France: Globalization of Human Resources in Times of Economic Uncertainty and Political Turmoil

Last Updated: 5 February 2002
Article by Patrick Thiebart

A. INTRODUCTION

As communication technologies and trade become increasingly international and as expatriate employment becomes more common, more companies recognize the need to become "global" and are re-engineering their entire business structures to that end.

This global growth and expansion of business has led multinational companies, under the pressure of trade unions, non-governmental organizations and consumers which are campaigning for international action against labor rights violations, to adopt ethical guidelines and voluntary workplace codes of conduct in order to maintain minimum labor standards in their subsidiaries all over the world.

Some multinational companies have even created workplace codes of conduct applicable to their vendors, licensees and suppliers and more generally to their contractors and business partners. Among these companies are Nestle, Adidas and Levi Strauss. For instance, Levi Strauss imposes penalties on contractors who violate its Global Sourcing and Operating Guidelines. If it determines that a business partner has violated the Guidelines, Levi Strauss may withdraw production from the partner’s factory, terminate the business relationship, or require the contractor to implement a corrective action plan.

Deplorable working conditions and unfair trade practices are still common in developing countries where goods are produced to be sold under well-known labels in the US, Europe and other consumer countries. However, there is no need to go to a developing country to be involved in unfair practices like bribery: the investigation of the International Olympic Committee’s actions in Salt Lake City is a reminder that bribery may also exist in the USA.

B. MAIN TOPICS COVERED BY INTERNATIONAL CODES OF CONDUCT

Generally, codes of conduct cover the following four main area:

  • freedom of association and the effective recognition of the right to collective bargaining;
  • the elimination of all forms of forced and compulsory labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise;
  • the effective abolition of child labor;
  • the elimination of discrimination in respect of employment and occupation: no person should be subject to any discrimination in employment, including hiring, salary, benefits, advancement, discipline, termination or retirement on the basis of gender, race, religion, age, disability, sexual orientation, nationality, political opinion or social or ethnic origin.

C. DO CODES OF CONDUCT REALLY MAKE A DIFFERENCE?

Adopting a code of conduct is increasingly perceived by multinational companies as necessary or appropriate for the following reasons:

  • to be seen socially responsible;
  • to enhance the company’s reputation by demonstrating, for example, integrity and other values which are seen to match the organization’s business;
  • to give guidelines to employees and business partners on what conduct is acceptable and what is not;
  • to proceed with the global integration by establishing a global branding or image acceptable across the world.

D. ARE INTERNATIONAL CODES OF CONDUCT ENFORCEABLE ?

1) Is there such a thing as an effective international code of conduct ?

Critics have argued that there are simply too many legal and cultural obstacles to implementing and enforcing a viable and consistent set of uniform global employment policies and practices. Furthermore, senior executives and shareholders generally are far less interested in social and ethical issues than in bottom-line financial information such as earnings and cash flows.

No one can deny that employment laws in the international arena may differ significantly according to the legal, social, political and economic forces in each country. Indeed, while employment relationships in the US are governed by private arrangements, which are voluntarily, entered into between employers and employees, they generally consist in other industrialized countries in a comprehensive and paternalistic set of legal rules whose main purpose is to protect employees in their subordinate relations vis-à-vis their employers. As a result, most employment laws in industrialized countries and in particular in Western Europe are more employee-friendly than US employment law (including California law) and tend to regulate the employment relationship far more intrusively than does the US.

However, codes of conduct may rely upon some employment doctrines emerging from global bodies such as the World Trade Organization, the International Labor Organization, the Organization for Economic Cooperation and Development and some regional trade regulations. The World Trade Organization (W.T.O.) has been discussing enshrining labor rights to trading agreements and treaties, and the World Bank is proposing to tie loans to compliance with minimum standards.

2) The I.L.O and its initiatives relating to global codes of conduct

There are initiatives from the International Labor Organization with respect to international corporate compliance programs.

Even if the ILO does not have any enforcement powers, it is an international body, which is able, by its constant pressure, to create an influence over countries not dealing in a democratic way in matters regarding workers and exposing children to hard labor. The ILO is also an important factor in the industrialized countries where the various ILO Conventions are being a significant tool in the structure of the labor force and their rights and duties (e.g. ILO Conventions 29 and 105 on forced and bonded labour; ILO Convention 87 on freedom of association; ILO Convention 182 on worst forms of child labour).

As a result, no country that is a member of ILO is keen to be pointed out as not complying with its conventions.

The key international labor standards are the core ILO standards through various programs aimed at promoting certain projects (e.g. the project on prevention of child labor which is including the prevention of slavery and prostitution). Since 1995, the International Labor Organization has been seeking to encourage as many countries as possible to sign "core" conventions of the ILO, including those relating to:

  • the right of freedom of association;
  • the right to organize and bargaining collectively;
  • the abolition of forced labor;
  • the respect of the minimum employment age regarding child labor;
  • equal pay for work of equal value; and
  • non-discrimination in employment.

