FWUMThis article proposes the creation of a new international sustainability standard certifying that wages and working conditions are set through ongoing processes of good faith collective bargaining. Businesses and unions that comply with the standard will be entitled to apply the ‘Fair Work: Union Made’ label to their products and services. The authors argue that while such a voluntary standard cannot substitute for robust collective and individual labour law, it is likely to be an effective means of promoting collective industrial relations.

If you are interested in being part of a small team to take this idea further, please contact communications@newunionism.net.

Voluntary sustainability standards

‘Voluntary sustainability standards’ (VSS) are sets of rules about business behaviour and production processes that lead to the award of social and environmental labels. Among the best-known types of label are those that certify that what you are buying is the product of organic agriculture or fair trade, but there are other labels that certify everything from the absence of child labour in your carpet, to the environmentally responsible management of the forests your floorboards came from, to the fact that mining the diamonds in your ring did not put money into the treasuries of oppressive regimes.

As distinct from public regulation on, for example, safety, quality or packaging, businesses are not obliged to conform with this private regulation in order to be allowed to sell their products. However, there are certain advantages that arise from putting in the effort required to show that some voluntary standard has been respected. It’s the incentive that comes from these advantages rather than the sanction that comes from breaking the law that leads organizations to follow the rules. Signing up to a VSS potentially has two types of advantage. On the one hand, conforming with the requirements of a social or environmental label can in some cases be accepted as evidence that products are in conformity with (less restrictive) legal regulation, or gives businesses or products exemption from certain tests or certifications. On the other, sustainability labels can bring a price premium or marketing advantage in cases where consumers are prepared to pay a little more for goods they believe to be the result of more ethical or sustainable business relationships and production processes.

Labelling work and production processes

A great many VSS include provisions about work and labour, but the idea that products and services should be labelled as having been produced by a certain group of workers who go about their work in a certain way which is desirable from some standpoint like quality or ethics or authenticity is certainly not a new idea. Since at least medieval times, craft workers like stonecutters and carpenters have marked their work to certify that it was produced within the rules of the trade. The idea that labels should be applied to products to show that they were made in unionised workplaces is at least 150 years old, as Kim Munson shows here. Union labelling might even qualify as the very earliest form of sustainability standard.

The AFL-CIO in the USA has been one of the strongest proponents of union labelling, with an entire department dedicated to promoting the practice. In the US tradition, the ‘Union Made’ label certifies that the employer recognises a particular union as representative of its employees and that each side participates in good faith in collective bargaining. It is the union in question that applies the label or stamp and it is the name of that union that features on the label. Unlike most current sustainability standards, the US style union label does not certify compliance with a substantive list of requirements, but certifies instead that labour practices in the enterprise concerned have been agreed between the employer and the union. Hence the label is a procedural guarantee and as such leaves everyone involved with considerably more flexibility to tailor the detail of labour practices to suit the needs of the particular national and sectoral context. Not only this, but the union label gets around one of the most difficult and controversial problems with existing sustainability labels, the problem of verifying compliance. Labels are often accused of being little more than window dressing in which standards of truth and accuracy are those of marketing and PR departments. Union labelling is different because what it certifies is not that some commercial social auditing company visits a business with a checklist once a year, but that workers are involved in agreeing and supervising labour standards every day of the week.

Up to now union labeling has been an overwhelmingly north American practice and it currently has little traction elsewhere in the world. What is more, in the USA it is strongly associated with the idea of ‘buying American’ and is not used to certify imported products. Rolling out the union labeling concept to a global market would therefore require some significant changes. Nevertheless, the basic concept of an international union made label is appropriate and timely, and we want to propose that it go by the title of the ‘Fair Work: Union Made’ standard.

Reasons why the Fair Work: Union Made label could be important

One of the ironies of the current demand for ‘evidence-based’ policy making is that evidence only seems to count if it doesn’t upset the existing political applecart. Thirty years’ worth of evidence that unionized industrial relations is a crucial element in balanced, sustainable economic development is roundly ignored by governments across the world. There seems to be little possibility that the active encouragement of independent worker organization will ever regain the public policy prominence it enjoyed in the industrialized world between the 1930s and 1970s. Beyond the few national economies where unionized industrial relations remains the norm, positive steps to support and promote the development of collective industrial relations are vanishingly rare.

It may be, though, that change to industrial relations practice can be promoted from the bottom up rather than from the top down. Recent research in international political economy points to the rapidly increasing significance of private or non-state governance systems like VSS as a means of regulating economic activity. In the social and environmental arena, some kind of commitment by enterprises to respect corporate codes of conduct, corporate social responsibility policies or sustainability standards is now the rule rather than the exception. Most VSS, even those whose main focus is on environmental protection, include some kind of work or labour standards component. Of the 124 standards listed in the joint UN-WTO International Trade Centre’s standards database, 77 include work and labour rights as a main theme under the ‘social standards’ heading and 65 specifically reference the ILO’s core conventions on freedom of association and collective bargaining.

