Memorandum submitted by TUC
With member unions representing some 6.5 million
working people, the TUC campaigns for a fair deal at work and
for social justice at home in the UK and abroad. The TUC, together
with its member trade unions are affiliated to a range of European,
and international trade union bodies. Together this global trade
union family places respect for human and trade union rights at
the centre of its work, and in particular rights to freedom of
association and collective bargaining.
Guaranteeing fundamental rights for trade unions
and for trade union members benefit workers, the economy and wider
civic society. Through collective bargaining and effective worker
representation trade unions play a central role in reducing inequality
as well as enabling organisations to adapt to increased global
competitive pressures. As the ILO recently concluded in major
study inequality in developed and developing countries: "high
trade union density, a more coordinated collective bargaining
structure, and greater coverage of collective bargaining agreements
tends to be associated with lower inequality".
UK business can play a positive role in providing
decent work in other countries by investing in or sourcing from
them. Yet without a strong set of rules and institutions to balance
the profound inequalities that often exist between UK business
and the host country it operates in, UK business can have a significantly
negative impact on labour rights.
The International Trade Union Confederation's
(ITUC) annual survey on trade union rights extensively documents
workers seeking to defend their rights suffer harassment, discrimination,
intimidation, assault, illegal dismissal, imprisonment and murder.
Examples of the positive and negative impact
of UK business on human rights include respectively:
Under the ILO's "Better Factories"
programme in Cambodia, garment firms were rewarded with better
market access if they could demonstrate improvements in labour
standards. Firms, working with local trade unions, government
and ILO technical experts and supported by major UK brands were
able to record significant improvements in labour standards. The
result has been better wages and better working conditions for
Cambodia's 350,000 mostly female garment workerswages
they have sent home to their families to help them overcome food
shortages. Importantly, it has resulted in a more productive and
Globally, Unilever, whose headguarters
are in the UK, has a deliberate policy of moving much of its global
workforce onto temporary contracts with very poor terms and conditions
of work with labour hire companies. For example, in Pakistan,
Unilever only directly employs 317 workers out of 8000 workers
in its factories. Globally, attempts by such workers to form or
join trade unions in response, have been meet with illegal terminations,
withholding of benefits, lock-outs, assault or reduction in working
hours, as has been extensively documented.3
UK international obligations
The latter actions should be at odds with the
UK's obligations under international law. The UK has ratified
all eight of the fundamental conventions of the ILO on forced
labour, child labour, discrimination and freedom of association
and the right to collective bargaining.4 Further,
it is a signatory to the International Covenant on Economic, Social
and Cultural Rights additionally covering in Article 7, the right
to a living wage, safe and healthy working conditions and reasonable
hours of work. The UK is also a signatory to the European Social
Charter of 1961 which affords protection inter alia for the
right for a fair remuneration sufficient for a decent standard
of living (article 4): the right to organise (article 5); the
right to bargain collectively (article 6(2)); and the right to
strike (article 6(4)). The UK has also ratified the European Convention
on Human Rights, the provisions of which also cover the right
to freedom of association (article 11).
Under international law, the UK has a duty to
comply with human right standards to which it is a signatory and
to protect against human rights abuses by non-state actors, including
UK business. The TUC has expressed repeated concerns that UK law
currently fails to comply with international labour standards
in a number of important respects. As the Committee will be aware,
since 1989 the ILO Committee of Experts has consistently
found that UK trade union laws fail to comply with ILO Convention
87 (on freedom of association and protection of the right
to organise) and ILO Convention 98 (on the right to organise
and bargain collectively).
The view that UK law fails to comply with international human
rights on freedom of association and the right to be bargain collectively
have also been reiterated by the Social Rights Committee of the
Council of Europe (in relation to Article 5 and 6 of
the European Social Charter 1961) and the UN Committee on Economic
Social and Cultural Rights (in relation to Article 8 of the
International Covenant on Economic, Social and Cultural Rights).
In addition, the TUC has serious concerns about
the implications of the recent decisions by the European Court
of Justice in the Viking
and Laval line of cases. It appears that these cases have
placed new restrictions on fundamental rights to freedom of association
and the right to bargain collectively, as well as limiting the
ability of national government to use national legislation and
procurement arrangements to promote social objectives and worker
Impact of state obligations on employers
There are also strong ethical, economic and
political arguments for the UK government (and host country governments)
to hold UK business to account while operating outside the UK.
