Asian countries, reputation and their potential reach and leverage. The descriptions of the below mentioned
initiatives can be found below.

- ACT (Action Collaborate Transformation) - http://www.hiil.org/project/act-towards-living-wages-in-global-supply-

chains

- Asian Floor Wage Alliance - http://asia.floorwage.org/about

- Ethical Trading Initiative(s) - http://www.ethicaltrade.org/sites/default/files/resources/living-wages-in-global-supply-

chains.pdf

- Fair Wear Foundation - https://www2.fairwear.org/living-wage-portal/?forceIntro=true

- Fair Wage Network - http://www.fair-wage.com/en/who-we-are-menu/introduction.html

- Global Living Wage Coalition - http://www.isealalliance.org/our-work/improving-effectiveness/global-living-wage-

coalition

- Fair Compensation Workplan by the FLA - http://www.fairlabor.org/report/beyond-minimum-wages-corporate-codes-

conduct

- Wage Indicator - http://www.wageindicator.org/main

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 5
2.1 Action, Collaboration, Transformation (ACT)

Action, Collaboration, Transformation (ACT) is an initiative between international brands &

What
retailers, and trade unions to address the issue of living wages in the textile and garment
supply chain.

ACT aims to improve wages by establishing industry collective bargaining in key garment and http://www.hiil.org/project/act-
Objective
textile sourcing countries, supported by world class manufacturing standards and responsible towards-living-wages-in-global-
purchasing practices. The proces focus is on the employees and employers. Employers should supply-chains
be understood as both manufacurers and brands and retailers.

Industry collective bargaining in global textile and garment supply chains, especially the ETI: LIVING WAGES IN GLOBAL
Scope
sourcing countries of member brands SUPPLY CHAINS, A new agenda
for business
The ACT group has agreed on a set of Enabling Principles, covering four focus areas to address
living wages:
1. Purchasing practices
2. Productivity and skills http://www.hiil.org/project/act-
3. Freedom of Association and Collective Bargaining towards-living-wages-in-global-
4. Influencing governments supply-chains

More specifically ACT promotes the so called concept of industry collective bargaining. Industry
collective bargaining differs from collective bargaining at an individual factory level as it means
that all workers and manufacturers in the garment sector within that country can negotiate
their wages under the same conditions, regardless of which factory they work for, and which
retailers and brands they produce for.
Benefits of industry collective bargaining agreements:
 Labor costs are taken out of competition
 All workers are included
 Factories adhere to the same labor standards
 A level playing field for manufacturers
 Increased compliance among employers
 Reduced conflict at the workplace

There are very few examples of industry collective bargaining agreements within key garment
and textile sourcing countries. This is why retailers & brands, and trade unions are working
towards this goal. The initiative looks at the Bangladesh Accord on Fire and Building Safety and
global framework agreements as an inspiration and potential best practice to be used.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 6
 A global framework on living wages in the garment sector that brings together all relevant ACT Factsheet
Ambition
stakeholders; identifying what each stakeholder’s role and responsibility is, and how, if taken
together, this can support living wages in a scaled up, sustainable, industry-wide approach.
The process is to develop industry-wide collective bargaining in garment-producing countries
which is backed by reform to brand purchasing practices to ensure that higher wages can be
paid.

Progress Started in 2014 and emerging from the IndustriALL Living Wage campaign, ACT currently has http://www.industriall-
15 participating brands with active interest from new brands. The brands have signed a set of union.org/industry-bargaining-
Enabling Principles amongst each other and have signed a Memorandum of Understanding1 with for-living-wages
IndustriALL Global Union. The MoU is explicit in identifying the development of industry
bargaining in garment producing countries as essential to achieving living wages and the need Article IndustriALL
for effective recognition of workers’ rights to freedom of association and collective bargaining in Cambodian Ministry
order for this to be realized. Article Phnom Penh Post

ACT started work on the first country programme in Cambodia. In September 2015 an ACT
delegation, consisting of IndustriALL and representatives from brands including H&M, Inditex, IndustriALL with H&M and
Primark, C&A and Top Shop explained the process in a series of meetings with suppliers, Inditex
garment unions, the Labour Ministry and the Ministry of Commerce, the garment manufacturers
association of Cambodia (GMAC), experts from ILO, the Fair Labor Association and other
organizations. ACT hopes to expand its activities to other countries like Bangladesh, Myanmar
and Turkey in the near future.

It is worth noting that key ACT stakeholders are also collaborating via an alternative yet related
path. IndustriALL Global Union and H&M and Inditex agreed upon signing and renewing global
framework agreements which focus on collective bargaining and freedom of association but also
include working toward living wages in the supply chain of these companies. ACT complements
these efforts as both the brands involved and IndustriALL realize that working towards living
wages can be better achieved collectively than individually.

Main IndustriALL Global Union, HiiL Innovating Justice (facilitating party), ETI, local unions, ACT Factsheet
Stakeholders manufacturers and governments
Brands: Esprit, C&A, Topshop, Inditex, Tchibo, H&M, Primark, New Look, Next, Tesco,
Debenhams, Arcadia, Asos, N Brown Group, Pentland;

1
A copy of the Memorandum of Understanding between brands/retailers and IndustriALL can be found in annex 1

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 7
Definition of ACT argues that minimum wages are typically below the level of a living wage in most major ACT Factsheet
Living Wage garment producing countries. ACT than continues by saying that industry collective bargaining
builds on these minimum wage setting mechanisms, where they exist, and establishes wages
and conditions that are appropriate for the industry, and agreed by workers and manufacturers
together.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 8
2.2 The Asia Floor Wage Alliance (AFWA)

The Asia Floor Wage Alliance (AFWA) is an international alliance led by trade unions and labor http://asia.floorwage.org/about
What
rights organizations from Asia mainly, representing the workers interest.

