Guidance Note 2

Labor and Working Conditions

January 1, 2012

Guidance Note 2 corresponds to Performance Standard 2. Please also refer to Performance Standards 1
and 3–8, as well as their corresponding Guidance Notes for additional information. Application of
Performance Standard 2 to financial intermediary clients is addressed in a separate Interpretation Note
on Financial Intermediaries. Information on all referenced materials appearing in the text of this Guidance
Note can be found in the Bibliography.

Introduction

1. Performance Standard 2 recognizes that the pursuit of economic growth through

employment creation and income generation should be accompanied by protection of the
1
fundamental rights of workers. For any business, the workforce is a valuable asset, and a
sound worker-management relationship is a key ingredient in the sustainability of a
company. Failure to establish and foster a sound worker-management relationship can
undermine worker commitment and retention, and can jeopardize a project. Conversely,
through a constructive worker-management relationship, and by treating the workers fairly
and providing them with safe and healthy working conditions, clients may create tangible
benefits, such as enhancement of the efficiency and productivity of their operations.

2. The requirements set out in this Performance Standard have been in part guided by a
number of international conventions and instruments, including those of the International
2
Labour Organization (ILO) and the United Nations (UN).

Objectives

 To promote the fair treatment, non-discrimination, and equal opportunity of workers.

 To establish, maintain, and improve the worker-management relationship.
 To promote compliance with national employment and labor laws.
 To protect workers, including vulnerable categories of workers such as children, migrant
workers, workers engaged by third parties, and workers in the client’s supply chain.
 To promote safe and healthy working conditions, and the health of workers.
 To avoid the use of forced labor.
____________________
1
As guided by the ILO Conventions listed in footnote 2.
2
These conventions are:
ILO Convention 87 on Freedom of Association and Protection of the Right to Organize
ILO Convention 98 on the Right to Organize and Collective Bargaining
ILO Convention 29 on Forced Labor
ILO Convention 105 on the Abolition of Forced Labor
ILO Convention 138 on Minimum Age (of Employment)
ILO Convention 182 on the Worst Forms of Child Labor
ILO Convention 100 on Equal Remuneration
ILO Convention 111 on Discrimination (Employment and Occupation)
UN Convention on the Rights of the Child, Article 32.1
UN Convention on the Protection of the Rights of all Migrant Workers and Members of their Families

GN1. The nature of the relationship between management and workers affects costs, quality, efficiency,
productivity, and customer service, in addition to shaping a client’s reputation. Performance Standard 2
recognizes that a good relationship between management and workers is an important ingredient in
determining the overall success of the client and the project.

GN2. Performance Standard 2 is in part guided by a number of International Labour Organization (ILO)
and United Nations (UN) Conventions. By applying Performance Standard 2, the client will be able to

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GN1
operate its business in a manner consistent with the four core ILO labor Conventions. In addition,
Performance Standard 2 also addresses other areas such as working conditions and terms of
employment, retrenchment, grievance mechanism, workers’ accommodation and occupational health and
safety (OHS) issues. Some of these requirements refer the client to the applicable national law. Where
national law establishes standards that are less stringent than those in Performance Standard 2, or are
GN2
silent, clients will meet the requirements of Performance Standard 2.

GN3. In the identification of labor risks and impacts, clients should engage with workers and with
representatives of workers’ organizations where they exist. In order to strengthen the process of
identifying risks and impacts, engagement could also include workers’ organizations at a sector level and
labor inspectorates. Actions identified through the risks and impacts identification process and needed to
achieve compliance with national law and the requirements under Performance Standard 2 will become
part of the management program outlined in Performance Standard 1 and its accompanying Guidance
Note. This process will allow the client to design or update its human resources (HR), employment,
contracting and purchasing policies and procedures in ways that enhance the long-term viability and
success of the business while safeguarding the rights of workers. This will help clients implement a
systematic approach to labor and working conditions in their operations (see paragraphs GN5–GN9 of
Guidance Note 1).

Scope of Application
3. The applicability of this Performance Standard is established during the environmental
and social risks and impacts identification process. The implementation of the actions
necessary to meet the requirements of this Performance Standard is managed through the
client’s Environmental and Social Management System (ESMS), the elements of which are
outlined in Performance Standard 1.

The scope of application of this Performance Standard depends on the type of employment
relationship between the client and the worker. It applies to workers directly engaged by the
client (direct workers), workers engaged through third parties to perform work related to
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core business processes of the project for a substantial duration (contracted workers), as
4
well as workers engaged by the client’s primary suppliers (supply chain workers).

Direct Workers
4. With respect to direct workers, the client will apply the requirements of paragraphs 8–23
of this Performance Standard.
______________________________________________________
3
Core business processes constitute those production and/or service processes essential for a specific
business activity without which the business activity could not continue.
4
Primary suppliers are those suppliers who, on an ongoing basis, provide goods or materials essential for the
core business processes of the project.

GN1
In 1998, the ILO adopted the Declaration on the Fundamental Principles and Rights at Work, which commits Member States to
respect and promote principles and rights related to the four core labor standards, regardless of having ratified the relevant
Conventions. These Principles and Rights refer to no child labor, no forced labor, non-discrimination, and freedom of association
and collective bargaining.
GN2
In addition to the ILO Conventions referred to in Performance Standard 2, and throughout this Guidance Note, the ILO has
established numerous other conventions on labor and working conditions. These are available through the ILO website. The ILO
has a considerable presence in many of its member countries and some of the local offices have programs with expertise to guide
the private sector in good labor practices.

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Contracted Workers
5. With respect to contracted workers, the client will apply the requirements of paragraphs
23–26 of this Performance Standard.

Supply Chain Workers

6. With respect to supply chain workers, the client will apply the requirements of
paragraphs 27–29 of this Performance Standard.

GN4. Clients have differing degrees of influence and control over the working conditions and treatment
of different types of workers associated with the project, and the requirements of Performance Standard 2
reflect this reality.

GN5. Clients should assess with whom they are considered to be in an employment relationship and
identify the types of workers. The employment relationship is the legal link between employers and
employees. It exists when a person performs work or provides services under certain conditions in return
for remuneration. It is through the employment relationship, however defined, that reciprocal rights and
obligations are created between the worker and the employer. ILO Recommendation No. 198,
paragraph 13, provides indicators to determine the existence of an employment relationship for direct and
contracted workers. Following Recommendation No. 198, the indicators of an employment relationship
might include:
(a) Subordination and dependence
(b) Control of the work and instructions: the fact that the work: is carried out according to the
instructions and under the control of another party; involves the integration of the worker in the
organization of the enterprise; is performed solely or mainly for the benefit of another person;
must be carried out personally by the worker; is carried out within specific working hours or at a
workplace specified or agreed by the party requesting the work; is of a particular duration and
has a certain continuity; requires the worker's availability; or involves the provision of tools,
materials and machinery by the party requesting the work;
(c) Integration of worker in the enterprise: periodic payment of remuneration to the worker; the fact
that such remuneration constitutes the worker's sole or principal source of income; provision of
payment in kind, such as food, lodging or transport; recognition of entitlements such as weekly
rest and annual holidays; payment by the party requesting the work for travel undertaken by the
worker in order to carry out the work; or absence of financial risk for the worker.

GN6. In some cases, there is difficulty in determining whether or not an employment relationship exists.
This include situations where (i) the respective rights and obligations of the parties concerned are not
clear, or where (ii) there has been an attempt to disguise the employment relationship, or where
(iii) inadequacies or gaps exist in the legal framework, in its interpretation or application.

