Beyond audit

Using the audit process alone to understand whether workers have access to the rights of freedom of association (FOA), collective bargaining (CB) and worker representation can present distinct challenges. ETI members have shared that the relevant audit box may ticked or signed off as “all in order”, but the reality may be quite different. 

FOA may be difficult to assess on site, as nuances of threats, harassment and intimidation of workers are easily masked on the production floor and create an environment where workers fear speaking out on issues that concern them.  Collective bargaining through independent trade unions, however, should be visible through documented processes and records.  

Recognising that there are situations where unions face significant challenges to carry out legitimate activity should not be used as a reason to establish alternative forms of representation that frustrate or interfere with union access or engagement in the future. We map out “RED FLAG” national and company indicators IN STEP TWO on identifying risks to workers and to an unexperienced auditor the signs of denying workers their rights and protections – especially FOA – may be missed.   

Audit and beyond 

ETI resources on 'Audit and beyond' provide useful guidance on auditing in context of human rights due diligence, while recognising that audits often have limited value in driving change. Indeed, they can be costly and labour intensive for brands, retailers and suppliers, who may be required to participate in multiple audits conducted by different brands. The Warwick Business School report2 – From Social Dialogue to Social Audit discusses this in detail and provides an alternative approach – worker representation 

In the case of elected worker representatives, there should be evidence of worker nominations, secret ballots, terms of reference, worker meetings and meetings between workers and managers, through which worker concerns are raised. 

In terms of ETI Base Code clause two, it is important to commission auditors with strong knowledge of freedom of association and collective bargaining, appropriate skills for determining whether workers have access to these rights, and who understand the risks to workers in the relevant sourcing country.   

Identifying auditors with appropriate knowledge and skills 

Based on ETI members' experience, good auditing teams should have:

• knowledge and understanding of the ETI Base Code  

• Knowledge of whether the ILO’s conventions on freedom of association and collective bargaining have been ratified, and whether they are enshrined in local law. This would include research and knowledge on complaints against the country and outcomes of an investigation. (ILO index) 

• Knowledge and understanding of local labour law and how trade unions or worker representative bodies are governed locally. For example, this could include where trade unions or worker committees are registered, the percentage of workers on site needed to establish a union, how and where a collective bargaining agreement is registered once complete, and whether there is a worker conciliatory organisation. 

• Where applicable, knowledge of how the local trade union movement is constituted, for example, through enterprise unions, national federations and affiliations to global union federations. 

• Knowledge of and ideally well connected to labour rights organisations working in the sourcing country.  

• Practical understanding and experience of secret ballots, worker dialogue and sectoral, enterprise or global agreements. 

• The ability to detect non-verbal cues from interviews (for example, body language, facial expressions).

Freedom of association indicators

At the global or national level, freedom of association indicators may be categorised into two groups:

Statistical indicators

These could include trade union density rate, collective bargaining coverage, days lost due to strike action or lockout, and where there is labour court provision, the number and type of cases and appeals. It is also useful to underpin the core indicators with broader indicators such as types of employment (permanent, casual, seasonal and both internal and external migrants), industrial, agricultural or service workforce and the informal to formal economy ratio. 

Legal indicators

This cover, for example, ratification of the fundamental International Labour Organization (ILO) conventions, and labour rights provision in local law, such as the right to organise and bargain collectively. It is important to establish whether there is a national law guaranteeing workers the right to join and form organisations for the protection of workplace interests and setting out trade union and agreement processes.

Legal indicators should also be considered in the context of whether workers can freely choose the trade union or independently elected representation group they join, or whether the state determines the role and activity of the trade union (as is the case in China, for example). Legal indicators typically translate well into and should guide and inform corporate policy, procedures and practice.