Central to AFWA demands is a call for a living wage to be paid to all garment workers. This led http://asia.floorwage.org/about
Objective
to the development of the Asia Floor Wage calculation, as a way to calculate a living wage for
payment across Asia.

AFWA has a focus on Asia; countries include China, India, Cambodia, Bangladesh, Indonesia, https://www.cleanclothes.org/li
Scope
Malaysia, Sri Lanka, Nepal, Philippines, Pakistan and Vietnam. Myanmar is not (yet) in scope. vingwage/asia-floor-wage-in-
The initiative is specifically focused on factory worker in the garment sector. It is driven by local-currency
unions and workers’ representatives in the respective countries.

Based on its regional approach, the AFWA aims to level the playing field between countries and http://asia.floorwage.org/what
aims to make sure, that the sourcing companies do not pull out of a country due to higher labor
costs, stopping the race to the bottom of price competition between garment producing
countries of the region. Therefore the AFWA developed a wage methodology based on
Purchasing Power Parity (in $), allowing standards of living between countries to be compared
regardless of the national currency. The base calculation of a minimum living wage is defined in
PPP terms, from which the precise amount in the local currency in calculated.

Achieve a living wage for all garment workers based on the Asia Floor Wage calculation through
Ambition
the strengthening of trade unions and the role of workers’ representatives.

Progress The campaign was launched in 2005. The last Asia Floor Wage figure from 2015 is PPP$ 1021. https://www.cleanclothes.org/li
In addition to this figure a calculation in local currency can be found on the website. The living vingwage/asia-floor-wage-in-
wage benchmark is supported by many Asian unions and labor rights organizations but is also local-currency
supported by western NGO´s like CCC and MSN and international brands and retailers. The
AFWA has therefore been successful in focusing public attention, both at the national and
international levels, on the wide gap between existing wages and a minimum living wage.
http://asia.floorwage.org/tribun
Another important activity of the AFWA is the convening of national Living Wage Tribunals in al
which workers give testimonies comparing their current wages and the amount they need to
meet the basic needs of themselves and their dependents. The tribunals bring public,
government, employer and brand attention to the problem of poverty wages in particular
countries. Tribunals have been held in Cambodia, Sri Lanka and most recently in Indonesia.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 9
Main Trade Unions and labor rights initiatives form Asia including Bangladesh (e.g. BGIWF - http://asia.floorwage.org/about/
Stakeholders Bangladesh Garment & Industrial Workers Federation), Cambodia, China, Hong Kong, India, members
Indonesia, western NGO´s and initiatives such as CCC, War on Want, Labour behind the Label
and Maquila Solidarity Network (MSN), and brands and retailers who accepted and adopted the
AFWA living wage estimates in their wage policies.

Definition of “Wages and benefits paid for a standard working week shall meet at least legal or industry http://asia.floorwage.org/calcula
Living Wage minimum standards and always be sufficient to meet basic needs of workers and their families ting-a-living-wage
and to provide some discretionary income.”

The Asia Floor Wage Alliance base their calculations on the following assumptions:
• A worker needs to be able to support themselves and two other “consumption units” (1
Consumption unit = 1 adult or 2 children)
• An adult requires 3,000 calories a day to be able to carry out their work.
• In Asia food costs account for half a workers monthly outgoings.

The Asia Floor Wage is calculated in PPP$ - Purchasing Power Parity $, which are an imaginary
World Bank currency built on the consumption of goods and services by people, allowing
standard of living between countries to be compared regardless of the national currency.

The 2015 Asia Floor Wage figure is PPP$ 1021.

Below is the calculation per country in local currency.

Cambodia 1,630,045 Riel

India 18,727 Rupees (INR)
Indonesia 4,684,570 Rupiah
Sri Lanka 8,608 Rupees (SLR)
Bangladesh 29,442 Taka
China 3,847 Yuan
Malaysia 1,643 Ringgit
Nepal 32,310 NPR
Pakistan 31,197 PKR
Philippines 20,247 PHP
Thailand 13,359 Baht
Vietnam 8,949,153 VND

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 10
2.3 Ethical Trading Initiative (ETI)

The Ethical Trading Initiative (ETI) is an alliance of companies, trade unions and NGOs that
What
promotes respect for workers’ rights around the globe. The ETI was founded in 1998.

Company members adopt the ETI Base Code and commit to implementing this within their
Objective
supply chains. ETI expects them to set themselves clear, time-bound targets for practical
actions that will contribute to the respect of workers’ rights including the achievement of living
wages.

The ETI works global and inter-sectorial, not limited to the garment sector or Asia. The aim is
Scope
to tackle the root cause of poor working conditions. ETI operates in the clothing and textiles, ETI Base Code Living Wages
food and farming and goods and household sectors. The ETI Case Code is based on ILO
conventions and covers 9 provisions among which living wage.

The ETI closely cooperates with the Dansk Initiativ for Etisk Handel (DIEH) also referred to as
the Danish ETI and Initiativ for Etisk Handel also referred to as the Norwegian ETI. Together
they are also described as the joint ETI´s.

Promote respect for workers around the globe and ultimately a living wage for all.
Ambition
Members follow the ETI base code that uphold 9 provisions based on ILO conventions.

