Strategic Human Resource Management

Branded with Allegations : Labour Rights violation in the supply chain

Case Report 2

Santosh Tamhane -#71

Introduction The case explains a situation confronted by Marks and Spencers, a renowned UK garment manufacturer wherein one of its suppliers from India was facing labour issues . The case analysis discusses the role of each actor in this context and attempts to explain the concept of decent work. Key Observations The following actors are observed to be keys in the entire episode a) Media The media played a key role in highlighting the issues faced at Viva Global . Its investigative report in a local London newspaper brought the labour conditions to the highlight of all. Possibly, M&S could have been influenced by the report to take action and investigate the allegations made on its supplier in India. Even more importantly, the report caught the attention of local labour support organizations in India which was then able to rally the support required by Viva Global employees b) Labour at Viva Global The labour force at Viva global was the key affected party. As per their allegations, they were victims of faulty overtime payments, excessive overtime work and less than decent working conditions. Many of the labour force were compelled to work under sweatshop conditions by the management. It was only when the media highlighted their plight and local labour organizations lent voice to their conditions that they were able to successfully confront their company management. c) Owners at Viva Global The owners of Viva Global insisted that they were following all the right practices in handling their labour force. However, apparently they did not actually take any steps to provide decent work to their labour and quite possibly suppressed the voice of the employee. It seems their only motivation was profit from the operations at the cost of their employees. Had it not been for outside intervention that compelled them to acknowledge worked demands, they could have continued scot free for a much longer time. d) Labour contractors

The sole aim of the labour contractors seems to be to provide cheap and temporary workers to needy management. Apparently, they are hand in glove with the managements to keep the labour force suppressed and have complete disregard to these workers once they get their commission for providing the labour force. e) Local Labour organizations The local labour organizations provide the necessary support to oppressed workers. It was their intervention that led credibility to Viva Globals workers who were then able to extract better conditions for themselves. e) Local industry bodies The local industry bodies such as AEPC do not seem to be serious of the worker conditions at their member organizations. They seem to be abdicating duties by simply issuing guidelines but not following up on its implementation. Ideally, these bodies need to govern their members on corporate social responsibilities and decent work conditions in the members premises. f) Marks and Spencers M&S seems to have fallen short of the high ethics bar they had set for themselves. Even though their audits indicated issues at their supplier no action was taken by them until media reports highlighted the issue. This approach is not conducive for M&S to proclaim its social and environmental commitments. In an increasingly global competitive world, corporates are expected to create profits by buying and producing low and selling high in the right geography. However, the underlying expectations are that the global corporates do so responsibly under ethical and social norms that cover the entire spectrum of their operations. Any deviations or lacunae can have negative impact on their brands and image and lead to their very existence getting questioned by an increasingly socially conscious global consumer. Analysis The following inferences can be drawn from the observations so far 1. Viva Global management in their greed for profit disregarded employee welfare to a large extent 2. M&S paid lip service to their corporate social responsibility norms and took action only when they were forced to confront it.

3. Employees find it difficult to protest their conditions as the governing bodies of their
industries are callous to their needs and hence need external support to help their cause.

Global corporates may have spruced up their own social responsibilities but they havent extended their charters outside their supply chain. They need to do much more than simply conduct audits that have no improvement actions associated with it. Also the role of media and labour organizations is becoming increasingly important to support affected workers and fight their battles legitimately. Framework The entire situation is based on the concept of decent work. Decent work as per ILO has three integral aspects: a) equal employee opportunities b) fair employee remuneration mechanisms and c) right to proper working conditions. These aspects are universal and global corporates cannot hide behind the veil of not in my backyard. They are responsible for ensuring that all workers in their entire global supply chain enjoy decent work expectations. This aspect was not adhered to by M&S. Even though they had commitments to CSR, they had not yet overhauled their systems to include their supply chain partners within this purview. As a result companies like Viva Global could continue to exploit their workers and deny them decent work expectations.

Conclusion M&S needs to enforce and implement decent work expectations rigorously throughout their supply chain if they really intend to become the worlds most sustainable retailer by 2015. They should not wait for ethical and social issues to blow up before taking stringent actions against erring parties. The role of media and labour organizations is increasingly important to bring out such similar cases of worker exploitations. Also industry bodies should force guidelines and ensure their implementations are vigorously followed by their members.