YOU can end exploitation

Kit-kat lovers should skip these opening paragraphs and, on no account should they watch the referenced video clip on You Tube, purporting to be an ad for their preferred confection. The spoof was released by Greenpeace in its effort to stop Nestlé from using palm oil originating in plantations which they felt were endangering the environment by "trashing Indonesian rainforests, threatening the livelihoods of local people and pushing orang-utans towards extinction." ¹ The clip shows an office worker turning to a Kit-kat for a break only to have an orang-utan’s finger inside the wrapper and proceeding to consume it, despite blood splattering around the workspace. Nestlé was unable to suppress the clip and its impact, particularly on social media. It became clear that "…some consumers are willing to boycott companies for perceived unethical behaviour and that consumers can affect a company’s hypocritical actions. In the Nestlé case, the viral campaign led Nestlé to commit to only use certified sustainable palm oil and lead to changes to its marketing and communication strategies." ² In another case from Ivory Coast: "Nestlé, Cargill, Barry Callebaut, Mars, Olam, Hershey and Mondelēz have been named as defendants in a lawsuit filed in Washington DC by the human rights firm International Rights Advocates (IRA), on behalf of eight former child slaves who say they were forced to work without pay on cocoa plantations in the west African country." ³

I have nothing against chocolate-makers but (since most of us don’t buy diamonds – bloody or otherwise) they do provide some of the most familiar cases of consumer and social media pressure forcing corporates to be more responsible in their use of natural resources and to be fair to the people they employ. Something similar is needed if the worst forms of employee exploitation are to be curbed and a modicum of fairness ensured in the treatment of employees in our country.

Why Appeal Directly to Consumers?

Appealing to consumers is not the obvious way to stop the mistreatment of employees. There are at least three others, all of which have a role to play, but which, individually, suffer from some significant handicaps. 

• The most idealistic is the appeal to the enlightened values of the CEO. Sadly, to paraphrase the wise words of Adam Smith, "It is not from the benevolence of the business-leader, the board, or the business-partnering-HR, that we expect enlightened employment practices, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of employees’ necessities but of their advantages." ⁴ When we appeal to the consumer, as suggested in this column, we are indirectly triggering the imperatives each business has for market share, profit and reputation.

• In the past, when softer suasions have failed, organizations have responded to hardballs thrown by the Government. In recent years, however, clarion calls for business friendliness have tended to drown out pleas for legislatively mandated social justice and fair dealings. Also, there are limits to the efficacy and sustainability of forced fairness. 

• There was also a time when trade unions played a constructive role in stopping unfair or underhand people practices. Those halcyon days for unions are past. "[D]emography, technology, contractualization, and paucity of organizing talent conspired to reduce the base of unionizable employees to the point that it could hardly prove a threat in any denial-of-work campaign." ⁵ Lowered strike ability has led to a striking decline in the ability unions have to agitate against injustices.

While we can think of auxiliary roles for charity, compliance and coercion, they are clearly not sufficient to put an end to employment malpractices. Consumer appeals become a vital part of the strategy to bring about substantial change in the way employees are treated because:

• Consumer pressure is among the least disruptive ways of raising employment fairness. This makes it far preferable to blanket laws and confrontations with unions.

• Consumer sentiment can today leverage the power of social media "… to proactively affect media and companies and to determine agendas…". ⁶ Moreover, social media is generally immune to the kind of muzzling and pressures that can silence conventional reportage.

• Any meaningful response to consumer disenchantment involves a public commitment to change by the corporate concerned. This places a huge reputational barrier to subsequent reneging which is the bane of other, less public, promises. For instance, I was direct witness to solemn (but private) agreements by some of India’s leading corporates to adopt a glide path, phasing out the use of contract labour for perennial and core operations. Long before landing, the glider conveniently found a thermal (glider-pilot-speak for rising currents of heated air that permit wafting along for extended lengths of time) that has carried each of the committing companies to soar in contract labour engagement.

Alongside these advantages, however, direct consumer appeals have some limitations. These are:

• Only a few of the most widely understandable fairness agenda issues can be highlighted through this channel. The Fairness Badge proposal in this column, therefore, limits itself to only three malpractices. Those interested in a more comprehensive and nuanced treatment of what organizations should deliver to their people are directed to an earlier column. ⁷

• The concerns must be conveyed through an uncomplicated visual with minimal text. We propose mandating a tri-segmented, circular badging graphic (with a simple A, B, C rating for each of our focus segments) on all product packs and service offer communications.

• The goodwill arising from higher evaluations may not always translate into willingness to pay significantly more for the products carrying them. However, aversion to buying poorly rated products should provide a nudge to all companies in the direction of greater fairness.