Progress All member brands and retailers have to commit to implementing the ETI Base Code which
includes living wages. This does however not imply that member companies have implemented
the concept in their supply chains. ETI and its members and stakeholders do however promote
and pilot the concept.
ETI Blog Cambodia
In Cambodia, starting early 2014, ETI brought together a group of 30 international brands and
global trade unions (incl. IndustriALL), for meetings with the Cambodian government over labor http://www.ethicaltrade.org/ne
issues and wage setting mechanisms in the garment sector. ETI can therefore be seen as an ws-and-events/news/eti-
important force behind the current efforts of ACT in Cambodia. supports-calls-new-myanmar-
minimum-wage-apply-garment-
ETI and its members also support international calls for Myanmar’s new minimum wage to be sector
applied countrywide. ETI has articulated this stance in a letter to the Myanmar government,
urging it to resist the request for an exemption from the country’s garment manufacturers. On ETI Report
29 June 2015, Myanmar’s government announced a new minimum wage of 3,600 Kyat (approx
$3.21/day), following a year of consultation with unions and employers. This proposed rate
represents a compromise between what industry groups were calling for ($2,500 Kyat) and
unions ($4,000 Kyat) were calling for. Myanmar’s garment factory owners unanimously voted
against the proposed minimum wage, which has been broadly welcomed by trade unions.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 11
 In 2015 the joint ETI´s published a report called Living Wages in Global Supply Chains; A new
Agenda for Business. In this report the ETI´s describe the importance of coordination and
collaboration, support of collective bargaining, a review of commercial practices and the
adoption of a sector wide approach.

The ETI Norway in cooperation with the Fair Wage Network (FWN) are working together on how
to make the FWN approach to Fair Wages workable for SME´s that often lack the capacity to
deal with the Fair Wages methodology.

Main ETI has more than 80 member companies, predominantly in the UK and in the food and http://www.ethicaltrade.org/ab
Stakeholders clothing sector. out-eti/our-members
Member companies include: Tesco, Asda, Sainsbury´s, H&M, Primark, Inditex, Tchibo and Next
but also include unions like IndustriALL and ITUC and NGO’s like Care, Christina Aid, Save the
Children, and Oxfam.

Definition of The ETI has defined a living wage via Base Code provision 5 ‘Living wages are paid’, which ETI Base Code Living Wages
Living Wage stipulates:
5.1 Wages and benefits paid for a standard working week meet, at a minimum, national legal
standards or industry benchmark standards, whichever is higher. In any event wages should
always be enough to meet basic needs and to provide some discretionary income.
5.2 All workers shall be provided with written and understandable Information about their
employment conditions in respect to wages before they enter employment and about the
particulars of their wages for the pay period concerned each time that they are paid.
5.3 Deductions from wages as a disciplinary measure shall not be permitted nor shall any
deductions from wages not provided for by national law be permitted without the expressed
permission of the worker concerned. All disciplinary measures should be recorded.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 12
2.4 Fair Wear Foundation (FWF)

Fair Wear Foundation (FWF) is an independent, non-profit organization that works with http://www.fairwear.org/22/abo
What
companies and factories to improve labor conditions for garment workers. ut/

FWF and its members work towards improving the labor conditions in factories and workshops http://www.fairwear.org/496/la
Objective
where the ‘cut-make-trim’ stage takes place, all over the world. The basis of the collaboration bour-standards/5.-payment-of-
between FWF and a member is the Code of Labour Practices. Eight labor standards form the living-wage/
core of the Code of Labour Practices. Members of FWF must comply with this Code of Labour
Practices. One of these Practices is the payment of a living wage. The FWF Code is based on
ILO conventions and the UN Declaration on Human Rights.

FWF´s focus is on factories and workshops where the ‘cut-make-trim’ stage takes place. FWF http://www.fairwear.org/26/cou
Scope
works with companies from seven European countries. These companies buy their products ntries/
from factories in fifty-five countries. Fair Wear Foundation, however, is not active in all of these
countries. FWF is active in 11 production countries in Asia, Europe and Africa. Most of FWF's
work is focused on four priority countries: Bangladesh, China, India and Turkey. Around 80% of
FWF member production comes from these four countries.

Implement workers’ rights and living wages globally, by both implementing the FWF Code and
Ambition
using the FWF available tools.

Progress FWF keeps track of the improvements made by the companies it works with. And through https://www2.fairwear.org/livin
sharing expertise, social dialogue and strengthening industrial relations, FWF aims to increase g-wage-portal/?forceIntro=true
the effectiveness of the efforts made by companies. The approach is progress oriented,
stresses the importance of supply chain responsibility of brands and emphasises long term
cooperation between suppliers and brands.

More in particular on living wages, FWF works on:

1. Pilots with brands like Switcher on the payment of living wage premiums
2. Combining collective bargaining efforts with working towards a living wage
3. Research on labor minute costing and the relation with living wages
4. Pilot projects looking at the link between increased productivity and increased wages
5. Guidance for companies on how to collaborate on efforts to improve wages without
violating EU anti-trust legislation or competition law. http://www.fairwear.org/563/w
6. Launch of Fair Wage Portal beginning 2015 age-ladder/

Besides the above mentioned activities FWF has put a lot of effort in the development of so
called Wage Ladders. The FWF Wage Ladder is an online tool that allows the wages paid at any
factory to be compared against a range of wage benchmarks.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 13
 The Wage Ladder generates a clear, easily understandable graphic that shows where a factory’s
wages fall short in comparison to these benchmarks. Brands, suppliers and workers’
representatives use these insights for negotiations on how to make improvements, moving
wages ‘up the ladder’ in regular steps.
Current steps or benchmarks included in the wage ladders include:
 Legal minimum wage
 Poverty line
 Average industry wage
 Wages negotiated through collective bargaining
 Living wage estimates of local stakeholders (trade unions, labor rights organizations, etc.)

The wage ladders are originally designed for use in the garment industry, however most wage
benchmarks apply to any industry. Therefore the wage ladders could also be used in other
sectors like the electronics, toys and agriculture sectors.

Main FWF works with ± 90 member companies, from the fashion and workwear sector, representing http://www.fairwear.org/36/bra
Stakeholders over 120 brands that are based in seven European countries; member products are sold in over nds/
20,000 retail outlets in more than 80 countries around the world. FWF also collaborates with
unions which include FNV and CNV, NGOs like CCC, SOMO and Oxfam and branch-
organizations.