There is however a limited legal framework for doing so.
States are often unable to apply and enforce
human rights standards. For example, core ILO conventions on Freedom
of Association and Collective Bargaining have been ratified by
148 and 158 member states respectively (out of 181 ILO
member states), yet, as the ITUC's annual survey on trade union
rights documents, these rights are, "subject to massive and
often vicious violations. Evidently, ratification is one thing
and application quite another".
In terms of state capacity, key problems here include chronically
under resourced labour inspectorates and judiciaries, corruption,
state abrogation of responsibility or intimidation.
Secondly, many countries deliberately restrict
the application of such rights, particularly in an effort to attract
investment. Trade unions are effectively banned in export processing
zones in countries such as Honduras, Pakistan, Bangladesh and
Guatemala. Last year, labour legislation was amended to reduce
the application of fundamental rights in Malaysia, El Salvador,
Morocco, and Vietnam.
Bilateral Investment Treaties also restrict the application of
human rights law to companies investing in host states.
Thirdly, the increasingly complex structures
of businesses operating across borders makes it easier for parent
companies to avoid liability for the actions of their subsidiaries
or suppliers. Where legal action does exist eg UK tort law, it
is poorly suited to covering a UK business's complex sphere of
influence and activities presenting potential plaintiffs with
significant practical and legal barriers to commencing proceedings.
International trade agreements that do cover
labour rights have a mixed record. They typically only apply to
states, not firms, and have a limited record in reducing human
rights abuses. For example the EU's GSP+ system awards trade preferences
to states demonstrating adherence to fundamental human rights.
Yet only in the most extreme cases of human rights abuses has
GSP+ status been revoked (Belarus, Burma) while states notorious
for failing to prevent, or being complicit in, the murder of hundreds
of trade unionists (Colombia, Guatemala) were not even investigated
under the recent renewal of preferences. The system could be greatly
The ability to hold company directors to account
for conduct both inside and outside the UK is limited. The legal
duties of company directors have recently been codified for the
first time. Section 172 of the Companies Act 2006 requires
directors to "promote the success of the company for the
benefit of its members as a whole" and in so doing "have
regard" to the long-term impact of decisions, the interests
of the company's employees, supplier and customer relationships,
community and environmental impacts and the company's reputation.
These new duties are mirrored in the reporting requirements in
section 417 of the Act, which include, for quoted companies,
a requirement to report on environmental matters, employees, social
and community issues and supplier relationships.
These new legal requirements are helpful in
setting a general framework for the way in which companies should
carry out their business operations. However, directors' duties
are very difficult to enforce,
so while they provide ammunition for those arguing for higher
corporate standards and should encourage directors to take account
of the impact of their decisions on their stakeholders, they do
not provide a mechanism for holding companies to account for their
actions. The wider reporting requirements are also positive, but
the requirements are not backed up by statutory guidance as to
which elements of information companies should report, so there
is a danger that reports will be inconsistent both with each other
and over time, detracting from comparability. Both the new duties
and the business review reporting requirements would benefit from
being backed up by detailed statutory guidance for companies and
mechanisms for enforcement.
Finally, and most significantly, workers suffering
human rights abuses faceparticularly in low income countriesalmost
impossible barriers to accessing justice.
The responsibility of business to respect core
labour standards should be universal, irrespective of where the
business is operating or how big it is. The standards were drafted
and agreed upon by ILO representatives of employers, government
and employees to be applied universally, irrespective of the country
and its level of development. Special initiatives, guidance or
technical assistance can assist companies understand their human
rights obligations and the impact of its activities eg guidance
for small or medium enterprises, or companies operating in difficult
environments is widely available.
The current climate should strengthen the obligations
of business to protect and promote human rights for several reasons:
Firstly, the drastic contraction of flows of
investment, remittances and trade is having a severe effect on
jobs, incomes and livelihoods globally, particularly for women,
youth, migrants and older persons in low income countries. Recent
ILO projections of working poverty across the world indicate between
2007 and 2009, up to 200 million workers will be added
to those living on less than USD 2 per day. This extreme
poverty both represents sever breaches on labour rights and places
severe pressure on others. This is therefore a powerful moral
argument for business to respect them.
