Productivity
and workers’ rights
A booklet for workers in the global garment industry
This booklet is for workers,
trade unions and other
labour organisations that
have day-to-day contact with
garment workers.
Sometimes productivity
schemes can be good for
workers, as the money
saved can be spent on better
pay and conditions.
Garment factories often
make changes to the way
their employees work in
order to save money and
increase the amount of
clothes they produce. These
are called ‘productivity
schemes’.
But, all too often, the changes
are harmful for workers.
People are laid off and lose
their jobs, or have to work
harder and longer hours.
This booklet explains what
these changes are, and what
the dangers are for workers.
It includes discussion points
that can be used in workers’
education.
It suggests questions that
workers and their union
representatives can ask
managers when productivity
schemes are introduced into
the factory.
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ActionAid Productivity and workers’ rights
The drive to increase
productivity
Often your
employer has
little choice
but to accept
the buyer
company’s
terms, or the
order will go to
a factory that
will accept the
lower price.
Garment workers in factories across the world
make clothes that will be sold by companies in
countries very far away.
Discussion point
What is it like, working on your line?
The companies who sell the garments place
their orders with factories like yours to produce
their clothes. And they have a lot of power in
their dealings with your employer.
Every time a ‘buyer’ company places an order
with your employer, it strikes a deal over the
price, delivery date and payment terms. These
deals can have an enormous impact on whether
or not your employer pays you a decent wage
or asks for reasonable hours of work. They can
affect how the production line runs, and the way
that you are treated by your supervisors.
• A
re you paid a bonus for reaching a
production target?
• O
r are you expected to stay behind
to complete the quota set by your
employer, without any extra pay for
overtime?
• If so, why do you think your employer is doing this?
The buyer companies generally want to lower
their costs. This means that sometimes they
reduce the price they pay to your employer for
the garments you make.
Often your employer has little choice but
to accept the buyer company’s terms, or the
order will go to a factory that will accept the
lower price.
Your employers often try and cope with this by
reducing their costs wherever they can. They
want to produce more clothes for less money.
This is what productivity is all about.
If you find that changes are happening in your
factory – such as re-organisation of the shop
floor, new machines being installed or new work
processes being brought in – they are probably
being done to improve productivity.
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ActionAid Productivity and workers’ rights
The drive to increase
productivity continued
LEAN is
intended to
change the
culture of a
factory as
well as the
physical
way that the
factory and
workstations
are organised.
Discussion point
Do any of these things happen at
your place of work?
Productivity
Output
Inputs
what your
factory makes
in value
what it costs
your factory
in labour,
machines,
rent, etc
Some changes may be very big, changing the
whole way that the factory is operating, from
top to bottom.
They may even affect the way that managers
communicate with workers, by bringing in new
systems for handling disputes.
What is ‘LEAN’?
LEAN is perhaps the most radical way of
improving productivity. It is based on a system
developed by the car manufacturer Toyota.
LEAN focuses on continuously improving the way a factory works, to make it ever more efficient.
Under LEAN, workers may be organised into
‘cells’. These are groups of workers trained in
several skills who can make a whole product.
Cells have production targets for the whole
group rather than for individuals.
This is different from the product being made
on an assembly line, where workers with
different skills each do a particular task. LEAN is intended to change the culture of a
factory as well as the physical way that the
factory and workstations are organised.
• D
o managers time workers with a
stopwatch?
• A
re workers constantly being changed
around on the line?
• H
ave any changes been made to your
workstation, such as to the seat, bench or machine?
• A
re there fewer bundles waiting to be
worked on by your assembly line?
• A
re you constantly being urged to produce more?
• H
as your production target been
increased? If so, how many times in the last year?
• Is what you make measured on an hourly or weekly basis?
• Have you noticed any other changes to
the work process at your factory?
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ActionAid Productivity and workers’ rights
Who wants higher
productivity?
If you are experiencing these kinds of changes
in your workplace, your employer may be
making them for his or her own reasons.
Perhaps they think that the current ways of
working are too slow, and lead to excessive
overtime in your factory.
These changes may also be asked for by the
buyer companies that place orders in your
factory. In some cases, the buyers might be
concerned about quality – perhaps they are
having to return too many faulty garments to your
factory. Some may be concerned about your
factory failing to meet delivery dates. All these
things can affect the buyer company’s profits.
Recently, some buyer companies have been
trying to make sure workers get a higher wage.
They claim that the best way to get higher wages
is to make changes in the workplace to increase
productivity.
The companies’ argument
goes like this: if you can
produce more clothes in less
time, the factory can earn
more money, and therefore it
can pay you more.