Definition of In the FWF Code of Labour Practices, a living wage is defined as a wage paid for a standard FWF CoLP
Living Wage working week that meets the basic needs of workers and their families and provides some
discretionary income. ‘Basic needs’ includes costs like housing (with basic facilities including
electricity), nutrition, clothing, healthcare, education, drinking water, childcare, transport, and
savings.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 14
2.5 Fair Wage Network (FWN)

The Fair Wage Network (FWN) is a multi-stakeholder network created on the initiative of Daniel http://www.fair-
What
Vaughan-Whitehead and Auret van Heerden. The initiative was set-up in 2009. The network wage.com/en/who-we-are-
regroups actors ready to commit themselves to work to promote better wage practices. The menu/introduction.html
idea is to set up an interactive and dynamic process, involving NGOs, managers, workers’
representatives and researchers.

The aim of FWN is to gradually move up individual factories’ wage practices, in terms of the http://www.fair-
Objective
different elements which are part of the so called Fair Wage approach. This approach has a wage.com/en/who-we-are-
focus on 12 wage dimensions which include a living wage. menu/introduction.html

FWN collects information and tries to overcome possible initial reluctance from the different
Scope
stakeholders. As such FWN offers a cooperative framework for different stakeholders with
mutual benefits of a collective approach. FWN interacts with stakeholders like ETI Norway,
BSCI, FLA, Solidaridad, Better Work, the Living Wage Foundation and others.

It is FWN ambition to ensure the coherence needed in the wage area and helping to liaise the http://www.fair-
Ambition
proposed fair wage approach in relation to all wage initiatives at international and national wage.com/en/fair-wage-
level. FWN wants to provide stakeholders with a practical tool aimed at finding the causes of approach-menu/definition-of-
wage problems and identifying levers to improve wage levels. fair-wages.html

Progress Most important in the work of the FWN is the developed “fair wage approach”. The approach is List of 12 dimensions for a Fair
a way of identifying and measuring an employer’s practices that determine whether workers Wage
are being properly compensated according to national labor law and a brand’s code of conduct.
The approach does not focus on payment of a living wage, though it is one of the issues
assessed. Instead, it measures 12 employer practices or dimensions related to wages and other
compensation. http://www.fair-
wage.com/en/our-work.html
They are listed below:
 Full and timely payment of wages;
 Living wage;
 Minimum wage; http://innovation-
 Prevailing wage; forum.co.uk/analysis.php?s=fair
 Proper payment for hours worked; -pays-supply-chain-challenges
 Pay systems, such as production bonuses, social security payments, wage deductions;
 Wages in relation to profits;
 Wages in relation to cost of living increases;
 Wage costs (as compared to total production costs); http://fair-
 Wage discrimination; wage.com/en/component/conte

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 15
  Social dialogue and communication, such as collective bargaining; and nt/article/13-events/211-fair-
 Wages in relation to increased skills and technology. wage-workshop-organized-with-
eti-norway-in-oslo-march-27-
Based on an assessment, outcomes per factory on the mentioned dimensions are reflected via 2015.html
a fair wage matrix. It highlights where the factory does well, needs to improve or fails.

The fair wage approach is part of H&M´s roadmap to a ‘Fair Living Wage’. It has also been used
by IKEA for its retail units in the USA, Japan, UK and China. Adidas has integrated the Fair
Wage approach into their supplier training on Human Resources Management Systems.
Solidaridad, G-Star and Lindex currently pilot the fair wage approach in China. FWN, ETI
Norway, and four smaller Norwegian clothing and sportswear companies collaborate on
applying the approach to small companies instead of larger companies.

Main FWN stakeholders include the mentioned brands among which H&M, IKEA, Adidas and some Brand & Initiatives
Stakeholders individual FLA-member companies. Other important stakeholders include the ETI´s, BSCI, ILO,
FLA, and Better Work

Definition of The FWN defines a living wage as: A wage that ensures minimum acceptable living standards. http://www.fair-
Living Wage wage.com/en/fair-wage-
approach-menu/12-fair-wage-
dimensions-menu.html

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 16
2.6 Global Living Wage Coalition

The Global Living Wage Coalition brings together six sustainability standards to improve wage The Coalition
What
levels in certified supply chains. Fairtrade International, Forest Stewardship Council (FSC),
GoodWeave, Sustainable Agriculture Network/Rainforest Alliance (SAN/RA), Social
Accountability International (SAI), and Utz Certified have made a joint commitment and
collaborates via the Coalition. They have agreed to a shared definition and approach for
measuring and implementing living wage. The collaboration is facilitated by the ISEAL Alliance.

The Coalition will lead to the strengthening of living wage requirements in codes and criteria. The Coalition
Objective
The Coalition is also focused on more than the content of standards, because compliance with a
certification programme will not raise wages on its own. The coalition will be refining and http://san.ag/web/global-living-
sharing a methodology for calculating living wage, developing a set of country-specific living wage-coalition-concludes-
wage estimates, and testing them in various sectors and countries. The Coalition feels that the successful-training-for-new-
estimates will not and should not supplant collective bargaining rights, but will serve as a living-wage-methodology/
replicable tool to support social dialogue between workers and employers and the value chain.

The coalition will focus on a large number of countries and sectors addressed or covered by the
Scope
six standards. The methodology used will apply to both urban and rural settings, to multiple
tiers in the supply chain, and will also be used in the garment sector in- and outside Asian
countries. The living wage estimates will be used for the certification work of the involved
standards but will also be shared with other stakeholders including unions, NGOs and
governments.

The long term goal and shared mission of the Coalition is to see improvements in workers'
Ambition
conditions, including wage levels, on the farms, factories and supply chains participating in
their respective certification systems and beyond. In this respect the Coalition works together
on establishing a publicly available database where information, such as wage estimates, can
be accessed by stakeholders. The Coalition is thus working towards a large number of living
wage estimates and aims to train a large pool of experts able to create estimates and integrate
methodology into standards setters operations.

