Ethical Trading Initiative Working Hours Clause Revision. Guidance: What do I need to do?

Transcription

1 Ethical Trading Initiative Wrking Hurs Clause Revisin Guidance: What d I need t d?

2 Table f Cntents 1. Intrductin Abut this Guidance What changes have been made t Clause 6? What d these changes mean fr my cmpany? Steps fr implementatin Revising plicies Updating prcedures Training and cmmunicatin Implementatin in practice Dcumentatin Mnitring implementatin Other imprtant tips Hw d I prepare fr the scial audit? Anticipate prblems Additinal resurces Online resurces Training resurces Page 2

3 1. Intrductin The revised wrding f Clause 6 f the ETI Base Cde n wrking hurs will cme int effect n 1 April Cmpanies using the ETI Base Cde shuld aim t start fllwing the revised wrding as sn as pssible. Cmpanies shuld als ensure that they wrk clsely with their suppliers t plan hw t implement the changes. As a guide, ETI has suggested t its members that they use much f 2014 t prepare t implement these imprtant revisins. Even if yur cmpany is already implementing the revised wrding n wrking hurs, yu must make sure yu understand hw these changes will affect yur cmpany and supply chain. Clause 6 calls fr cmpanies fllwing the Base Cde t implement limits n daily wrking hurs, vertime and ttal weekly wrking hurs. Internatinal guidelines, many existing cmpany cdes f cnduct and lcal laws place a high pririty n these rights. Legal requirements and ETI guidance n wrking hurs are ften extremely difficult t meet in practice. Yur cmpany depends n the wrkfrce t meet rders and wrkers want t wrk t earn mney. Hwever, excessive wrking hurs can negatively impact yur cmpany and wrkers well-being. The revised ETI Base Cde Clause 6 wrding helps yu vercme these challenges. It makes requirements clearer while ensuring that wrkers fundamental rights n wrking hurs are upheld. The business case fr aviding excessive hurs Regulating wrking hurs is nt nly imprtant fr wrkers health and safety, but als fr the cmpany. It is imprtant t remember that respecting limits n wrking hurs helps meet legal requirements, avid penalties and meet custmers requirements. Ensuring that wrkers wrk a reasnable number f hurs and that these hurs are agreed t by the wrker, can imprve wrker satisfactin, mrale, safety and welfare. These benefits t wrkers can als bring business benefits, such as: a) Increased prductivity due t better wrker health and increased alertness. Well-rested wrkers generally wrk faster and make fewer mistakes. b) Reduced staff turnver. c) A mre harmnius wrkplace as rested wrkers are less irritable and less likely t cnflict with c-wrkers r senir staff. d) Increased business frm custmers and better perfrmance during scial audits. Page 3

4 Cmpanies fllwing the ETI Base Cde will be respnsible fr: Implementing the revised wrding in their peratins. Ntifying HR departments and suppliers f the revisins. Negtiating with trade unins and cllabrating with wrker representatives and emplyees t implement the revised wrding. Directing suppliers t ETI fr guidance. Prviding suppliers with in-huse briefings and training. Guiding and supprting suppliers n updating plicies, revising cntracts and therwise implementing the revised wrding. This guidance dcument is a resurce fr members and suppliers t get started with this prcess. It is imprtant t prepare ahead f time t meet the revised wrding. Cmpanies need t understand hw changes affect current and future business practices. Preparing nw, befre the end f 2014, means that yu can avid prblems befre they happen Abut this Guidance The purpse f this dcument is t prvide practical guidance n implementing the revised wrding f the ETI Base Cde clause 6 n wrking hurs. It is designed t assist cmpanies that fllw the ETI Base Cde in updating plicies, prcedures and ther prcesses. This guidance als ffers practical steps that cmpanies can take t wrk with and supprt their supply chain business partners during the implementatin prcess. 1 One f the mst imprtant things is making sure cmpanies that fllw the Base Cde have time t determine hw t implement these changes. ETI estimate that it may take abut six mnths t develp plans t implement the revised wrding (within yur cmpany and/r within yur supply chain). Abut three mre mnths shuld then be alltted t realise these plans befre the revised wrding is cvered by scial audits. This guidance dcument takes yu thrugh the steps needed t cmply with the revised wrding and t be fully prepared fr audits t evaluate these changes by the end f What changes have been made t Clause 6? 1 The main purpse f this guidance is t help yu implement these changes in yur cmpany and in yur cmpany s supply chain. If yu are lking t better understand what the revised wrding means and hw it is interpreted, please refer t the Interpretatin Nte n ETI Base Cde Clause 6: Wrking Hurs (Interpretatin Nte) at: Page 4

5 The Table belw cntains a cmparisn f the riginal wrding in Clause 6 with the revised versin that yu shuld implement by the end f Yu will see the frmer wrding right next t the revised wrding in red: Original wrding: Wrking hurs cmply with natinal laws and benchmark industry standards, whichever affrds greater prtectin. (riginal 6.1) ETI Base Cde, Clause 6 - Wrking hurs are nt excessive REVISED 6.1 Wrking hurs must cmply with natinal laws, cllective agreements and the prvisins f 6.2 t 6.6 belw, whichever affrds the greater prtectin fr wrkers. Sub-clauses 6.2 t 6.6 are based n internatinal labur standards. Original wrding: In any event, wrkers shall nt n a regular basis be required t wrk in excess f 48 hurs per week. (riginal 6.2) REVISED 6.2 Wrking hurs, excluding vertime, shall be defined by cntract and shall nt exceed 48 hurs per week.* * Internatinal standards recmmend the prgressive reductin f nrmal hurs f wrk, when apprpriate, t 40 hurs per week, withut any reductin in wrkers wages as hurs are reduced. Original wrding: Overtime shall be vluntary shall nt be demanded n a regular basis and shall always be cmpensated at a premium rate. (riginal 6.2) REVISED 6.3 All vertime shall be vluntary. Overtime shall be used respnsibly, taking int accunt all the fllwing: the extent, frequency and hurs wrked by individual wrkers and the wrkfrce as a whle. It shall nt be used t replace regular emplyment. Overtime shall always be cmpensated at a premium rate, which is recmmended t be nt less than 125% f the regular rate f pay. Original wrding: Overtime shall nt exceed 12 hurs per week. (riginal 6.2) (Wrkers) shall be prvided with at least ne day ff fr every seven day perid n average. (riginal 6.2) REVISED 6.4 The ttal hurs wrked in any seven day perid shall nt exceed 60 hurs, except where cvered by clause 6.5 belw. REVISED 6.5 Wrking hurs may exceed 60 hurs in any seven day perid nly in exceptinal circumstances where all f the fllwing are met: this is allwed by natinal law; this is allwed by a cllective agreement freely negtiated with a wrkers rganisatin representing a significant prtin f the wrkfrce; apprpriate safeguards are taken t prtect the wrkers health and safety; and the emplyer can demnstrate that exceptinal circumstances apply, such as unexpected prductin peaks, accidents, r emergencies. REVISED 6.6 Wrkers shall be prvided with at least ne day ff in every seven day perid r, where allwed by natinal law, tw days ff in every 14 day perid. Page 5