Secondly, respect for fundamental labour rights
can be an important driver of economic recovery. Collective bargaining
and provision of a living wage has a vital role to play in preventing
systemic deflationary spirals by re-inflating the economy and
ensuring a more balanced distribution of the gains from growth
and reducing excessive inequalitiesa key factor behind
Further, the ILO has recently estimated that the "opportunity
cost" of forced labour to the workers affected in terms of
lost earnings is some USD 20 billion.
Finally, there is an emerging international
consensus, voiced by G8 Social Summit in March and endorsed
by the recent London Summit that "the current downturn should
not be taken as a pretext to weaken workers' rights
Stemming out of these meetings is the proposal to include a labour
chapter in the proposed "Merkel Charter" on global business
standards for sustainable developmenta clear global endorsement
of the need for business to strengthen respect for labour rights
in response to the crisis.
To address the foregoing, the TUC firmly supports
realising the three principles of the Ruggie Framework namely:
The duty of states to protect;
That business should respect fundamental
and human rights
That victims of corporate harm should
have effective access to remedies
Given the extent of the gaps in respecting fundamental
labour rights, as identified above, realising this framework will
require pursuing a number of complementary approaches at least
in the medium term. The TUC believes that institutional reform
should have the following aims:
(a) Promoting high standards of conduct for business
organisations in their operations.
(b) Ensuring understanding and buy-in from business
organisations and other relevant actors on the standards that
they are expected to uphold in their operations;
(c) Enforceability of such standards, so that
infringements followed by a refusal to take voluntary corrective
actions lead to sanctions that are appropriate to the infringement
and the size of the company;
(d) Mechanisms for redress for victims of infringements.
The TUC believes that creation, promotion or
strengthening of the following are essential steps towards these
A review of UK labour law and EU law
with a view to ensuring compliance with international labour standards.
The establishment of a UK Commission
on Business, Human Rights and the Environment as proposed by the
Corporate Responsibility (CORE) coalition;
Strengthening the UK National Contact
Point to the OECD Guidelines for Multinational Enterprises and
advocating for the strengthening of the OECD treaty itself during
the mooted 2010 review;
The promotion of effective multi-stakeholder
initiatives such as the Ethical Trading Initiative; and
The promotion of Global Framework Agreements
between Multinational Enterprises and Global Union Federations;
Review of UK labour law and EU laws
In its Report on the International Covenant
on Economic, Social and Cultural Rights,
the Joint Select Committee concluded "The CESCR [Concluding
Observations of the UN Committee on Economic Social and Cultural
Rights] concludes that current law places undue restrictions on
the right to strike, as protected in Article 8 ICESCR. We
consider that the Government should take seriously the successive
findings of the authoritative international bodies overseeing
treaties to which the UK has become party, and should review the
existing law in the light of them." The TUC supports this
conclusions and notes that limited progress has been made in this
area since the Committee reached its conclusions in 2004. We take
the view that the Government should review UK labour law and in
particular the provisions of the Trade Union Labour Relations
(Consolidation) Act 1992 to ensure the proper implementation
of and compliance with international labour law standards.
The recent investigation by the Information
Commissioner's Office in the construction sector has highlighted
the need for introduction of new laws outlawing blacklisting activities
designed to discriminate against trade union members and activists.
The TUC welcomes the recent announcements by the Government that
it will seek to use the powers contained in section 3 of
the Employment Relations Act 1999 to introduce regulations
in this area. We call on the Government to introduce effective
and robust blacklisting regulations which protect fundamental
rights of UK workers to freedom of association.
We also call on the UK to review and address
the implications of recent ECJ judgments on fundamental freedoms,
and in particular rights to freedom of association and the right
to bargain collectively. The TUC supports proposals from the ETUC
for revisions to be made to the EU Posting of Workers Directive
and for the adoption of a Social Progress Clause which would provide
that EU law, including free movement principles contained within
the EU Treaty are interpreted in a manner which respects fundamental
social rights, in particular the right for unions to bargain collectively
and to take industrial action. Where a conflict arises, precedence
should be given to fundamental social rights.