Progress The Coalition has developed, tested and refined a common living wage methodology which has http://sa-
been developed by Richard and Martha Anker, international specialists on living wages. The intl.org/index.cfm?fuseaction=p
methodology has been field tested in four countries (the Dominican Republic, South Africa, age.viewPage&pageID=1700&n
Kenya and Malawi). The research and outcomes have been made public via four separate odeID=1
reports. The research shows applicable living wage estimates, a country and/or sector specific
wage ladder, and how to include in kind benefits given by employers to workers in living wage https://www.utzcertified.org/en
calculations. /newsroom/utz-in-the-
news/26584935-working-

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 17
 In order to scale up the number of living wage estimates, the coalition has now started a series together-to-achieve-a-living-
of trainings to qualify researchers on the use of the Anker methodology. Trainings took place in wage
Turkey, China and Costa Rica and has qualified researchers from Brazil, Ethiopia, Ghana,
Tanzania, India, China, Costa Rica, Ecuador, India, Mexico, Nicaragua, Pakistan, Sri Lanka, and
Vietnam. These researchers will begin the long term goals of building a living wage database
for a wide number of countries. They will start with specific subject industries in each of the
mentioned countries to create living wage reports and estimates.

Main Fairtrade International, Forest Stewardship Council (FSC), GoodWeave, Sustainable Agriculture The Coalition
Stakeholders Network/Rainforest Alliance (SAN/RA), Social Accountability International (SAI), UTZ Certified,
Iseal Alliance, Richard and Martha Anker.

Through these main stakeholders the approach replicates to many other brands companies and
suppliers and thereby workers and sectors/ industries.

Definition of Remuneration received for a standard work week by a worker in a particular place sufficient to Methodology and definition
Living Wage afford a decent standard of living for the worker and her or his family. Elements of a decent
standard of living include food, water, housing, education, health care, transport, clothing, and
other essential needs, including provision for unexpected events.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 18
2.7 Fair Compensation Workplan by the Fair Labor Association (FLA)

The FLA is a collaborative effort of socially responsible companies, colleges and universities, http://www.fairlabor.org/
What
and civil society organizations, to promote workers’ rights, such as ‘fair compensation’. In
February 2015 the FLA launched its Fair Compensation Work Plan – a strategy for buyers,
suppliers, and unions to move companies toward meeting their Code of Conduct obligations on
fair compensation, and for the FLA to hold them accountable for measurable progress.

The FLA brings together three key constituencies - universities, civil society organizations FLA Mission
Objective
(CSOs) and companies - to find sustainable solutions to systemic labor issues, including a fair
compensation.

The FLA offers tools and resources to companies, delivering training to factory workers and http://www.fairlabor.org/our-
Scope
management, conducting due diligence through independent assessments, and advocating for work/principles
greater accountability and transparency from companies, manufacturers, factories and others
involved in global supply chains. The FLA is active in the agriculture, electronics, apparel and
footwear sectors in which it addresses labor rights in the supply chains of its affiliate companies
which are mostly from the US. One of the addressed labor right is right to fair compensation.

By 2017, the FLA aims to complete the first stages of the developed Fair Compensation Work Draft Fair Compensation
Ambition
Plan. The plan prepares affiliated companies for assessments that flag the parts of the supply Workplan, February 2015
chain—from individual suppliers to key sourcing countries—where companies need to work with
unions, workers, and governments to close the gap between prevailing wages and fair
compensation.

Progress In February 2015 the FLA released its Draft Fair Compensation Work Plan. http://www.fairlabor.org/report
The plan contains three phases: /beyond-minimum-wages-
corporate-codes-conduct
The first phase is labelled “Taking Stock” and includes organizing and benchmarking of
compensation data (Element 1), and reporting (Element 2). One of the goals of this phase is
the gathering of relevant baseline data and benchmarks against which to measure.

The second phase is “Learning and Planning” and will require intensive research and training by
the FLA on current approaches. It also includes experimentation by company affiliates to help
them individually design compensation strategies for their supply chains. The FLA will begin
developing “Taking Stock” and “Learning and Planning” between mid-2015 and mid-2017.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 19
 The final stage is labelled “Making Change,” and is slated to begin in mid-2017. It describes
how progress will be measured and hold company affiliates accountable for progress towards
fulfilment of the compensation code element. Progress by affiliates will be measured and
reported annually in this phase by the FLA. Formal evaluations — for the organization as well as
individual companies — will follow in 2017 and 2020 and serve as the basis for consideration of
changes to the FLA’s strategy.

Main Affiliates: Several American Colleges (MIT, Brown, Stanford, Princeton, Yale, etc), Adidas http://www.fairlabor.org/affiliat
Stakeholders Group Apple, Arena, Esquel Group, Fast Retailing, Fruit of the Loom, Global Fairness Initiative, es
GTM Sportswear, H&M, Hugo Boss, Kathmandu, Nestle, New Balance, Nike, Patagonia, prAna,
Puma, PVH, Syngenta, S. Oliver, Under Armour

Definition of The FLA uses the term “basic needs wage” in its FLA Workplace Code of Conduct. http://www.fairlabor.org/sites/d
Living Wage It is defined as: efault/files/fla_complete_code_
and_benchmarks.pdf
“Every worker has a right to compensation for a regular work week that is sufficient to meet
the worker’s basic needs and provide some discretionary income. Employers shall pay at least
the minimum wage or the appropriate prevailing wage, whichever is higher, comply with all
legal requirements on wages, and provide any fringe benefits required by law or contract.
Where compensation does not meet workers’ basic needs and provide some discretionary
income, each employer shall work with the FLA to take appropriate actions that seek to
progressively realize a level of compensation that does.”

Basic needs is defined as : The minimum necessary for a worker and two dependents to have
access to resources, including food, safe drinking water, clothing, shelter, energy,
transportation, education, sanitation facilities and access to health care services.