6 The main bjective behind these changes is t preserve fundamental prvisins and wrkers rights. At the same time, changes address cncerns expressed abut the frmer wrding and prvide cmpanies fllwing the ETI Base Cde with greater verall clarity, as well as definitins fr many terms. Changes als address situatins when excessive vertime is unavidable and natinal wrking hurs are less than 48 regular hurs per week. In additin, d nt frget that there are many internatinal standards n wrking hurs upn which the revised wrding is based (specifically, items 6.2 t 6.6). Internatinal standards are cnsidered at the cre f and fundamental t the ETI Base Cde and wrking hurs are n exceptin. Sme f the mre imprtant standards frm the Internatinal Labur Organisatin (ILO) and United Natins (UN) are: ILO Cnventins: C1: Hurs f Wrk (Industry) Cnventin, 1919 C47: Frty-Hur Week Cnventin, 1935 C14: Weekly Rest (Industry) Cnventin, 1921 C171: Night Wrk Cnventin, 1990 (N. 171) Other Internatinal Standards and Guidelines: The United Natins Internatinal Cvenant n Ecnmic, Scial and Cultural Rights addresses labur rights in Article 6, which states that wrkers are entitled t sufficient rest and leisure, including limited wrking hurs and prviding regular, paid hlidays. ILO Recmmendatins address wrking hurs, such as the Reductin f Hurs f Wrk Recmmendatin, 1962 (N. 116). The United Natins Universal Declaratin f Human Rights als states that all persns have the right t rest and leisure, including reasnable limitatin f wrking hurs and peridic hlidays with pay (Article 24) What d these changes mean fr my cmpany? The revisins t Clause 6 are relevant t any cmpany that fllws the ETI Base Cde. Cmpanies that are cmmitted t uphlding labur rights frm headquarters thrugh t glbal supply chains need t understand these changes. If yu need mre infrmatin n hw these changes are interpreted, please refer t the Interpretatin Nte. 2 Yu can best meet the revised wrding by reviewing the plicies and prcesses yu already use t manage wrking hurs and meet the ETI Base Cde. Yu shuld lk clsely at current practices against 2 This resurce is available at: Page 6

7 the key areas f change abve (see Table in sub-heading 1.2) and then adjust business practices t meet the revised wrding. Since yu have a few mnths t make these changes, it is best t use this time t anticipate and avid ptential prblems rather than react t them later. Taking the time nw t build effective implementatin plans fr the revised wrding is the best way frward. Wrker and trade unin agreement with changes is critical t this prcess and will make it mre effective, s make sure they are active participants frm the beginning. Cmpanies may als have t re-negtiate cllective agreements with trade unins t meet the revised wrding. D nt frget t cmmunicate the revised wrding t trade unin representatives and then invlve them at each stage f yur implementatin prcess. Ensure yu have enugh time fr this prcess. Can wrkers exceed 60 hurs per week? T meet the requirements in the revised wrding, yu will need t revise the cntrls t the prcesses that yu already use t manage wrking hurs (such as prductin planning t avid lng hurs) and make sure yur plicies and prcedures are updated t ensure that: Wrkers d nt wrk ver the legal r ETI limits fr regular r vertime hurs. Wrkers are given ne day ff in seven. Legally-required breaks are prvided t wrkers during their wrking day. Wrkers are paid a premium fr their vertime hurs, which shuld be in line with legal requirements r at least 125% f the regular rate f pay. Overtime is vluntary and undertaken with the agreement f wrkers. Wrkers hurs are accurately recrded, preventing underpayment f wages. It is imprtant that yur updated prcesses are accurately dcumented and cmmunicated. Yu shuld als regularly mnitr prcesses t make sure they are wrking, making adjustments if yur plicy bjectives are ff track. Generally, n. The revised ETI Clause 6.5 des make sme exceptins in cases where lcal law and cllective agreements allw this practice. In additin, exceeding 60 hurs per week can nly happen under exceptinal circumstances and when wrkers health and safety are guaranteed. The term exceptinal means just that smething has t happen that yu cannt predict. Remember that if yu have a peak seasn every year (that is, right befre December hlidays r Chinese New Year); this is nt cnsidered exceptinal since it happens annually. On the ther hand, if yur custmer dubles the typical rder and needs delivery right away, this is exceptinal since yu had n way t fresee this (and this is why it is imprtant fr surcing cmpanies t avid making changes at shrt ntice like this.) Hwever, yu will need t have agreed t this exceptin with yur wrkfrce in advance and even then nly within the maximum number f hurs permitted by natinal r lcal labur laws. Page 7