A UK Commission for Business, Human Rights and
The TUC supports the proposal put forward by
the Corporate Responsibility (CORE) Coalition for the government
to create a Commission for Business, Human Rights and the Environment.
It is a compelling and sensible realisation of the framework that
Ruggie proposes. The TUC would welcome being a part of the process
to establish such a Commission.
Rather than repeat the details of the proposal
the TUC makes the following supplementary comments in support
Firstly, the Commission will not be an unfair
cost on UK business: Abusing human rights should never be a competitive
advantage, and there are significant commercial and reputational
advantages in respecting human rights. Aside from failing to address
human rights abuse, the absence of a level playing field created
by such a mechanism could see ethical businesses undermined by
those less ethical.
Secondly, the Commission could play an important
role in strengthening local systems of justice, not undermining
them. Penalties awarded against companies could be used to run
capacity building activities to strengthen local judicial systems.
Such an approach under the labour side agreement of NAFTA was
effective in convincing the Mexican government to outlaw discriminatory
pregnancy testing in workplaces.
The OECD Guidelines on Multinationals
For trade unions, the OECD Guidelines for Multinational
Enterprises are an important soft law instrument in holding companies
to account, especially as most complaints under the guidelines
concern alleged breaches of chapter IVEmployment and Industrial
Relations of the guidelines.
Recent reforms to the UK's National Contact Point (NCP) to the
Guidelines such as increased staffing, an oversight body with
external representative, and the use of independent professional
mediators have increased its effectiveness and are welcomed by
trade unions. The reformed NCP played an important role in encouraging
global security firm G4S to sign a global framework agreement
with the Global Union Federation UNI to respect core labour standards
in the 112 countries where it operates.
However significant shortfalls remain. The capacity
of the NCP to investigate complaints is still weak. The NCP is
unable to compensate victims or penalise companies breaching the
Guidelines, enabling companies such as Unilever, currently facing
four complaints, to unreasonably delay the process, or in the
case of Afrimex, to completely ignore the NCP finding that it
breached the Guidelines. The Guidelines also have a very low profile.
These weaknesses explain the very low usage of the Guidelines
globally: since their revision in 2000, each of the 40 NCPs
has received on average only one complaint every 16 months.
The TUC recommends that the UK government:
Increase the level of resources for the
NCP to allow it to better investigate complaints.
Develop a system to penalise companies
failing to remedy breaches of the Guidelines; perhaps through
withdrawal of subsidies or export credits; placing companies under
supervision, requiring them to report this fact to shareholders
or referral to the Companies Investigation Branch of BERR.
At the mooted 2010 review of the
OECD guidelines advocate for amendment of the Guidelines to adopt
the Ruggie Framework.
Better promote the guidelines to UK business.
The Ethical Trading Initiative and other voluntary
The Ethical Trading Initiative is an important
multi-stakeholder body enabling UK companies working with trade
unions and NGOs, to better understand how decisions they make
can negatively impact on workers' rights in their global supply
chains, and then set about improving respect for workers rights.
Even seemingly benign decisions of a UK business can profoundly
undermine respect for core labour standards in ways not immediately
obvious. For example, a UK company placing a high volume order
with a tight turnaround time with a supplier in a low income country
often forces the supplier to implement excessive overtime or lock-ins,
pay wages well below the absolute poverty line, suppress workers'
attempts to organising, or even to use forced or child labour.
An impact study on the effectiveness of ETI
found that progress on improving health and safety, working hours
and wages was made but that discrimination, harassment, and restrictions
on freedom of association remained serious problems.
A core conclusion of the study is that a strong legal framework
for respecting freedom of association is essential to making any
progress on improving respect for labour standards, especially
in allowing workers to monitor and work with management to remedy
any breaches. Therefore, the ETI model remains an important complement
to a bigger framework on rights but it is certainly no substitute
This conclusion is shared by a comprehensive
survey of the effectiveness of mechanisms in trade agreements
to improve labour standards, where the author concludes that it
is the "combination of negative and positive incentives that
are more likely to change firm behaviour than purely informative
or voluntary activities".
UK government guidance to business on respecting
human rights is limited and piecemeal, consisting largely of different
government departments supporting a range of voluntary initiatives.
For example, BERR's recent report on corporate responsibility
lists a range of such initiatives but there is no evidence of
their reach or effectiveness.