GN7. Companies need to ensure that contractual arrangements, including those involving multiple
parties, are clear and establish who is responsible for providing adequate labor and working conditions to
workers.

GN8. Companies should refrain from entering into disguised employment relationships such as
(i) contractual arrangements that hide the true legal status of the employment relationship; and/or
(ii) contractual arrangements that have the effect of depriving workers of the protection they are due.

GN9. Clients need to be aware of the effects of the employment relationship on vulnerable groups,
including women workers, young workers, migrant workers and workers with disabilities, and make efforts
to address any potential negative effects.

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GN10. Direct Workers: The client has a clear employment relationship and complete control over the
working conditions and treatment of its direct workers. Therefore all requirements of Performance
Standard 2 apply to this group of workers. Clients may be responsible for applying all the requirements of
Performance Standard 2 to certain workers nominally engaged by third parties, notwithstanding
paragraph GN8, if the client controls the working conditions and treatment of these workers in a manner
GN3
comparable to that for workers directly engaged by the client.

GN11. Contracted Workers: In respect of those workers engaged through third parties (for example
contractors, brokers, agents, or intermediaries) who are performing work or providing services directly
GN4
related to core business processes of the project for a substantial duration, including the construction
phase of the project or who are geographically working at the project location, the client will implement
policies and procedures for managing third parties and ensure these comply with the requirements under
Performance Standard 2. Even though these workers may be engaged through a third party and the client
may have limited legal responsibilities in relation to these workers, this Performance Standard has
specific requirements that are set out in paragraphs 24–26. Clients should ensure that the employment
relationship is clear in the contractual agreement with third parties, and that it provides the appropriate
labor and working conditions as outlined in Performance Standard 2.

GN12. Supply Chain Workers: These workers are employed by suppliers providing goods and materials
to the company. There is no direct contractual or labor relationship between the client and the workers at
supplier level, and costs and benefits are paid by suppliers. With regard to those working in sectors
known for involving child or forced labor or significant safety violations, the client will assess if there are
any incidents of child labor, forced labor or significant safety issues by applying paragraphs 27–28 of
Performance Standard 2. If child labor, forced labor or significant safety issues are identified the company
will work with the suppliers to take corrective action. In the event that corrective action is not feasible the
company will change to suppliers that are managing the risk of child labor, forced labor and safety issues
adequately.

Requirements

Working Conditions and Management of Worker Relationship

Human Resources Policies and Procedures
7. The client will adopt and implement human resources policies and procedures
appropriate to its size and workforce that set out its approach to managing workers
consistent with the requirements of this Performance Standard and national law.

8. The client will provide workers with documented information that is clear and
understandable, regarding their rights under national labor and employment law and any
applicable collective agreements, including their rights related to hours of work, wages,
overtime, compensation, and benefits upon beginning the working relationship and when
any material changes occur.

GN13. In order to ensure efficient and fair management of workers, clients are required to have policies
and procedures dealing with a range of HR matters. The scope and depth of the policies should be
tailored to the size and nature of the client’s workforce. These policies and procedures should cover all
type of workers, including direct workers, contracted workers and supply chain workers. At a minimum,
policies in place should be consistent with the requirements of local labor law and Performance
GN3
Clients may find useful guidance in ILO Recommendation 198 on the Employment Relationship.
GN4
Substantial duration” should be understood to mean employment other than on a casual or intermittent basis.

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Standard 2. These procedures need to be up to date and integrated into the overall management system
of the company to ensure consistency and ongoing monitoring. See Annex B for a list of topics typically
covered by such policies.

GN14. All workers performing work for the company should have a contract which describes the
employment relationship with the company or a third party. This contract should be provided as part of the
hiring process and should explain in detail the policies and procedures related to the labor and working
conditions. This will include terms and duration of the employment relationship, wages and benefits, wage
calculation and pay slips, hours of work, overtime, rest days, breaks, grievance procedures, deductions,
working conditions, termination procedures, health insurance, and pension.

GN15. Clients should keep a written record of the employment relationship conditions at the time of hire
of each directly contracted worker. Documentation needs to be up-to-date and maintained by a
designated responsible person or department.

GN16. The working conditions and terms of employment should be communicated to the workers orally
or in writing. Oral communication may be appropriate for simple short-term jobs or where workers are
illiterate. In other cases, clients should provide documentation of the working conditions and terms of
employment. Where there is a collective agreement that applies to the workers, this should be
communicated to them as well.

GN17. Documentation should be clear, easily understandable, and accurate,.. The extent of
documentation can be appropriate to the length and nature of the employment relationship. For example,
a simple public notice of the job to be done, the number of hours, pay, and other key terms and working
conditions may be adequate for seasonal workers (with copies available on request), while for longer-
term employment, material terms of the employment relationship should be documented. In some
countries, individual contracts are a legal requirement. See Annex C for a list of information that should
be communicated to the worker.

GN18. The HR policy should also include statements on workers’ right to privacy relevant to the
particular business operations. This should include i) notification: notification to workers on the data
collection process and the type of data collected; ii) purpose: the purpose of collecting the data; iii)
consent: data should not be disclosed without the worker’s consent; iv) security: data should be kept
secure and confidential; v) disclosure: workers should be informed as to who is collecting their data; vi)
access: workers should be allowed to access their data and make corrections to any inaccurate data; and
vii) accountability: workers should have a method available to them to hold data collectors accountable for
following the above principles. Data should only be collected and used for reasons directly relevant to
employment; all medical data remains confidential. If workers are being filmed, or will be body searched,
or if other surveillance methods are to be used, they should be informed and the reasons explained for
these procedures. Any such method should follow the principle stated above and should be conducted in
ways that are not intimidating or harassing for the workers.

GN19. Clients need to inform workers about the type of information that will be kept and how this
information will be used. Countries have different legal requirements for employment record retention.
Clients will follow these requirements and inform workers to ensure that information is accurate, relevant
and safe from improper disclosure. Clients should also keep personnel files that reflect performance
reviews and any complaints brought against the company or individual employees. Clients should also
keep all final memoranda and correspondence reflecting performance reviews and actions taken by or
against personnel in the employee's personnel file.

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GN20. For further guidance, see IFC’s Measure & Improve your Labor Standards Performance
Handbook.

Working Conditions and Terms of Employment

9. Where the client is a party to a collective bargaining agreement with a workers’
organization, such agreement will be respected. Where such agreements do not exist, or do
5
not address working conditions and terms of employment, the client will provide
6
reasonable working conditions and terms of employment.

10. The client will identify migrant workers and ensure that they are engaged on
substantially equivalent terms and conditions to non-migrant workers carrying out similar
work.

