Proposed Revisions to WRC Model Code of Conduct
April 19, 2013
Dear Colleagues,
The WRC’s Governing Board has been engaged in discussions regarding potential updates and revisions to the WRC’s Model Code of Conduct. I write to share with you language that is under consideration by the Board and seek your input.
As you know, any revisions to the Model Code will impose no obligation on affiliate universities, since schools are not required to adopt the Model Code or any of its specific provisions or revisions thereto. Because, however, the WRC Model Code is an important non-binding guideline for universities and other stakeholders, we would like your thoughts on the matters under consideration.
Below is draft language that covers four topics: (1) Forced and Prison Labor, (2) Licensee Responsibility for Unpaid Compensation, (3) Natural Disasters/Interruption of Production), and (4) Freedom of Association. A copy of the current WRC Model Code of Conduct is attached.
We invite you to send any thoughts you have about the proposed language. You are of course also welcome to contact us to discuss these questions. Please send any comments, or any questions you may have, to my attention.
Best,
Scott
1. Forced and Prison Labor:
Proposed Change – To amend Employment Standard 5 (“Forced Labor”) by changing the current reference to “forced prison labor” to “prison labor.” The revised text would read:
“Forced/Prison Labor: There shall not be any use of prison labor, indentured labor, bonded labor or other forced labor.”
WRC Governing Board Comments: The current language in the Model Code limits the prohibition on prison labor to forced prison labor. The Board is considering expanding this definition for the purpose of clarifying that the restriction on prison labor is not limited to forced prison labor, and that any form of prison labor is prohibited under the Model Code.
WRC Executive Director’s Comments: This amendment reflects the reality that it is essentially impossible to produce and market collegiate apparel that has been manufactured using prison labor without violating existing national laws, university codes of conduct, or both. For example, most collegiate apparel sold in the United States is manufactured, in whole or in part, outside of the country. U.S. customs law flatly prohibits the import of goods produced by prison labor. Therefore, any item of collegiate licensed apparel sold in this country that was produced by prison labor abroad was imported into this country illegally.
While the U.S Department of Justice operates a waiver certification program that permits the interstate sale of garments manufactured in state prisons in the United States, university codes of conduct contain key provisions that are inconsistent with the restrictions placed on inmate labor in this country. In particular, the U.S. Supreme Court has affirmed that state prisons can lawfully restrict many forms of association among inmates, including prohibiting them from forming unions or engaging in collective bargaining. Therefore, it is simply not possible for companies to manufacture garments in U.S. prisons while complying with existing university codes. The amendment simply provides greater clarity on this point.
2. Licensee Responsibility for Unpaid Compensation:
Proposed Change – To add the proposed language to the Model Code of Conduct:
“Licensees must ensure that workers are paid all compensation and benefits due to workers under local law in the case of dismissal, layoff, plant closure and other instances of termination of employment or suspension of work, regardless of whether the payment is made by the affected workers’ direct employer or the licensees, themselves.
To ensure compliance, licensees must require, at the time of contracting for products from a given supplier factory and on a quarterly basis thereafter during the duration of the contract, proof that the supplier factory and/or its owners have set aside and/or contributed sufficient funds to fulfill these obligations, in a manner that guarantees the availability of these funds to workers at the time when such obligations become due.
Licensees must not enter into a contract for products from a given supplier factory when the licensee knows or reasonably should know that the factory and/or its owners have significant outstanding obligations to current or former employees as a result of prior dismissals, layoffs, plant closure or other instances of termination or suspension of work, unless the contract requires the supplier to satisfy its obligations to these employees as a condition of receiving payments.
Notwithstanding the foregoing, in the event that a supplier factory does not fulfill its obligations to current and/or former employees from dismissal, layoff, plant closure or other instances of termination of employment or suspension of work within thirty (30) days of effective date of the obligation, the licensee(s) will pay, according to principles of joint and several liability, the entire outstanding obligation within thirty (30) days.
Licensees shall be jointly and severally responsible for all legally mandated compensation, including but not limited to severance pay, accrued vacation and holiday pay, and unpaid wages owed to workers employed at factories that have produced licensees’ apparel, even if the licensee is not the direct employer of the workers.”