8 As yu make changes t yur plicies and prcesses, take care t wrk with thers, like trade unins, during implementatin. Trade unin negtiatins and wrker agreement as part f this prcess will nt nly be necessary, but als helpful. The next sectins f this guidance dcument will take yu thrugh the steps t implement the changes needed t meet the requirements f the revised wrding. 2. Steps fr implementatin Yu will nt be able t effectively implement the revised ETI wrding if yu d nt review all f yur cmpany s plicies, prcedures, cmmunicatin mechanisms and dcumentatin systems. Yu need t ensure that all prcesses used t manage wrking hurs meet revised wrding and are apprpriately updated t meet these changes. Prblems arise when actins and prcesses designed t prevent excessive wrking hurs are either prly maintained r are nt implemented at all. Yur cmpany shuld undertake analysis and evaluate the rt causes f ptential issues arund wrking hurs in rder t develp effective and lnger-term slutins Revising plicies Revise the written plicies that define yur cmmitments and describe yur practices t meet updated ETI wrding. If yur cmpany has suppliers that fllw the ETI Base Cde, yu shuld als wrk with them t d this. Negtiate with trade unins A cmpany may have many similar plicies already in place; but in rder t ensure yur plicies n wrking hurs meet revised ETI wrding, a cmpany s plicies n wrking hurs shuld be revised accrdingly and include: A restrictin n wrking n mre than 48 regular wrking hurs per week. Ensure yu understand lcal legal requirements, since yu must fllw whichever limit is stricter. Many cuntries have laws prescribing a 40-hur regular wrk week. A cmmitment t prvide all wrkers with at least ne day ff per seven day week, r at least tw days ff in every 14 day perid, if this is legally permitted. A statement ensuring that vertime will be used respnsibly, per revised ETI guidance. Page 8 If there is a trade unin present at the cmpany, it is likely that yu will need t renegtiate the cllective agreement as part f the implementatin prcess. First, cmmunicate the revised wrding t wrkers and unin representatives. Then, secndly, make sure the unin is invlved in all stages f yur cmpany s revisin prcess. If the cmpany has uninised subcntractrs, ensure that there is enugh time fr thse negtiatins. Once the negtiatin prcess is cmplete, cmmunicate the new agreement with the unin t all managers, supervisrs and wrkers. Trade unins have an imprtant rle as the independent vice f the wrkfrce. Yu will find that dialgue with unins is very valuable ver the implementatin prcess.

9 A limit n vertime that fllws legal r ETI requirements, whichever is stricter. Ttal wrking hurs shuld nt exceed 60 per week except under rare and exceptinal circumstances and nly if permitted under lcal law. Make clear in the plicy that under n circumstances shuld wrkers health and safety be cmprmised by excessive wrking hurs. Any wrk ver 60 hurs per week can nly be cnsidered under a cllective agreement that is freely negtiated with a wrkers rganisatin representing a significant prtin f the wrkfrce. Clear separatin between regular and vertime wrking hurs. Fr example, yur plicies might state when vertime hurs begin and end within varius shifts. A statement that all vertime is vluntary and agreed t by wrkers. Wrkers shuld nt face penalties f any kind fr refusing vertime, including threats, intimidatin, r lss f pprtunity fr ther vertime wrk. The plicy shuld guarantee that all wrkers have the same chances t wrk vertime and detail the prcess fr wrkers t apprve, accept, r refuse vertime wrk. A cmmitment that all wrker emplyment cntracts specify regular hurs, rest days, vertime hurs and vertime pay. Cntracts shuld als state that vertime wrk is vluntary. A cmmitment t pay fr vertime wrk at a premium f n less than 125% f regular wages, r higher as required by laws r a cllective agreement. Be aware that many cuntries legally require that vertime premiums be a minimum f 150% r higher, fr example, if the vertime is wrked n a hliday. A cmmitment t c-perate n a regular basis with representatives r staff handling wages and benefits t ensure that all hurs wrked, including vertime hurs, are paid in full and n time. A grievance prcedure t recrd and respnd t all cmplaints related t issues f wrking hurs and prescribing utlets fr wrkers t ask questins abut yur plicies, with prmpt and clear respnses. Plicies shuld encurage wrkers t reprt cases f cncern with Clause 6, including inability t refuse vertime r cases f unsafe situatins due t wrking lng hurs. A cmmitment stating that any agencies r business partners recruiting and managing wrkers n yur behalf (such as cntract r agency wrkers) fllw all f yur plicies n wrking hurs. When drafting updated plicies, cnsult with trade unins frm the start. Make sure trade unins and wrker representatives agree with specific changes. Wrker and trade unin input while yu make changes is imprtant and will help make the implementatin prcess g much mre smthly. In additin, remember that if yur cmpany has suppliers that fllw the ETI Base Cde, yu need t supprt them in updating their plicies. This culd mean answering questins, helping t interpret the revised ETI wrding f Clause 6 and making sure suppliers have resurces (such as this guidance dcument) Updating prcedures Once written plicies are updated, it is critical that yu review and update existing prcedures t make sure these are effective in meeting revised ETI wrding. Either a persn r a department, depending n Page 9

