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As companies look to uphold ethical labor practices in their supply chains, a major challenge arises – how to promote worker freedom of association (FoA) rights in places where union rights are legally restricted? Furthermore, the corporate accountability landscape is shifting toward government regulation of supply chain compliance via transparency and due diligence mandates and trade sanctions. Considering this, how must companies reassess the prevailing practices in their supply chains that create obstacles and suppression of rights, even in countries where union rights are less restrictive on paper?
The reality is that FoA issues can seem highly situational based on a country’s laws and political climate. However, most nations have some legal provisions governing FoA and worker representation, even if imperfect. In addition, whether the countries ratified the international labor conventions regarding FoA or not, all member countries of the United Nations and International Labor Organization are obligated to uphold the principles provided in the UN Universal Declaration of Human Rights and ILO Declaration on Fundamental Principles and Rights at Work.
The core problems boil down to two factors:
- 1) Legal restrictions on FoA rights
- 2) Poor enforcement of existing worker protections
Legal constraints include outright union monopolies (like in China), bans on the right to strike, cumbersome union registration processes, and laws allowing corporate influence over unions. But in addition to these legal barriers and obstacles, many suppliers undermine FoA through business practices out of step with international labor standards. Tactics like intimidating workers, terminating organizers, blocking unionization efforts, and refusing to bargain collectively violate core principles of the ILO. Ethical companies must focus on mitigating these harmful practices by suppliers that restrict freedom of association (FoA) rights. They should carefully consider the various de jure (by law) and de facto (in practice) obstacles to organizing, even in countries like the United States that have stronger legal protections compared to authoritarian nations but still present barriers to unionization efforts.
Through robust human rights due diligence, enforcement of corporate policies, and engagement with local stakeholders, businesses can promote ILO FoA standards globally. What this means in practice is creating and enforcing policies and practices that are conducive to workers exercising their rights to organize and bargain collectively, regardless of whether suppliers or buyers want a union. Companies must learn to distinguish the difference between arguing against a union and improperly hindering the workers’ choice of whether they want a union for themselves.
Upholding other forms of worker empowerment is another fundamental responsibility that is different from the specific rights of FoA and collective bargaining. An empowered workforce is key to an ethical, productive, and sustainable supply chain. Unfortunately, many supplier factories lack even the basic, fundamental building blocks of worker participation, such as effective grievance systems and communication channels between workers and management. This deficit undermines worker voice, value, and engagement while contributing to high turnover rates. In contrast, strengthening management systems around worker participation can provide significant benefits for businesses. While companies should enhance engagement and communication with workers individually and collectively, these efforts must not intentionally or inadvertently suppress workers’ rights to unionize.
Empowering Workers:
The Business Case for Effective Worker Participation
Working towards strengthening FoA and worker participation in the workplace represents a cost-effective strategy to meet supply chain compliance and regulatory goals on worker voice, social dialogue, and improved labor relations between managers and workers. Strong worker participation systems enable suppliers to comply with legal requirements and client mandates related to grievance mechanisms and worker communication channels.
Furthermore, it transforms the notion of social compliance from a mere auditing exercise into a proactive approach that addresses the root causes of labor rights issues within supply chains. Additionally, promoting worker participation aligns with the fulfillment of UN and ILO conventions in sourcing countries, upholding fundamental principles and rights at work. Notably, this systematic approach mitigates labor-related risks, such as unresolved grievances or inadequate representation, which can have detrimental effects on operations.
Tools such as Verité’s Advancing Worker Participation Toolkit enhance both management and workers’ knowledge and capabilities, fostering more effective two-way dialogue between workers and management. Consequently, this approach boosts worker well-being, satisfaction, and engagement levels within the workplace. When workers are empowered to engage and advocate for their rights and interests, it catalyzes a fundamental shift in supply chains, enabling companies to build a sustainable business model and systematically mitigate labor risks.
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