Proposal B2: Eliminate third-party employment schemes.

Eliminate third-party employment schemes for any workers engaged in the company’s core business

Where the excessive use of short-term contracts has been legally restricted, some employers have responded by hiring workers through a third-party contracting agency that acts as the legal employer of the worker (known as “dispatched” or “outsourced” labour) – even though the workers are still, for all intents and purposes, performing regular duties at the factory. The use of dispatched labour creates additional insecurity for workers who have few protections under the arrangement.

Responses

adidas

Although adidas’ Workplace Standards do not explicitly prohibit the use of recruitment agents, the company deems its suppliers “directly responsible for all recruitments terms, employment terms and conditions…” Suppliers are therefore not “allowed to use employment agencies which manage the entire employment relationship.”

Full response

"In recent years there has been a growing trend in some countries for suppliers to outsource the entire employment relationship. The Workplace Standards does not prohibit the use of recruitment agents. However, the factory will still be deemed directly responsible for all recruitments terms, employment terms and conditions, and to ensure that our Employment Guidelines are adhered to throughout the recruitment process. In short, suppliers may use recruitment agents, but are not allowed to use employment agencies which manage the entire employment relationship. A supplementary guidance note was developed on this standard in 2006, which will be incorporated into the second edition of the adidas Group Employment Guidelines, due for release in 2009."

Lotto

Lotto says it is waiting for the Fair Labor Association (FLA) code review to be completed and will try to follow FLA policy on this issue. The company is not currently willing to make a commitment on the matter.

Full response

"With reference to the questions in the section 'Precarious Employment', we would like to mention that we are waiting on an update on behalf of FLA in regards to this matter, and once this is finalised, we will try following a similar policy."

Mizuno

Mizuno says it understands “these problems and will take steps to state our policies on the response to the problems related our suppliers gradually,” but does not currently make a commitment on the issue.

Full response

"In Japan also there has been short-term contract and third-party employment problems in recent years. We understand these problems and will take steps to state our policies on the response to the problems related our suppliers gradually."

New Balance

No response given.

Puma

Puma expects its suppliers to be responsible for the terms and conditions of recruitment and employment, but does not commit to eliminating third party employment schemes across the board.

Full response

On the elimination of third party employment schemes, PUMA communicated clearly to its suppliers that they are immediately responsible for all terms and conditions of recruitment, employment and workplace environment, including any subcontract work that is being carried out in their facilities. As PUMA sources from countries where there is a heavy use of foreign labor such as in Malaysia and South Korea, the monitoring of recruitment agency practices is also expected to be taken care of by the suppliers themselves. We have recently started auditing a percentage of the total number of second and third tier suppliers, which are essentially materials and process subcontractors of our first tier suppliers. Through this, we have strengthened the standards for subcontractor monitoring of our first tier suppliers.

Nike

Nike says it strongly discourages factories from using 3rd-party contractors to hire workers engaged in its core business, but the company will not commit to eliminating the practice, claiming that employment agencies are required in some countries (i.e. small firms in Malaysia).

Full response

"Overall, we support this recommendation for workers who can be consistently employed all year. We enforce our Code of Conduct for the benefit of all workers, whether they are full-time or employed through a contractor. We strongly discourage our factories from using third-party contractors to hire workers for employment in core business functions In some countries, under some conditions, however, it is legally required to use employment agencies (e.g. small firms in Malaysia)."

Pentland

“These already form part of our work with suppliers. Although there are some problems in some countries, in general all our core business suppliers have permanent, direct and open-ended contracts with workers.” While this is positive, the company needs to clarify whether they apply this standard at all supplier factories or just “in general” at “core” suppliers.

Full response

Response Key

The brand claims to implementing all components of this proposal or has agreed to implement them within Play Fair's proposed timeframe.

The brand is currently implementing or has agreed to implement some of the essential components of the proposal but has refused to implement, has overlooked, or has raised issues with one or more important components; or, the brand agrees to implement the proposal but not within Play Fair’s proposed timeframe.

The brand has refused to implement the essential components of the proposal.

The brand has misunderstood or failed to comment on the proposal; or the brand is considering the proposal, but has yet to make a decision.