You are the Human Resource Manager of a large apparel manufacturer which has subcontracted 14 per cent of its production to a company in the country of XYZ. The company employs 1400 production workers. Their current workweek is 56 hours (10 hours per day for five days, and 6 hours on a sixth day). There is no legal requirement for overtime pay and the subcontractor does not pay a premium for any hours worked. The country does have child labor laws, which the company does not violate; however, the laws allow children over the age 16 to work up to 20 hours per week. There are 200 such cases at that location. Safety practices in the factory meet ILO minimum standards, although recently there were ventilation problems uncovered by your company’s audit of the location. The subcontractor is currently developing a plan of correction.
The country’s labor law does allow unions to represent employees in a collective bargaining relationship; however, the law does not provide a set of employer unfair labor practices. In fact, during a recent organizing campaign the company exhibited conduct that would have violated sections of the National Labor Relations Act, as amended, but was not in violation of XYZ’s legislation. The union lost the election by a wide margin.
Your company pays a wage rate to most workers approximately 40% higher than comparable wages employees earn at other subcontracting locations, although it is understood that the company could easily double the wage rate and, given its technological superiority over its competitors still maintain a competitive advantage over those same firms.
Your company is cognizant of the negative publicity surrounding American companies employing sweatshop labor overseas. It has made a strategic decision NOT to retain subcontractors who promote such conditions. The company has asked you to provide a paper of at least 1000 but not more than 1500 words analyzing the degree to which the situation in XYZ would violate that commitment and recommending what actions, if any, it should take based on that analysis.