As previously noted, the majority of our Sourcing Supply Chain Partners are located in China across a wide number of regions, however, all are covered by an extensive centralised legal framework that gives all workers a range of rights and protections against exploitation and discrimination including:
Timely payment of a Living Wage (Local Governments in China are requested to update and adjust their minimum wages according to the regions level of development and cost of living. As a result, minimum wages are higher in capital and developed cities and lower for smaller cities and rural areas).
A formal employment contract.
Legally set working week hours with fixed overtime rates.
Social Security covering pensions, healthcare unemployment, injury and severance pay in case of termination.
Housing Fund.
Annual Leave.
The only official union recognised by the Government and allowed to practice is the ALL-CHINA FEDERATION OF TRADE UNIONS (ACFTU). All local, industry, or enterprise-level unions and associations must work under Worker Representatives/Committees and the National Law mandates Trade Unions and designated associations to protect the rights and interests of workers and to negotiate on their behalf.
As our journey in China has progressed, we have worked with our Supply Chain factories’ Management to identify how we could be assured that ours and their commitments to having all workers employed under rights, protection, and conditions as set out in the ETI Base Code which includes rights of Collective Bargaining, Safe and Hygienic Working Conditions and access to Grievance Reporting and Remediation etc.
Workers also have the right of individual bargaining with their employees/management.
Workers’ rights and labour relations in China | China Labour Bulletin (clb.org.hk)
Our ongoing work established that the most effective and successful pathway for Workers’ Grievance and Suggestions reporting, including Mitigation/Resolution was achieved through a functioning Workers’ Representative/Committee.
Our Hotsprings & Brands WE CARE: WE LISTEN Workers’ Grievance program was developed during 2023 in conjunction with a select trial group of factories in collaboration with our China based Compliance Team: Factory Management: Worker Representatives and Workers: The development and implementation of this program replaced our previous trial Workers’ Voice program which was operated and administered by an external international service provider which had to be discontinued due to the implementation of a mandatory data protection law/requirement in China where workers’ personal details and data access is strictly controlled.
Hotsprings & Brands QR blocked ETI poster
Our WE CARE: WE LISTEN program clearly includes assessment of Workers’ Grievances with Workers’ Representative/Committee and ourselves and will continue to be trialled through 2023 and through to Quarter 3, 2024.
In order to enable resolution of reported grievances including instances of verbal and physical assault our China Compliance Team work closely with both the Worker Representative/Committee and Factory Management to reach successful resolutions and implementation of ongoing improvement programs in a timely manner where the best interests and outcomes for the reporting workers are guaranteed.
The use and support of Workers’ Representative/Committee extends through to General Workers’ Grievance reporting and support for Collective Bargaining covers wages: Working Conditions: Health and Safety, and a wide range of other areas.
In order to facilitate the best possible outcomes for our Trial Programs we have joined with a China Team: Workers’ Representatives and Factory Management to develop and implement policies and procedures that support both successful operations and outcomes for Collective Bargaining including:
Our programs also include the use of SEDEX SMETA 4 Pillar Audit Programs that report on audit findings section 2 Freedom of Association and Rights to Collective Bargaining are respected (ETI Base Code) as per ETI Base Code | Ethical Trading Initiative (ethicaltrade.org)
We recognise that annual formal audits such as SMETA need to be combined with our China Team factories’ audits and reviews in order to develop, implement and monitor ongoing improvement programs where needed as may be reported in audit findings.
Use of SEDEX Risk Assessment and Analytic programs serve to further identify “At Risk” areas where follow up action and programs.
The SEDEX My Supply Chain Audits and findings include all Audit data from July 31, 2022, to current date where Category Freedom of Association and Collective Bargaining findings indicate potential issues in two factories only.
Management, Health, Safety and Hygiene plus Wages, Working Hours and the Environment non-compliances as shown are shared with our factory Supply Chain Partners where appropriate Corrective Action Plans are agreed with the factory and Workers’ Representatives/Committee with ongoing progress monitoring and reporting programs in place.
A current extract from one of our Supply Chain Partners factories details SMETA Pillar 4 Audit findings covering “Freedom of Association and Right to Collective Bargaining are respected” where Current Systems and Evidence viewed by the Auditor are reported including Worker & Management interviews.
These findings are shared with factory and Workers’ Representative/Committees and ongoing action and improvement programs are implemented.