This all sounds reasonable
doesn’t it?
But there are dangers in this
for the workers.
ActionAid Productivity and workers’ rights
The risks for workers
If workers don’t come together and get involved
when management brings in major changes at
your workplace to increase productivity, you
could end up:
• with job losses, leading to a smaller workforce
• with a faster pace of work
• w
ith extra pay, but not in line with how
much extra you are actually producing
• working in an unsafe environment.
So let’s pause and think about this for a
moment, as workers...
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ActionAid Productivity and workers’ rights
Calculating labour
productivity
Buyer
companies and
employers can
also use SAMs
to calculate
how much it
costs them to
pay wages and
benefits for
each minute
worked.
One of the arguments that buyers use in their
negotiations with your factory management is
that the ‘labour productivity’ or ‘line efficiency’
in your factory is too low. What do they mean
by this?
In your factory, the workplace changes you
identified earlier (see page 2) are usually carried
out by industrial engineers – the so-called IE
department. It is their job to maximise the number
of garments produced in the time available.
You will probably have seen a board hanging
up at the end of your assembly line, monitoring
your output against a target, usually on a daily
and hourly basis.
One of the tasks done by the IE department is
to calculate the time taken to make a specific
garment. This is usually called a SAM (Standard
Allowed Minute), although some factories call
this the Standard Minute Value (SMV).
SAM (or SMV) means the time (in minutes)
that it takes a worker to complete a specific
operation or produce a specific garment. The
SAM is often calculated by using a stopwatch.
Sometimes it’s done by looking at a special
table of times that have already been calculated,
for every task needed to make a garment.
Once the buyer company and employer know
how long it takes a worker to complete a
specific operation, they can compare this with
other factories, or with a special table of times,
to see how ‘productive’ workers are.
Standard Allowed Minute
/Standard Minute Value.
What should it cover?
SAM (or SMV) should cover the time taken
to perform an operation at normal or
standard pace, plus an allowance for
relaxation and possible stoppages. It
should also be rated to allow workers to
earn an incentive bonus, if they work above their expected performance.
But be careful. Sometimes these
calculations can be done incorrectly.
Workers should ask management for
training in these methods of work
measurement, so that you can check the
calculations done by the IE Department.
Buyer companies and employers can also use
SAMs to calculate how much it costs them
to pay wages and benefits for each minute
worked. This is called the Labour Minute
Value, that is to say, what the wage cost is for
each minute it takes to make a garment.
We have seen that buyer companies and
employers can work out how long it takes to
make a garment. This means that they should
also be able to set realistic targets for workers.
So now we need to ask: why is it that targets
often cannot be reached?
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ActionAid Productivity and workers’ rights
The myth of labour
inefficiency
The correct
term should be
‘management’
inefficiency
and not ‘labour’
inefficiency.
Usually, managers and the IE department say
that targets cannot be reached because of
‘labour inefficiency’. That is to say, they blame
the workers for low productivity.
In fact, when we look more closely at the
causes of so-called ‘labour inefficiency’, we
often find that it’s the fault of management, and
not the workers.
But is this right?
For example, problems in the factory might be
caused by:
• a lack of proper training for workers
Discussion point
What causes downtime in your
factory?
Low levels of production from an assembly
line can be caused by various factors,
such as:
• machine breakdown
• a build up of unsewn components (the
technical term is Work in Progress, or
WIP)
• components, such as fabric or zips, not available when needed
• a high number of rejects/faulty garments, which reduces productivity
• worker(s) performing below standard
• worker(s) absent from the line
• changes in garment styles
• power cuts.
Which factor(s) is/are the biggest cause of ‘downtime’ in your factory?
Who do you think is to blame for this
downtime: managers; supervisors; workers; factory suppliers; or someone
else?
• fatigue and lack of concentration among
workers caused by excessive overtime
• a
n unrealistic incentive scheme – where the
production target at which a bonus can be
earned is far too high
• a
n unrealistic time being calculated to
produce the garment properly.
So really the correct term should be
‘management’ inefficiency and not ‘labour’
inefficiency.
This is an important distinction, especially when
we come to discuss the payment of a living
wage (see overleaf).
Discussion point
Workers and productivity
Usually, productivity problems lie in
the hands of management. So do you
think workers should be involved or not
when changes are brought in to improve
productivity?
Even if management inefficiency is the cause of
excessive overtime, poor product quality and
low wages, workers do need to be involved
in improving productivity. Otherwise, the only
ones to benefit will be your employer and the
companies that it sells clothes to.