10 the size and nature f yur business, shuld be assigned t make sure the revised plicies are carried ut in practice. Invlve trade unins and wrkers, since yur changes will likely mean the cllective agreement must be re-negtiated. If yur cmpany has suppliers that fllw the Base Cde, make sure there is a persn r team assigned t wrk with suppliers and guide them thrugh implementatin. Please see 4.2 belw fr details f training n the revised wrding available frm ETI. Much like written plicies, it is likely that cmpanies already implement many prcedures fr wrking hurs, but yu shuld review them all while cnsidering the changes in Clause 6. Fr example, it is likely that yu already prvide yur wrkers with pay slips. Hwever, in rder t demnstrate yu are meeting the requirements in the revised clause, yu shuld make sure pay slips clearly distinguish between regular and vertime wrking hurs and als shw vertime pay separately. Make sure HR prcedures are updated t cver: A wrk scheduling prcess that limits regular wrking hurs t 48 hurs per week fr all shifts, wrkers and staff. Regular hurs may be fewer accrding t legal requirements. Breaks and rest days Laws and standards that regulate the prvisin f breaks after every three r fur hurs f wrk exist fr imprtant reasns. These are based n research indicating that cntinuus wrk in excess f thse hurs cntributes t fatigue, as well as a slwdwn in brain and mtr skills. A 15- minute break allws wrkers t recharge their energy and actually prduce better quality utput. Laws that stipulate the prvisin f at least ne rest day a week and hliday leave recgnise the imprtance f a reasnable, wrk-life balance. This ensures that ther aspects f a wrker s life family, leisure, educatinal and vcatinal pursuits are fulfilled. These aspects cntribute t the wrker s verall well-being and cntinuing develpment. This benefits the cmpany by reducing absenteeism and tardiness, while imprving wrker prductivity and the quality f utputs. Please nte: These facts were taken int accunt by ETI when develping the revised wrding f Clause 6. A wrk scheduling prcess that limits vertime t within legal limits, r such that weekly wrking hurs d nt exceed 60 hurs per week. A wrk scheduling prcess that makes sure all wrkers are given at least ne day f rest (that is, 24 cnsecutive hurs) per seven days wrked, r at least tw days ff per each 14 day perid if this is legally allwed. An vertime scheduling and apprval prcess that makes sure wrkers are free t refuse vertime and agree t any vertime wrked. This may be specified in updated emplyment cntracts r cllective bargaining agreements (if relevant t yur cmpany). An accurate time recrding system in which all wrkers recrd their wn wrking hurs. This is imprtant under the revised wrding since it creates transparency int hurs wrked. Make sure that supervisrs and security guards d nt recrd hurs wrked fr emplyees. A payrll system that prvides wrkers with pay slips indicating the number f regular and vertime hurs wrked fr the pay perid, plus any deductins r ther relevant items. Page 10

11 A prcess t make sure accurate recrds are kept f the hurs (bth regular and vertime) that each emplyee wrks. A prcess t change existing wrker emplyment cntracts t match yur plicies n wrking hurs that meet Clause 6 requirements. Remember that yu have t bth update existing cntracts and make sure new emplyees receive a cntract that cmplies with the revised wrding. A prcess t negtiate with trade unins and wrk with emplyees t make sure yu are all in agreement abut the changes. Yu may als have t re-negtiate cllective agreements. Wrker input and feedback. Even if there is nt a trade unin active at the cmpany, make sure yu gather wrker input and reflect their feedback in yur implementatin prcess. In additin, wrk clsely with any suppliers t help them revise prcedures accrdingly. Make sure they have access t guidance and training materials and imprtantly, answer their questins prmptly and clearly. Suppliers will need yur supprt thrugh the implementatin prcess Training and cmmunicatin Cmmunicating plicy and prcedural changes Cmmunicatin is always mre effective if yu use multiple methds. Simply handing wrkers an updated plicy handbk and asking them t read it wn t be effective. In additin t regular training sessins, use sme r all f the methds belw t ensure yur message is received: It is imprtant that yur updated plicies and prcedures are disseminated amng managers, supervisrs and wrkers. Yu shuld use a variety f cmmunicatin methds s that all emplyees understand hw their respnsibilities have changed. Use the fllwing methds t make sure yur emplyees are aware f revised plicies and prcedures n wrking hurs: Prvide training prgrammes 3 fr existing managers, supervisrs and wrkers n the revised wrking hurs plicies and prcedures. Make sure that: key changes and hw these affect different wrkers jbs are cmmunicated; changes t emplyment cntracts are Create summaries f key plicy revisins and display them n ntice bards. Wrk with trade unins t cmmunicate messages. Display reminders in wrkers husing. Hld meetings where wrkers can ask questins n changes. Always make sure cmmunicatin is in a language that wrkers understand. Use team meetings and ther frums t reinfrce key updates. Verbally explain changes t wrkers that may nt be able t read. Require recruitment agencies r any party managing HR n yur behalf t cmmunicate messages. 3 Please see 4.2 belw fr details f training n the revised wrding available frm ETI. Page 11

12 cmmunicated; wrkers understand the vluntary nature f vertime; supervisrs and prductin planning persnnel understand that vertime must be vluntary, that vertime has t be used respnsibly and that wrk hurs generally cannt exceed a ttal f 60 per week; and all emplyees understand the imprtance f managing wrking hurs within legal and ETI limits. Prvide training prgrammes fr new managers and supervisrs and new emplyees n yur cmpany s plicies and prcedures n wrking hurs and time ff. This will ensure that yur revised prcedures becme a nrmal part f day-tday business. Managing vertime Make sure that the training sessins cver laws and regulatins and emplyee rights related t hurs f wrk, particularly n vertime limits, the vluntary nature f vertime and rest time. Regularly retrain all emplyees management, supervisrs and wrkers n the revised prcedures fr assigning and refusing vertime. Ensure that yur training and cmmunicatin effrts cver all types f wrkers (fr example, dmestic migrants, freign migrants, apprentices, temprary wrkers, trainees, prbatinary wrkers and s n). Display updated cmpany plicies, laws, regulatins, the ETI Base Cde and emplyee rights n wrking hurs in nticeable lcatins (in a language wrkers understand) and include them in an emplyee handbk that is given t each wrker. Wrk with trade unins r wrker representatives t crdinate cmmunicatin effrts. Make sure the renegtiated cllective agreement is cmmunicated t all emplyees. Cnsider whether materials need t be translated fr migrant wrkers. Cmmunicate with and train yur suppliers n their implementatin plans. Yu shuld wrk clsely with suppliers t ensure that they implement the revised wrding With the revised ETI wrding f Clause 6 n wrking hurs, having a slid system fr determining and managing vertime is very imprtant. Certainly these systems will differ frm cmpany t cmpany, but in general yu shuld be able t demnstrate that: Overtime is always tracked accurately and separately frm regular hurs. Overtime hurs are within legal limits, r are n mre than 60 hurs per week. Overtime shuld nly be allcated r permitted if wrkers have nt already reached these limits, r under an exceptinal circumstance. Overtime is vluntary. Fr example, having wrkers sign vertime apprval ntices, r maintaining recrds f wrkers declining vertime are gd ways t track this. The 60-hur ttal limit can nly be exceeded in t exceptinal circumstances. Dcument these cases carefully, whether it is due t an unexpected rder r an extreme weather event that disrupted prductin. Page 12