The Fairness Badge (FB)

To meet the criterion of simplicity, the FB will have only three segments:

1. Firing and Hiring at will: The bane of fair employment is the weakening of the standard durable employment contract which is the pillar on which any superstructure of productivity, quality and innovation can be built. The most open flouting is still via the contract labour addiction route. ⁸ However, innovation abounds and there are a variety of trainees, term-limited employees as well as GIG and platform-intermediated workers who are marshalled to replace and disguise the blatant contractual conduit. Apart from the nature of the contract, under this head we also cognize hiring malpractices that condone some form of discrimination. ⁹

2. Unreasonable and unsafe work demands: Excessive and mental or physical health-destroying work demands are the second way in which employees are exploited. "… [U]ncontrolled work demands have resulted in noxious workplaces where tragedies are just waiting to happen." ¹⁰ Poor working conditions and sub-optimal work organization can also make employment unpleasant, unhealthy or unsafe.

3. Paltry payments: The third leg of the FB tripod is inadequate remuneration. Equally pernicious are delayed payments and trumped-up deductions. The last few years have seen erosion in average Bottom-Of-Pyramid wages, as contract workers form larger and larger proportions of the hands-on value adders, while payments at the apex of the pyramid leap higher and higher.  

In combination, insecurity of engagement, excessive (compulsory) work-hour demands together with deficient and delayed wages create a deadly mix. They are not far short of engendering a form of modern slavery. ¹²

Rating in each segment again has to be intuitively understandable. The schema FB follows attempts this:

The A and B levels (C, obviously, covers all the rest) for the three segments, now appearing with positive headers, are:

1. Employment terms and selection:

A level:

• Less than 15% of the effective workforce is not regular i.e. the precariat (contract workers), the gigariat (workers, often classified as independent contractors, who are dependent on one-off jobs / work-spells and contingent payments) and the mislabelariat (workers designated as apprentices, trainees, temporaries and what-not, who are actually doing regular, permanent work). None of these are in core operations.

• The composition of the regular workforce broadly reflects the diversity in the general population (at least relating to gender and SC/ST) and there is a reasonable trajectory towards level-wise diversity as well.

• Loyalty is reciprocal and due process is followed for all terminations. ¹³

B level:

• Less than a third of the effective work force is not regular. There is a route for those working in core operations but are non-regular to become regular employees.

• The composition of the regular workforce is on a trajectory to broadly reflect the diversity in the general population (at least relating to gender and SC/ST).

• Due process is followed for all terminations and rampant insecurity is not permitted to demoralize the regular workforce.

2. Working hours and conditions:

A level:

• Compulsory Hours Of Work (CHOW) do not exceed 8 hours a day in a 5-day week. There are adequate work breaks. The process militates against informal pressure being used to hike work hours or encroach into breaks. Overtime / holiday working is rare and compensated when it is unavoidable.

• Phone calls, emails or text messages outside of work are a rarity justified only in an emergency.

• There is a pleasant work environment and work design that gives an opportunity to take initiative / innovate. There are prospects for development and progress regardless of the point of start.

B level:

• CHOW do not exceed 8 hours a day in a 6-day week. There are adequate work breaks. Only a limited amount of overtime / holiday working is permitted and compensated at statutorily specified rates.

• Phone calls, emails or text messages outside of work are rare.

• Working conditions, training and equipment reflect in health, safety, and satisfaction statistics.

3. Compensation:

A level:

• All categories of the effective work-force are paid at least a living wage. Incidentally, this is also a direction the Government has espoused. ¹⁴ Wages are paid in time and in full. All members of the effective workforce share in the gains of the company through an equitable mechanism.

• Those working in non-regular jobs get a non-permanency premium in their compensation apart from social security coverage on par with the regular workforce.

• There are attractive welfare, medical and retiral benefits.

B level:

• All categories of the effective work-force are paid more than the minimum wage. Wages are paid in time and in full.

• Those working in non-regular jobs get the same compensation as the regular workforce and there is adequate social security coverage.

• There are adequate welfare, medical and retiral benefits.

Making it Happen

The seed at the core of FB is consumer opinion acting on the self-interest receptors of corporate managements. It needs three types of fertilizer. Tri-segmented badging has first to become visible and meaningful to consumers. Next, the buying public should be confident of the veracity of the ratings. Finally, it must become a prerequisite for any higher corporate reputational gains. 

A key benefit of this proposal is that it does not demand any additional laws and rules. The Government needs only to stipulate that badging be prominently displayed on all products / service offerings and specify how it should be obtained. A simple modification of the relevant labeling acts and rules should meet the first requirement. As for the actual evaluations, statutory audits are (relatively speaking) the most robust checking mechanisms within business. Instead of setting up a cumbersome new network of assessing agencies, a small tweaking to the Companies Act should enable statutory auditors to gather the data needed for fairness badging. These audit firms would, of course, need to engage a nucleus of staff proficient in HR processes or, if they are small in scale, have their existing auditors suitably trained. Many of the larger firms will just need to call across the Chinese wall to their consulting counterparts for the necessary expertise to flow through.

