BUYER GUIDANCE: OUR FACTORY SERVICE MODEL
OCTOBER 2015
BUYER GUIDANCE SHEETS
Introduction
In April 2015, Better Work began introducing an adjusted model for the delivery of factory
services. The revised approach is based on ongoing consultations with actors from across the
supply chain and is designed to maximize impact, sustainability and scale.
It will do this by:
• Stimulating improvements in areas of non-compliance
• Creating higher levels of factory ownership and responsibility
• Strengthening mechanisms for worker-management communication
• Providing platforms for shared learning between factories
• Focusing on root causes through a management systems approach
• Establishing greater accountability through public reporting
• Differentiating factories based on performance
To help our Buyer partners understand key elements of the adjusted model we have developed
“cheat sheets” on the following subjects:
• Initial advisory
• Assessments
• Progress reporting by factories
• Integrated training services
• Service differentiation
• Public reporting on factory compliance
For each topic, we highlight how buyers can support their factories and the effective delivery
of Better Work factory services.
B E T T E R WO R K . O C TO B E R 2 0 1 5 . PA G E 2
The revised
approach is...
designed to
maximize
impact,
sustainability
and scale.
BUYER GUIDANCE SHEETS
Figure 1.
First cycle after
the launch of the
adjustments
(effective from
April 2015)
Figure 2.
Second cycle
after the
launch of the
adjustments
B E T T E R WO R K . O C TO B E R 2 0 1 5 . PA G E 3
BUYER GUIDANCE SHEETS
Initial advisory and self-diagnosis
What happens during the initial advisory phase?
Once registration is complete, factories begin the initial advisory phase. During this period
of approximately 100 days, Better Work will work with the factory to create (or work with an
existing) worker-management committee to discuss and resolve workplace issues.
In parallel, Better Work guides factories through a process of classifying their current
circumstances and identifying learning needs, with a focus on developing management
systems that will support sustainable improvements. This process is referred to as “selfdiagnosis.”
Two or or three factory visits by a dedicated Better Work Enterprise Advisor and at least one
industry learning seminar help support the factory through the self-diagnosis phase and
strengthen the worker-management committee. Self-diagnosis enables factories to develop
their own goals for the improvement process.
In reporting results of self-diagnosis, factories are not
expected to list or address all of the issues they
may have identified, particularly in the first
year. Self-reporting is a first step. The goal
is to give factories time to strengthen
their reporting and gain confidence
that they will not be penalized for
being transparent.
Buyers are requested not to
penalize factories for incomplete
data or discrepancies between a
factory’s self-diagnosis and their
Assessment Report. You are instead
encouraged reinforce your support
for transparency when communicating
with factories.
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Self-diagnosis
enables factories
to develop their
own goals for the
improvement
process.
BUYER GUIDANCE SHEETS
What should we say to our factories during this phase?
During the initial advisory (as soon as possible after factory registration) :
• Explain to factories that they are expected to engage constructively in the initial advisory
phase
• Highlight the self-diagnostic process as an opportunity to demonstrate that the factory is
proactive and committed to improvement
• Encourage the factory to be transparent and senior management to involve the bipartite
committee in the self-diagnostic process, as well as in the follow-up improvement
activities after the assessment
• Request that the factory emails Better Work their initial improvement plan two to three
months after the start of the process (in the future this will be available to you through
STAR)
• Explain that you are looking forward to the first progress report, which must be released
by the factory (and will be accessible to you through STAR thereafter)
Factories are expected to release an overview of the results of their self-diagnosis to their
buyers within three months of the start of the cycle. If this is not done, the buyer should
enquire why the self-diagnostic process has not yet been completed and reiterate the points
above.
After receiving the self-diagnosis results:
• Thank the factory for releasing the results from its self-diagnostic process
• Ask the factory for clarification or explanation regarding areas where further details are
needed
• If the worker-management committee was not fully involved in the self-diagnosis, request
the factory to strengthen the committee so that it helps drive the improvement process
• If the worker-management committee has been fully involved the self-diagnostic process,
encourage the factory to continue working on the issues with its worker-management
committee after the Better Work assessment
• If you or your colleagues find additional needs for improvement during factory visits, ask
the factory to add these issues to the improvement plan so that the worker-management
committee can address them
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The self-diagnostic
process as an
opportunity to
demonstrate
that the factory
is proactive and
committed to
improvement.
BUYER GUIDANCE SHEETS
Assessment
When does the assessment take place?
Better Work will carry out an independent, unannounced assessment roughly 100 days after
the beginning of the annual cycle. The final assessment report is released to factories and
buyers, with authorization from the factory, via the portal, approximately one month after the
assessment.1
What is the purpose of the assessment?
