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The Supply Chain Act (German : Lieferkettensorgfaltspflichtengesetz, literally Obligation to Exercise Due Diligence in the Supply Chain Act or German : Lieferkettengesetz (LkSG) in short) is a German law requiring companies to monitor human rights and environmental risks in their supply chains. [1] [2]
The law requires companies to carry out analyses on supply chain contracts to identify risks to human rights and requires companies to take action against identified risks. The companies will have to publish an annual report containing the analyses. Companies must also establish a complaint procedure for workers to report potential risks. The law additionally gives civil society organisations the ability to sue companies on behalf of workers over breaches of human rights in supply chains. Companies that fail to respect the terms of the law can face fines of up to two percent of the company's annual revenues. [3]
The law came into effect starting with 2023, only applying to companies with over 3000 employees in its first year. As of now, the law only applies to one group of companies:
Companies that have their central administration, their principal place of business, their administrative headquarters or their statutory seat in Germany or companies that have a branch in Germany. [4]
However, in 2024, the provisions of the law will extend to apply to all companies with over 1000 employees. In 2026, the federal government will carry out an evaluation of the law's effectiveness.
The German federal cabinet proposed the law on 3 March 2021. It had originally been planned to be introduced in 2020, but negotiations were required between the government's coalition partners, with the Social Democratic Party of Germany eventually backing down on including small companies in the law after opposition from the CDU/CSU. [5] [6]
Human Rights Watch supported the passing of the law, stating that "the law is an important step toward meaningful corporate accountability" but that "it does not incorporate the highest international standards." [7]
The Confederation of German Employers' Associations opposed the law, arguing that it was too strict, that it would force companies to stop operations in regions with poor human rights records, and that "foreign companies that do not have to comply with the German rules will jump in and replace German companies." [8]
The future of the Supply Chain Act is evolving, and the EU is expected to follow Germany in the coming years with a similarly sweeping piece of legislation. Specifically, the EU Supply Chain Directive will also cover the same measures as the German Supply Chain Act and is built to level the playing field for ESG initiatives and the people throughout the supply chain.
Labour laws, labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, employer, and union.
Workers' compensation or workers' comp is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence. The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain.” One of the problems that the compensation bargain solved is the problem of employers becoming insolvent as a result of high damage awards. The system of collective liability was created to prevent that and thus to ensure security of compensation to the workers.
United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK have a minimum set of employment rights, from Acts of Parliament, Regulations, common law and equity. This includes the right to a minimum wage of £10.42 for over-23-year-olds from April 2023 under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempt to limit long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995. Workers must be able to vote for trustees of their occupational pensions under the Pensions Act 2004. In some enterprises, such as universities or NHS foundation trusts, staff can vote for the directors of the organisation. In enterprises with over 50 staff, workers must be negotiated with, with a view to agreement on any contract or workplace organisation changes, major economic developments or difficulties. The UK Corporate Governance Code recommends worker involvement in voting for a listed company's board of directors but does not yet follow international standards in protecting the right to vote in law. Collective bargaining, between democratically organised trade unions and the enterprise's management, has been seen as a "single channel" for individual workers to counteract the employer's abuse of power when it dismisses staff or fix the terms of work. Collective agreements are ultimately backed up by a trade union's right to strike: a fundamental requirement of democratic society in international law. Under the Trade Union and Labour Relations (Consolidation) Act 1992 strike action is protected when it is "in contemplation or furtherance of a trade dispute".
A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees for business reasons, such as personnel management or downsizing an organization. Originally, layoff referred exclusively to a temporary interruption in work, or employment but this has evolved to a permanent elimination of a position in both British and US English, requiring the addition of "temporary" to specify the original meaning of the word. A layoff is not to be confused with wrongful termination.
An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old master-servant law, used before the 20th century. Employment contracts relies on the concept of authority, in which the employee agrees to accept the authority of the employer and in exchange, the employer agrees to pay the employee a stated wage.
United States labor law sets the rights and duties for employees, labor unions, and employers in the US. Labor law's basic aim is to remedy the "inequality of bargaining power" between employees and employers, especially employers "organized in the corporate or other forms of ownership association". Over the 20th century, federal law created minimum social and economic rights, and encouraged state laws to go beyond the minimum to favor employees. The Fair Labor Standards Act of 1938 requires a federal minimum wage, currently $7.25 but higher in 29 states and D.C., and discourages working weeks over 40 hours through time-and-a-half overtime pay. There are no federal laws, and few state laws, requiring paid holidays or paid family leave. The Family and Medical Leave Act of 1993 creates a limited right to 12 weeks of unpaid leave in larger employers. There is no automatic right to an occupational pension beyond federally guaranteed Social Security, but the Employee Retirement Income Security Act of 1974 requires standards of prudent management and good governance if employers agree to provide pensions, health plans or other benefits. The Occupational Safety and Health Act of 1970 requires employees have a safe system of work.
Equal pay for equal work is the concept of labour rights that individuals in the same workplace be given equal pay. It is most commonly used in the context of sexual discrimination, in relation to the gender pay gap. Equal pay relates to the full range of payments and benefits, including basic pay, non-salary payments, bonuses and allowances. Some countries have moved faster than others in addressing equal pay.
Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights influence working conditions in the relations of employment. One of the most prominent is the right to freedom of association, otherwise known as the right to organize. Workers organized in trade unions exercise the right to collective bargaining to improve working conditions.
The Worker Adjustment and Retraining Notification Act of 1988 is a U.S. labor law that protects employees, their families, and communities by requiring most employers with 100 or more employees to provide notification 60 calendar days in advance of planned closings and mass layoffs of employees. In 2001, there were about 2,000 mass layoffs and plant closures that were subject to WARN advance notice requirements and that affected about 660,000 employees.
The Fair Labor Association (FLA) is a non-profit collaborative effort of universities, civil society organizations, and businesses.
The eastern Democratic Republic of the Congo (DRC) has a history of conflict, where various armies, rebel groups, and outside actors have profited from mining while contributing to violence and exploitation during wars in the region. The four main end products of mining in the eastern DRC are tin, tungsten, tantalum, and gold, which are extracted and passed through a variety of intermediaries before being sold to international markets. These four products, are essential in the manufacture of a variety of devices, including consumer electronics such as smartphones, tablets, and computers.
A work permit or work visa is the permission to take a job within a foreign country. The foreign country where someone seeks to obtain a work permit for is also known as the "country of work", as opposed to the "country of origin" where someone holds citizenship or nationality.
Workplace privacy is related with various ways of accessing, controlling, and monitoring employees' information in a working environment. Employees typically must relinquish some of their privacy while in the workplace, but how much they must do can be a contentious issue. The debate rages on as to whether it is moral, ethical and legal for employers to monitor the actions of their employees. Employers believe that monitoring is necessary both to discourage illicit activity and to limit liability. With this problem of monitoring employees, many are experiencing a negative effect on emotional and physical stress including fatigue, lowered employee morale and lack of motivation within the workplace. Employers might choose to monitor employee activities using surveillance cameras, or may wish to record employees activities while using company-owned computers or telephones. Courts are finding that disputes between workplace privacy and freedom are being complicated with the advancement of technology as traditional rules that govern areas of privacy law are debatable and becoming less important.
European labour law regulates basic transnational standards of employment and partnership at work in the European Union and countries adhering to the European Convention on Human Rights. In setting regulatory floors to competition for job-creating investment within the Union, and in promoting a degree of employee consultation in the workplace, European labour law is viewed as a pillar of the "European social model". Despite wide variation in employment protection and related welfare provision between member states, a contrast is typically drawn with conditions in the United States.
A whistleblower is a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization that is either private or public. The Whistleblower Protection Act was made into federal law in the United States in 1989.
The kafala system is a system used to monitor migrant laborers, working primarily in the construction and domestic sectors in Gulf Cooperation Council member states and a few neighboring countries, namely Qatar, Bahrain, Kuwait, Lebanon, Oman, Saudi Arabia and the United Arab Emirates.
Migrant workers in the United Arab Emirates describe the foreign workers who have moved to the United Arab Emirates (UAE) for work. As a result of the proximity of the UAE to South Asia and a better economy and job opportunities, most of the migrant foreign workers are from India, Nepal, Sri Lanka, Bangladesh, and Pakistan.
The right to sit refers to laws or policies granting workers the right to be granted suitable seating at the workplace. Jurisdictions that have enshrined "right to sit" laws or policies include Mexico, France, Spain, Argentina, the United Kingdom, Jamaica, South Africa, Eswatini, Cameroon, Tanzania, Uganda, Lesotho, Malaysia, Brazil, Israel, Ireland, Zambia, Guyana, the Indian states of Tamil Nadu and Kerala, the Canadian province of Newfoundland and Labrador, and the British overseas territory of Gibraltar and Montserrat. Almost all states of the United States and Australia, as well as the majority of Canadian provinces passed right to sit legislation for women workers between 1881 and 1917. US states with current right to sit legislation include California, Florida, Massachusetts, Montana, New Jersey, New York, Oregon, Pennsylvania, West Virginia, and Wisconsin. A right to sit provision is included in the International Labour Organization's Hygiene Convention, 1964; the international treaty being ratified by 52 countries as of 2023. EU-OSHA recommends suitable seating as a best practice. Local jurisdictions with right to sit laws include Portland, Oregon, St. Louis, Missouri, and London's Royal Borough of Kensington and Chelsea.
The Scholz cabinet is the current cabinet of Germany, led by Federal Chancellor Olaf Scholz. The cabinet is composed of Scholz's Social Democratic Party, Alliance 90/The Greens and the Free Democratic Party, an arrangement known as a "traffic light coalition" in Germany after the parties' traditional colours, respectively red, green and yellow, matching the colours of a traffic light (Ampel). This traffic light coalition-government is the first of its kind at the federal level in the history of the German federal republic.
The Corporate Sustainability Due Diligence Directive is a proposed Directive in European Union law to require due diligence for companies to prevent adverse human rights and environmental impacts in the company’s own operations and across their value chains.
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