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11. Where accommodation services are provided to workers covered by the scope of this
Performance Standard, the client will put in place and implement policies on the quality and
8
management of the accommodation and provision of basic services. The accommodation
services will be provided in a manner consistent with the principles of non-discrimination
and equal opportunity. Workers’ accommodation arrangements should not restrict workers’
freedom of movement or of association.
____________________________________________________________________
5
Working conditions and terms of employment examples are wages and benefits; wage deductions; hours of
work; overtime arrangements and overtime compensation; breaks; rest days; and leave for illness, maternity,
vacation or holiday.
6
Reasonable working conditions and terms of employment could be assessed by reference to (i) conditions
established for work of the same character in the trade or industry concerned in the area/region where the work
is carried out; (ii) collective agreement or other recognized negotiation between other organizations of
employers and workers’ representatives in the trade or industry concerned; (iii) arbitration award; or (iv)
conditions established by national law.
7
Those services might be provided either directly by the client or by third parties.
8
Basic services requirements refer to minimum space, supply of water, adequate sewage and garbage disposal
system, appropriate protection against heat, cold, damp, noise, fire and disease-carrying animals, adequate
sanitary and washing facilities, ventilation, cooking and storage facilities and natural and artificial lighting, and in
some cases basic medical services.

GN21. Working conditions, as used in Performance Standard 2, refer to conditions in the workplace and
treatment of workers. Conditions in the workplace include the physical environment, health, and safety
precautions, and access to sanitary facilities. Treatment of workers includes disciplinary practices,
reasons and process for termination of workers and respect for the worker’s personal dignity (such as
refraining from physical punishment or abusive language).

GN22. Terms of employment include wages and benefits, wage deductions, hours of work, breaks, rest
days, overtime arrangements, and overtime compensation, medical insurance, pension, and leave for
illness, vacation, maternity, or holiday.

GN23. Performance Standard 2 identifies two distinct circumstances that define the clients’ obligations
with regard to working conditions and terms of employment. One circumstance is where the client is party
to a collective bargaining agreement with a workers’ organization that was chosen by the workers without
employer interference. The other is where such agreements do not exist, do not cover all workers
employed or contracted by the client, or do not address working conditions.

GN24. Where collective bargaining agreements are in place, the client should verify that these meet the
requirements of national law and Performance Standard 2, and provide conditions and terms of
employment in line with these agreements. Where some employees are covered by collective bargaining

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agreements and others are not, the terms and conditions of employment as well as benefits of all
employees in similar positions should be substantially equivalent.

GN25. Where collective bargaining agreements do not exist, or do not address particular working
conditions and terms of employment, clients should provide reasonable working conditions and terms of
employment that, at a minimum, comply with national law. Most countries have extensive legal
frameworks covering many working conditions and terms of employment, such as minimum wage,
maximum hours, payments for overtime work, minimum leave time for vacation, holiday, illness, injury,
maternity, and health and safety protections. However, sometimes these legal frameworks do not reflect
the prevailing market conditions for the industry, sector, or geography of the client’s business. The client
should therefore consider whether the terms and conditions provided to workers are in line with industry,
sector or geographical norms, and would normally be expected to provide terms and conditions not less
GN5
favorable than those provided by comparable employers in the country concerned.

GN26. If clients are working in countries where comparable employers do not exist, they should provide
wages, benefits and conditions of work consistent with the legal framework.

GN27. Where agreements exist, but have not gone through a collective bargaining process, clients will
not use these to discriminate against unionized workers. The guiding principle is that all workers have the
right to choose the most appropriate option for their needs and should have substantially equivalent terms
of employment.

GN28. If the client hires migrant workers (internal or international), their working conditions and terms of
employment should be the same or substantially equivalent to those of non-migrant workers performing
GN6
the same type of work. These terms and conditions include remuneration, overtime, hours of work,
weekly rest, holidays with pay, safety, health, termination of the employment relationship and any other
conditions of work which, according to national law and practice, are covered by these terms. Other terms
of employment, include minimum age of employment, and restriction on work. This refers both to migrant
workers engaged directly or through a third party.

GN29. In some cases, migrant workers might take their families or members of their families to the place
of employment. Due diligence on potential risks and impacts will allow the client to better manage these.
Negative impacts could include use of child labor in client operations; children exposed to dangerous or
hazardous conditions by accessing the operations; poor living conditions; lack of access to services such
as healthcare and education; etc.

GN30. On projects that have a construction element or are remote, (such as large factories away from
urban areas, mining projects, oil and gas projects, and some plantation-based agriculture), the client, or
contractors, working for the client will provide accommodation, transportation, and basic services
including water, sanitation, and medical care for the workers working on that project. This accommodation
may take various forms, ranging from long-established permanently built dormitories to temporary
exploration camps.

GN31. When the client provides services to workers these services shall be provided in a non-
discriminatory manner and comply with national and international standards for quality, security, safety
and professional competency. The workers should not be forced to use any of the services provided by
the client and if the client charges for services, prices should be at market rate, transparent and fair.
GN5
This is based on formulations in the ILO Tripartite Declaration of principles concerning multinational enterprises and social policy
(2006) and the OECD Guidelines for Multinational Enterprises (2001).
GN6
See ILO Convention 97: Migration for Employment (1949).

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Clients should develop a set of standards and a plan for establishment and maintenance of
accommodation and services. These standards should be clearly communicated and required of any
contractor or accommodation providers. Conditions with respect to accommodation and services provided
should be monitored by the client.

GN32. IFC and the European Bank for Reconstruction and Development published guidance that sets
out a range of criteria which can be applied in relation to worker accommodation (Workers’
Accommodation: Processes and Standards—A Guidance Note by IFC and the EBRD).

Workers’ Organizations
12. In countries where national law recognizes workers’ rights to form and to join workers’
organizations of their choosing without interference and to bargain collectively, the client
will comply with national law. Where national law substantially restricts workers’
organizations, the client will not restrict workers from developing alternative mechanisms to
express their grievances and protect their rights regarding working conditions and terms of
employment. The client should not seek to influence or control these mechanisms.

13. In either case described in paragraph 13 of this Performance Standard, and where
national law is silent, the client will not discourage workers from electing worker
representatives, forming or joining workers’ organizations of their choosing, or from
bargaining collectively, and will not discriminate or retaliate against workers who
participate, or seek to participate, in such organizations and collective bargaining. The
client will engage with such workers’ representatives and workers’ organizations, and
provide them with information needed for meaningful negotiation in a timely manner.
Workers’ organizations are expected to fairly represent the workers in the workforce.

GN33. A workers’ organization is any organization of workers for the purpose of furthering and defending
GN7
the interests of workers with regard to working conditions and terms of employment. Workers’
organizations are typically called trade unions or labor unions. Professional and administrative workers’
organizations are often called workers’ associations. Under Performance Standard 2, the term excludes
organizations that have not been freely chosen by the workers involved or that are under the influence or
control of the employer or the state.

GN34. Collective bargaining consists of discussions and negotiations between employers and
representatives of workers’ organizations for the purpose of determining working conditions and terms of
GN8
employment by joint agreement. It also includes the implementation and administration of any
agreements that may result from collective bargaining and the resolution of other issues that arise in the
employment relationship with respect to workers represented by the workers’ organization.

GN35. In a large number of ILO member countries workers have the legal right to form unions or other
workers’ organizations of their own choosing and to bargain collectively with their employers. National law
GN9
typically reflects a number of international agreements that recognize and protect these rights.

GN36. Clients should not interfere with workers’ rights to form or join a workers’ organization, for
example, by favoring one workers’ organization over another or unreasonably restricting access to
GN7
Based on ILO Convention 87 on Freedom of Association and Protection of the Right to Organize.
GN8
Based on ILO Convention 98 on the Right to Organize and Collective Bargaining.
GN9
International agreements include the UN International Covenant on Economic, Social and Cultural Rights; UN International
Covenant on Civil and Political Rights; ILO Convention 87 on Freedom of Association and Protection of the Right to Organize; and
ILO Convention 98 on the Right to Organize and Collective Bargaining.