The assessment provides a comprehensive overview of factory performance in meeting core
International Labour Standards (freedom of association and collective bargaining, child labour,
forced labour and discrimination), national labour laws (occupational safety and health,
contracts, compensation and hours) and in the development and implementation of effective
management systems on workplace health and safety and human resource management.2
While buyers are encouraged to review the Assessment Report, you are requested not to use
it to assess the validity or quality of self-diagnosis, which should not be seen as equivalent
to a self-assessment. Self-diagnosis is intended as an on-going process to build capacity and
accountability, but may not reflect all issues a factory is facing. Buyers are also requested
not to focus on (or give penalties for) discrepancies, but rather to reinforce their support for
transparency in communication with factories.
What should we say to our factories during this phase?
• Inform the factory that you have received the assessment report and thank them for their
cooperation with this process
• Highlight which areas you expect the factory to prioritize during the improvement process
• Ask them to address these issues through the bipartite committee, with timeframes
agreed by the committee
• Request that the factory keeps its improvement plan in the template provided by Better
Work, to allow for easier review
• Where possible, suggest ways in which your company could support the factory in
the ongoing improvement process, for example, by reinforcing its support to senior
management or observing worker-management committee meetings with a Better Work
advisor
• State that you are looking forward to the first progress report, which must be released by
the factory no later than one month after the assessment report has been issued
1. Since the initial advisory phase before the assessment is key to Better Work’s process of giving ownership to factories
and building trust, it is not possible to carry out an assessment earlier. This means that requests for rushed or pre-sourcing
assessments prior to completion of the initial advisory phase cannot be met.
2. Better Work’s assessment tool (known as the Compliance Assessment Tool, or CAT) was developed to ensure assessments
focus on key areas, acting not as a test but as a benchmark of current performance. The generic CAT against which factories are
assessed is available on the Better Work website. There are versions of the CAT available for each country to reflect differences
in national laws.
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Self-diagnosis is
intended as an
on-going
process to build
capacity and
accountability.
BUYER GUIDANCE SHEETS
Progress reports
What is Progress Report One?
In the fifth month of the cycle, the factory will release a progress report to buyers, known as
“Progress Report One”. Progress Report One includes the Improvement Plan, which features
an overview of the initial progress made on issues identified during self-diagnosis and the
assessment. The factory will also indicate in the report how it plans to continue making
progress, improve workplace cooperation and strengthen internal management systems.
Factories are responsible for preparing Progress Report One using the template provided by
Better Work. Although an Enterprise Advisor will offer guidance to the factory on completing
the report, it will not contain any recommendations from Better Work. The only report content
Better Work will verify relates to publically-reported non-compliances which the factory states
have been fully rectified. This is done to provide you, our buyer partners and participants,
with the assurance you need, as well as to give the factory clarity on the key issues where
improvements are still needed.
What is Progress Report Two?
In the eleventh month of the cycle, Better Work will release “Progress Report Two,” detailing
where improvements have taken place. Better Work will use Progress Report Two to follow
up on steps outlined by the factory in Progress Report One and further substantiate progress
in terms of resolving non-compliances, setting up effective management systems and
establishing sound social dialogue.
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Progress Report
One includes the
Improvement
Plan, which
features an
overview of the
initial progress
made on issues
identified during
self-diagnosis
and the
assessment.
BUYER GUIDANCE SHEETS
Why is self-reporting important?
Self-reporting is key to building factory capacity and accountability. It may, however, take time
for factories to develop the skills and confidence to do this well. Buyers are asked to support
factories as they make this transition.
What should we say to our factories about the progress reports?
If no progress report is released by the factory within the fifth month of the cycle:
• Enquire why the progress report has not been completed
• Reiterate keeping buyers informed about the improvement process and submitting
Progress Report One is a requirement of the Better Work programme
• Explain that they are expected to engage constructively in the ongoing improvement
process after the assessment and that improvements will be validated during the next
Better Work assessment
• Encourage them to release the improvement plan as soon as possible
After receiving the progress report:
• Check if the progress and planned next steps outlined in the first progress report are
sufficient
• Where needed, encourage the factory to engage more actively in the process, for example
when it comes to involving senior management, allocating sufficient resources or
supporting the worker-management committee
• Refer to specific issues in the Improvement Plan, including enquiring about the status
of pending issues and encouraging factories to address priorities identified in a timely
manner
• Encourage continued self-reporting by the factory
• Encourage the factory to continue the improvement process by working through the
bipartite committee
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Self-reporting
is key to
building factory
capacity and
accountability.
BUYER GUIDANCE SHEETS
Integrated training services
What are Integrated Training Services?
Learning drives the Better Work approach to continuous improvement so, from January 2016,
training will be included in the service package offered to factories. This means that all Better
Work factories will have an assessment, advisory services and up to either 15 or 25 participant
days of training per service cycle depending on the country. A participant day means one
person attending one day of training. To meet demand, 15 days of training will be offered by
country programmes with more than 100 suppliers registered, while 25 days will be offered
by country programmes with fewer than 100 suppliers registered.