Compensation is defined as: Total remuneration, in cash or in kind, payable by the employer to
an employee in return for work done by the latter during a specific time period; has two main
components: (a) Wages and salaries payable in cash; (b) The value of the fringe benefit or
social contributions payable by employers: these may be actual social contributions payable by
employers to Social Security schemes or to private funded social insurance schemes to secure
social benefits for their employees; or contributions by employers providing unfunded social
benefits.
Discretionary income is defined as: The amount of a worker’s wages available for spending or
saving after basic needs have been met.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 20
2.8 Clean Clothes Campaign

The Clean Clothes Campaign is an alliance of organizations in 16 European countries. Members http://www.cleanclothes.org/ab
What
include trade unions and NGOs covering a broad spectrum of perspectives and interests, such out/who-we-are
as women’s rights, consumer advocacy and poverty reduction. A special focus if also given to
living wages.

CCC is dedicated to improving working conditions and supporting the empowerment of workers
Objective
in the global garment and sportswear industries.

CCC works to help ensure that the fundamental rights of workers in the global garment and http://www.cleanclothes.org/livi
Scope
sportswear industries are respected; through education and mobilisation of consumers, ngwage
lobbying of companies and governments, and offering direct solidarity support to workers as
they fight for their rights and demand better working conditions.
CCC relies on a partner network of more than 200 organizations and unions in garment-
producing countries to identify local problems and objectives, and to help develop campaign
strategies to support workers in achieving their goals.

Achieve living wage for industry workers globally: member of the AFW Alliance, aiming to make
Ambition
the wage floor a reality in Asia. CCC calls for:
◦ Clothing brands and companies to set concrete, measurable steps throughout their
supply chain to ensure garment workers get paid a living wage.
◦ National governments in garment producing countries to make sure minimum wages
are set at living wage standards.
◦ European governments to implement regulation to ensure companies are responsible
for the impact they have on the lives of workers in their supply chain.

Progress CCC regularly publishes reports and analyses of different sectors/ brands/ processes, such as:
Evaluation of H&M Compliance with Safety Action Plans for Strategic Suppliers in Bangladesh
2015; the Asia Wage Report 2014; the Stitched Up Report 2014 on poverty wages in Eastern
Europe and Turkey; the 2014 Tailored Wages Report looking at policies and practices of the 50
largest clothing brands regarding living wages.
CCC is further involved in:
◦ workers’ struggles in Cambodia for a higher minimum wage (Global Living Wage Cambodia Campaign
Campaign for Cambodia #weneed177): In October, the Labour Advisory Council (LAC),
a tripartite wage-setting body, voted to approve a new minimum wage of $140, to be Tribunals
implemented in January 2016 for Cambodia’s 700,000 garment workers, but CCC and
trade unions call for a raise to $177.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 21
 ◦ the AFW Permanent People’s Tribunals in Sri Lanka, India and Cambodia (2014) and
Indonesia (2015), giving workers an opportunity to share their experiences and speak
with government and brand representatives around the issues they face due to poverty
pay in the garment sector. Held in conjunction with the Permanent Peoples’ Tribunal,
an opinion tribunal identifying and publicising systemic labor rights violations.

Main Trade Unions, NGOs and organizations in Europe and Asia, such as ITUC, MSN, Oxfam, AFWA,
Stakeholders IndustriALL, UNI, Workers Rights Consortium.
CCC part of the board of the FWF and engages with different brands through its campaigns

Definition of The human right to a living wage: A living wage should be earned in a standard working week http://www.cleanclothes.org/livi
Living Wage (no more than 48 hours) and allow a garment worker to be able to buy food for herself and her ngwage
family, pay the rent, pay for healthcare, clothing, transportation and education and have a
small amount of savings for when something unexpected happens.

2.9 The Wage Indicator

The Wage Indicator Foundation specializes in collecting and providing workers and social http://www.wageindicator.org/
What
partners with user-friendly labor market information on minimum wages, collective main/Wageindicatorfoundation
agreements, current wages, labor law, debates, and compliance sessions through the national
Wage Indicator websites to enable well-informed decision making. The Wage Indicator is active
in 89 countries and many sectors including the garment sector and Asia.

The objective of the Wage Indicator Foundation is: “More labor market transparency for the
Objective
benefit of all employers, employees and workers worldwide by sharing and comparing
information on wages, Labour Law and career.”

The Wage Indicator aggregates data and provides insights in the labor market of 89 countries.
Scope
Via its international teams and tools it gathers information on issues which include salaries,
labor law, collective bargaining agreements, minimum wages, actual wages, living wages, and
the position of women in labor markets. With this information the Wage Indicator aims to assist
individual workers and employers with real wage data during negotiations and job search, and
workers, employers and labor inspectors with comprehensive insight in national Labour Laws.

The Wage Indicator hopes to expand to ‘all’ countries and provide for an excellent indicator to
Ambition
make sure that everybody gets a fair pay under "OK" circumstances or can act fair.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 22
Progress Progress realised by the Wage Indicator include among others:
 350.000 observations for Salary and Working Conditions
 100 committed WageIndicator team members with a core team of 15 team members
 89 countries with a Salary and Working Conditions Survey in one or two national
national languages
 74 countries with a Salary Check
 80 countries in the Minimum Wage Database in English and national languages
 29 countries in Collective agreement Database
 76 countries in the Labour law Database in English and national languages
 89 countries with a Cost of Living Survey
 52 countries with a Living Wage Calculation

Main Main stakeholders include trade Unions (incl. FNV), NGOs, academia (incl. the University of
Stakeholders Amsterdam) and research agencies in Europe and globally.

Definition of The Wage Indicator living wage estimates the monthly expenses necessary to cover the cost of http://www.wageindicator.org/
Living Wage food, housing and transportation, as well as a 10% margin for unexpected expenses (such as main/salary/living-wage/faq-
expenses for other basic necessities like education, health and clothing). living-wage

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 23
3. Best practices
At the same time we can also learn from what is already there. One of the sub-objectives of the
ALWC is to discuss best practices that can bridge the gap between legal minimum wages and living
wages. Some best practices in the sector on Living Wages on different levels are therefore
highlighted in this chapter.