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workers by representatives of such organizations. Workers’ organizations should be representative of the

work force and act pursuant to the principles of fair representation of workers.

GN37. Clients should not discourage workers from forming or joining a workers’ organization or
discriminate or retaliate against workers who attempt to form or join workers’ organizations. Refusing to
hire workers who have been members or leaders of workers’ organizations at other firms (for reasons
unrelated to qualifications or job performance) would constitute discrimination. Other forms of
discrimination or retaliation would include demoting or re-assigning workers, as well as outsourcing or
shifting work among facilities, in response to union activities.

GN38. Clients should also provide access for representatives of workers’ organizations to the workers
they represent. Workers should be free to meet and discuss workplace issues on the premises during
scheduled breaks, and before and after work. Furthermore, workers should be allowed to choose
representatives to speak with management, inspect working conditions in an appropriate manner and in a
way that does not disrupt productivity, and carry out other organizing activities.

GN39. In a number of countries, or in particular sectors, workers’ freedom of association and/or

collective bargaining is substantially restricted by law. This may occur in a number of ways. In some
countries unions are prohibited, while in others, workers’ organizations may exist but are controlled or
subject to approval by the state. There are some instances where either particular categories of workers
(e.g., non-nationals) or workers in particular sectors, such as export processing zones, are excluded from
the right to associate freely and bargain collectively. In any of these circumstances, the client should
engage with workers to address issues relating to their working conditions and terms of employment.
Methods to enable alternative mechanisms include but are not limited to recognizing worker committees,
and allowing workers to choose their own representatives for dialogue and negotiation over terms and
conditions of employment with the employer in a manner that does not contravene national law.

GN40. In a number of countries, the law is silent on workers’ freedom of association and/or collective
bargaining rights, but does not prohibit workers’ organizations or collective bargaining. In these countries,
clients should engage with workers to address issues relating to their working conditions and terms of
employment. In the absence of legal constraints, clients in these countries are encouraged to recognize
workers’ organizations if the workers have chosen to form or join such organizations and engage in
collective bargaining.

Non-Discrimination and Equal Opportunity

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14. The client will not make employment decisions on the basis of personal characteristics
unrelated to inherent job requirements. The client will base the employment relationship on
the principle of equal opportunity and fair treatment, and will not discriminate with respect
to any aspects of the employment relationship, such as recruitment and hiring,
compensation (including wages and benefits), working conditions and terms of
employment, access to training, job assignment, promotion, termination of employment or
retirement, and disciplinary practices. The client will take measures to prevent and address
harassment, intimidation, and/or exploitation, especially in regard to women. The principles
of non-discrimination apply to migrant workers.

15. In countries where national law provides for non-discrimination in employment, the
client will comply with national law. When national laws are silent on non-discrimination in
employment, the client will meet this Performance Standard. In circumstances where
national law is inconsistent with this Performance Standard, the client is encouraged to
carry out its operations consistent with the intent of paragraph 15 above without
contravening applicable laws.

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16. Special measures of protection or assistance to remedy past discrimination or selection

for a particular job based on the inherent requirements of the job will not be deemed as
discrimination, provided they are consistent with national law.
__________________________________________________
9
Such as gender, race, nationality, ethnic, social and indigenous origin, religion or belief, disability, age, or
sexual orientation.

GN41. Discrimination in employment is defined as any distinction, exclusion, or preference with respect
to recruitment, hiring, firing, working conditions, or terms of employment made on the basis of personal
characteristics unrelated to inherent job requirements that nullifies or impairs equality of opportunity or
GN10
treatment in employment or occupation. Inherent job requirements refer to genuine occupational
qualifications that are necessary to perform the job in question. For example, requiring that a worker
possess strength sufficient for lifting that is a frequent and essential part of a job would be considered a
bona fide occupational qualification. If the client requires the workers to wear a uniform, the uniform
should be culturally appropriate and appropriate to both genders. If identification cards are issued by the
company, they will not contain irrelevant personal/private information such as cultural affiliation or marital
status.

GN42. Equal opportunity is the principle of basing all employment decisions, such as hiring and
promotion, on the ability of a person to perform the job in question, without regard to personal
characteristics that are unrelated to the inherent job requirements. For further guidance on non-
discrimination and equal opportunity see Annex D and IFC’s Good Practice Note on Non-Discrimination
and Equal Opportunity. A client can apply the principles of equal opportunity and non-discrimination using
methods that are effective and acceptable within the country’s legal framework and cultural context as
long as the methods used do not compromise the principles. Beyond the objective to fulfill international
legal obligations and commitments to gender equality, employers may value increasing gender equality in
the workplace for a variety of different reasons. The business case for doing so may not be equally strong
for all employers, but there is growing awareness among employers to focus on the recruitment and
retention of women in the workforce and address workplace gender-equality issues to enhance their
competiveness in the marketplace. For example, clients should promote equal opportunities for women
and men with special emphasis on equal criteria for selection, remuneration, and promotion, and equal
application of those criteria.

GN43. If the client hires migrant workers, appropriate measures should be taken to prevent any
discriminatory treatment of migrant workers.

GN44. The client will take measures to prevent and will not endorse any harassment, including sexual
harassment or psychological mistreatment within the workplace.

GN45. Laws in a large number of countries forbid discrimination based on a range of factors. These laws
typically reflect a number of international agreements that recognize and protect the rights established in
GN10
Based on ILO Conventions 100 and 111. ILO Convention 111 and a number of other international instruments have
enumerated types of personal characteristics that are unrelated to the requirements of the job. ILO Convention 111 defines as
discrimination any distinction, exclusion or preference made on the basis of race, color, sex, religion, political opinion, national
extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or
occupation. The UN Universal Declaration of Human Rights covers all of the personal characteristics listed in the ILO Convention
and also includes language, political or other opinion, property, birth or other status; the UN Convention on the Elimination of All
Forms of Racial Discrimination also prohibits discrimination based on descent or ethnic origin; the UN Convention on the Rights of
the Child also prohibits discrimination based on disability.

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GN11
those agreements. When the law is silent, clients are expected to base recruitment, hiring, working
conditions, and terms of employment on equal opportunity and non-discrimination in accordance with
these principles.

GN46. Clients should also address protection of disabled people’s rights under all of their labor policies
and procedures. HR policies and procedures should also include working conditions, access and egress
for disabled people. These policies and procedures should be available and communicated to disabled
workers, which may mean providing them in alternative formats such as large print, Braille, audio tape,
GN12
etc.

GN47. Special measures of protection or assistance to remedy past discrimination refer to policies
designed to increase employment of underrepresented groups in the workforce or in particular
occupations in order to remedy past discrimination, such as affirmative action, with a view to achieving
effective equality of opportunity and treatment in the workplace. These will not be deemed discrimination
and may be used where permitted by law. Similarly, projects may have objectives to promote the
employment of the local community within the project. Where this is done in accordance with national law,
this will not be taken to infringe the principles of this paragraph.

Retrenchment
10
17. Prior to implementing any collective dismissals, the client will carry out an analysis of
11
alternatives to retrenchment. If the analysis does not identify viable alternatives to
retrenchment, a retrenchment plan will be developed and implemented to reduce the
adverse impacts of retrenchment on workers. The retrenchment plan will be based on the
principle of non-discrimination and will reflect the client’s consultation with workers, their
organizations, and, where appropriate, the government, and comply with collective
bargaining agreements if they exist. The client will comply with all legal and contractual
requirements related to notification of public authorities, and provision of information to,
and consultation with workers and their organizations.