Learning
Factory
visits
Industry
seminars
Training
Assessment
The 15 or 25 participant days of training can be used in many ways. If a factory has been
allocated 25 days, they can choose to send 25 participants to a one-day training or split up
their allocation differently, sending fewer participants to trainings that last for several days,
for example.
start
start
cycle 1
cycle
(FV1)
BETTE
R
WO
RK
FACT
ORY
industry
seminar 4
factory
visits
(approx. 1)
ini
industry
seminar 1
factory
visits
(approx. 3)
improvement
plan
ory
vis
ad
al
on
lua
a
ev
assessment
training up to 25 days per cycle
factory
industry
seminar 2-3
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(approx. 4)
co n
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ed
nu
During the initial advisory visits,
the Worker-Management
Committee will develop
a learning plan
progress
to meet specific
report 2
needs identified
in their factory’s
improvement plan.
The learning plan
should then help
guide training
priorities for the
factory.
ad
vis
ory
improvement
plan
progress
report 1
assessment
report
From January
2016, training
will be included
in the service
package offered
to factories.
BUYER GUIDANCE SHEETS
What training is available?
All Better Work country programmes offer the following training courses:
• Training for workers and managers on the Performance Improvement Consultative
Committee (or equivalent Worker-Management Committee)
• Supervisory Skills Training
• Occupational Safety and Health
• Human Resource Management
• Introduction to Workplace Cooperation
Other courses are available on a case-by-case basis. Country programmes will share a menu of
services to their factories, based on what they offer. More information on the training courses
available can also be found on the respective country programme websites.
Can factories use fewer, or more, training days than they are allocated?
Factories are responsible for signing up for Better Work trainings to use the 15 or 25 participant
training days they are allocated. Participant days not used during the one year cycle will be
lost. In addition to the 15 or 25 participant training days offered, factories can still purchase
additional training days at the normal rate.
What should we say to our factories about the training?
• Encourage factories to use their full allocation of Better Work training days
• Help ensure that the training courses chosen relate to needs identified in the improvement
plan
• Encourage the factory to send the most relevant participants to the training course
• Help factories understand that this is a key opportunity for the factory to engage with
Better Work beyond the PICC
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Country
programmes will
share a menu of
services to their
factories, based
on what they
offer.
BUYER GUIDANCE SHEETS
Service Differentiation
What is Service Differentiation?
From 1 October 2016, Better Work will tailor its services to factories depending on their stage
of development and performance. This will enable us to effectively target our interventions at
the level that is most appropriate to the factory.
Based on information collected during two consecutive assessments, Better Work will evaluate
whether factories meet the required criteria to be classified as Stage Two.
Better Work will classify factories as being in “Stage Two” if they consistently demonstrate
high levels of compliance, a mature level of social dialogue, effective management systems
and a commitment to learning.
As part of the differentiated approach, Better Work will decrease repetitive assessments for
Stage Two factories. These factories will receive one assessment every 24 months, provided
that they continue to meet all of the required criteria.
In addition, Better Work will offer Stage Two factories the following benefits:
• Targeted advisory services
• Exclusive access to special projects and publications
• Enhanced visibility to buyers, including access to networking events
Through advisory and training services, we will offer support to all factories interested in
working towards achieving Stage Two status.
There will be no public
communications from
Better Work regarding
which factories have been
classified as Stage Two,
though buyers in the
programme will be able
to identify these factories
through the Better Work
Buyer Portal.
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From 1 October
2016, Better
Work will tailor
its services
to factories
depending on
their stage of
development and
performance.
BUYER GUIDANCE SHEETS
What should we say to our factories about service differentiation?
Encourage proactive action:
• Explain Better Work’s approach towards service differentiation to all your factories in
countries where we are active
• Highlight the benefits offered by Better Work, and any additional incentives that you wish
to offer to the factory
• Inform the factory that Better Work’s advisory and training services can support them in
achieving Stage Two status
• Encourage factories to work proactively through its bipartite committee to identify and
realize actions needed to ensure that the criteria for Stage Two are satisfied
If the factory has not yet been classified as Stage Two:
• Reassure the factory that it will not be penalized for not achieving Stage Two status
• Encourage the factory’s bipartite committee to identify areas in which improvements are
needed for them to be classified as Stage Two, including developing action plans that can
be executed with Better Work’s support during the continuing advisory process
• Remind the factory that they have another opportunity to reach Stage Two during the next
assessment
If the factory has been admitted to Stage Two:
• Congratulate the factories that have demonstrated outstanding performanc
• Reward factories with good compliance levels
• Advise your sourcing colleagues to continue relations with the factory
• Support the reduction in repetitive and duplicative monitoring through audits every two
years
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Better Work’s
advisory and
training services
can support
(factories) in
achieving Stage
Two status.
