Rachel McEwen's (Scottish and Southern Energy) presentation to STUC's Decent Work, Dignified Lives conference of 15 October 2014 in which she explains SSE's approach to implementing the living wage.

1. Implementing the Living Wage
Rachel McEwen
Director of Sustainability

2. Living Wage: a practical application
• SSE Plc accredited in September 2013
• 322nd organisation to be accredited
• At the time, the biggest in the FTSE 100
• Still the only energy company
This is our story…

3. Why become a Living Wage employer?
• The business case
• The moral case
• The leadership case

4. How the decision was taken
• Working group: HR, Procurement – and the corporate centre
• Work through the detail with Living Wage Foundation
• Management Board decision: CEO and FD
• Board endorsement
• Shareholders and shareholder activism

5. Directly employed staff
•148 individuals
•Cleaners, shop assistances, tour guides and meter readers
•67:33 female:male split
•Wick to Belfast to Slough
•Pay rise backdated to 1st April 2013; implemented in Sept Payroll
•Average payrise = £1,100 a year

6. LW in procurement: the deal breaker?
• Without doubt this was the tricky bit
• ‘Utilities Regulations Code’
• Came up with a process to ensure a level playing field for all
potential contractors
• LW clause is included at every stage of the procurement process
Bottom line: It’s not OK to promise to pay
a Living Wage and simply outsource
lower value work.

7. 7
High Level Procurement approach
CPSF UVDB Stage 4
Stage 1
(optional)
Stage 2 Stage 3
Stage Description Action
1 PQQ Pass/Fail & Deselect (if appropriate)
2 ITT Part 1 – Introduce LW
Part 2 – Include Clause in form of agreement
Part 3 – Obtain sign off
3 Evaluation Pass/Fail
4 Award Part 2 – Non-negotiable Clause

8. 8
What the supplier MUST do:
The Supplier agrees to pay all of its employees, contractors and sub-contractors not
less than the Living Wage for the term of the contract provided the following conditions are met:
The employee, contractor or sub-contractor (as applicable) engaged in the provision of the Services:
•is aged 18 or over;
•works on the Purchaser’s premises (and such premises are based in the United Kingdom);
•works for at least 2 hours in any working day; and
•works for at least 8 consecutive weeks in any calendar year.
The Supplier agrees to implement any change to the Living Wage as soon as possible and in any event within
6 months of the respective annual announcement date. In the event such change is not implemented
immediately, the Supplier shall backdate any applicable payments to the relevant annual
announcement date.

9. What happens if they don’t
• The Purchaser may request, and the Supplier shall provide to the Purchaser all of the information the
Purchaser requires (acting reasonably) to confirm the Supplier’s compliance of its obligations pursuant
to this clause [Living Wage].
9
• In the event of non-compliance of this clause [Living Wage] by the Supplier, the
Purchaser shall notify the Supplier of such non-compliance and the Supplier
shall act in accordance with the Purchaser’s instructions to resolve any non-compliance,
which shall include backdating any applicable payments to the relevant annual
announcement date.
• In the event the Supplier has not resolved the non-compliance within a reasonable time (as
determined by the Purchaser in its sole discretion) the Purchaser shall be entitled to
terminate this Agreement with immediate effect by giving written notice to the Supplier.
• Any termination of this Agreement pursuant to clause 4 shall be without prejudice to any right or
remedy which has already accrued to the Purchaser.
• If the Purchaser terminates this Agreement for breach of this clause [Living Wage], the Supplier shall
not be entitled to claim compensation or any further remuneration, regardless of any activities or
agreements with additional third parties entered into before termination.

10. Why accreditation matters
• This is not a PR stunt: a serious attempt to make a difference
• The strength and credibility of the mark is key
• Standards and criteria provide authenticity
• Living Wage Foundation have got the balance right – celebration
versus ‘naming and shaming’
• Scotland has it’s own project: the Scottish Living Wage
Accreditation Initiative

11. Want to know more?
scottishlivingwage.org
www.sse.com/beingresponsbile
rachel.mcewen@sse.com
@rachelmcewen