Just to be clear, VSS can never be an adequate substitute for robust public regulation that protects workers from anti-union employers and that guarantees that the right to independent representation is an accessible everyday reality rather than a legal obstacle course. On the other hand, VSS might just be a good way to encourage both employers and workers to adopt or improve collective industrial relations. Nevertheless, as long as provisions on work and labour, however progressive, are buried within standards systems whose headline focus is on some other aspect of sustainability, it is unlikely that individual and collective employment relationships will get the attention they deserve. The potential of collective IR as a means of unlocking a fairer, more sustainable relationship between workers and employers will remain unfulfilled. This is why we think that fair work deserves its own label.

What would the standard cover?

The standard would certify that an employer and an independent, democratic organization representing employees agree wages and terms and conditions of work through an ongoing good faith bargaining relationship. The label will be a guarantee that the collective bargaining agreements reached between employers and employees reflect a fair balance between the interests of all the stakeholders of the organization and that the possibility of unreasonable constraint or compulsion is excluded.

The substance of the standard would be drawn principally from the ILO’s conventions and recommendations, which provide extensive source material for the definition of effective good faith bargaining relationships. The two fundamental conventions involved are number 87 on freedom of association and the protection of the right to organise and number 98 on the right to organize and collective bargaining. The details of the standard in terms of the rights and duties of union members, unions and employers would be based on the outputs of the ILO supervisory system, notably the opinions of the Committee of Experts on the Application of Conventions and Recommendations and the Committee on Freedom of Association.

How will the standard be developed?

The development of the standard would be a multistakeholder process involving national and international unions together with other workers’ organizations and labour NGOs, as well as some kind of employer representation. It would be necessary to establish an organization of some kind to run the development process. While this could initially be hosted from within an existing organization, it would in the end have to become an independent organization in its own right. Standards development would take place via an iterative process of meetings and open consultations.

How would the label be attributed?

Perhaps the most significant difference between the US style union label and the new global label would be that the attribution of the label would not be a decision of the union, but would be the result of a joint application by employer and union, with 3rd party verification of the reality and substance of the ongoing bargaining relationship between union and employers, together with the democratic credentials of the union and employer non-discrimination policies towards union members and officers. The verification procedure would ideally be organised by a second dedicated organization rather than an existing social auditing concern. There would be a need to involve those from both worker organization and employer backgrounds, preferably with direct experience in the regions and industries in question. As a further unique guarantee of credibility, the label would only be attributed if workers (employees of the enterprise in question) vote in a secret ballot to have it attributed.

Other aspects of the standard

One essential element of the standard would be a web platform that gives consumers and potential contractors access to the wage rates and collective agreements currently in force in each Union Made certified business. Submitting CBAs will be a compulsory element of the standard, together with the supply of basic information about pay rates and the number of employees on each rate. Whether or not this information is made freely available or is made accessible only to subscribers as part of an income-generation strategy is something that would be determined in the standards development process.

Where does FWUM fit within the existing standards universe?

The FWUM project is not just a means to promote collective industrial relations, but is also part of the current drive to increase the interoperability of sustainability standards as promoted by both the UN Forum on Sustainability Standards and the International Social and Environmental Accreditation and Labelling Alliance. FWUM will be a label that proposes a universally applicable definition of socially sustainable representation and participation practice, offering the possibility of a harmonization of standards requirements in this crucial area.

Furthermore, it may prove possible to persuade other standard setting organizations that an enterprise qualifying for the FWUM label should be exempted from the labour standards requirements other than freedom of association to the extent that local collective bargaining agreements are in place that cover the areas in question and that improve on the legal minima in areas like health and safety, redundancy pay, paid holidays, sick leave, maternity leave etc. Together with the market incentive of the FWUM label, this would provide a strong organizational incentive to adopt collective bargaining.

What are the main advantages of the Fair Work/Union Made standard?

  • It leverages the successful diffusion of the ILO’s core labour standards via private supply chain governance codes and sustainability standards by offering both market and organizational incentives to adopt collective bargaining:

o       Provides unions with arguments in favour of union recognition and collective bargaining that go beyond respecting worker rights to include possibilities for expanding market access;

o       Promotes a different kind of organizational routine, helping to bring HR policies based around collective bargaining back into the mainstream of business thinking.

  • Employer compliance with labour standards as established in collective bargaining agreements is under continual monitoring by those who are most directly concerned, the employees.
  • The detail of the labour standards applied depends on the local context and can be adapted to suit the needs of the employer and the employees involved, thus getting around arguments that sustainability labelling is a disguised trade barrier.
  • The presence of active union organization ensures that local flexibility in standards development is not simply an excuse for lower standards.
  • The regular revision of collective bargaining agreements ensures that standards continue to evolve along with the local market context and do not function as a ceiling on the aspirations of employees.
  • Any product or service, whether produced in the public or private sector, for domestic consumption or export, in the global north or global south can be certified and labelled.
  • Such a label helps to harmonize the labour aspect of sustainability standards and CSR codes by defining best practice in worker representation and participation by reference to ILO standards and the outputs of the ILO supervisory system.
  • Depending on developments in trade law, the label may support and encourage the inclusion of labour conditions in public procurement processes by providing a standard for worker representation that qualifies as ‘technical’ under WTO regulation.
  • The label associates collective bargaining and organized labour with attractive, media-friendly frontline approaches to sustainable development like fair trade and organic agriculture, helping to dispel the image of unions as old-fashioned and out of date.
  • It also encourages union accountability to members by giving workers the right to approve or deny the attribution of the label.