PRINCIPLE THREE

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

Freedom of Association and Collective Bargaining

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. Security of representation is a foundation for building trust on both sides. Freedom of association and the exercise of collective bargaining provide opportunities for constructive rather than confrontational dialogue, and this harnesses energy to focus on solutions that result in benefits to the enterprise, its stakeholders, and society at large.

A number of studies indicate that the dynamic that results from freedom of association can set in motion a "decent work"-cycle that increases productivity, incomes and profits for all concerned. The guarantee of representation through a "voice at work" facilitates local responses to a globalised 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.

Freedom of Association

Freedom of association implies a respect for the right of employers and workers to join associations of their own choice. It does not mean that workforces must be organised or that companies must invite unions in. Employers should not interfere in an employee's decision to associate, or discriminate against the employee or a representative of the employee.

"Association" includes activities of rule formation, administration and the election of representatives. The freedom to associate involves employers, unions and 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 organisations) in defence of their economic and social interests.

Collective Bargaining

Collective bargaining refers to the process or activity leading up to the conclusion of a collective agreement. Collective bargaining is a voluntary process used to determine terms and conditions of work and the regulation of relations between employers, workers and their organisations.

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 organisations.

Possible Strategies for Business

The Global Compact does not suggest that employers change their industrial relations frameworks. However, as organisations such as the International Organisation for Employers have indicated, some 'high performance' companies have recognised the value of using dialogue and negotiation to achieve competitive outcomes.

What companies can do:

In the workplace

• Ensure that all workers are able to form and join a trade union of their choice without fear of intimidation or reprisal.
• Ensure union-neutral policies and procedures in such areas as applications for employment and record-keeping; and decisions on advancement, dismissal or transfer.
• Provide facilities to help worker representatives carry out their functions within the company's needs, size and capabilities.
• These facilities include the ability to collect union dues on company premises, posting of trade union notices, and distribution of union documents related to normal trade union activities in the enterprise, and time-off with pay for union activities.

At the bargaining table

• Recognise representative organisations 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 organisations.
• Address any problem-solving or preventive need within the imagination and interests of workers and management, including restructuring and training needs, redundancy procedures, safety and health issues, grievance and dispute settlement procedures, disciplinary rules, and family and community welfare.
• Provide information needed for meaningful bargaining.
• Balance dealings with the most representative trade union to ensure the viability of smaller organisations to continue to represent their members.

In the community of operation

• Take account of the climate in labour-management relations in the country when ensuring freedom of association and collective bargaining. In countries with insufficient legal protections, take steps to preserve the safety and confidentiality of trade unions and their leaders.
• Support the establishment and functioning of local/national employers' organisations, and trade unions.
• Inform the local community, media and public authorities of your company's endorsement of the UN Global Compact and its intention to respect its provisions, including those on fundamental workers' rights.