13 effectively. Simply ing suppliers the revised wrding f Clause 6 will nt be effective. Use a cmbinatin f the fllwing methds t supprt yur suppliers: Make sure suppliers are clear n hw t interpret the new wrding. Pint them t the Interpretatin Nte 4 and answer questins they have after reviewing the dcument. Alert suppliers t ther ETI guidance materials, such as this dcument. Make sure suppliers have ne r mre cntact persns available t answer questins. Tell suppliers clearly that yu are available t supprt them. Make sure suppliers are aware f the training sessins prvided by ETI. Prvide in-huse briefings t suppliers. Ding this in persn is best. Check in regularly n prgress ver the curse f 2014 and help suppliers if they are nt n track. Wrking hurs and hmewrkers Hmewrkers deserve equal treatment as ther wrkers and equivalent access t benefits, even where these are nt required by natinal law. These shuld be cvered in cntracts, as fr any ther type f wrker. Hmewrkers wh are paid by the hur are entitled t the limits n vertime and premium payments f Base Cdes 6.1. t 6.6. Hwever, many hmewrkers are paid by prductin r piece-rate. Their wrk may als be irregular, which means that wrking hurs vary widely; hmewrkers may be expected t wrk lng hurs with n vertime pay, but are unlikely t refuse if there is n guarantee f regular wrk; and this may nt be visible t cmpanies, especially where wrk is distributed dwn sub-cntract chains. Hmewrkers shuld be paid piece-rates which are equivalent t r greater than the legal minimum wage r industry benchmark standards, whichever is the highest r the minimum wage fr a factry wrker ding the same task. Fr guidance n setting piece rates g t and scrll dwn t Additinal guidance. Once an equitable piece-rate has been agreed, this shuld be used t calculate hw many hurs wrk given t hmewrkers will take. Hmewrkers shuld nt be bliged t cmplete mre wrk than can be dne in the regular hurs fr yur site. Avid giving unreasnable deadlines fr rders. When shrt deadlines are unavidable, a premium can be added t the piece-rate, as defined fr a factry wrker ding the same task. Assess the capacity f hmewrking cntractrs t ensure that their pl f wrkers is large enugh t meet yur rder withut demanding excessive hurs. Hmewrkers shuld nt be penalised if they refuse r are unable t cmplete extra wrk. Simple dcumentatin (eg hmewrker lg bks) shuld be used t mnitr wrk given t hmewrkers; these can be used t demnstrate that hmewrkers hurs f wrk are nt excessive. 4 This resurce is available at: Page 13

14 In general, yu need t aid yur suppliers during this prcess. Suppliers face the same challenges as yu d in implementing the revised wrding. Wrk clsely with suppliers t help them set and meet implementatin gals Implementatin in practice The best plans, plicies and prcedures will nt eliminate challenges in implementatin f the revised wrding. Althugh yur cmpany may already have mechanisms fr managing hurs under the riginal Clause 6, these strategies are even mre imprtant under the revised clause. Overbking, pr capacity planning, unanticipated client demands, prductin mistakes, high absenteeism and a lack f flexibility in wrkers skills are typical cntributrs t the need t wrk excessive vertime. Suggestins fr managers t reduce the need fr vertime and meet the revised wrding in Clause 6 include: Set reasnable prductin targets and schedules based n realistic labur efficiency rates. Measures f wrker prductivity frm the basis fr setting targets and schedules. If the efficiency rate is unreasnably set, the timetable is naturally affected and wrkers will have t wrk vertime t cmplete their targets. Make sure that labur efficiency rates cnsider set-up time and allw sufficient time fr wrkers t eat, rest, stretch and g t the tilet. Failure t cnsider these factrs culd result in ther, mre serius cncerns with the ETI Base Cde. Clsely crdinate HR plans and prductin targets. Capacity planning shuld cnsider past client demands, the cmplexity f the prductin prcess and wrkers skills. Make sure yu cnsider hw these factrs will affect yur effrts t implement the revised wrding. Cntinually upgrade wrkers skills thrugh training, mentring and caching. Having wrkers with skills that match their jbs reduces the amunt f unnecessary extra wrk, which ften leads t the need fr irrespnsible vertime. Having multi-skilled wrkers wh are cmpetent in mre than ne peratin allws mre flexibility and efficiency in the prductin prcess, which in turn increases prductivity. Imprve cmmunicatin with supervisrs and line managers and between line managers and wrkers. Wrker-management dialgue is particularly imprtant as yu implement these changes. Make sure wrk instructins are clear and easy t fllw. Reduce errrs that culd cause cstly delays by hlding team meetings and giving clear instructins. Listen t wrker feedback n hw t imprve prcesses. Frm a team f trade unin members and/r wrker representatives t supervise changes and prvide nging feedback. It is critical that yu invlve wrkers thrughut the implementatin prcess. Trade unins and wrker representatives already wrk with yu n many emplyment issues, s pay special attentin t their feedback n yur effrts t meet the revised wrding. In additin t re-negtiating the cllective agreement, unin representatives can give yu valuable independent feedback. Page 14

