"Based on the findings from our own monitoring, and in response to feedback from the NGO community, union organizations, and workers themselves, in 2006 a supplementary guidance note was developed dealing with contract, temporary and/or casual labour. The standards and practices set out in the guidance note, make it clear that we expect suppliers to comply with local laws and our Employment Guidelines when recruiting workers and signing employment contracts, and that the use of short-term labour should be limited and only used under certain conditions. (Note: this guidance note will also be incorporated into the second edition of the adidas Group Employment Guidelines.)
The two underlying principles governing this standard are:
"(1) suppliers must not hire workers on a contract basis as a means for depriving such workers of the correct wage and benefits, or other rights and privileges provided to permanent workers; and
"(2) suppliers must not hire contract workers on a continuous basis, multiple short-term contracts, or as regular practice, to support normal business needs.
"The guidance note referred to directly above states that suppliers may hire contract workers where contract (ie short-term) employment is allowed by law; in cases of unusual or extraordinary circumstances which may result in great financial loss to the supplier if delivery of goods cannot be met on time; or in the event of an unexpected or unusually large volume of orders placed at the factory and the permanent workforce is not sufficient.
"If factories use contract workers during peak periods, then the peak season must be clearly defined and this information provided to adidas, ie suppliers should consult with SEA before hiring any contract workers. Additionally, the factory should define the job functions or tasks that contract workers are hired to perform, and maintain information on the use of contract workers in relation to production needs.
"The same guidance notes specifically states: 'Contract workers must receive at least the minimum wage or the prevailing industry wage, whichever is higher, and all legally mandated benefits such as social security, other forms of insurance, annual leave and holiday pay.' It also states: 'Factory rules and regulations apply to contract workers the same as to permanent workers.'
"The guidance that we have developed on this point does not specify at which point a supplier would be required to automatically hire a worker who has been engaged on a short-term or contract basis. This is mainly because different countries and jurisdictions have adopted their own requirements to protect contact workers.
"Nonetheless, the standards set out in the guidance note referred to above, are aimed specifically and preventing suppliers from continuously engaging workers on multiple short-term contracts.
"Additional requirements set out in the guidance note are:
"• Any local laws governing contract workers must be observed. Where local law is silent on specific aspects of contract employment, at a minimum, contract workers must be provided an employment agreement, setting out the employment terms and conditions.
"• Personnel files and all relevant information in relation to contract workers must be maintained and accessible at the factory at all times. If a contract worker is hired on more than one occasion, ie under separate contracts, the worker should retain the same ID number where possible and all information on that worker must be kept in one file.
"• Contract workers must be given priority when the factory is seeking ‘new’ permanent employees
"• For any contract worker who becomes a permanent employee, seniority and other benefits such as social security entitlements, must be dated from the first date of entry to the factory as a contract worker, and not from the first day of permanent employment, ie all work-related benefits accumulate. "