1. Switcher Resources:
In 2013, FWF member Switcher embarked on an experimental project to implement living CCC Tailored
wages in a portion of its supply chain. They trialled a method to pay a wage ‘top-up Wages Report
bonus’, calculated as a 1% increase on the price paid to the factory, which goes directly
to the workers.
FWF website
Switcher sources from 20–30 total suppliers worldwide in 6 or 7 different countries
(including Bangladesh, India and China). Despite its small size, Switcher has been widely
recognised as a leader in this arena, according to FWF.
After consultations with stakeholders Switcher decided to work on improving wages of
workers in sourcing countries, and started to set aside 0.25 Euro per garment for a small
part of their collection, to find a way to get that money directly to the workers. The
approach is based on the FWF wage ladder, aiming for incremental change in wages, with
small but significant steps.
Switcher commissioned Professor Doug Miller to conduct research and consult with
stakeholder groups – like workers, unions, and factory managers in Bangladesh, where
the project was planned with new factories in their supply chain. The feedback was that
the additional income would have to be shared between all workers of the factories, not
just the ones working on Switcher orders. It was further important that the extra income
was included in the payment of the order and not considered charity. After difficulties in
cooperation and resistance from the management of the factories in Bangladesh, the
project was moved to a factory in China.
In the factories in China, management supported the pilot, and the distribution of the
funds to workers was overseen by local FWF staff. The distribution was linked to a
training session for workers on the 8 FWF labor standards, to put the wage pilot into
perspective. Besides the wage benefits, Switcher was also expecting workers to be more
engaged and was hoping for a reduction in turnover at factories, and increased
productivity and quality. These benefits have not been demonstrated yet.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 24
2. Tchibo/ WE Programme Resources:
The WE Programme is a supplier qualification programme jointly developed by Tchibo and CCC Tailored
the GIZ, mandatory for all Tchibo factories in Bangladesh. The programme initiated Wages Report
improvement processes in factories, supported by qualified local trainers: factory 2014
management, workers and their representatives as well as Tchibo buyers developed
And
solutions and action plans for better working conditions (including better wages) and
implemented them in the factories. During the four years of the pilot project (2007 and CCC Company
2011/12), WE had a total budget of €2.9 million. Tchibo contributed 53% and GIZ on Submission
behalf of BMZ 47% of the costs. The pilot phase covered Bangladesh, China and Thailand,
where a total of 40 production facilities were trained.
At factory level, WE training was carried out by local unions and workers’ rights groups. A Tchibo on
facilitation process took place between IndustriALL, BGMEA (the Bangladesh Garment Bangladesh
Manufacturers and Exporters Association), BNC (the Bangladesh National Council) and
Tchibo suppliers to discuss freedom of association. The project aimed at “establishing
fairwage systems. These include dimensions such as actual wage levels, wage payment Success Factors
processes, transparency over wage grading and its relation to job expectations … WE Programme
Workers’ perception as to whether they feel they are receiving a fair wage is emphasized.
In combination with quality and productivity gains which arise from the programme,
wages are increased for the workforce.” Evaluation

Tchibo has since been expanding the programme and by 2014: 320 suppliers located in
Bangladesh, China, Ethiopia, India, Cambodia, Turkey and Vietnam had been covered. Progress
Managers and workers are actively integrated into the process, manufacturing non-food
articles (in particular textiles). Trainers are continuously trained to conduct social
standards trainings and also initiate and moderate dialogue processes between managers
and workers. They also offer this training approach to other interested parties (Trainer
Database).
An evaluation of the project found that concerning compensation some factories were
able to pay higher wages due to efficiency gains which were attributed to the WE project
approach.

3. Impact of Higher Wages on Productivity and Employment Rates https://www.wt

o.org/english/re
Interesting and promising research has been executed on the effect of the raising of
s_e/reser_e/gtd
minimum wages on the productivity of companies in China. Interesting research as the
w_e/wkshop14_
raising of minimum wages can be seen as one of the ways to close or reduce gaps with
e/florian_mayne
living wage levels. In their research, Mayneris, Poncet and Zhang, conclude that higher
ris_e.pdf
minimum wages might be a way for developing countries to increase the wages of low-
paid workers without necessarily hurting their economy. The report shows evidence that
at the firm-level survival was reduced, wages were significantly raised and labor
productivity was significantly increased, allowing surviving firms to maintain their jobs
and their profits. Moreover, the research shows that higher minimum wages have
boosted city-level aggregate productivity thanks to efficiency improvements among
incumbent firms and net entry of more productive ones. Therefore the authors conclude
that in a fast-growing economy like China suffering from numerous sources of https://blog-
inefficiency, higher labor standards might have a cleansing effect and may be a way to imfdirect.imf.org
foster the aggregate productivity of the economy. /2014/10/23/do
Other research however shows that more careful analysis on this topic is needed before es-raising-the-
the above can be generalised. This other research which also looked in to the effects of minimum-wage-
minimum wage increases in China shows a mild negative impact of minimum wage hurt-
increases on employment rates in China. employment-
evidence-from-
china/

