"In 2001 the Wages & Benefits standard in our code was revised and updated, to read as follows: 'Wages are essential for meeting the basic needs of employees and reasonable savings and expenditure. We seek business partners who progressively raise employee living standards through improved wage systems, benefits, welfare programmes and other services, which enhance quality of life.'
"The adidas Group has examined the question of fair wages in the past and has concluded that the best way to improve the general welfare of workers is to work with our business partners at the enterprise level, to promote wage-setting mechanisms which are transparent and have been developed with the direct input of workers. Ideally, this occurs through negotiation or collective bargaining, or through alternative legal means, such as a workers council or welfare committee. We believe basic pay should be benchmarked at a level higher than the local minimum wage or the industry wage, and should acknowledge and rewards workers for productivity gains. A suppliers’ wage-setting should also take into account data the general cost of living and needs of their workforce. The wage setting mechanisms must also be supported by improvements in the factories human resources management system and they must meet, in full, all legally mandated benefits.
"However there remains a significant gap between broad objectives and ideals derived from our research on Fair Wages and the delivery of improved wage-setting mechanisms and increased pay and benefits at the factory level. Across the supply chain we find that:
"a) the majority of our suppliers pay minimum wage + OT + some allowances and bonuses based on seniority, special skills, hazardous work or night shift work, and productivity;
"b) some of our long-term, dedicated FW and apparel suppliers pay a basic wage above the local minimum to workers with experience and seniority OR in some countries suppliers and employer associations have been pressured (in the case of Vietnam, for example, by industrial action) to pay a basic salary above the minimum in recognition that the local minimum wage is simply too low compared to the workers cost of living;
"c) we fully support the establishment of wage setting mechanisms that are based on negotiation with the workforce, collective bargaining and other forms of direct worker input, as well as the provision of increased benefits to workers which improve worker welfare and living standards; and
"d) in order to realize c) above, in addition to our ongoing monitoring programme, we have engaged service providers and NGOs to project manage a number of initiatives in different countries, including a Human Resource Management Systems ( HRMS) Training programme, establishment of Worker Cooperative Organizations, Industrial Relations & Negotiation Training for factory management, Election of Worker Committees, and FOA Awareness Raising."