The client should ensure that all workers receive notice of dismissal and severance
payments mandated by law and collective agreements in a timely manner. All outstanding
back pay and social security benefits and pension contributions and benefits will be paid
(i) on or before termination of the working relationship to the workers, (ii) where appropriate,
for the benefit of the workers, or (iii) payment will be made in accordance with a timeline
agreed through a collective agreement. Where payments are made for the benefit of
workers, workers will be provided with evidence of such payments.
_____________________________________
10
Collective dismissals cover all multiple dismissals that are a result of an economic, technical, or
organizational reason; or other reasons that are not related to performance or other personal reasons.
11
Examples of alternatives may include negotiated working-time reduction programs, employee capacity-
building programs; long-term maintenance works during low production periods, etc.

GN48. Retrenchment means the elimination of a number of work positions or the dismissal or layoff of a
number of workers by an employer, generally by reason of plant closing or for cost savings.
Retrenchment does not cover isolated cases of termination of employment for cause or voluntary
GN11
Many laws are based on international conventions that have been widely ratified, including ILO Convention 100 on Equal
Remuneration; Convention 111 on Employment and Occupation Discrimination; UN Convention on the Elimination of All Forms of
Racial Discrimination (CERD); UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW).
GN12
Additional references can be found in the ILO C159 Vocational Rehabilitation and Employment (Disabled Persons) Convention
and the UN Convention on Disability.

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 Guidance Note 2
Labor and Working Conditions
January 1, 2012

departure. Retrenchment is often a consequence of adverse economic circumstances or as a result of a

reorganization or restructuring.

GN49. The client will carry out an alternative analysis describing all alternatives analyzed, number of
positions saved due to application of each alternative, and a cost analysis to determine viability of
alternatives. As an alternative to dismissal, the client should consult workers about the possibility of
adopting a range of other measures, including reduction in hours; productivity improvements; temporary
layoff; and salary reduction. Such measures should be introduced after a period of consultation, and in full
agreement of the workers affected. The duration of these measures have a determined and agreed time
limit.

GN50. In many countries, national law requires advance notice to affected workers, and/or governments
of plant closings or layoffs above specified numerical thresholds. Some national laws require that
retrenchments be negotiated with workers’ organizations through collective bargaining. Severance
payments to affected workers may be required by national law or existing collective bargaining
GN13
agreements.

GN51. When significant layoffs cannot be avoided, a plan should be developed to address the adverse
impacts on workers and their community. The retrenchment plan should address issues such as the
consideration of alternatives to retrenchment; schedule of dismissals, if unavoidable; retrenchment
methods and procedures; selection criteria; severance payments; offers of alternative employment or
assistance in retraining efforts; and job placement.

GN52. Selection criteria for those to be laid off should be objective, fair, and transparent. The
retrenchment should not be based on personal characteristics unrelated to inherent job requirements. In
particular, the provisions of paragraphs 15–16 of Performance Standard 2 and national law on non-
discrimination and protection of workers’ representatives and trade union officials should be taken into
account.

GN53. Clients should also consult with workers and their organizations in developing the retrenchment
plan. Consultations are essential for the development of plans that reflect workers’ concerns as well as
their ideas about ways to avoid or minimize layoffs, criteria for selection and compensation payments.
Where national law or an existing collective bargaining agreement stipulates that retrenchment is a
subject for collective bargaining, the client should allow time for good faith bargaining as well as to
implement the terms of applicable collective bargaining agreements. Any legal requirements specifying a
period of advance notice must be followed. It is good practice to establish a grievance mechanism to deal
with claims that provisions in the retrenchment plan were not followed.

GN54. Consultation with governments may be required by law, and, in addition, clients are encouraged
to consult governments where the scale of layoffs can have significant impacts on communities, and
where government assistance may be available to help address these impacts.

GN55. For further guidance on good practices in retrenchment, see IFC’s Good Practice Note on
Retrenchment.

GN13
Useful guidance on retrenchment is included in the Guidelines for Multinational Enterprises available at:
http://www.oecd.org/topic/0,2686,en_2649_34889_1_1_1_1_37439,00.html and the Tripartite Declaration of Principles concerning
Multinational Enterprises and Social Policy of the ILO, available at: http://www.ilo.org/public/english/employment/multi/index.htm.

12
 Guidance Note 2
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GN56. Any outstanding back pay and benefits as well as severance payments mandated by law and/or
collective agreements should be paid in a timely manner as required by paragraph 19 of Performance
Standard 2. In some jurisdictions the client might be obligated by law to transfer certain payments to
specific institutions such as pension fund administration, health funds, etc. In such cases the client will not
provide payments directly to the worker but for the benefit of the worker to the appropriate institution. The
client, however, will provide the worker with evidence of such payments. In cases where payments to
certain institutions are optional the client will provide options to the worker who might chose either a direct
cash payment or payment to a defined institution.

Grievance Mechanism
18. The client will provide a grievance mechanism for workers (and their organizations,
where they exist) to raise workplace concerns. The client will inform the workers of the
grievance mechanism at the time of recruitment and make it easily accessible to them. The
mechanism should involve an appropriate level of management and address concerns
promptly, using an understandable and transparent process that provides timely feedback
to those concerned, without any retribution. The mechanism should also allow for
anonymous complaints to be raised and addressed. The mechanism should not impede
access to other judicial or administrative remedies that might be available under the law or
through existing arbitration procedures, or substitute for grievance mechanisms provided
through collective agreements.

GN57. In providing a grievance mechanism through which workers may raise workplace concerns, the
client should ensure that matters are brought to management’s attention and addressed expeditiously. It
should also provide feedback to those involved and should bar retribution for filing complaints. Grievance
mechanisms may be designed to direct complaints through an appropriate process in order to protect the
confidentiality of the worker, and should ensure that workers can raise concerns other than to immediate
supervisors. Where there are gender, ethnic, or other tensions at work, adequate representation of such
groups in grievance committees should be considered and the accessibility of grievance mechanisms to
them should be ensured. The client needs to document all grievances and follow up on any corrective
action. The client will appoint a committee to deal with grievances, which will include management,
supervisors and workers’ representatives. Most countries have judicial or administrative processes to
address labor complaints; the client’s mechanism should not delay or hinder access to other judicial or
administrative remedies that are available under law.

GN58. Where a grievance mechanism is provided through a collective bargaining agreement, and meets
the requirements of Performance Standard 2, the client should utilize it for those workers covered by the
agreement. If there are other workers who are not covered by an agreement, the client should establish a
separate mechanism for them, or discuss with unions and workers the feasibility of using the same
grievance mechanism. Clients should inform and train workers on how to use the grievance mechanism
and encourage the use of it to express complaints and suggest improvements.

GN59. A grievance mechanism should clearly establish the policy and procedures for grievances. This
grievance mechanism should be communicated to all workers, including management, in a clear and
understandable manner. The mechanism should always allow for timely resolution of complaints and
should normally provide for a meeting to discuss the grievance should the worker wish to attend. The
worker should have the right to be accompanied and/or represented by a colleague or official of a trade
union at that meeting if they so choose.