In June 1998, the ILO issued its Declaration on Fundamental Principles and Rights at Work in order to promote the fundamental rights of freedom of association and right to collective bargaining, elimination of all forms of forced labor, effective abolition of child labor and the elimination of employment discrimination.

3) International trade union movement

Guidance on the international labor standards can also be seen in the "Basic Code of Conduct covering Labor Practices", which was adopted by the executive board of the International Conference of Free Trade Unions (ICFTU) in Brussels in December 1997 - by far the most representative existing global trade union - and the International Trade Secretariat (ITS).

4) The Social Accountability 8000 standard

There is a uniform independent method to measure and certify the integrity of global workplace codes of conduct – the Social Accountability 8000 standard ("SA 8000"). This standard provides a means for companies and consumers to ensure that the policy and practices of the companies whose goods they purchase meet minimum labor standards.

5) The O.E.C.D. Guidelines

The Organization for Economic Cooperation and Development has issued Guidelines for Multinational Enterprises whereby O.E.C.D. member-states are expected to recommend that multinational headquartered in their countries consider voluntarily adoption and compliance with recommended international labor standards (e.g. right to free association and collective bargaining, non-discrimination and commitment to employee training and development …).

More particularly, under the O.E.C.D. Guidelines, companies should:

  • respect the right of their employees to be represented by trade unions and other bona fide organizations and engage in constructive negotiations with them on employment conditions;
  • observe standards of employment and industrial relations not less favorable than those observed by comparable employers in the host country
  • implement their employment policies including hiring, discharge, pay, promotion and training without discrimination unless selectivity in respect of employee characteristics is in furtherance of established governmental policies which specifically promote greater equality of employment opportunity.

Even though the Guidelines are voluntary and, consequently, not legally enforceable, the O.E.C.D. Guidelines have proven, in the two decades of their existence, to be a respected point of reference for a great number of companies. Furthermore, they carry the weight of a joint Recommendation of O.E.C.D. governments. In addition, their language has influenced considerably the other codes of conduct for multinational enterprises, such as the ILO Tripartite Declaration and the Code of Conduct for Transnational Corporations of the United Nations.

The Office of Investment Affairs of the US State Department is responsible for encouraging compliance with the O.E.C.D. Guidelines.

6) Codes of conduct and Human Rights

In 1999, the United Nations issued a Global Compact consisting of nine principles covering human rights and the environment.

Furthermore, regional Human Rights Conventions (e.g. the European Convention on Human Rights of 1950, the American Convention on Human Rights of 1969 and the African Charter on Human and Peoples’ Rights of 1981) provide for the practical implementation of the principles set out more generally in the Universal Declaration of Human Rights, which covers social but also economic, cultural, as well as civil and political rights.

7) Global labor standards issued by business and industry associations

Interestingly, in a number of industries, there has been an agreement on a code of conduct. IN the E.U., the most notable so far is that reached in the textile industry between the European partners in this sector.

Outside Europe, a number of business and industry associations also have issued global labor standards. Among these are the American Chamber of Commerce in Hong Kong and the Fair Labor Association.

In 1997, the members of the Apparel Industry Partnership (A.I.P.) have created the Workplace Code of Conduct and Principles of Monitoring. To achieve the objective of establishing a means to provide the public with confidence about implementation of the Workplace Code and the Monitoring Principles, the members of the A.I.P. set forth a charter for the formation of a Fair Labor Association with the following purposes:

  • to accredit independent external monitors to conduct independent external monitoring and inspections of the facilities of the participating companies;
  • to certify whether the brands of each participating company are produced in compliance with the Fair Labor Association Standards;

E. The limit of the enforceability of international codes of conduct:

There are some standards that cannot be uniformly applied to all countries because not all countries are rich enough and sufficiently developed to apply them. This is, for instance, the case of the following standards:

  • minimum safe and healthy working environment to prevent accidents and injury to health;
  • wages and benefits;
  • working time and compensation for overtime hours.

In other words, standards must be variable, appropriate to a country’s stage of development. For example, considering a fixed minimum wage that would be applicable around the world is just an illusion. A more useful approach might be to request that wages and benefit levels be equal to minimum local law requirements or the local prevailing industry wage, whichever is higher.

In any event, harmonizing the social policies of countries within the same free trade area is a condition precedent to the implementation of codes of conduct incorporating sophisticated labor standards such as wages and benefits, working time and compensation for overtime hours.

Currently, the North American Free Trade Agreement and the European Union are the two most significant multi-jurisdictional bodies which produce labor standards. The U.S. and the European Union have each recommended core labor standards for adoption by multinational corporations.

More particularly, in 1996, the US Department of Commerce issued the US Model Business Principles in order to encourage companies to develop through codes of conduct a corporate culture that:

  • respects free expression consistent with legitimate business concerns, and does not condone political coercion in the workplace;
  • encourages good corporate citizenship and makes a positive contribution to the communities in which the company operates, and where ethical conduct is recognized, valued and exemplified by all employees.

Adoption of codes of conduct reflecting these principles is voluntary in the US Model Business Principles.

