Examination of Witnesses (Questions 220
TUESDAY 30 JUNE 2009
CMG AND STEVE
Q220 Earl of Onslow: You would say
"This is the cloth, we want you to stitch it into a shirt
and we will buy it from Mr So-and-So in Knightsbridge".
Mr Lister: Yes. Your shirt, for
instance, we would buy the cloth in X, we would give the cloth
to the supplier whom we had contracted to make the shirt and the
same with the buttons and all the rest of it. So we are doing
the contracting to make sure the standard of the cloth is up to
our standards as opposed to getting the supplier to source that.
In the case where the supplier does do it, we look very carefully
at what the supplier is doing and how it is doing because, again,
it goes to the very fabric of the garment.
Ms Neville-Rolfe: May I just add
that I agree with a lot of those things? You ought to check before
you start the business and we have a code of practice which we
give to new suppliers so they know what our expectations are.
We have the buyer training, we have the audits, we have the supplier
training and then we have the independent element. We have 726
independent auditors as well as our own technical people in our
supply chain and then we try to change the culture of the supply
chain, which helps you with the buttons and the cotton. We try
to work with the suppliers so they understand that ethical is
important, so that they in turn are going to trade ethically.
The NGOs can also play a part. In Costa Rica we worked with Banana
Link and the unions to try to make sure they understood about
ethics. In South Africa we have a special group to help us with
both the women who work on fruit farms and the issues of ethical
trading there. It is not just the audit, it has to be a joined-up
process and in a sense you are going to get problems because you
will have a weak link somewhere with so many transactions. Then
you have to put it right and I agree very much with Paul that
the improvement plan is the important thing.
Q221 Chairman: Can we go back to
something Paul said earlier on in response to a question from
me? You said that somebodyI think it was the reporterhad
been coached to lie to the auditors. Presumably if the reporter
had been, then other people in the factory had been as well; that
would probably follow. So how can you be sure that the information
you are getting is accurate? How can you rely on it?
Mr Lister: If for a minute you
just ignore the Manchester example, the idea behind the audit
and what we instruct the auditor to do is to take out a sample
of the employees, take them outside the factory and talk to them
independently outside of management hearing, outside of management
influence. In that way you try to understand what is really going
on within the factory. There is a decent sample of employees within
any factory who are spoken to and you would expect at some stage
that you would begin to see whether there had been coaching. To
go back to your specific example of coaching in Manchester, the
programme came very quickly after the audit so that gap was too
close to understand whether there was coaching going on or not.
It was just the timing.
Q222 Chairman: The sequence was the
audit before the TV programme, was it not?
Mr Lister: Yes.
Q223 Chairman: Did the audit give
them a clean bill of health?
Mr Lister: No, it did not. The
first audit in April did not give them a clean bill of health
and there were issues to work on. The second audit in December
did not give them a clean bill of health; again there were issues
to work on. It is fair to say that the audit did not pick up all
of the issues that the programme picked up and have subsequently
been picked up with everybody looking at this Manchester factory.
Would it have picked them up over time? I think it may have taken
two or three more audits of that factory, which is extremely frustrating,
but you keep going back going for continuous improvement within
the factory to ensure that actually the issues you are auditing
against are ultimately met and they then get a clean bill of health.
Q224 Lord Dubs: My question is about
Tesco. A few weeks ago we had a session with trade unions where
we focused on the importance of right to freedom of association
for the purposes of securing human rights. In your Corporate Social
Responsibility Report for 2009 you say that "Employees across
our business are free to join unions, and we have an industry
leading partnership agreement with Solidarity in Poland and Usdaw
in the UK". What do you think are the benefits of having
a unionised workforce?
Ms Neville-Rolfe: If we talk about
the UK example, we have had a business for nearly 80 years in
the UK and we have been unionised for about half of that. We work
with the unions in the stores, when we put our induction packs
out they recruit and they work with us on training, they work
with us on health and safety, have consultation machinery which
they are involved with and they wanted Tesco to grow, helped us
with that whole growth piece over a long period. Similarly in
some of the other countries in which we operate: You highlighted
the Solidarity arrangement in Poland, which obviously is much
less longstanding as our international business is 15 years' old.
