Getting Started on Company-Worker Relations

In this blog, we share insights from our forthcoming guide on company-worker relations. This new guide is a part of a larger series of issue based Getting Started Guides on Rights and Wellbeing at Work that we will release over the coming months.

About our Getting Started Guides

Anchored in research, each guide tackles a specific sustainability sub-issue to help you (and others in your business) build a foundational understanding and clarify the work ahead. We explain each sub-issue along with relevant trends, system thresholds, key concepts, actors, and pair that with resources to help you along the journey. We also outline common corporate goals and internal interim targets to show how companies are working on addressing the impacts of their operational and value chain activities.

Getting Started on Rights and Wellbeing at Work

Our next set of Getting Started Guides address the focus area of Rights and Wellbeing at Work. This set will include seven guides, covering:

Human Dignity and Integrity (forthcoming)

Safe and Health Working Conditions (forthcoming)

Fair Compensation

Company-Worker Relations (forthcoming)

Respectful, Equitable, and Inclusive Workplace (forthcoming)

Workforce Planning and Employee Development (forthcoming)

Worker Wellness (forthcoming)

Ensuring a respectful relationship with workers

Maintaining good company-worker relations provides clear business benefits. When your employees feel valued and respected, it improves morale and increases engagement, productivity, and innovation. Good worker relations also helps your business recruit and retain talent.

Company-worker relationships include a variety of activities. How your organisation values its relationship with workers, how it communicates with employees, the channels it uses, the messages it sends, and the opportunities it offers for employees to provide feedback all play a part in building strong relationships with workers. Supporting workers’ freedom of association and right to collective bargaining, negotiating in good faith with workers, fostering psychological safety, establishing effective grievance mechanisms, and building a respectful organsiational narrative around social dialogue underpins this relationship.

Freedom of association and collective bargaining

Workers can often face an imbalance of power in their individual negotiations with employers. Freedom of association supports the right of employees to meaningfully associate in the pursuit of collective workplace goals, which includes a right to collective bargaining. These rights are a part of the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work. They are critical enabling rights – they underpin the realisation of other fundamental principles and rights at work by empowering the voices of workers.

While these rights are enshrined in international law, respect for freedom of association and collective bargaining still faces challenges in many countries around the world. The International Trade Union Confederation’s (ITUC) Global Rights Index 2024 found that 8 out of 10 countries denied workers the right to collective bargaining, 49% of countries arrested or detained trade union members, and 74% of countries impeded the registration of trade unions.

Psychological safety

Psychological safety underpins the relationships that exist within all companies, whether between team members or across the organisation. Broadly, it refers to the “belief that one can speak up without risk of punishment or humiliation.” Psychological safety is ultimately about open dialogue within an organisation. Workplaces with low psychological safety are less likely to utilise mechanisms for feedback, grievances, and social dialogue as workers hesitate or second-guess their ability to engage with them in candour.

Your company will need to build psychological safety as a foundational part of your organisation to ensure that your efforts to build relationships and solicit feedback are effective. Psychological safety is not something that is static - this will need to be a continuous process to ensure that different components and relationships continue to foster psychological safety for workers.

Grievance mechanisms

Establishing an effective grievance mechanism is a key component of maintaining good company-worker relationships by ensuring employees are able to, and empowered to, raise concerns about serious matters within the workplace. It supports the early identification of potential human rights impacts, providing companies with the opportunity to take proactive action before issues escalate or have lasting impacts. The UN Guiding Principles on Business and Human Rights (UNGPs) outline the effectiveness criteria for grievance mechanisms.

Social dialogue

Social dialogue is a mechanism for participation and consensus building that supports respectful labour relations. As defined by the ILO, social dialogue includes “all types of negotiation, consultation or simply exchange of information between, or among, representatives of governments, employers and workers, on issues of common interest relating to economic and social policy.” It goes both ways; freedom of association and the right to collective bargaining underpin the process of social dialogue and effective social dialogue underpins the execution of these rights.

Reflecting on your organisation’s narrative infrastructure

When people in organisations communicate, they often do it through stories. Stories reinforce and give life to an organisation’s identity and values, and they are often invoked to justify decision-making. Stories are critical to building and reinforcing an organisation’s identity, values, and relationships and can guide, or constrain, how an organisation sets its strategy and the culture it fosters.

Your organisation’s narrative infrastructure shapes the relationships between your company’s management and its employees. An understanding of this infrastructure and attention to shaping it is crucial to supporting more reciprocal and robust relationships within your organisation.

Our forthcoming Company-Worker Relations: A Getting Started Guide helps to explain key concepts in more depth and outlines the work ahead to develop a credible strategy. To give you a sense of what it covers, we share some insights from the guide below.

Getting Started on Company-Worker Relations

Company-Worker Relations: A Getting Started Guide provides insights on how to build collaborative and respectful relationships with workers. It explores how workers’ ability to engage in their rights to freedom of association and collective bargaining, investments in creating psychological safety, open communications, and effective grievance mechanisms underpin the realisation of many other fundamental principles and rights at work.

Common long-term commitments include establishing strong and effective communication channels to proactively engage with employees; respecting workers’ rights to organise, to freedom of association, and to collective bargaining in operations; and promoting respect for these rights throughout value chains.

These are often accompanied by mid-term commitments to implement effective grievance mechanism aligned with the UNGPs; supporting psychological safety, ensuring a fair process for negotiations and avoiding protracted negotiations; building contractual agreements in ways that enable and, where possible, require key suppliers to respect freedom of association and collective bargaining; and more.

Taking action on company-worker relations begins in year one with understanding the right to organise in local contexts where you operate, benchmarking current practices, understanding current efforts towards respectful engagement with workers, and establishing (or strengthening) grievance mechanisms. Year two involves understanding root causes to prioritise areas for action in your value chain, building psychological safety, listening to employees to understand their perspectives, and developing a clear policy commitment to respecting workers’ right to organise. Year three includes developing a strategy to foster positive company-worker relations and developing an action plan to respect workers’ right to organise in your operations. Lastly, year four covers extending your efforts to your value chain to strengthen supplier capacity to build stronger company-worker relationships and prevent risks related to workers’ right to organise.

This was just a summary of the more detailed guidance provided by the forthcoming Company-Worker Relations: A Getting Started Guide. For more information on relevant trends, system thresholds, key concepts, and detailed process-based interim targets that can guide the work needed to get started on these issues, visit our website or join our mailing list to be notified about the release of our next set of Getting Started Guides.