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ActionAid Productivity and workers’ rights
Labour productivity
and the ‘living wage’
In recent years, garment prices have generally
been falling, both in the shops and at the factory
gates. Yet the cost of living for workers who
produce the garments has continued to rise.
Trade unions and other labour organisations,
in the producing countries and in the buyer
countries, have stepped up their campaigning.
They are putting pressure on the buyer
companies to change the way they do business
with the producer companies, freeing up money
to pay workers like yourselves a living wage,
to reduce the length of your working day and
keep you free from harassment from your
supervisors.
This pressure has made some buyer companies
take action. Many have adopted ‘codes of
conduct’, which say that workers who produce
their goods should be paid a ‘living wage’,
should not be forced to do overtime and should
have other rights respected.
However, the buyer companies are not giving
a bigger share of their profits to your employer
so they can improve your pay and conditions of
work. Instead, buyer companies are looking to
their supplier factories, such as your employer,
to improve productivity as a way of finding extra
money for the workers.
But can efforts to raise productivity also benefit
workers?
Logically, if your factory can make more
garments in less time, it can make more money,
as long as orders continue to come in. If this
is done without increasing the pace of work,
and without job losses, then it can be a positive
thing for workers.
But experience so far of productivity schemes
has been mixed:
• In China, some schemes have succeeded
in bringing down working hours, while at the
same time raising wages. However, this only
ensured that the legal minimum wage was
paid, and workers were still not paid for any
faulty garments that were produced. Also, in
What is a ‘living wage’?
Most clothing workers in the world are paid a minimum wage. As you know, this is nowhere near what you and your family need to live on.
You know what level of wage is necesary to cover all your basic needs, provide some money to pay for additional items and even save a little. This is what we call a ‘living wage’.
The actual level of the ‘living wage’ differs from country to country, because living costs vary across countries.
There have been efforts recently to calculate a living wage for all workers across Asia – the Asia Floor Wage. To find out more about this, see: www.asiafloorwage.org
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ActionAid Productivity and workers’ rights
Labour productivity
and the ‘living wage’ continued
Key point:
productivity
schemes
address
management
inefficiencies.
They should not
be seen as a
way for buyer
companies to
deliver on their
responsibility to
ensure workers
are paid a
living wage.
some cases, these schemes were short lived
and the employer only took more work on,
leading once again to excessive overtime.
• In Bangladesh, some productivity schemes
have reduced the number of ‘helpers’ on
assembly lines. They have been retrained as
machinists, thereby improving their skills and
raising their wages through re-grading. This
is a good thing. However, buyer companies
have been able to claim that they are bringing
about wage increases for the lowest paid
workers, even though those same workers
are still earning well below a living wage.
• A
lso, in China, one employer introduced a
productivity bonus to try and retain more
senior employees and reduce turnover.
However, the company insisted on an
unrealistic production target for these
workers. When the worker representatives
protested, the management did not change
the targets. Eventually, many of the older
workers quit their jobs at the factory, which
defeated the point of the scheme.
• W
here LEAN (see page 2) has been
introduced, and workers are grouped in cells
rather than on lines, workers are complaining
that they have been moved too close to the
hazardous chemicals used in production.
This is particularly prevalent
in footwear factories.
If you have seen no benefit for yourself and your
fellow workers from productivity schemes, and
in fact you are working harder than ever, then
you need to do something about it…
Discussion point
Does higher productivity benefit
workers?
Think back to your answers in the first
discussion activity (on page one).
Now consider these questions:
• W
hen management changed the way
you work, did your wages increase?
• D
id it lead to a reduction in the overtime
you worked, at no loss to your takehome pay?
• W
as there a reduction, or increase, in
the pace of work in the factory, and
specifically on the assembly line where
you work?
• H
as there been a change in the way you are treated at your workplace,
particularly by your supervisors?
• H
ave any jobs been lost in the factory
as a result, or different types of contract
been introduced?
• H
ave you acquired new skills as a result of the changes? If so, has this led to any pay increase or regrading?
• W
hen changes are introduced, is it
usually only for a specific group of
workers?
• A
re all the workers usually informed and involved in these changes?
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ActionAid Productivity and workers’ rights
So what can
workers do?
The fact is that most ‘labour’ productivity
schemes affect pay and working conditions.
So, you and your fellow workers should be
involved in any changes to improve productivity.
For this, you need to prepare some questions
for management.
Questions to ask management
1
How much money has the company saved as a result of
this productivity schemes?
2
What are the workers going to get for their contribution
to this schemes?
3 How many workers are working on the lines at present?
4 Are any jobs going to be lost?
5
If jobs are going to be lost, where will the workers be
transferred to?