Q225 Lord Dubs: That being the case,
I wonder whether you can comment on the following. You have set
up a chain of stores in California and Nevada, have you not?
Ms Neville-Rolfe: Yes.
Q226 Lord Dubs: Why is it that your
approach to trade union membership there is not as enlightenedif
I may put it that wayas you have just described it is in
the UK and indeed in Poland?
Ms Neville-Rolfe: I would emphasise
that staff are free to join a trade union and to freedom of association.
What we found in the Fresh n' Easy business is that staff do not
want to join a trade union; trade-unionism is not quite the same
in the States. Some of our competitors, Trader Joe's, Whole Foods,
Walmart, are not unionised as it happens. We have a very good
pay and benefit package. It is a convenience business, so they
are small stores not big box stores in the United States. There
is a very supportive culture. We have our best figures on staff
motivation and satisfaction in that business of all our businesses;
90 per cent figures. They have not wanted to become union members.
Obviously there have been some steps by groups which I know have
given evidence to you who are looking for support to extend trade
unionism in that context, but it is early. We have been there
a couple of years and the staff do not want to join the trade
unions. They like the consultation mechanisms we set up within
Q227 Lord Dubs: Our difficulty of
course is that we hear one side from you and we hear another side
from them and we did meet the United Food and Commercial Workers
Union in the United States. I do not think they would agree with
you. They even said that some of the people who worked for you
were frightened to talk to us. We are getting two different views.
I just wonder how we can arrive at what your company's policy
Ms Neville-Rolfe: Our policy is
to support free association. The trade unions in the United States
have not come along in a collaborative and constructive way in
quite the way I described for Usdaw. They have followed our staff
home to try to get them to join the union in circumstances where
they do not want to join. It is a different circumstance out there
to be honest.
Q228 Lord Dubs: In that case, would
you be willing to look into this just to see. It is very difficult
for us to get totally diametrically opposed views. I am not saying
we have any evidence to support one way or the other. We have
heard what you have to say and we heard what they had to say.
Would you be prepared to look into that for us?
Ms Neville-Rolfe: I am grateful
to you for listening and certainly we will give you a further
Q229 Chairman: May I pursue this
a little further because we did not just meet the union, we met
some of your employees there? You have described the union following
people home; well that may or may not be the case. However, is
it not a fact that the union is not allowed to do anything at
all inside your shops, they are not allowed to talk about the
union, if they are they will be subject to disciplinary action?
There is no question of any form of recruitment anywhere in the
shops at all. People have been subjected to what I can only describe
as union-busting activities where assistant managers are bussed
into a shop with only one or two employees in it. We heard stories
of four or five assistant managers being bussed in to this particular
shop to keep an eye on what was going on. Generally a very intimidatory
atmosphere. We also heard complaints of your staff attempting
to use the open-door policy to come in and make a particular complaint
about their pay being underweight for the particular period concerned
and it not being resolved. They go to the union and the union
tries to resolve it for them. The fact is that I understand Mr
Obama actually wrote to Sir Terry Leahy asking whether he would
actually meet the United Food and Commercial Workers Union to
discuss these issues yet there has been no reply, there has been
no effort by the management to meet the union at all. That is
completely contrary to what Tesco's union representation is in
the UK. Why are you adopting this much more aggressive anti-union
approach in the US compared to the UK, particularly bearing in
mind that some 70 per cent of retail workers in California, Arizona,
Nevada are unionised?
Ms Neville-Rolfe: A series of
these points has been raised with us and obviously I will look
at the transcript and at the points you have raised to check those
are the ones we have previously checked. When we have looked into
them, they have not been true. Sir Terry did reply to President
Obama and obviously I can ask him whether he would be happy to
share the reply to that letter with you and explain the circumstances
that we find ourselves in and the way that our staff have reacted.
Individuals are entirely entitled to join unions; that is part
of the protocols we have been discussing here today and I want
to emphasise that.
