What is the issue?
The COVID-19 crisis is primarily a public health emergency, but its consequences have shown that it is much more than that. While there is a sense that the pandemic is a collective phenomenon, the stark reality is that it hits the most vulnerable hardest. The lack of a social safety net and worker protection in many countries are leading to significant negative impacts on individuals, and in turn on markets and wider society.
The pandemic and subsequent lockdowns have disrupted the lives of workers across sectors and geographies. These disruptions have emphasised the vulnerability and precarious employment status of some workers and have exposed a widespread lack of adequate safeguards necessary to protect workers and enforce rights in times of crisis. The job losses caused by the pandemic have also highlighted the challenging conditions in which many workers live – from pay check to pay check, unable to set aside savings and in many cases dependent on state aid to subsist.
As businesses have navigated the crisis, their actions have also had an impact. The table below shows some of the risks that different types of workers have been most exposed to since the start of the crisis and the key sectors in which they work. In addition to the risks to different types of workers and the sectors in which they operate, there are also wider implications for the rights of workers who have lost their jobs, been furloughed, or seen their hours reduced. The latest ILO estimates for the second quarter predict a decline in working hours globally of around 10.7% relative to the last quarter of 2019, equivalent to 305 million full-time jobs.
For those workers who have lost their jobs or faced reduced hours, there has been a divergence in how they have been protected by their employers and/or governments. However, many were left without access to healthcare or financial support. Some companies laid off hundreds – sometimes thousands - of workers via zoom calls in a matter of minutes.1 For workers in the informal economy2, this resulted in a loss of their livelihoods. Where governments distributed emergency packages, informal workers did not always qualify as recipients. The precarious situation of vulnerable workers, with little or no savings, large debt, and no social safety net meant that many were unable to support themselves or their families. This was exacerbated by lockdowns and travel bans which meant that they were also unable to find alternative sources of income.
|Type of workers3||Exposure to risks||Primary sectors|
||Healthcare, agriculture, transport and logistics, food retail, cleaning services|
|Gig economy workers||
||Delivery and transport services|
Agriculture, apparel & footwear
Workers in the informal economy4
||Accommodation and food services, manufacturing, wholesale and retail trade, small holder farming|
|Teleworkers / remote workers||
Key near-term investor actions
Investors have a responsibility and a key role to play in protecting workers. Poor and inadequate management of labour and human rights risks can expose businesses to legal, operational, and reputational risks. On the legal front, lawsuits have been brought against companies including Walmart, McDonalds and Celebrity Cruises that allegedly did not take the necessary safety precautions and therefore failed to fulfil their duty of care to their workers.6 Other companies were forced to stop commercial activity until they had put the necessary safety measures in place – as was the case for Amazon in France. Over recent months, corporate practices have also been scrutinised by civil society organizations and the media and it is reasonable to expect that, in some cases, this will have repercussions in terms of brand reputation.
Where there are immediate concerns with respect to labor rights linked to the COVID-19 pandemic, companies should engage in dialogue with workers. Discussions should include, but not be limited to, OHS concerns, access to paid sick leave and healthcare, and freedom of association and collective bargaining. Workers should be able to express concerns via appropriate channels and with no fear of retaliation. They should be consulted throughout the crisis, including on issues around lay-offs and human capital management plans.
Questions for companies:
Considerations around health & safety
- Does the company provide paid sick leave to all workers including temporary and newly hired workers? If these provisions are not included in the national legislation of operations, employers should provide a minimum of two weeks sick paid leave to workers exhibiting symptoms.
- Does the company provide workers with sufficient Personal Protective Equipment (PPE) and access to sanitation supplies? Does the company conduct training for workers on how to use these to make sure they are protected against infection?
- Does the company ensure safe working arrangements allowing workers to maintain social distancing in the workplace?
Considerations around employee health and wellbeing
What measures have been implemented to support the social protection of workers, such as: access to health care, unemployment protection, emergency paid leave, sick benefits, family leave and care policies and income support through social assistance?
- Does the company provide flexible working arrangements and/or family care leave for workers with childcare or other family members care responsibility?
- For companies in sectors that are seeing a surge in demand – does the company have ethical recruitment policies in place to make sure new workers are protected? And does the company screen and monitor labour brokers to make sure that they also abide by ethical recruitment standards?
Considerations around freedom of association and workers’ voice
Does the company ensure that workers are able to engage in workplace activism without fear of or risk of reprisal?
- Does the company actively share information with workers around new labour regulations being put in place as a response to the crisis?
- Can staff anonymously and confidentially report ethical, company policy and health and safety breaches with no fear of retaliation?
Examples of current investor initiatives on workers’ rights in context of COVID-19 pandemic:
- Covid-19 collaborative engagement led by CalSTRS and APG
- Engaging apparel and footwear companies on COVID-19 and forced labour using the KnowTheChain benchmarks
- Human capital management coalition
- Investor statement on coronavirus response led by Domini & ICCR
- Investor statement on COVID-19 and the pharmaceutical sector
- Investor statement | Recommendations for the meat sector during COVID-19
- Workforce Disclosure Initiative
Examples of corporate good practice
Airbnb had to lay off 1,900 employees (25% of its staff) but gave those effected 14 weeks pay, an Airbnb laptop, equity stakes, and healthcare insurance for a year. It also set up a talent directory for departing employees to help them find a new job and repurposed part of its recruitment team into an “Alumni placement team” to provide additional career support.
CVS Pharmacy68 in the United States waived charges for home delivery to discourage customers from coming to its pharmacies.
Twitter mandated employees to work from home from early March and announced that those who prefer to work remotely can now do so indefinitely.
Tools, guidance, and further resources
Podcasts and webinars
- Podcast – COVID-19 Putting People at the Heart of Investor Response
- Webinar – Protecting workers’ rights through the COVID-19 crisis
- Webinar - Workplace & Investor Risks in Amazon.com, Inc.’s COVID-19 Response
- Webinar – Supply chain management during the COVID-19 crisis and how to plan for the recovery
Guidance documents and resources
- Australian Council of Superannuation Investors – Modern Slavery Reporting Guide for Investors
- CDC Group – COVID-19 Guidance for investors and financial institutions on job protection
- Committee on Workers’ Capital - Workforce Best Practices for COVID-19
- Institute for Human Rights and Business –Respecting human rights in the time of the COVID-19 pandemic
- ILO – COVID-19 and the world of work
- Oxfam – Which supermarkets are doing the most to protect the rights of food workers?
- Shift Project – Making rights-respecting business decisions in a COVID-19 world
- Minderoo Foundation – Protecting People in aPandemic
- UN Global Compact – COVID-19 Impact Brief – Decent Work
1 Coronavirus: Start-ups use Zoom app to lay off staff https://www.bbc.co.uk/news/technology-52091615
2 In 2015, the ILO Recommendation n°204 concerning the transition from the informal to the formal economy describes the “informal economy” as referring to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements. The informal economy does not cover illicit activities.
3 These categories can overlap, and this is not an exhaustive typology.
4 In 2020, over 2 billion workers are earning their livelihoods in the informal economy. This is 62 per cent of all those working worldwide. Informal employment represents 90 per cent of total employment in low-income countries, 67 per cent in middle-income countries and 18 per cent in high-income countries – ILO, 2020
5 AGM Season 2020: Investor questions on COVID-19
6 What are the avenues for corporate liability for COVID-19-related human rights abuses?