GN60. The grievance mechanism should be designed in such a way as to ensure that anonymous
complaints can be submitted and resolved. Submitting a grievance will not require personal information or

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 Guidance Note 2
Labor and Working Conditions
January 1, 2012

physical presence. The response to anonymous grievances should be posted at locations that can be
seen by all employees.

Protecting the Work Force

Child Labor
19. The client will not employ children in any manner that is economically exploitative, or is
likely to be hazardous or to interfere with the child’s education, or to be harmful to the
child’s health or physical, mental, spiritual, moral, or social development. The client will
identify the presence of all persons under the age of 18. Where national laws have
provisions for the employment of minors, the client will follow those laws applicable to the
12
client. Children under the age of 18 will not be employed in hazardous work. All work of
persons under the age of 18 will be subject to an appropriate risk assessment and regular
monitoring of health, working conditions, and hours of work.
________________________________
12 Examples of hazardous work activities include work (i) with exposure to physical, psychological, or sexual

abuse; (ii) underground, underwater, working at heights, or in confined spaces; (iii) with dangerous machinery,
equipment, or tools, or involving handling of heavy loads; (iv) in unhealthy environments exposing the worker to
hazardous substances, agents, processes, temperatures, noise, or vibration damaging to health; or (v) under
difficult conditions such as long hours, late night, or confinement by employer.

GN61. For purposes of Performance Standard 2, a child is a person under age 18. Child labor consists
of work by children that is economically exploitative or likely to be hazardous or to interfere with the child’s
education, or to be harmful to the child’s health or physical, mental, spiritual, moral, or social
development. Certain types of work performed by children may be acceptable, but only when carried out
in a manner that is both legal and safe. Most countries impose legal restrictions on the use of child labor,
although terms vary. In countries where applicable laws do not specify a minimum age, children aged
below 15 (14 in some less-developed countries) should not perform work. Where applicable laws diverge
from this specified age standard, the higher standard should apply. In the case of family and small-scale
holdings that produce for local consumption and do not regularly employ workers, the work performed by
children may be acceptable so long as it is not harmful to the child in any manner. Under no
circumstances should children perform work that is 1) economically exploitative; or 2) likely to be
hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical,
mental, spiritual, moral, or social development; or 3) illegal, even if such practices are socially or culturally
acceptable in the sector, country or region. Obligations on child labor are extended to the client’s supply
chain as outlined in paragraph 27–29 of Performance Standard 2.

GN62. ILO definitions for Child Labor are listed below. Depending on the sector, some countries might
have exceptions to the age limit for a determined period of time. These exceptions need to be approved
by ILO.

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 Guidance Note 2
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Age Groups Working Hours Explanations

Children 0–12 years A single hour of economic activity by children under
12 automatically qualifies them as child laborers.
Children 13 – 14 More than 2 hours of economic activity each day for Light work must not
years more than 6 days in a week even if it does not threaten the
interfere with schoolwork and is not hazardous children’s health and
automatically qualifies them as child laborers. Any safety, or hinder their
work which is hazardous or which interferes with the education or
children’s education will automatically qualify them as vocational orientation
child laborers. and training.

Children 15–17 years Allowed to work up to a maximum of 40 hours per The national
week subject to the work being age appropriate. Any minimum age for
hazardous work which is likely to jeopardize children’s work should not be
physical, mental or moral heath, safety or morals will below the age for
automatically qualify them as child laborers. finishing compulsory
schooling, which is
generally 15.

GN63. The presence of child labor may not be immediately evident at the time of due diligence or
financing. Handling the discovery of children working in a business presents significant challenges for a
client to manage. Immediately removing children from their work is likely to worsen their financial
condition. Rather, clients should immediately remove children from tasks that are dangerous, harmful, or
inappropriate given their age. Children who are under the national school-leaving age may only be
allowed to work outside of school hours. Those children who are over the school-leaving age but are
performing hazardous tasks must be moved to non-harmful tasks. Clients should review workplace
conditions (i.e., OHS conditions including exposure to machinery, toxic substances, dust, noise, and
ventilation, work hours, and nature of the tasks) to be certain that legally employed children are not
exposed to conditions likely to be harmful to them. To do this effectively, clients need to examine the
specific types of tasks that are hazardous to children, and whether employment interferes with access to
education.

GN64. Clients should set a corporate minimum work age that at a minimum complies with national law
and is not lower than 15 (14 in some less-developed countries) (with some exceptions on minimum age
noted in paragraph GN68). Clients should develop a corporate policy against employing, using, or
benefiting from child labor. This policy should include procedures for age verification in hiring. Clients
should review and retain copies of verifiable documentation concerning the age and employment profile
of all people under 18 working in the business, and retain this documentation. The work of persons under
the age of 18 shall be subject to an appropriate risk assessment and regular monitoring of health, working
GN14
conditions, and hours of work.

GN65. Human trafficking is the recruitment, transportation, transfer, harboring, or receipt of persons, by
means of the threat or use of force or other forms of coercion, abduction, fraud, deception, abuse of
power, or of a position of vulnerability, or of the giving or receiving of payments or benefits to achieve the
consent of a person having control over another person, for the purpose of exploitation. Trafficking of
GN14
See ILO Convention 16: Medical Examination of Young Persons (sea) 1921, ILO Convention 77: Medical Examination of Young
Persons (Industry) 1946, ILO Convention 78: Medical Examination of Young Persons (Non-Industrial Occupations) 1946, ILO
Convention 79: Night Work of Young Persons (Non-Industrial Occupations) 1946, ILO Convention 90 Night Work of Young Persons
(Industry) 1948, and ILO Convention 124 Medical Examination of Young Persons (Underground work) 1965.

15
 Guidance Note 2
Labor and Working Conditions
January 1, 2012

children for labor exploitation has been identified as an international problem. Clients shall inquire about
and address these issues with third parties who supply labor so that they do not benefit from these
coercive practices. More information can be found in the ILO’s International Programme for the
Elimination of Child Labor (IPEC) and the International Organization for Migration (IOM) (see
Bibliography).

GN66. For further guidance, see IFC’s Good Practice Note, Addressing Child Labor in the Workplace
and Supply Chain and IFC’s Measure & Improve your Labor Standards Performance Handbook.

Forced Labor
20. The client will not employ forced labor, which consists of any work or service not
voluntarily performed that is exacted from an individual under threat of force or penalty.
This covers any kind of involuntary or compulsory labor, such as indentured labor, bonded
labor, or similar labor-contracting arrangements. The client will not employ trafficked
13
persons.
________________________________________
13
Trafficking in persons is defined as the recruitment, transportation, transfer, harboring, or receipt of persons,
by means of the threat or use of force or other forms of coercion, abduction, fraud, deception, abuse of power,
or of a position of vulnerability, or of the giving or receiving of payments or benefits to achieve the consent of a
person having control over another person, for the purpose of exploitation. Women and children are particularly
vulnerable to trafficking practices.

GN67. Forced labor consists of any work or service not voluntarily performed that is exacted or coerced
GN 15
from a person under threat of force or penalty. Forced labor includes any kind of involuntary or
compulsory labor, such as indentured labor, bonded labor or similar labor arrangements, slavery and
slavery-like practices. Bonded labor is labor that is required in order to pay off a debt. The level of the
debt as a ratio to money credited for work is such that it is impossible or very difficult to ever pay off that
debt. Forced labor also includes requirements of excessive monetary deposits, excessive limitations on
freedom of movement, excessive notice periods, substantial or inappropriate fines, and loss or delay of
wages that prevent workers from voluntarily ending employment within their legal rights. Migrant workers
are most vulnerable to these types of arrangements. Obligations on forced labor are extended to the
client’s supply chain as outlined in paragraphs 27–29 of Performance Standard 2.

GN68. Laws in a large number of countries prohibit most forced labor practices. ILO Convention 29 on
Forced Labor, which provides the basis for the definition above, has been ratified by a large majority of
GN16
countries.

GN69. The employment relationship should be freely chosen and free from threats. Forced labor is a
grave abuse of the fundamental rights of the worker, and retards economic development by keeping
capital in sectors that would not survive without such practices.

GN70. Forced labor practices may not be immediately apparent. If forced labor is discovered in the
client’s workforce, including direct and/or contracted workers, or supply chain, immediate steps should be
taken to address the practice that has coerced the worker and instead offer terms of employment that can
be freely chosen and do not recreate conditions of coercion. Immediate steps should also be taken to
refer cases of forced labor to law enforcement authorities, as appropriate.

GN71. Clients need to avoid any type of physical or psychological coercion of workers, such as
unnecessary restrictions on movement or physical punishment that create a situation whereby the worker
GN15
Based on ILO Convention 29 on Forced Labor.
GN16
Additional guidance is provided by ILO Convention 105 on the Abolition of Forced Labor.

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 Guidance Note 2
Labor and Working Conditions
January 1, 2012

feels compelled to work on a non-voluntary basis. Examples of such practices include locking workers in
their workplace or worker housing. Clients may not retain worker’s identity documents, such as passports,
or personal belongings; such actions may, in effect, amount to a forced labor-like situation. Workers
should have access to their personal documents, including government-issued documents such as
passports, at all times. Security personnel employed by the client may not be used to force or extract
work from workers.

GN72. Clients should avoid practices that have the effect of creating unpayable debt obligations, such as
excessive charges for travel, housing and meals as part of the employment relationship. Clients should
also exercise diligence with regard to key contractors and subcontractors so that they do not knowingly
benefit from practices that lead to bonded or indentured status of workers.

GN73. Clients should clearly recognize and communicate worker’s freedom of movement in employment
contracts, including access to personal documents at all times. Contracts need to be provided in the
workers’ language and need to be understood by them.
GN17
GN74. Trafficked persons and migrant workers who lack legal status in a country may be particularly
vulnerable to forced labor situations, for example through debt bondage to “recruiters and brokers” who
charge exorbitant fees to place workers. Clients should inquire about and address these issues with
contractors who supply labor so that they do not benefit from these coercive practices. Diligence should
also be exercised when the client’s project is situated in an export processing zone (EPZ) since EPZs are
often exempt from national labor laws or have weak enforcement of such law. Migrant workers,
particularly girls and young women, are one of the groups that have been identified as more vulnerable to
human trafficking and forced labor. Several institutions are addressing issues of migrant vulnerability,
including the ILO and the IOM.

GN75. There are circumstances where prison labor and labor from correctional facilities will be
considered to be forced labor. If prisoners are working and a private company benefits, then work will only
be acceptable where the prisoners have demonstrably volunteered for the work and they are paid at a
rate which is equivalent to the prevailing market rate for that job. If prison labor comprises an important
and irreplaceable part of the client’s supply chain, the client should provide a detailed review
demonstrating that the proposed prison labor meets the above requirements.

Occupational Health and Safety

21. The client will provide a safe and healthy work environment, taking into account
inherent risks in its particular sector and specific classes of hazards in the client’s work
areas, including physical, chemical, biological, and radiological hazards, and specific
threats to women. The client will take steps to prevent accidents, injury, and disease arising
from, associated with, or occurring in the course of work by minimizing, as far as
reasonably practicable, the causes of hazards. In a manner consistent with good
14
international industry practice, as reflected in various internationally recognized sources
including the World Bank Group Environmental, Health and Safety Guidelines, the client will
address areas that include the (i) identification of potential hazards to workers, particularly
_________________________________
14
Defined as the exercise of professional skill, diligence, prudence, and foresight that would reasonably be
expected from skilled and experienced professionals engaged in the same type of undertaking under the same
or similar circumstances, globally or regionally.

GN17
United Nations, Human Trafficking and Business: Good Practices to Prevent and Combat Human Trafficking, United Nations
Global Initiative to Fight Human Trafficking, 2010.

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 Guidance Note 2
Labor and Working Conditions
January 1, 2012

those that may be life-threatening; (ii) provision of preventive and protective measures,
including modification, substitution, or elimination of hazardous conditions or substances;
(iii) training of workers; (iv) documentation and reporting of occupational accidents,
diseases, and incidents; and (v) emergency prevention, preparedness, and response
arrangements. For additional information related to emergency preparedness and response
refer to Performance Standard 1.

GN76. OHS refers to the range of endeavors aimed at protecting workers from injury, illness or impacts
of mutagenic or teratogenic agents associated with exposure to hazards encountered in the workplace or
while working. Hazards may arise from materials (including chemical, physical and biological substances
and agents), environmental or working conditions (such as excessive hours of work, night work, mental or
physical exhaustion, oxygen deficient environments, excessive temperatures, improper ventilation, poor
lighting, faulty electrical systems or unshored trenches), or work processes (including tools, machinery
and equipment). OHS practices include the identification of potential hazards and responses including
design, testing, choice, substitution, installation, arrangement, organization, use and maintenance of
workplaces, working environment and work processes to eliminate sources of risk or minimize workers’
exposure to them. Some OHS risks may be specific to women workers. This may partly be due to the fact
that men and women tend to have different types of jobs, but also because of physiological differences.
Sexual harassment at the workplace is typically a risk for female workers, which should be considered
when designing the grievance mechanism. This could for example, imply having staff that have the
appropriate skills to receive and handle complaints related to sexual harassment. The client should
provide separate toilet and locker facilities for men and women. The client may also want to consider
including women on OHS committees to help ensure that policies and practices respond to women
workers needs.
GN18
GN77. Most countries have laws regulating OHS and workplace conditions and the client is expected
to comply with such laws. Additional guidance on the management of OHS issues according to Good
International Industry Practice is provided in the World Bank Group Environmental, Health and Safety
Guidelines (EHS Guidelines), both general and industry sector.

GN78. Sources of hazards to workers’ health and safety should be eliminated rather than allowing the
hazards to continue and providing personal protective equipment. However, when the hazard is inherent
to the project activity or it is otherwise not feasible to completely eliminate the hazard, the client should
take appropriate protective measures such as controlling the hazard at its source through the use of
protective solutions (e.g., exhaust ventilation systems, isolation rooms, machine guarding, acoustic
insulation, etc) and provide adequate personal protective equipment at no cost to the worker. Protective
measures, training and equipment will be necessary to prevent occupational exposure to hazardous
materials.

GN79. Asbestos, which has been classified as a Group 1 carcinogen by many national and international
organizations, and asbestos-containing material (ACM), need to be addressed through practices which
are specified in the General EHS Guidelines and the WBG’s Good Practice Note: Asbestos Occupational
and Community Health Issues. ACM should be avoided in new construction, including construction for
disaster relief. In reconstruction, demolition, and removal of damaged infrastructure, asbestos hazards
should be identified and a risk management plan adopted that includes disposal techniques and end-of-
life sites.

