Focus on Eco Clothing


New clothing line and a fairer wage for workers


Ethical garment manufacturer Continental Clothing Co. has launched a new clothing line, featuring T shirts and hooded sweatshirts. This range promises a fairer wage for workers in India, but what does this actually mean?


T


he new Fair Share range from Continental Clothing will carry a premium price that is ring-fenced from the normal pricing escalation and passed directly to the garment workers in India to enhance their monthly wages.


The price premium of 10p per T shirt and 54p per hoodie is passed along the value chain, from the factory through to the retailer without being marked up, ensuring that the small additional cost at the point of sale is returned to the workers in its entirety.


The scope of the project Continental Clothing, in collaboration with the Fair Fashion Network and BSD Consulting, has


implemented a scheme that aims to deliver a living wage for the garment workers at its factory in India. The first stage of the wage increase, which came into effect on January 1, covers the entire workforce and is paid with monthly wages. The projects scope included primary research into the earnings and living conditions specific to the geographical area where the factory is located. A benchmark was calculated for minimum earnings required to provide a decent living for a typical family in the area. The difference between the current wages and the living wage was then converted into the additional amount that needed to be paid for each garment produced at the factory. The premium that has been added to the cost of each garment is documented as a separate item, providing a complete paper trail, transparency and accountability. Working closely with the workers representatives and local stakeholders, the Fair Share project determined the monthly financial requirements of a family of four living in the Tirupur area in India. It was calculated that instead of the government legal minimum wage of 285 INR per eight hours shift, the lowest paid


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workers should receive 466 INR for a shift in order to earn a living wage. The Fair Share project therefore set the living wage benchmark for the area at 14,048 INR per month. The project so far only accounts for 10% of the factorys production capacity, so for now every worker receives extra 650 rupees. This is not a living wage yet, but if the project is received well in the marketplace and extended as planned, every worker will get at least the living wage.


permanent basis.


The initial orders in the first year would not generate sufficient funds to reach the target living wage level in full, and therefore it was agreed that the available funds should be shared equally among all the workers through the pay grades, which meant that effectively the lowest paid workers received the highest increase in percentage terms. Continental Clothing has guaranteed that the additional monthly wage payment would not decrease or stop for as long as the company has a trading relationship with the factory, regardless of the volume of future orders.


Continental Clothing will absorb the cost of initiating the project, defining the methodology and the benchmark, carrying out the research, implementing, reporting, marketing and auditing. The factory will absorb the cost of


administering the scheme and covering the additional statutory employers contributions to the provident fund. Any further funds generated as a result of increased production volumes would be


Items from the new range


In line with Continental Clothings sustainable development policy, all the products labelled Fair Share are manufactured under the Global Organic Textile Standard (GOTS) from 100% Indian organic cotton, certified by Fairtrade.


Paying the Fair Share living wage Even though the current production covered by the Fair Share scheme would be only 5-10% of the factorys output in the first year, it was decided that all the factory workers should benefit from the increase in wages rather than only those actively involved, and it should be paid through the monthly pay roll rather than as a one-off bonus, every month, on a


accumulated in a fund to further increase the wages in the following months until the living wage level is reached for all employees.


The future of the Fair Share project The longer-term aim of this project is to reach the full living wage for all workers by covering 100% of the factorys production within the scheme. This objective, however, will depend on the response from the market and the willingness of the retailers and consumers to pay the additional premium. Continental Clothing has committed to fully support the communication and marketing of the scheme in order to achieve a high take up rate for products carrying the premium. The company will also encourage other brands sourcing from the same supply chain to participate in the programme.


July 2016 | 57 |


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