On December 7, 2000, the European Parliament issued the Charter of Fundamental Rights of the European Union, which lists the civil, political, economic and social rights of European citizens and all persons residing in the European Union.

However, it is undoubtedly easier to implement labor codes of conduct incorporating sophisticated labor standards in the European Union than in the NAFTA area. The reason for this is that, contrary to NAFTA, the E.U. is more than an agreement on free trade among its member states. It creates a single market for goods and services within the Union’s entire territory, which means that no single European state’s employment laws can be allowed to impede free movement of goods and services within Europe such as the free movement of workers guaranteed by Article 48 of the E.U. Treaty.

However, because of the reluctance of the some member states (e.g. the United Kingdom) to allow Brussels to extensively regulate social matters, because also employment initiatives have for long parts of the EU’s history required a unanimous vote of EU member states for approval, and because employment issues remain a political "hot button", the EU had only furthered its employment agenda in earnest since the mid-1990’s.

If the European Union gives rise to a significant area of international employment law practice since the mid-1990’s, this is not the case so far for NAFTA.

When NAFTA was being negotiated, US organized labor and US workers’ rights groups argued that if the North American countries were to enjoy free trade, Mexico should first have to raise its "labor standards" up to the standards of US law as it had a competitive advantage by employing workers under "lower standards". This US request has not been successful as it finally appeared that Mexico had ratified many more of the ILO conventions than had the US, and Mexico overall had a far stronger legislative record than did the US.

Therefore, under the NAFTA’s labor side agreement i.e. the North American Agreement on Labor Cooperation (NAALC), no NAFTA country has been forced to undergo any significant initiative to change its employment law enforcement mechanisms.

Essentially, the NAALC establishes a set of substantive labor principles to guide the development of domestic legislation (e.g. protection of workers in association and organization, the right to strike to protect collective interests, the prohibition on the use of forced labor, labor protections for children and young workers, the adoption of occupational health and safety standards …). It also erects a framework for extensive trilateral oversight of enforcement practices within each signatory country. However, the Side Agreement does not create any particular worker rights under domestic law. Nor does it provide sanctions to remedy violations of workers rights enumerated in the underlying Treaty.

F. Ingredients to create an effective code of conducts:

Global codes of conduct must:

  • establish clear and written workplace standards;
  • develop a questionnaire to verify and qualify compliance with the workplace standards;
  • formally convey those standards to company’s subsidiaries as well as to licensees, contractors and suppliers;
  • require local manager and contractors and suppliers to complete and submit the questionnaire to the company on a regular basis;
  • receive written certifications on a regular basis from subsidiaries as well as contractors and suppliers that standards are being met, and that employees have been informed about the standards;
  • obtain written agreement to subsidiaries and contractors and suppliers to submit to periodic inspections and audits, including by accredited external monitors, for compliance with workplace standards;
  • have company’s monitors conduct periodic audits of production records and practices of wage, hour, payroll and other employee records and practices of company factories and contractor and suppliers;
  • ensure that all subsidiaries as well as contractors and suppliers inform their employees about the workplace standards orally and through the posting of standards in a prominent place (in the local languages spoken by employees and managers) and undertake efforts to educate employees about the standards on a regular basis: in practice, many codes of conduct are not communicated properly to employees;
  • provide training on a regular basis about the workplace standards and applicable local and international law, as well as about effective monitoring practices so as to enable company monitors to be able to assess compliance with the standards;
  • have trained company monitors conduct periodic announced and unannounced visits to an appropriate sampling of company factories and facilities of contractors and suppliers to assess compliance with the workplace standards;
  • develop a secure communications channel, in a manner appropriate to the culture and situation, to enable company employees and employees of contractors and suppliers to report to the company on noncompliance with the workplace standards with security that they shall not be punished or prejudiced for doing so;
  • consult periodically with legally constituted unions representing employees at the worksite regarding the monitoring process and utilize, where company deem appropriate, the input of such unions;
  • assure that implementation of monitoring is consistent with applicable collective bargaining agreements;
  • work with local managers, contractors and suppliers to correct instances of noncompliance with the workplace standards promptly as they are discovered and to take steps to ensure that such instances do not recur conditions future business with contractors and suppliers upon compliance with the standards.

G. CONCLUSION

An international code of conduct that is thoughtfully designed and carefully enforced can be very influential in creating a more ethical atmosphere and deterring corporate misconducts globally. As a result, these codes are viewed by many companies as a part of an ongoing educational and informational program vis-à-vis their employees and business partners.

At a time when the U.N. Secretary General urges multinational companies to adopt international compliance programs at the World Economic Forum in Davos, arguing that codes of conduct may be legally and culturally specific and lack global impact is no longer true as there are now various models of global codes of conduct emerging from international organizations, which are respected points of reference for a great number of companies. Needless to say, codes of conduct can only be effectively developed when counsel has a firm grasp of the local law in relevant substantive areas. This may require retaining local counsel to assure that local law is being observed.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions