Due diligence & subcontracting​

EU directive on mandatory Human Rights due diligence and responsible business conduct

The ETUC calls for a European directive on mandatory human rights due diligence and responsible business conduct. It should establish mandatory and effective due diligence mechanisms covering companies’ activities and their business relationships, including their supply and subcontracting chains. The directive would constitute an important step forward to ensure the respect and enforcement of human rights with trade unions’ and workers’ rights as main components. A directive should empower workers to fight against violations of human rights. It should ensure the full involvement of trade unions and workers’ representatives in the whole due diligence process. Effective remedies and access to justice should be available for victims, including trade unions. Companies should be accountable for the impacts of their operations. Liability must be introduced for cases where companies fail to respect their due diligence obligations, without prejudice to joint and several liability frameworks.

Due dilligence written
On the international level

Recent scandals & human right violations in subcontracting chains have put the issue of due diligence on the global political agenda. For instance, the OECD promotes Due Diligence Guidance for Responsible Business Conduct. Also the ILO promotes due diligence in global supply chains.

At EU level, new legislation imposes certain requirements in subcontracting chains. However, there’s a mismatch of regulations with different scopes and varying impact. In parallel, EU companies increasingly make use of cross-border provision of services.

Due dilligence international

Subcontracting refers to an increasing business practice when a company hires individuals or companies to complete a project. A subcontracted company or individual may then hire another entity for specific tasks. Subcontracting chains are composed of different undertakings in charge of specific tasks within one bigger project.

It’s a convenient way for businesses to look for external expertise without a long-term commitment. It’s also attractive for the contractor as he or she can avoid potential liability of legal obligations, such as employment rights.

In a globalised world, subcontracting chains can easily lead to exploitation. It also blurs the traditional employer/ employee relationship: employees’ representatives are left without a counterpart to dialogue and bargain with. Furthermore, without due diligence on the main contractor it can lead to violation of the applicable labour law and health & safety obligations. We need effective legislation to impose a duty of diligence on multinational companies. They need to be hold responsible for monitoring and securing decent working conditions throughout their supply chain and contractors. The ETUC is mobilised and call for a European directive on mandatory human rights due diligence and responsible business conduct.

ETUC project on workers’ rights in sub-contracting chains

In 2019, the ETUC has launched a project to secure workers’ rights in sub-contracting chains aiming at:

  • building a case for a consistent EU approach towards subcontracting.
  • helping to create better tools and conditions (more adequate legal framework) for workers’ representatives.
  • identify their rights and to be informed and consulted about the practices of their company along its subcontracting chain.

This project will gather data to illustrate the consequences of the lack of regulation at EU level. On the basis of experts’ conclusions, the ETUC will put forward a series of policy recommendations.