Q230 Chairman: They certainly did
not give that impression to us. That may be your formal policy,
but it is quite clear they were being frightened off as the only
way to describe it. I met personally and spoke to two young women
who were working for you. I have no reason to doubt their truthfulness.
They tell their stories very clearly, very cogently, answered
our questions. I have no reason to believe they were making it
up. I think they were being entirely truthful. You can argue about
what the union officials may or may not have said and put their
gloss on it, but these were two ordinary shopfloor workers, the
sort of people you see in the supermarkets in the UK, who wanted
to join the union to be represented, to make sure they get a fair
crack of the whip and they were being subjected to what I can
only describe as union-busting practices.
Ms Neville-Rolfe: I can assure
you that they are entitled to join the union. I can say that clearly.
Also, when individual things have been stated and the union concerned
has actually put out some material in the UK as well, they have
a lobbying company here, some of the material in that is not accurate.
They say it is only 60 hours paid part time off, for both sickness
and holiday and it is actually 160 hours or more which is actually
Q231 Chairman: Was the union allowed
to recruit in your stores?
Ms Neville-Rolfe: They are outside
our stores some of the time.
Q232 Chairman: Are they allowed to
recruit in your stores like they would be in the UK?
Ms Neville-Rolfe: The staff are
allowed to join a union and it is entirely up to them.
Q233 Chairman: Can one member say
to another member of staff "I'm a member of a trade union.
Here's a membership card" inside your stores like they could
in the UK?
Ms Neville-Rolfe: I do not think
the card system works in quite the same way in the US.
Q234 Earl of Onslow: With the greatest
respect, you were asked a very, very, very simple question. Are
they allowed to recruit inside your stores or not? I have noticed
that you have been dodging. You may think it slightly odd for
an hereditary peer on the right of the Conservative Party to suddenly
be taking a pro-trade unions attitude but this is because I would
quite like an answer.
Ms Neville-Rolfe: Individuals
are allowed to join the union.
Earl of Onslow: That was not the question.
Q235 Chairman: You made a criticism
earlier on about unions following people home to recruit. It is
probably not surprising that the union tries to follow people
home to recruit new staff, if that is what they are doing, if
they are not allowed to recruit on the shopfloor like they can
in the UK. Are they or are they not allowed to recruit inside
the shops in the US or not? A simple question.
Ms Neville-Rolfe: I would prefer
to come back to you on that detailed issue to make absolutely
sure I am not misleading the Committee in any way. What I can
state absolutely clearly and we have said again and again is that
there is a right of association but that the approach the unions
have taken has been different in the United States to the one
we have been used to in other places, including the UK. They seem
to be trying to use discussions outside the US to push forward
the trade-unionism in the US.
Q236 Chairman: It is perhaps not
surprising, if your management in the US will not meet with the
union, that they come and raise issues with us and other people
in the UK to raise with you if you will not talk to them. Here
you are talking to us about it. Will your company meet the union,
will the American management meet the American union, to discuss
these issues with them?
Ms Neville-Rolfe: We are very
happy to meet our staff.
Q237 Chairman: Will you meet the
Ms Neville-Rolfe: I think my colleagues
in Fresh n' Easy have not had a collective meeting with the union.
There has not been evidence of individual staff
Q238 Chairman: That is a given. We
know they have not met the union because you have said so and
they told us so. That is agreed. The question I am asking you
now is whether you willnot you personally, your management
in the United Statesmeet the union to discuss your mutual
concerns about each other and try to reach an accommodation which
is to everybody's benefit, in particular your staff's benefit?
Ms Neville-Rolfe: I think our
staff have made quite clear what they think is to their benefit.
I am in touch regularly with the management in the United States.
I will talk to them about the exchanges we have had. I can assure
you that we are trying to do our best for our staff there but
they so far have not chosen to join the union.
Q239 Chairman: The ones we met had
and they were not being given an easy time as a result.
Ms Neville-Rolfe: Obviously if
you can give me any details in relation to them in an appropriately