Many such initiatives lack credibility, a conclusion shared by
the overwhelming majority of UK "elites" in a recent
The TUC recommends to the UK government to:
Conduct research into the reach of such
initiatives and their effectiveness in driving respect for human
rights; with a view to providing positive incentives to UK business
to become members of multi-stakeholder initiatives that can demonstrate
improvements in respect for human and labour rights;
Task a specific government body with
developing and coordinating a cross-Whitehall approach on business
and human rights;
Run awareness-raising activities for
UK business eg mandatory in-country inductions for UK business
when establishing operations there.
Global Framework Agreements
Underpinning the operation of health and safe
workplaces, free from harassment or discrimination, with a skillful
and productive workforce working reasonably hours for fair wages
is the ability of workers themselves to advocate for them. Freedom
of association is therefore the foundation upon which respect
for all other labour rights rests.
The UK government could play a stronger role
in promoting freedom of association globally, particularly in
the areas that Prof. John Ruggie describes as facing "governance
gaps". It can do so by promoting Global Framework Agreements.
These are instruments negotiated between a multinational enterprise
and a Global Union Federation (GUF) to establish an ongoing relationship
between the parties and ensure that the company respects the same
core labour standards in all the countries where it operates.
There are at least 60 agreements currently.
The TUC recommends that the UK government:
Explore the effectiveness of the Norwegian
in encouraging its companies to enter into global framework agreements
with global union federations with a view to enacting this approach
548 ILO (2008) World of Work Report: Income Inequality
in the age of financial gloablisation Back
ITUC Annual Survey of Violations of Trade Union Rights (2008) Back
See the report by FNV Mondiaal (2009) Adding Insecurity to
Life available at
The Core ILO conventions include: Forced Labour (no.29); Freedom
of Association and Protection of the Right to Organize (no. 87);
Right to Organize and Collective Bargaining 1949 (No.98);
Equal remuneration (No.100); Abolition of Forced Labour (No. 105):
Discrimination (Employment and Occupation) (No.111); Minimum Age
Convention (No.138); and Elimination of the Worst Forms of Child
Labour (No. 182) Back
For the ILO Committee of Expert's most recent observations see
C 438/05 IFF and FSU v Viking Line  IRLR 143 Back
This is despite all ILO member states committing to respect,
promote and realise core labour standards under the ILO Declaration
on Fundamental Principles and Rights at Work 1998. Back
ITUC (2008) Annual Survey of Violations of Trade Union Rights,
ITUC Ibid. Back
Directors' duties can only be enforced by shareholders and such
actions are very rare. Back
ILO (2009), The financial and economic crisis: A Decent Work
Response pg.53 Back
ILO (2009) The cost of coercion: Global Report under the follow-up
to the ILO Declaration on Fundamental Principles and Rights at
Work 2009. Back
G8 Social Summit: People first: Tackling the human dimension
of the crisis: http://www.g8italia2009.it/static/G8_Allegato/conclusioni_ENG.pdf Back
Joint Committee on Human Rights (2004) The International Covenant
on Economic, Social and Cultural Rights: Twenty-first Report
of Session 2003-04. Back
CORE (2008), Filling the Gap: A new body to investigate, sanction
and provide remedies for abuses committed by companies abroad,
available at: http://www.corporat.e-responsibility.org/module_images/Filling%20the%20Gap_dec08.pdf Back
Polaski, Sandra, "Protecting Labor Rights through Trade Agreements:
An analytical guide", Journal of International Law and
Policy 14 J 2004, pg.24 Back
OECD (2008) Annual Report on the OECD Guidelines, p.21 Back
Calculated from Ibid, p.21 Back
Ethical Trading Initiative (2006) The ETI code of labour practice:
do workers really benefit? Back
Polaski Ibid. Back
73% of respondents to a recent UK poll on Multinational Companies
and international development thought that companies only invested
in such initiatives to deflect criticism of their business practices.
Multinational Companies Poll, PSB and Foreign Policy Centre, 19 May
See for example:
Although not yet available in English, the Norwegian Government's
newly launch strategy on business and human rights should be considered
by the Joint Committee: http://www.regjeringen.no/pages/2146192/PDFS/STM200820090010000DDDPDFS.pdf Back