BUYER GUIDANCE SHEETS
Public reporting on factory compliance
What is public reporting?
Public reporting refers to the posting of selected compliance and non-compliance information,
along with a factory’s name, on the Better Work public website.
As assessment reports are finalized, Better Work will publish information on factory compliance
(or non-compliance) with core labour standards, basic legal requirements relating to wages
and worker safety, mechanisms for workplace dialogue as well as certain country-specific
issues. The list of issues subject to public reporting can be found in the box opposite.
Why is Better Work using public reporting?
Public reporting helps provide a balanced view of the industry. It shows both the positive and
the negative, and ensures the reputation of both individual factories and the industry as a
whole are not damaged by a minority of poorly performing factories. It also enables buyers to
reward factories with good compliance levels and allows governments to use their resources
more effectively to target those with poor performance.
Public reporting has already been tested and refined – and proven to be successful – in
Cambodia and Haiti.
When will public reporting begin?
From 1 April 2016 onwards, all Better Work factories where at least two assessments have
been conducted will be subject to public reporting. Public reporting will be launched on 1
October 2016, initially covering the six month period from 1 April to 30 September 2016.
From that point on, when an assessment report is released, factory compliance and noncompliance will be posted publically on the Better Work website.
A factory’s compliance findings remain on the website until a new assessment report is
published the following year. The website is updated continuously as assessment reports
are released, so it will reflect the factory’s most recent assessment data. Factories can upload
documents and photos on the website at any time to make clarifications and demonstrate
progress or actions taken.
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Public reporting
helps provide a
balanced view of
the industry.
BUYER GUIDANCE SHEETS
Publicly reported issues
Child Labour
Occupational Safety and Health
• Workers under the legal age for
employment under national law
• Periodic emergency drills
Discrimination
• Terminating workers who were
pregnant or on maternity leave or
forcing them to resign
• Gender discrimination (conditions
of work)
• Sexual Harassment
Forced Labour
• Forced overtime under threat of
penalty
• Free exit from the workplace at all
times, including during overtime
Freedom of Association/
Collective Bargaining
• Attempt(s) to interfere with,
manipulate or control the
union(s)
• Punishment of unionists
• Termination or non-renewal of
worker’s employment contract
due to union membership or
activities
• Freedom to form and join a union
• Requiring workers to join a union
• Implementation of collective
agreement
• Punishing workers for
participating in a strike
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• Accessible, unobstructed, and/
or unlocked emergency exits
during working hours, including
overtime
• Number of emergency exits
• Fire detection and alarm system
• Storage of chemicals and
hazardous substances
• Mechanisms to ensure
cooperation between workers and
management on OSH matters
• Providing drinking water
Compensation
• Payment of minimum wage for
regular workers
• Informing workers about wage
payments and deductions
• Payment for maternity leave
• Payment for overtime
Contracts and Human Resources
• Limits on the use of fixed term
contracts
• Bullying, harassment or
humiliating treatment of workers
Process Integrity
• Two instances of refusal to
allow Better Work to conduct an
assessment (except in cases of
force majeure or where there is
more than one non-Better Work
other audit on the same day)
Note that specific
issues may vary
somewhat from
country to country
BUYER GUIDANCE SHEETS
What should we say to our factories about public reporting?
Encouraging proactive action:
• Explain Better Work’s approach towards public reporting to all factories in countries where
the programme is active
• Inform factories that Better Work advisory and training services can support them in
addressing non-compliance issues in a timely fashion
• Encourage factories to be transparent with Better Work from the outset so that they can
work with us to address issues during the initial advisory process, before the assessment
takes place
• Assure factories that you will not penalize them for being transparent about problems,
provided that they demonstrate a commitment to make sufficient and timely progress
If non-compliance will be publicly reported:
• Request that the factory prioritizes publically-reported, non-compliant issues for
improvement
• Ask the factory to address these issues through the bipartite committee and to report on
their status in the Better Work improvement plan
• Encourage the factory to demonstrate progress by posting regular updates on all noncompliant issues on the public reporting website
• Do not penalize the factory, negatively rate them or reduce or cancel orders, provided they
are demonstrating a commitment to make sufficient and timely progress
If no publicly reported issues have been found in noncompliance during assessment:
• Congratulate the factory on its performance and encourage the factory to work towards
“Stage Two” status (please see the Service Differentiation guidance sheet for further
details)
• Reward factories with good compliance levels.
• Ask your sourcing colleagues not to terminate relations with the factory
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Encourage
the factory to
demonstrate
progress by
posting regular
updates on all
non-compliant
issues on the
public reporting
website.