15 Establish and maintain a sense f teamwrk and high wrker mrale. Wrkers wh wrk under cnditins f fear and intimidatin, wh are dissatisfied due t lw wages and lng hurs and wh are expsed t excessive heat, fumes and ther unsafe wrking cnditins, are nt the mst prductive wrkers. In shrt, the rest f the ETI Base Cde will help yu imprve wrking cnditins and mrale. Wrkers wh take pride in the rganisatin they wrk fr and are treated well by their supervisrs and c-wrkers are in a better psitin t meet delivery deadlines. Managing wrking hurs effectively cannt be dne vernight, s make sure yu think abut all f the different ways yu can meet yur implementatin plans Dcumentatin Yu need t make sure yur prcesses fr meeting the requirements in the revised wrding are welldcumented. This helps track changes in practices, but als ensures that practices are transparent and accuntable. In rder t keep wrking hurs within the limits stipulated in the Base Cde, yu must keep impartial, accurate and transparent recrds. These shuld shw hw many hurs (bth regular and vertime) are actually being wrked and hw ften and fr hw lng wrkers are allwed t rest. Dcumentatin als serves as a means fr identifying wrking hur trends and highlighting prblem areas respnsible fr excessive hurs. This will be especially useful during implementatin, but als cme December 2014 when scial audits cver the revised wrding in Clause 6. There is generally n single way t keep dcumentatin and recrds. Cmpanies, frm factries t fd prcessing plants, will have different appraches t keeping time and payrll recrds. Hwever, t cmply with the requirements in Clause 6, the dcuments shuld always include: Accurate recrds f hurs wrked fr each emplyee, such as wrkers pay slips and summary reprts generated frm the timekeeping and payrll systems. Accurate reflectin f regular and vertime hurs wrked and the rates paid in the payrll register and n pay slips. Clear separatin between regular and vertime hurs in all wrking hurs dcumentatin. Recrds f any cmplaints related t inaccurate recrding f wrking hurs, r related t inaccurate wage payments based n recrded Risk cntrl: mnitr external agents A majr surce f risk fr cmpliance t any scial requirement is when wrkers are emplyed by an external recruitment agent. Wrkers emplyed thrugh agents are nt excluded under the revised wrding. In many cases, these agents are respnsible fr HR functins amng the wrkers they recruit (such as recrding hurs and paying wages). Yur cmpany might use these agents, fr example, t recruit temprary wrkers. It is critical that yu require agents t fllw yur cmpany s updated plicies and prcedures n wrking hurs. If during the busy seasn, half yur wrkfrce is temprary and yu are nly mnitring yur wn direct wrkers, yu are ignring half f the wrkfrce. Make sure yu wrk with recruitment agencies t implement yur revised plicies and that yu mnitr perfrmance. Page 15

16 hurs (bth regular and vertime). Emplyment agreements (updated r issued t new emplyees) that shw regular hurs expected, the prcess fr requesting wrkers t wrk vertime and what rates will be paid. If relevant, a cllective bargaining agreement n wrking hurs. Make sure dcuments are kept fr all types f wrkers (such as temprary r seasnal) and fr any agency wrkers. Remember that t avid any cnfusin r dispute, emplyment agreements shuld be updated fr existing emplyees. Cntracts cntaining the same terms shuld be issued t new emplyees. Cntracts must include detailed infrmatin regarding regular and vertime wrk hurs and schedules, as well as regular and vertime pay rates. Agreements shuld als cntain an express statement that vertime is strictly vluntary. Wrkers signatures shuld be secured n the agreement. A cmplete cpy f any cllective bargaining agreement gverning wrking hurs and wages shuld be kept n file t ensure cperatin and cmpliance Mnitring implementatin Yu will need t mnitr whether yur updated plicies n wrking hurs are being fllwed and that the prcesses are effective. Use the fllwing steps t evaluate and imprve the effectiveness f yur prgrammes by the end f 2014: Mnitr trends and key perfrmance indicatrs (KPIs) t identify actual and ptential prblems relating t yur revised plicies n wrking hurs. Over the curse f this year, cnsider setting KPIs t prgressively meet the requirements in Clause 6. This might include lking at: ttal verall number f hurs, including vertime, wrked by individual wrkers and by grups f wrkers; regular hurs shuld always be within legal limits r n mre than 48 hurs per week; vertime hurs shuld always be within legal limits and ttal weekly hurs including vertime shuld nt exceed 60; and rest days wrkers shuld always receive at least ne day ff in every seven days, r tw days ff in every 14 day perid (if legally permitted). Mnitr and evaluate trends in recruitment, prductin needs, wrking hurs and ther functins and data t help yu cmply with the Plan fr all custmers Yur business prbably has many custmers, each with different prductin and delivery requirements. They may als have different scial respnsibility cdes f cnduct. It is imprtant that yu develp management practices fr wrking hurs that take int accunt all custmers. Wrk with ther departments t plan ahead and understand hw yur different custmers culd affect meeting the requirements in the revised wrding. Page 16

17 revised wrding n regular and vertime hurs. This will als help yu avid unexpected prductin spikes and plan vertime hurs accrdingly t keep within ETI limits. Regularly review the cmpensatin prcess t make sure that vertime hurs are paid crrectly (accrding t legal requirements r, if there are n legal stipulatins, at least 125%). Perfrm randm checks f the wrking hurs listed n wrkers pay slips against timekeeping system recrds t make sure that hurs are being prperly recrded. This is imprtant fr maintaining transparency in yur management activities. Remember, wrk hur ttals are nly as accurate as they are verifiable by dcumentatin frm at least three surces: persnal time recrds, payrll registers and wrkers pay slips. Encurage and btain feedback frm wrkers n prblem areas. If there is a trade unin at yur cmpany, this will be an excellent surce f feedback fr yu. Once mnitring and reprting have begun and trends and prblems becme apparent, the prcess f investigatin and analysis begins t lk at the rt causes f any cmpliance prblems with the revised wrding Respnding and investigating Investigate ptential prblems and cncerns and analyse why they ccur. Thrughut 2014 and beynd, when a situatin arises that indicates the existence f a ptential prblem; the cmpany shuld investigate the rt cause and what can be dne t address it. This will help ensure cmpliance in 2014 and beynd. Fr example, if yu find that sme wrkers did nt get a day ff in every seven days, r wrked mre than the legal limit fr vertime, find ut why this happened whether because f unexpected circumstances like a rush rder r brken equipment, r due t a larger prblem, like high staff turnver r unreasnable prductin qutas. Hw des the cmpany ensure that vertime is vluntary? Under the revised wrding, vertime must be vluntary and wrkers must agree t wrk extra hurs. Use the fllwing methds t demnstrate that vertime is vluntary in practice: The cmpany plicy clearly states that wrkers may be asked t wrk vertime at certain times, but that wrkers can refuse vertime withut fear f penalty r harassment. The cmpany gives wrkers at least 24 hurs ntice when scheduling vertime wrk. This als gives the business time t make ther arrangements in case sme wrkers cannt wrk vertime as scheduled (fr example, t find ther wrkers wh can and are willing t d the wrk). Wrkers sign a cnsent frm if they are willing t wrk vertime each time they are asked. Overtime arrangements have been negtiated with the wrkfrce and are described in a cllective bargaining agreement There is a grievance prcess in place that wrkers can use t reprt vilatins f the wrking hurs plicy. Emplyment cntracts state that vertime is vluntary and specify the vertime hurs wrkers may be asked t wrk. Page 17

