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M&S asked Oxfam to conduct a ‘gap analysis’ of its supply chain in footwear factories in India and food manufacturers in the UK |
A collaborative review into Marks & Spencer‘s footwear and food supply chains has identified a number of human rights and worker well-being issues, including inadequate sick pay and a lack of effective worker voice, as the UK food, homeware and fashion retailer looks to pinpoint areas to address.
M&S asked charitable organisation Oxfam to conduct a ‘gap analysis’ of its supply chain in footwear factories in India and food manufacturers in the UK to better help it understand “the true worker experience” and identify changes it needs to make in its own operations and those of its suppliers.
Focusing on ‘worker voice’ along with living wages and gender equality, M&S says the issue of worker voice was chosen in collaboration with Oxfam as it was identified as an area where existing sector-wide social processes could be improved.
Oxfam interviewed 390 workers across both industries over a six-month period, focusing on gender equality, worker voice and in-work poverty.
The research revealed a range of concerns among workers, as well as examples of good practice on which the company can build. Yet a number of consistent themes emerged: a lack of effective worker voice; concerns about speaking out; inadequate sick pay; the need for more transparent or fairer job progression processes; and a difficulty in meeting living costs in some instances.
A key conclusion was the disconnect between the information that M&S managers typically receive about conditions in workplaces, based largely on third-party ethical audits, and what workers report as their experience. This raises important questions for M&S and other companies about the reliability of auditors’ findings on suppliers, and the need for stronger worker representation and potentially regulation.
Taking on the challenge
Here are some of the findings:
- A lack of effective representation via worker committees and/or trade unions was found to be the norm. The majority of workers who expressed a view said committees and unions lacked the power and expertise needed to advance workers’ interests on the key issues that mattered to them, i.e. wages, working hours, discrimination.
- At all sites, trade unions were found to lack backing from the management team or workforce as a whole.
- In India, trade unionists reported working anonymously at some of the sites to avoid retaliation against workers. At three Indian sites, workers could only join a ‘trade union’ that was managed by the company’s human resources (HR) team. This, by definition, is not a trade union.
- At supplier sites, many managers responsible for HR felt under significant pressure themselves and often lacked the necessary time, skills and motivation to actively listen to workers.
- It was a common theme that workers reported earning the legal minimum but less than a living wage and some had incurred debts. Women in India reported taking paid piece-rate work they could do at home, whereas men were more likely to work excessive hours on site or in a second job.
- In both the UK and India, some workers reported issues with their pay, and pay discrepancies between men and women. The latter was much more common in India.
- Virtually all workers said they wanted to be in permanent and secure jobs with predictable incomes so they could plan their lives. Such concerns are increasingly prevalent for workers in India and the UK, where the ‘gig economy’ has doubled in size in three years.
- At all 11 sites, there were workers who described concerning health and safety issues they were experiencing or had experienced. A common theme was workers describing the long-term health impacts of their work, the cost of which was not factored into wages or workplace practices.
- Oxfam interviewed 49 managers at the 11 supplier sites visited, as well as 17 of M&S’s own procurement staff and managers. The M&S and supplier managers all agreed it is important M&S operates with integrity and ensures workers’ well-being. Persistent overtime and stress were cited most often by supplier managers as the worst thing about their job; attempts to moderate their working hours had failed.
“High-street retailers, including M&S, face huge challenges, from consumers looking for the best price while expecting next-day delivery, to employers under financial pressure and intense competition from discounters and online retailers, as well as investors looking for the best returns,” Oxfam said in its report. “Covid-19 has further exacerbated these pressures, and highlights the need for workforce resilience and well-being across companies’ operations and supply chains.”
Taking action
“Oxfam’s research found some evidence of good practice in M&S’s supply chain. We are pleased that M&S is committed to doing more and is not complacent about this, as evidenced by its willingness to initiate this study, and the actions it has taken and the commitments it has made since the fieldwork was completed,” the report stated.
As part of its wider response, M&S has taken action to supplement its existing audits and quickly scale its work voice pilot programmes. It has also made three priorities for action in 2021: to further enhance corporate governance; reset its training and engagement programmes for commercial buying teams to amplify human rights and worker perspectives; and scaling its pilot Worker Voice Programmes to help shape a best practice framework for industry.
“Setting standards and making changes in our own operations – no matter how effective – can only ever be a baseline,” M&S said in its response. “To effect real change, especially in an age of increasingly complex globalised supply chains, we have to work together appropriately as a sector. While we are competitors, we know we share the same concerns, and in many cases share the same sites too.”
Collaborative effort
Oxfam believes that while some issues documented by the study – such as gendered norms and caste discrimination in India – represent clear human rights risks, there is a limit to the influence of one company to address them.
“Challenges in M&S’s supply chains, both in the UK and in India, such as unpredictable and low pay, a lack of access to sick pay and health care and debt, are a challenge for the whole sector, not only M&S. They reflect wider social and economic realities. Effective change will require a global cross-industry effort, stronger government regulation and enforcement, as well as strengthened workers’ organisations.”
The results of the study echoed Oxfam’s research from the last 25 years into the global food and garment supply chains, which evidenced in-work poverty, gender discrimination and poor communication between managers and workers.
The report set out a number of recommendations for retailers, including M&S:
- Strengthen corporate governance for human rights impacted by the business and supply chain operations, in line with the UN Guiding Principles on Business and Human Rights and examples of best practice guidance.
- Transition away from reliance on ethical audits towards a greater emphasis on human rights due diligence and management planning – to integrate identifying, redressing and mitigating harm into everyday operations – as well as effective worker–management dialogue based on a range of channels that work for women and men.
- Adjust the performance management process and procurement team incentives; offer support, incentives and rewards to suppliers that demonstrate better workforce management standards.
- Collect and publish disaggregated data on women, men, contract type, migrant status and ideally all protected characteristics within the supply chain workforce. Use the data to improve outcomes for vulnerable workers.
- Commit to sourcing a larger percentage of products from women-owned businesses, those applying feminist principles and producers with more equitable business models.
- Advocate for action by governments and investors to address systemic issues that affect the realization of workers’ rights – such as minimum wage levels, discrimination, freedom of association and collective bargaining – together with outlining clear expectations and rewards for companies that prioritize investment in social sustainability standards and tackle laggards.
