Performance Standard 2 of the IFC Performance Standards for Environmental & Social Sustainability (Performance Standards) requires that workers not be discouraged from joining or forming a workers’ organization. Discrimination, retaliation, refusal to hire, demotion, reassignment, outsourcing, shifting work, or other retaliation in response to union activities is prohibited by PS 2. Does it also require neutrality of the employer in regard to unionization? Probably not, but FIs and clients applying the Performance Standards should be careful when taking a position regarding organizing efforts of workers.
Ultimately, the Freedom of Association aspects of PS 2 are oriented towards the promotion of the right of workers to organize and collectively represent their interests vis-à-vis their employer. PS 2 requires that workers be free to choose representatives to speak with management, inspect working conditions without disrupting productivity and carrying out other organized activities. Clients are required to provide access for representatives of workers’ organizations to carry out these activities. Employees should not be prohibited from meeting to discuss workplace issues during scheduled breaks and before and after work.
The extent and scope of freedom of association is a complex topic in labour relatios law in domestic jurisdictions - even very advanced ones like Canada, the UK, the United States or Australia. In a recent decision of the Canada Industrial Relations Board (CIRB), the CIRB ruled that the employer, FedEx, did not interfere with the formation of a union contrary to the Canada Labour Code when it distributed two letters to its employees warning of questionable union tactics and conveying its opinion that a union was unnecessary during a contentious organizing campaign at its Mississauga office. The employer's decision to hold an impromptu meeting with employees to discuss union tactics was also held not to cross the line into coercive or intimidating conduct. Rather, the Board held that the union had crossed this line when it targeted an anti-union employee through e-mails and numerous vexatious complaints, finding that these actions were intended to silence and intimidate those with anti-union views. As Lancaster House notes, one of the cornerstones of labour legislation is the protection it affords unions to be free from employer interference while it is attempting to organize workers, and once certified, to effectively represent those workers. The scope of what constitutes "interference" was clarified in 1999 amendments to the Canada Labour Code which recognize the right of employers to express their views in the face of union organizing drives even when those views include opposition to unionization.
This may seem counter to the principle of protecting workers' rights to organize, but it is not consider to be so in Canada and other jurisdictions with similar labour relations structures. Those systems consider freedom of association to necessitate that employers not engage in coercive practices against employees seeking to organize - such as threats, intimidation, promises or surveillance. However, protection of worker rights should not go so far as eliminating the freedom of speech of employers to express their views on unionization of the workplace. Unionization in these jurisdictions is a democratic process, which may include expressions of support or opposition by employers, so long as those activities do not become coercive or result in interference in the formation of a union.
In emerging markets, where weak governance in the area of employment relations exists or where strong State authorities are the norm, labour organizing may face substantial interference. Organizing employees may also be subject to harmful consequences for such activities, including infringements upon personal dignity and even physical violence or coercion. Within this context, the PS 2 protections of freedom of association can be seen as a prohibition on retaliation and interference with workers’ freedom of association, where such rights are not otherwise protected by law. That being the case, it should be kept in mind that even in in highly developed legal systems where workers’ rights to organize are protected by law, it is understood that rights to freedom of association may have legitimate limits - including the freedom of speech of employers. While employers may be prohibited from retaliation against workers for union activities, or from engaging in unfair labour practices including threats, intimidation, coercion, promises of gain, or the use of surveillance to intimidate employees, beyond such limitations it may be and often is permissible for employers to take a position opposing unionization that can be communicated to employees through a campaign of information even in the midst of organizing efforts.
In other jurisdictions however, neutrality of the employer may be the expectation in law. Alternatively, some employers agree with unions to remain neutral in any organizing drive. In applying the IFC Performance Standards, financial institutions and clients must be cognizant of these variances amongst legal jurisdictions and corporate practice to inform how PS 2 ought to be applied.
The fact of these divergences in law and policy, even between highly developed legal systems, highlights the importance of examining the particular circumstances of a given jurisdiction in comparison with the overall requirements and purpose of PS 2 in determining what approach clients should take to workers' organizations.
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