H&M launched its Fair Wage Method in 2013

H&M launched its Fair Wage Method in 2013

Hennes and Mauritz (H&M) is scaling up its fair living wage efforts with plans to add all of its strategic suppliers by 2018 - and is updating its purchasing practices to support those suppliers.

The Swedish apparel giant launched its Fair Wage Method in 2013, with pilots in a few role model factories. The initiative is aimed at driving wage improvements through a sustainable pay structure, wage levels and wage adjustments, and through enhanced communication and social dialogue with suppliers.

H&M says the strategy is showing progress, and will now be scaled up to more markets and suppliers.

“The initial test results are very promising and H&M looks forward to continue the work. The Fair Wage Method – focusing on a well-functioning dialogue between the employer and the employee – will be rolled out to all strategic suppliers by 2018, the first 68 of them already this year,” the retailer said in an update.

As part of this strategy, H&M is updating its purchasing practices to support the suppliers in implementing fair living wages. The overall goal is to make it easier for suppliers to plan their capacity and thereby reduce production peaks and overtime.

“Our purchasing practices should always provide reasonable lead times, fair pricing, timely payments and transparent communication,” H&M explains.

The retailer also offered an update on its collaboration projects, including training and skills development, social dialogue, and industrial relations.

In Bangladesh, cooperation with the ILO and SIDA on training and skills development has been showing “promising results.” The project, initiated by H&M in 2013 to create a link between skills and wage levels, has been completed both at its Centre of Excellence and at one factory. An additional 11 factories are waiting to start training.

Also in Bangladesh, H&M is hoping to get all of its supplier factories covered by its Social Dialogue programme by the close of 2018. At present, 88 factories are participating, 43 have elected participation committees, and the 580 committee worker representatives who have received training are now representing 108,303 workers.

In Cambodia, H&M has been working with the ILO, SIDA and Swedish trade union IF Metall to strengthen industrial relations in the country's textile industry.

To date, 12 factories have participated, with the aim of covering one-third of H&M's supplier factories by 2016. All participating factories have signed an MoU on improving industrial relations and an agreement to eliminate unfair labour practices.

Around 791 trade union representatives and 530 factory managers have completed industrial relations training provided by IF Metall, and 744 trade union members and 95 members of the Garment Manufacturers Association in Cambodia have participated in awareness-raising.

H&M is now finalising tailor-made projects for industrial relations projects in Myanmar and Ethiopia.