18 If yu are a cmpany that fllws the ETI Base Cde and has multiple suppliers r a large supply chain, it is imprtant t cllect data frm acrss all cmpnents f yur business. Examine trends at varius levels frm verall acrss the cmpany thrugh t individual suppliers r business units since this can help t: Lk fr particular suppliers r business units where hurs are excessive. These business units might need mre help r training than thers. Lk fr particular suppliers r business units that are mre successful in managing hurs. This culd help yu identify gd practices fr replicatin elsewhere. Wrk with trade unins t find slutins fr ptential prblems. Wrkers themselves are amng yur best resurces fr finding answers t prblems as challenging as managing wrking hurs. Lk fr trends, such as particular times f the year when vertime is excessive, which culd be used t help fcus resurces and management effrts. Cmpare data against multiple factrs such as gegraphy, particular prductin prcesses, seasnal prductin spikes and reliance n seasnal r temprary wrkers. The better and mre cmprehensive yur data is, the better yu will be able t identify risk and the areas where mre effrts will be required t meet the requirements in Clause Wrking tgether t find slutins Implementatin is mre effective if yu wrk with ther departments t identify implementatin slutins. Remember that the implementatin f the revised ETI wrking hurs wrding in Clause 6 cannt cme at the cst f cmpliance with requirements cvered by ther Base Cde clauses. Take care t develp slutins s that the prblem des nt reccur and the slutin itself des nt create ther prblems. Fr example, yur HR team may need t wrk with prcurement r sales in rder t better frecast wrkfrce needs t meet upcming rders. This is imprtant t make sure that vertime is used respnsibly and that wrking hurs d nt exceed ETI Base Cde limits, except under exceptinal circumstances. Yur cmpany shuld: Cnsult with trade unins and/r wrker representatives fr any changes in emplyment cnditins (such as changes t cntracts, wrking hurs, r vertime premium rates). If there is cllective bargaining agreement with yur wrkfrce, wrk with unin representatives t re-negtiate the agreement. Liaise n a regular basis with bth agency and prductin staff t: make sure yur wrkers skills match jb requirements s that they are able t meet prductin qutas within legal and revised Base Cde limits; always use vertime respnsibly and accrding t the Base Cde r legal limits. Planning Page 18

19 ahead is imprtant, since yu cannt plan t rely n vertime as part f nrmal prductin; wrk with HR t make sure there are enugh wrkers r shifts t meet upcming custmer rders and deliveries. This will help yu anticipate and avid prblems; and plan fr and schedule vertime as far ahead as pssible, based n custmer rders and bearing in mind that vertime cannt be relied upn at all times. Again, this helps anticipate and avid prblems. Liaise n a regular basis with staff handling wages and benefits t ensure that all hurs wrked, including vertime hurs, are paid in full and n time. Make sure vertime is paid at least at the rate f 125% f the regular wage rates, r higher if required by law. Cmmunicate guidelines t custmers n placing and changing rders t avid last minute r versized rders that can put a heavy strain n yur wrkfrce and therefre lead t excessive vertime hurs. Answer questins frm wrkers and ther stakehlders regarding revised hurs and vertime plicies in a prmpt and clear manner. This will help avid cnfusin as yu implement the revised wrding f Clause 6. Respnd quickly t prblems yu can fix in the shrt term, like repairing brken machines r bringing wrkers frm anther line r anther area t help meet an rder with limited lead time. Wrk with external suppliers, such as labur agents and service prviders. If yu use agency staff, temprary, r seasnal wrkers, yu need t make sure that these emplyees are wrking within the limits f natinal law and the revised ETI wrding. Use yur analysis f why prblems ccur t plan lnger-term slutins with ther departments r functins. This might mean emplying mre wrkers t meet increased demand, r rearranging shifts and prductin schedules. Yu shuld use time befre December 2014 t prepare fr these eventualities. Onging mnitring is imprtant t the lng-term success f yur system t manage wrking hurs and meet the revised wrding. Yu cannt just update a few plicies and prcedures and then stp maintaining them. Hwever, if yu keep up yur mnitring effrts and make adjustments, yu will be in the best psitin t cntinuusly imprve yur practices. 3. Other imprtant tips 3.1. Hw d I prepare fr the scial audit? Page 19

