Principle Three: Labour

Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

What does it mean?

Freedom of association implies respect for the right of all employers and all workers to freely and voluntarily establish and join groups for the promotion and defence of their occupational interests. Both workers and employers have the right to set up, join and run their own organizations without interference from the State or any other entity. All, including employers, have the right to freedom of expression and opinion, including on the topic of unions – provided that the exercise of this right does not infringe a worker's right to freedom of association. As a voluntary initiative, the UN Global Compact does not and cannot require that employers adopt or express any particular opinion. To be able to make a free decision, workers need a climate free of violence, pressure, fear and threats.

"Association" includes activities of rule formation, administration and the election of representatives. The freedom to associate involves employers, unions and other workers representatives freely discussing issues at work in order to reach agreements that are jointly acceptable. These freedoms also allow for industrial action to be taken by workers and organizations in defence of their economic and social interests.

Collective bargaining is a voluntary process or activity through which employers and workers discuss and negotiate their relations, in particular terms and conditions of work and the regulation of relations between employers, workers and their organizations. Participants in collective bargaining include employers themselves or their organizations, and trade unions or, in their absence, representatives freely designated by the workers. An important part of the effective recognition of the right to collective bargaining is the "principle of good faith". This is important for the maintenance of the harmonious development of labour relations. This principle implies that the social partners work together and make every effort to reach an agreement through genuine and constructive negotiations, and that both parties avoid unjustified delays in negotiations. The principle of good faith does not imply a pre-defined level of bargaining or require compulsory bargaining on the part of employers or workers and their organizations.

Why should companies care?

Businesses face many uncertainties in this rapidly changing global market. Establishing genuine dialogue with freely chosen workers' representatives enables both workers and employers to understand each other's problems better and find ways to resolve them. Freedom of association and the exercise of collective bargaining provide opportunities for constructive rather than confrontational dialogue. This harnesses energy to focus on solutions that result in benefits to the enterprise, its stakeholders, and society at large and is often more flexible and effective than state regulation. It can thus help in anticipating potential problems and advance peaceful mechanisms for dealing with them. A number of studies indicate that the dynamic resulting from freedom of association can set in motion a "decent work" cycle that increases productivity, incomes and profits for all concerned. Moreover, the guarantee of representation through a "voice at work" facilitates local responses to a globalized economy, and serves as a basis for sustainable growth and secure investment returns. The results help bridge the widening representational gap in global work arrangements, and facilitate the input of those people, regions and economic sectors — especially women and informal sector workers — who otherwise may be excluded from participating in processes that build decent work environments.

What can companies do?

In the workplace

  • Respect the right of all workers to form and join a trade union of their choice without fear of intimidation or reprisal, in accordance with national law;
  • Put in place non-discriminatory policies and procedures with respect to trade union organization, union membership and activity in such areas as applications for employment and decisions on advancement, dismissal or transfer;
  • Provide workers’ representatives with appropriate facilities to assist in the development of effective collective agreement; and·
  • Do not interfere with the activities of worker representatives while they carry out their functions in ways that are not disruptive to regular company operations. Practices such as allowing the collection of union dues on company premises, posting of trade union notices, distribution of union documents, and provision of office space, have proven to help build good relations between management and workers, provided that they are not used as a way for the company to exercise indirect control.

At the bargaining table

  • Recognize representative organizations for the purpose of collective bargaining;
  • Use collective bargaining as a constructive forum for addressing working conditions and terms of employment and relations between employers and workers, or their respective organizations;
  • Address any problem-solving or other needs of interest to workers and management, including restructuring and training, redundancy procedures, safety and health issues, grievance and dispute settlement procedures, disciplinary rules, and family and community welfare;
  • Provide information needed for meaningful bargaining; and
  • Balance dealings with the most representative trade union to ensure the viability of smaller organizations to continue to represent their members.

In the community of operation

  • Take into account the role and function of the representative national employers’ organizations; and
  • Take steps to improve the climate in labour-management relations, especially in those countries without an adequate institutional and legal framework for recognizing trade unions and for collective bargaining

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