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 25
4. Ethical Tea Partnership Resources:
The Ethical Tea Partnership (ETP) is an alliance of tea companies wanting to achieve www.ethicalteap
socially just and environmentally sustainable tea industry. Members range from large artnership.org
international brands to smaller independently-owned labels, accounting for more than 50
brands, selling in over 100 countries.
Oxfam ETP
ETP provides support in the following areas: Monitoring & Certification, Producer Support
Understanding
and Strategic Sustainability.
Wages Issues in
ETP initiated a project in 2010 to increase understanding of wages in the tea sector, and the Tea Industry
to use this as a basis for constructive dialogue in the future, with three objectives:
1. Developing an evidence-based understanding of what wages are paid in relation
Malawi Project
to a range of wage benchmarks, including developing and testing a wage ladder
tool.
2. Building a partnership of stakeholders with a common concern to ensure that tea Oxfam on Living
workers’ wages are adequate for sustainable livelihoods Wages
3. Identifying obstacles to raising wages
ETP commissioned a ‘Wage Ladder’ assessment of hired plantation tea worker wages
against international benchmarks in Indonesia, India and Malawi. The findings of this
initial assessment were broadly accepted by most stakeholders, even though challenging.
In light of the findings ETP, Oxfam, and members of the Global Living Wage Alliance
(Fairtrade International, Rainforest Alliance and UTZ Certified) commissioned detailed
analysis by wage and basic needs experts Richard and Martha Anker of what would
constitute a living wage for rural Malawi with focus on tea growing area of Southern
Malawi. The conclusion was that wages of tea pluckers were below the extreme poverty
line in Malawi, despite meeting the legal minimum and providing in-kind benefits.
ETP, Oxfam and IDH have been holding ongoing dialogue with Malawian producers, tea
buyers, civil society, government and development partners on the reports’ findings and
how a living wage could be implemented. This dialogue has led to an agreed roadmap,
supported by IDH and GIZ, and underpinned by an MoU for ‘Supply Chain Commitment to
Living Wages on Tea Plantations and Living Income on Smallholder Farms in Malawi by
2020’ signed in March 2015 by estates, buyers, traders and supporting parties (including
donors). ETP notes that the engagement and support of the Government of Malawi was
vital to the successful agreement on the Roadmap.

5. Alta Gracia Resources:

Alta Gracia manufactures apparel in the Dominican Republic and sells “collegiate branded http://altagracia
products” on the US market. T-shirts, sweatshirts, and hoodies are available at over 350 apparel.com/livi
campuses. Alta Gracia was founded in 2010 as one of the few apparel companies in the ng-wage.html
developing world that is independently certified in paying a living wage.
The living wage paid to all workers is defined as the income necessary for a worker to
http://ibd.georg
meet all of their family’s basic needs (food, clean water, clothing, housing, energy,
etown.edu/Alta-
transportation, child care, education, and health care). Family size is calculated as the
Gracia
worker and two dependents and a working week comprises 44 hours. The Spanish
translation of “living wage” is salario digno - a wage with dignity - which better captures
the Alta Gracia concept. Alta Gracia pay their workers over 300% more than the legal
minimum wage for apparel workers in the Dominican Republic. The living wage is Georgetown
regularly adjusted to inflation, but does not decrease with deflation. Voluntary overtime is University
compensated at legally required premium of 35-100%, Saturdays with 100%. Parallel to Report
a living wage, the salario digno includes building, equipment, and operational safety
standards; good sanitary and other health conditions; non-discriminatory treatment; no
forced overtime; and no physical or verbal abuse. A particularly important element that
can promote and sustain the other components is management’s respect for workers’
rights to associate freely and bargain collectively. Other policies prohibit common wage-
related abuses by requiring that any part-time or temporary workers receive the same
“living wage” as full-time employees. And finally, temporary furloughs and layoffs are
prohibited as a response to periodic declines in factory orders.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 26
The Worker Rights Consortium (WRC), verifies Alta Gracia’s compliance with these
standards through intensive on-the-ground monitoring of the factory. Every Alta Gracia
product carries a WRC tag confirming the product was sewn by workers who are paid a
living wage, have a union to represent them, and are treated fairly when they come to
work.

6. Better Work Jordan Resources:

Better Work is a partnership between the International Labour Organization (ILO) and the ETI Report (p.
International Finance Corporation (IFC) in collaboration with local and international 34)
stakeholders. Focussed on improving labor standards in the garment sector, Betterwork
Jordan aims to help participating factories establish Performance Improvement
Consultative Committees (PICCs), which bring together equal numbers of worker and http://www.ilo.o
management representatives to develop and implement improvement plans. While rg/beirut/media-
migrant workers (representing the most vulnerable section of the workforce in Jordan) centre/news/WC
were able to participate in Better Work Jordan PICCs, it was not until 2010 that they MS_214426/lan
became able to legally join trade unions, vote in union elections and participate in g--en/index.htm
factory-level trade union worker committees.
In 2012, the Jordanian National Minimum Wage Committee, comprising government
officials, employers and worker representatives, agreed to increase the minimum wage of and Case Study
workers. The government encouraged the employers and the garment union to negotiate
an agreement for the implementation of the new minimum wage for the sector, and the
two parties agreed on an increased monthly basic minimum wage. More general
Info BW Jordan
Better Work Jordan supported the negotiations and the progressive effort to pursue a
sector-wide collective bargaining agreement (CBA) by introducing the concept to the
employers and the garment union in 2012. Trainings were held for garment union
executive board members and migrant worker representatives on the collective
bargaining process starting to on the development of a comprehensive CBA proposal.
Training for employers and worker representatives included practical skill development in
negotiation.
In May 2013, a collective bargaining agreement was signed between two apparel
employers’ associations and Jordan’s garment union covering some 40,000 workers,
including migrants. The agreement is considered one of the most comprehensive CBAs to
be found in the apparel sector globally, covering provisions on union recognition and
access to workers, dues check-off, dormitory standards, dispute settlement, employer
rights, and annual seniority bonuses for all workers regardless of their nationalities.
In February 2015, the ILO supported an initial review with the sectoral trade union and
the employers group, recapping their experience during the first CBA and starting to
assist both groups to prepare for the upcoming negotiations to renew the CBA. Both sides
are now in the process of establishing bargaining committees. Negotiations took place
during May, building on the existing agreement, and focusing on clarification of language
and additional provisions.

Living Wage Initiatives – an overview - February 2016 - Asian Living Wage Conference 27