20 All scial audits frm December 2014 shuld use the revised wrding. Special audits will nt be required and the revised ETI Clause 6 will becme part f any audit based n the ETI Base Cde. The way t prepare fr this is t implement the changes described abve, check t make sure yu have identified and cntrlled risk surces and mnitring perfrmance during implementatin. Yu have until December 2014 t d this, s use the remaining time this year t first make changes t yur plicies and prcedures and then mnitr yur perfrmance leading up t the December 2014 deadline. The best strategy during an audit is t be transparent abut yur practices and the bstacles yu are wrking t vercme t meet standards. Since managing wrking hurs is nt easy and will nt happen vernight, yu shuld fcus n an apprach f cntinuus imprvement. Scial auditrs will want t make sure that they can verify yur practices against multiple surces f infrmatin, usually three. This means infrmatin frm management, wrkers and dcuments. Wrker awareness f plicies and prcedures; management s ability t describe risk identificatin and cntrl prcess; and well-rganised dcumentatin will help yu meet audit requirements. The Supplier Ethical Data Exchange (SEDEX) will be preparing much mre detailed guidance n auditing. Fr mre infrmatin, please visit SEDEX s website Anticipate prblems The table belw prvides examples f nn-cmpliance with the revised Clause 6 requirements, alng with suggested risk cntrls. These are examples nly lk at yur cmpany s peratins and make sure yu understand the risk cntrls that are needed t meet the revised wrding, using this guide as a starting pint. Examples f nn-cmpliance with ETI Base Cde Clause 6 Suggested updates t cmpany cntrls Wrking hurs (regular and vertime) exceed legal r ETI limits. This culd mean: Regular hurs exceed 48 in a week. Overtime limits exceed legal requirements. Wrkers wrk mre than 60 ttal hurs per week. Revised wrding reminder: Update yur plicy n vertime such that it indicates the start and end f regular wrking hurs and fllws limitatins set by the law and ETI, whichever is stricter. Establish a mechanism fr vertime apprval that requires sign-ff fr hurs in excess f the cde limits under exceptinal circumstances. Ensure that all managers, supervisrs, staff and wrkers are aware f updated cmpany plicies related t hurs and vertime. Answer questins frm wrkers, as well Page 20

21 Examples f nn-cmpliance with ETI Base Cde Clause 6 Suggested updates t cmpany cntrls 6.1 Wrking hurs must cmply with natinal laws, cllective agreements and the prvisins f 6.2 t 6.6 belw, whichever affrds the greater prtectin fr wrkers. 6.2 Wrking hurs, excluding vertime, shall be defined by cntract and shall nt exceed 48 hurs per week. 6.5 Wrking hurs may exceed 60 hurs in any seven day perid nly in exceptinal circumstances and when certain cnditins are met. as ther stakehlders, regarding updated hurs and vertime plicies. Mnitr and evaluate trends and practices related t Clause 6 implementatin and take measures t ensure that all laws and revised plicies are being met at all times. Indicate specified hurs f wrk in the emplyment agreements f all types f wrkers (ie dmestic wrkers, freign cntract wrkers, temprary wrkers, apprentices, trainees, prbatinary wrkers and s n). Cmmunicate updated plicies n wrk hurs t all emplyees by displaying them in prminent lcatins, uplading them n the cmpany intranet and including them in the emplyee handbk that is distributed t wrkers. Have natinal laws and regulatins n wrking hurs, including gvernment limitatins n vertime, easily available t wrkers in a language that they understand. Overtime is invluntary. This culd mean: Wrkers cannt refuse vertime wrk. Wrkers must wrk vertime until prductin qutas are met. Wrkers must wrk extra time fr disciplinary reasns. Revised wrding reminder: 6.3 All vertime shall be vluntary. Overtime shall be used respnsibly, taking int accunt all the fllwing: the extent, frequency and hurs wrked by individual wrkers and the wrkfrce as a whle. It shall nt be used t replace regular emplyment. Establish a plicy that expressly states that vertime is, at all times, vluntary. This plicy shuld als clearly state that n penalties can be impsed n wrkers fr refusing vertime. The plicy includes a prvisin fr equal pprtunity fr vertime amng all types f wrkers. Cmmunicate the cmpany s plicy that vertime is vluntary t all new and existing wrkers. Make sure there is a way fr wrkers t reprt cases f invluntary vertime t management. Make sure any prductin qutas are reasnable and wrkers can finish them within legal and ETI wrking hurs limits. Page 21

22 Examples f nn-cmpliance with ETI Base Cde Clause 6 Suggested updates t cmpany cntrls Legally-required breaks are curtailed r nt prvided. This culd mean: Breaks are shrter than the legal minimum entitlement. Wrkers wrk thrugh breaks t meet targets. Nte: Prvisin f breaks at wrk is almst always required by law and necessary in rder t meet Clause 6 requirements. Establish a plicy that states wrkers are t be prvided with all legally-required breaks. The revised ETI Clause 6 wrding is clear that laws n hurs must be fllwed and nearly all cuntries have laws requiring rest breaks at wrk. Cmmunicate the cmpany s plicy n breaks at wrk t all new and existing wrkers. Review prductin qutas, targets, r ther prductivity requirements t make sure these can be achieved within revised ETI wrking hur limits. Cmmunicate t supervisrs that practices such as wrking thrugh breaks r ther designated rest times is nt permitted. One day ff in seven is curtailed r nt prvided. This might mean: Wrkers wrk n Sundays. Wrkers are asked t give up their days ff in rder t meet qutas. Revised wrding reminder: 6.6 Wrkers shall be prvided with at least ne day ff in every seven day perid r, where allwed by natinal law, tw days ff in every 14 day perid. Revise cmpany plicy t state that all wrkers receive at least ne day ff per week, r if legally permitted, at least tw days ff in every 14 day perid. Infrm all wrkers (new and existing) f the cmpany s plicy n rest days. Mnitr and track all departments, paying special attentin t areas f greatest risk, t make sure yur updated plicy is fllwed. Cmmunicate t different departments and supervisrs that wrking n designated rest days is nt permitted. Unequal access t vertime. This might mean: Permanent wrkers receive vertime, while temprary wrkers d nt. Wrkers that refuse vertime are denied future pprtunities fr vertime. Update cntrls at the plicy level. Cmmit t eliminating discriminatry practices. Practice fairness and prvide equal pprtunity fr all wrkers. Embed this plicy int the prductin planning system and int the cmpany s wage/salary administratin system. Ensure that vertime wrk assignments are based n prductin need and n clear agreement with the emplyee Page 22