WRC Governing Board Comments: Although the WRC Model Code, like existing university codes, does not include explicit language regarding licensees’ obligations concerning severance benefits for workers, these codes require compliance with local law, including payment of all applicable forms of legally-mandated compensation, including severance benefits. However, in light of the many cases in recent years in which workers have been denied their legal severance, and because some licensees have claimed that there is no obligation to ensure a remedy if it means the licensees themselves must pay, the Board feels that more explicit language regarding severance obligations should be added to the Model Code as a guide to universities that may wish to modify their codes to specifically address this issue.
One of the key aspects of this revised language is the specific reference to joint and several liability. The Board developed such language to make fully explicit that each licensee bears full responsibility for remedying each violation in its entirety. The Board also notes that the revised language should address legal obligations concerning all forms of compensation and benefits, including overtime pay and back wages, and should not be limited to severance.
The Board also discussed adding a specific timeframe within which workers must be compensated, so that violations of payment obligations are remedied within a reasonable amount of time, and that delays in payment do not cause further harm to workers and their families.
Because, as noted above, the Model Code, like existing university codes, already imposes a responsibility on licensees to remedy unpaid compensation/severance violations, the Board also discussed adding a brief note to the Code, explaining that the revised language imposes no new obligations on licensees, but simply makes the requirement to remedy these abuses more explicit.
WRC Executive Director’s Comments: No additional comments.
3. Natural Disaster/Interruption of Production
Proposed change: To add the proposed language to the Model Code of Conduct:
“In the case of natural disaster or other crisis that causes the disruption of production, licensees shall make every effort to resume production at the affected worksite(s) to prior levels as soon as feasible and not to move production elsewhere, recognizing that doing so would further intensify the effects of the disaster/crisis on the workers and their community.”
WRC Governing Board Comments: Recent natural disasters in garment-producing countries, including the January 2010 earthquake in Haiti, have raised concerns about the impact of such events on employment security. As was the case following the Haitian earthquake, natural disasters often disrupt production by causing structural damage to manufacturing facilities, obstructing the transport of raw materials, or causing shortages of electricity and other utilities. When it leads to loss of wages and employment, disruption of manufacturing in disaster-affected areas further increases the negative impact of such events on workers and their families. The Board’s interest in considering such language is to reduce these consequences for workers to the greatest extent possible. Board members are discussing whether or not to include the phrase “make every effort to” in the proposed language, as excluding it would make the obligation of licensees in such instances more binding.
WRC Executive Director’s Comments: The proposed revisions would require licensees, in the case of natural disaster or other crises that cause the disruption of production, to resume production at the affected worksites to prior levels as soon as feasible and not to move production elsewhere.
4. Freedom of Association and Collective Bargaining.
Proposed change: To amend the Model Code’s current language on this subject by adding the following bolded text:
“Licensees shall recognize and respect the right of employees to freedom of association and collective bargaining. No employee shall be subject to harassment, intimidation or retaliation in their efforts to freely associate or bargain collectively. Licensees shall not cooperate with governmental agencies and other organizations that use the power of the State to prevent workers from organizing a union of their choice. Licensees shall allow union organizers free access to employees. Licensees shall recognize the union of the employees’ choice. Licensees shall not permit members of factory management to hold office in factory level unions.”
WRC Governing Board Comments: The Board proposed adding language to restrict the ability of factory management to hold office in factory unions. When management plays a leadership role in a factory-level union, this presents a direct conflict of interest, as the union can no longer adequately represent the interests of its members. The Board felt it was important to clarify that genuine freedom of association and union representation should not include any management involvement.
WRC Executive Director’s Comments: The phenomenon of factory managers holding office in unions representing factory employees varies in prevalence among the countries where collegiate apparel is produced. Where it is found, however, workers’ ability to exercise associational rights is significantly impaired, both because unions run by factory managers fail to advocate effectively or independently for workers, and because the presence of such management-sponsored unions tends to obstruct the formation and functioning of independent unions run by workers, themselves. The proposed language recognizes the incompatibility of factory managers holding union office with workers’ right to form and join a union of their own choosing.
Scott Nova
Worker Rights Consortium
5 Thomas Circle NW
Washington DC 20005
ph 202 387 4884
fax 202 387 3292
[email protected]
www.workersrights.org