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Global labour law update: February 2016

  • United Kingdom
  • Employment law - HR E-Brief


Global unions renew pressure on labour conditions in supply chains
Global trade unions are continuing to work with pressure groups and human rights activists to hold companies to account for labour conditions in their supply chains. Their activities include campaigning for global laws to introduce supply chain legal accountability, as well as applying reputational ‘naming and shaming’ type pressure on individual businesses to change their practices. The current trend for governments around the world to introduce laws or national procurement conditions increasing corporate transparency on supply chains is providing unions with new leverage. For example, the California and UK slavery and trafficking disclosure duties, the US federal anti-trafficking contract conditions and the upcoming EU human risks reporting duty which must be implemented in Member States by early December 2016.

A recent report from ITUC (International Trade Union Confederation) is an example of the pressure that trade unions are applying to global employers and it accuses them of relying on a “massive hidden workforce” in their supply chains. While it does call on national governments to play their role by implementing and enforcing labour standards, ITUC turns its sights on companies and demands greater supply chain transparency. For example, recommending that companies publish with whom they contract. In addition, it wants companies to inspect supplier sites for health and safety risks and end short-term contracts, low pay and barriers to collective bargaining in the supply chain.

Faced with such pressure, global companies will inevitably need to prioritise their response, given that resources are finite and their influence inevitably decreases beyond tier one in their supply chain. The UN Guiding Principles for Business and Human Rights states that businesses, when having to prioritise, should to be guided by the severity of the human rights risks. How companies respond to problems in their supply chains will also by driven by their size, resources, the leverage they can exercise over suppliers, the importance of the supplier (or sub-supplier) and whether terminating a supplier could have knock-on harm to the workers. The more complex the situation, the more companies need to draw on expert advice in deciding how to respond.

Our Geneva conference, on 21-22 June 2016, will consider these issues and how employers are responding with company case studies. Click here for more information on ‘International labour issues - Human rights: ‘soft’ law with hard edges’

Information and consultation duties in the EU: change postponed?
Last summer, the EU Commission consulted the Social Partners (EU level representatives of both sides of industry) on strengthening existing EU legislation on worker information and consultation. Three Directives (the TUPE, collective redundancies and information and consultation of workers Directives) are under scrutiny following an earlier review which highlighted some shortcomings and gaps in the definitions of 'information' and 'consultation' across the Directives. Of particular concern to employers is a proposal to introduce stricter obligations to inform and consult by adopting those definitions found in the EWC Directive. Such a move could result in delays to business restructuring and other business change, as well as the potential for more litigation and an increased risk of leaks of market sensitive confidential information.

The Social Partners objected to the Commission’s consultation, for different reasons. Subsequently, the Commission published its work plan for 2016 and there is no mention of the information and consultation initiative. This might mean that the proposal has been postponed or is being reformulated, due to opposition. However, it should be noted that the Council has stated that “simplification of EU legislation on information and consultation of workers” remains a priority over the next 18 months. As such, it would be premature to assume that the threat of change has gone away. For further information on the Commission’s consultation, read our briefing.

The state of European Works Councils: key statistics
The European Trade Union Institute (ETUI - partly funded by the EU and the research arm of the European Trade Union Confederation) released some statistics on the current state of European Works Councils (EWC). Given that the EU Commission must review the operation of the EWC Directive this year, resulting in inevitable trade union calls to strengthen the content and timing of transnational employee consultation, these statistics will no doubt form part of the debate.

The research suggests that there are currently 1071 active EWCs, with 25 new EWCs being established annually over the last five years. It is interesting to note that 39% of EWCs are so-called Article 13 agreements, meaning that they are some of the oldest, voluntary agreements, operating largely outside the EWC Directive. The overwhelming majority of EWCs have a select committee and less than one in ten have competences extending beyond information and consultation. In 40% of EWCs, representatives of European Trade Union Federations are allowed to attend meetings. One in five EWCs were established in German companies, followed by French and British. There are 151 US companies with EWCs, often choosing Germany or Britain as their legal base. Two thirds of all EWC bodies have a right to paid experts.