6
Can you guarantee the transferred workers will not have
their pay cut?
7 What changes, if any, will be made to line targets?
8
How can workers’ earnings reflect any increase in productivity?
Can we discuss bringing in a production bonus scheme or,
if one already exists, how it can be improved?
9 Can independent training in ‘work study’ (SAMs) be provided
to the workers and their representatives?
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ActionAid Productivity and workers’ rights
Why workers
need a union…
If you are
going to make
any lasting
progress,
you need to
organise into
a trade union
to negotiate
and collectively
bargain with
your employer.
Some productivity schemes try to involve
workers by establishing worker committees.
Both your employer, and the buyer companies,
might think that these are a suitable substitute
for a trade union.
However, you need to be careful about these
bodies. Worker committees often represent
management’s interests rather than workers,
and some may not permit discussion on
productivity.
Remember – the buying company’s code of
conduct should say that you have the right
to join a union, of your own choice, for the
purposes of bargaining with management.
If you work in a factory where there is a worker
committee rather than a trade union, there are
some questions you might want to consider.
Discussion point
Worker committees or trade unions?
• W
hat system is there in your factory
for workers and your representatives
to discuss matters relating to pay and
productivity with management?
• Is there a worker committee in your
factory? If so, how was it set up? Was
it democratically elected by workers?
Or did management nominate the
members?
• W
hat issues are discussed in the worker committee? Does it meet
regularly and are minutes kept? Has it reached any agreements on workers’ pay and conditions? What rights do you have if management refuses to abide by the agreements?
• W
hat is the difference between a worker committee and a trade union?
Which one is more likely to bring real
improvements to workers’ pay and
conditions of work, and why?
So, if you are going to make any lasting
progress, you need to organise into a trade
union to negotiate and collectively bargain with
your employer. In some countries, managers
are obliged by law to respect and implement
any agreement reached with the union through
collective bargaining.
Your representatives are also going to need
training on these issues, since they can often
get quite complex.
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ActionAid Productivity and workers’ rights
…and no victimisation
Ask your
employer,
and any
representative
from companies
that buy from
your factory, for
a written nonvictimisation
guarantee.
You also need to make sure that your employer
does not bully or harass any workers who join
or become active in the union. This is known
as ‘victimisation’.
All workers across the world have the right
to join a trade union of their choice (called
‘freedom of association’), and to bargain
collectively with their employer. These rights
are included in many of the buyer companies’
codes of conduct.
Ask your employer, and any representative
from companies that buy from your factory,
for a written non-victimisation guarantee.
A model ‘non-victimisation guarantee’
(Name of company), in accordance with national and international
law and the code of conduct of (name of buyer) governing freedom
of association, hereby guarantees you, as an employee of this
company, the right to join or form a union of your choice for the
purposes of bargaining collectively with (name of company) on
wages and working conditions.
(Name of company) will not discriminate against you, nor
victimise you, for exercising this right. Furthermore, (name of
company) will adopt a positive attitude towards any trade union
organisers granted access for the purposes of talking about the
benefits of trade union membership.
(Name of company) also undertakes to permit the formation of
an organising committee in the factory whose members should
operate without fear of hindrance, interference or victimisation.
SignedSigned
---------------------------------------------------------------------------------------------On behalf of (name of buyer) On behalf of (name of supplier)
ActionAid Productivity and workers’ rights
Key points
Intoday’scommercialworld,youremployerwillalwaysbe
trying to cut costs. This may involve specific schemes to
improve productivity. Workers need to be fully involved in
these schemes.
• Anyschemesdesignedtolowercostsshouldnotresultin
workers losing out, such as job cuts, pay cuts, a faster pace
of work, or longer overtime.
• Productivityschemesshouldnotbetheonlywaytomeet
a buyer’s commitment to making sure the workers get a
living wage, as set out in its code of conduct.
• Cost-cuttingschemesorefficienciesareanopportunityfor
workers to sit down with the employer to negotiate better
pay and conditions.
• Workersneedtorespondcollectivelytoproductivity
schemes. A unionised workforce, involved in all aspects of
workplace change, is the best way to deal with this.
• Workersfacedwithchangestoworkingpracticesshouldseek
advice from their local trade union.
www.actionaid.org.uk
ActionAid,ChatawayHouse, LeachRoad,Chard,SomersetTA201FR
[email protected]
Publication date: 2012
Author: Doug Miller
Editor: Celia Mather
ActionAidisaregisteredcharityno.274467.Printed onrecycledpaper.
ActionAid is a registered charity no 274467. Printed on recycled paper
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