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FOA & worker representation: company guidance

How to implement Clause 2 of ETI's Base Code, including a 5-step roadmap for companies.

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"We don't need a union here - all our workers are happy!"

Freedom of association — the right of workers to join and form trade unions so that they can bargain collectively for their rights - is a fundamental principle of the ETI Base Code.

Yet around the world, both employers and governments interfere with these rights. Trade union leaders are denied promotion opportunities, physically abused, arrested or even murdered for standing up for their right to organise: the ITUC 2023 report states that in 2023, the right to free speech and assembly was restricted in 42% of countries and workers were arrested and detailed in 69 countries in 2023.

In other cases, managers may threaten to close their factory or move production to another site if their workforce unionises, or refuse to negotiate with legitimate worker representatives.

The more subtle forms of interference include paternalism, where structures are created that may resemble unions, but are actually controlled by management in some form: for example, workers may be selected to be the representatives on workers' committees rather than democratically elected, or else company management may pay union fees.

In some cases, managers may formally recognise trade unions but then refuse to sit down and negotiate with them. Or they may spend six months negotiating the first clause of their collective bargaining agreement.

The absence of freedom of association at a workplace represents a clear breach of the ETI Base Code. As with any other type of breach, retailers and brands have a responsibility to work with their suppliers to find a constructive solution.

Human rights efforts are not yet having a big enough impact

But so far, efforts to improve human rights have made little progress in furthering these rights.

This is partly because audits of workers' conditions often fail to identify their absence. For example, auditors may accept managers' word that they don't need a union, as workers' needs have already been met.

Or they may accept documents such as a collective bargaining agreement as evidence of the existence of freedom of association, without checking whether both sides ever meet.

In many countries there is a culture of fear and mutual mistrust between unions and employers, with the latter seeing unions as being out to destroy their business - and vice versa.

Another obstacle is that retailers and brands often have little understanding of how unions operate, and how a unionised workforce can benefit suppliers' businesses, and hence are ill-equipped to explain to their suppliers why it is so important, and how their business could benefit.

Tips on finding out whether freedom of association is respected

• Establish the local climate - what is the usual attitude of employers? Discuss this with employers as well as local unions and NGOs.
• Talk to workers outside the workplace, so they feel free to open up.
• Ask probing questions - eg: was there ever an attempt to form a union and what was the outcome?
• Does the company have a collective bargaining agreement with a union?
• What does the agreement cover and how does it compare with minimum legal requirements?
• How frequently are the contents reviewed and what is the process for review?
• How often do negotiation meetings take place?
• What information is provided to negotiators to enable genuine bargaining to take place?
• Are all workers allowed to take part in union activities?
• Are union members and leaders more or less likely to be promoted?
• If the workplace does not have a union, is there a mechanism for raising collective grievances with management?

Creating a win-win situation

Yet suppliers that engage with unions find that they have fewer worker grievances to deal with, a more motivated workforce, lower turnover and less absenteeism - as well as fewer strikes.

Constructive worker-management dialogue can also be enormously helpful to companies seeking to trade ethically. Where there are strong trade unions with positive working relationships with management, they allow continuous resolution of problems as they occur, rather than letting them escalate and potentially become explosive media stories.

This means that buying companies that encourage their suppliers to adopt an open attitude towards trade unions stand a better chance of implementing their ethical trade responsibilities. In short, everybody stands to gain.

Furthering freedom of association and collective bargaining in supply chains is a key priority area for ETI. We are currently developing a major new programme of work to develop models of constructive management-union dialogue in supplier workplaces, and will widely disseminate the lessons we learn.