Global Compact Principle Three

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

What does Freedom of Association mean?

Freedom of association implies a respect for the right of all employers and all workers to freely and voluntarily establish and join organizations of their own choice. These organizations have the right to carry out their activities in full freedom and without interference, including the promotion and defense of their occupational interests. Employers have the right to freedom of expression provided that its exercise does not infringe a worker's right to make a free decision on whether or not to join a trade union. Employers should not interfere in an employee's decision to associate, or discriminate against the employee or their representative. "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 organizations) in defense of their economic and social interests.

What does Collective Bargaining mean?

Collective bargaining refers to a voluntary process or activity through which employees 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 are Freedom of Association and Collective Bargaining important?

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. 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.

Strategies for Business

The Global Compact does not require that employers change their industrial relations frameworks and expresses no view on whether any particular national law meets international standards. However, as organizations such as the International Organization for Employers have indicated, some high performance companies have recognized 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, 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.
• 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.
• Provide workers’ representatives with appropriate facilities to assist in the development of effective collective agreement.

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.
• 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

• Preserve the confidentiality of the trade unions and leaders in countries where the government does not permit respect for human rights (including rights at work) or does not provide a proper legal and institutional framework for industrial relations and collective bargaining.
• Support the establishment and functioning of local/national employers' organizations, 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.

(Last updated: 14 August 2009)