A rather more active role will be expected from industry associations and professional HR bodies as well as from any agency involved in evaluating corporates for awards and recognition. They must take the lead in educating the public on the meaning and importance of FB and what lies behind the segments as well as the rating schema. These bodies can hugely impact the attractiveness of moving up the rating chain by incorporating FB in the evaluation criteria for the awards they bestow. This will automatically garner select but prized publicity for the badge levels the best corporates get and create an attractant for others to follow. 

Finally, there will be a need for strategizing agents, who prioritize battles for the public’s attention, direct media gaze to gaps between pronouncements and practices as well as provide fairness comparisons of alternative goods and service providers. In short, the kind of role played by Greenpeace in the domain of climate and the environment. While a single such organization, built from scratch, is not inconceivable, practically it will be difficult to energize, fund and sustain. Even at the cost of losing a single guiding entity, unleashing the competitive and focused innovation of various new-age unions may be the quickest way to get FB off the ground. After all, it is their members who will be the direct beneficiaries of the gains badging brings.  ¹⁵

Heyrick’s Heirs

In 1824, "Elizabeth Heyrick… began campaigning among the people of Leicester to promote a new sugar boycott, visiting all of the city’s grocers to urge them to stock no slave-grown goods. Her message was clear and bracing: 'The West Indian planter and the people of this country, stand in the same moral relation to each other, as the thief and the receiver of stolen goods… Why petition Parliament at all, to do that for us, which… we can do more speedily and more effectually for ourselves?' … Heyrick hoped that the poor, in particular, would rally to the cause, because they 'have themselves tasted of the cup of adversity.' " ¹⁶ It would be unrealistic to give Elizabeth Heyrick a substantial share of the credit for the abolition of slavery. Yet to deny her any would be both mean-spirited and misogynistic. Appealing to the conscience of the consumer has been part of the tool-kit of many social and political transformations. Our goal may not be as lofty as Heyrick’s or of the Indian patriots who launched the swadeshi movement, but that need not prevent us from learning from them.  

While this proposal, particularly in its specifics, may not be the final word on FB, I hope there will be no disagreement on the need to raise employment fairness levels and the efficacy of bringing consumer and enlightened public opinion to bear on the subject. Typically, I have stuck my neck out in mentioning actual figures of limits and, if a percentage here or a criterion there needs to be changed, so be it.

Now I need a break. Does anyone have a Kit-kat?

Notes

1. Greenpeace UK, Have a Break?, 17 March 2010.

2. Andreas Plank and Martina Gschoesser, The Fine Line between Responsibility and Hypocrisy: A Cross-Media Case Study of Nestlé’s Fairtrade Kit Kat Bar, Proceedings of The 5th International CSR Communication Conference, Stockholm School of Economics, September 2019.

3. Oliver Balch, Mars, Nestlé and Hershey to face child slavery lawsuit in US, The Guardian, 12 February 2021.

4. Adam Smith, The Wealth of Nations, Wordsworth Editions, 2013. Smith’s actual words were: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

5. Visty Banaji, The Future of Trade Unions, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 325-333, AuthorsUpfront, 2023.

6. Andreas Plank and Martina Gschoesser, The Fine Line between Responsibility and Hypocrisy: A Cross-Media Case Study of Nestlé’s Fairtrade Kit Kat Bar, Proceedings of The 5th International CSR Communication Conference, Stockholm School of Economics, September 2019.

7. Visty Banaji, A hierarchy of organisational needs, People Matters, 10 September 2024.

8. Visty Banaji, Udta Udyog, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 351-354, AuthorsUpfront, 2023.

9. Visty Banaji, There is an Elephant in the Room, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 163-169, AuthorsUpfront, 2023.

10. Visty Banaji, Who killed dedicated motivation?, People Matters, 8 October 2024.

11. Visty Banaji, But Who Will Guard the Guardians, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 260-266, AuthorsUpfront, 2023.

12. Kevin Bales, Disposable People: New Slavery in the Global Economy, University of California Press, 2012.

13. Visty Banaji, The Great Reciprocation: Loyalty is a two-way street, People Matters, 11 July 2022.

14. India plans to replace minimum wage by living wages by 2025; Here's what it could it mean, Economic Times, 26 March 2024.

15. Visty Banaji, The Future of Trade Unions, Angry Birds, Angrier Bees – Reflections on the Feats, Failures and Future of HR, Pages 325-333, AuthorsUpfront, 2023.

16. Adam Hochschild, Bury The Chains: Prophets and Rebels in the Fight to Free an Empire's Slaves, Mariner Books, 2006.