GN18
Parties to the ILO have also negotiated numerous conventions that address these matters, both at the general level and with
regard to specific industries. Examples include ILO Convention 155 on Occupational Safety and Health and Protocol 155 of 2002 to
Convention 155; Convention 162 on Asbestos; Convention 174 on Prevention of Major Industrial Accidents.

18
 Guidance Note 2
Labor and Working Conditions
January 1, 2012

GN80. Training should be provided to all workers on relevant aspects of OHS associated with their daily
work, including emergency arrangements and OHS briefing for visitors and other third parties accessing
the premises. Workers should not face any disciplinary measures or negative consequences for reporting
or raising concerns about OHS.

GN81. The client should document and report occupational injuries, illnesses and fatalities. Worker
monitoring data (such as exposure levels and health testing) should be retained and reviewed. Health
monitoring data should be used to check the effectiveness of protection measures to hazardous agents.
Looking at such data by gender may provide useful information on how women at work may be affected
differently than men.

GN82. Clients will extend a safe and healthy work environment to contracted workers and to any other
workers who provide project-related work and services. Contract specifications for contractors providing
workers should include provisions that they meet the OHS requirements of the client, both to satisfy the
requirements of Performance Standard 2 and to minimize risk and liability to the client. Clients should
monitor contractor performance on the implementation of OHS requirements and suggest corrective
actions if necessary. Clients should also ensure that the contractor’s workers have adequate access to
first aid and medical assistance in cases of work related accidents or injuries. As a way to lessen risk and
liability, and to improve performance, clients should require comparable practices of suppliers.

GN83. The overall social and environmental management system as required by Performance
Standard 1 should be designed with adequate capacity for oversight of OHS matters. The management
system should include regular monitoring and review of occupational health and safety matters, ambient
working environments and other OHS indicators. It is good practice to apply information compiled and any
corrective measures in a continuous process to improve OHS conditions and management.

Workers Engaged by Third Parties

22. With respect to contracted workers the client will take commercially reasonable efforts
to ascertain that the third parties who engage these workers are reputable and legitimate
enterprises and have an appropriate ESMS that will allow them to operate in a manner
consistent with the requirements of this Performance Standard, except for paragraphs 18–
19, and 27–29.

23. The client will establish policies and procedures for managing and monitoring the
performance of such third party employers in relation to the requirements of this
Performance Standard. In addition, the client will use commercially reasonable efforts to
incorporate these requirements in contractual agreements with such third party employers.

24. The client will ensure that contracted workers, covered in paragraphs 24–25 of this
Performance Standard, have access to a grievance mechanism. In cases where the third
party is not able to provide a grievance mechanism the client will extend its own grievance
mechanism to serve workers engaged by the third party.

GN84. Some workers working on the core business processes of a project may not be directly
contracted by the client, but rather through contractors, agents, brokers or other intermediaries. Indicators
determining the type of employment relationship and type of workers are included in paragraphs GN9 and
GN17. This will help clients to determine if there are gaps in covering contracted workers rights. Even
though workers are outsourced by the client, these workers tend to perform important functions of the
client’s core business processes for a substantial period as if they are substitute workers of the client.
Where such workers are performing work related to the core business processes of the project, the client

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 Guidance Note 2
Labor and Working Conditions
January 1, 2012

has the responsibility to ensure that contractors and other intermediaries comply with the standards set
out in this Performance Standard.

GN85. In cases where third parties are small and medium enterprises or have limited resources and
capacity, the client will assess the type of support it can provide to improve such third party performance,
which may include the use or extension of the client’s systems or services to supplement those of the
third party, in relation to the requirements under this Performance Standard. If third party performance
cannot be improved over a reasonable timeframe, the client will need to evaluate alternative sources to
these services.

GN86. The client should develop and implement procedures to manage and monitor performance of
third parties. These procedures should be integrated in the day-to-day operations of the company and
requirements should be clearly communicated to third parties, and if possible to workers engaged by
these third parties.

GN87. Most national laws address contract labor, though the terms vary widely among countries and
types of contract labor. The client should assess the employment relationship between the contractor and
workers, and ensure that all contractors comply with legal requirements covering but not limited to
minimum wage, hours of work, overtime payments, health and safety conditions, contributions to health
insurance and pension schedules, and other legally mandated employment terms with regard to all
workers engaged by third parties. There may also be national law provisions that state that contractors’
workers should not work on key functions within the business.
GN19
GN88. The clients should use commercially reasonable efforts so that they do not benefit from labor
practices of third parties that are in breach of national law or the standards set out in this Performance
Standard. Such efforts may include establishing contractual obligations on contractors or intermediaries
who supply workers to the client; defining and enforcing policy regarding use of employment agencies
and labor requirements; auditing the relationship and type of contract between third party and workers;
making unannounced visits and visual inspections at the core business processes; exercising due
diligence in supervising contractors and other intermediaries who supply workers; monitoring compliance
of third parties; and providing training for all third party workers to explain labor and working conditions for
that project. The client will assess the track record or standing of contractors and other intermediaries that
will engage workers. The client should also exercise due diligence to ensure that contractors or other
intermediaries engaging workers satisfy all legal requirements.

GN89. It is good practice for clients to exercise visual inspections over all those working at the client’s
core business processes. The clients shall ensure that a grievance mechanism is available for these
workers either directly by the third party or through the company. In case the grievance mechanism is
provided by the third party, the client will receive regular reporting on the grievance raised by the workers.

GN90. Where workers are employed by a third party with limited capacity to deal with workers’
grievances the client should either take steps to ensure that the third party has a grievance mechanism in
place, or should establish a grievance procedure which allows for the workers of the third party to directly
bring complaints to the client, which the client should then bring to the attention of the third party for
resolution.

GN19
Commercially reasonable efforts refer to taking all measures necessary to achieve a purpose as long as their cost or burden is
not unreasonable from a commercial perspective. For example, if a measure is uneconomical for a business to undertake, it could
be deemed to be commercially unreasonable. It contrasts with "best efforts," which usually means taking any measures necessary,
even if they could be excessively costly or burdensome.

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GN91. When the client or third party provides services to contracted workers, these services shall be
provided in a non-discriminatory manner and comply with national and international standards for quality,
security, safety and professional competency. The workers should not be forced to use any of the
services provided by the third party and if the third party charges for services prices should be at market
rate, transparent and fair.

GN92. IFC and the European Bank for Reconstruction and Development have produced guidance
(Workers' Accommodation: Processes and Standards (Workers' Accommodation: Processes and
Standards) that sets out a range of standards which can be applied in relation to worker accommodation.
Third parties should consider this guidance and those provided by national law and develop an agreed
set of standards for the project and a plan for establishment and maintenance of accommodation and
services. Conditions in the accommodation and services provided should be monitored by the client.

Supply Chain
15
25. Where there is a high risk of child labor or forced labor in the primary supply chain,
the client will identify those risks consistent with paragraphs 21 and 22 above. If child labor
or forced labor cases are identified, the client will take appropriate steps to remedy them.
The client will monitor its primary supply chain on an ongoing basis in order to identify any
significant changes in its supply chain and if new risks or incidents of child and/or forced
labor are identified, the client will take appropriate steps to remedy them.

26. Additionally, where there is a high risk of significant safety issues related to supply
chain workers, the client will introduce procedures and mitigation measures to ensure that
primary suppliers within the supply chain are taking steps to prevent or to correct life-
threatening situations.

27. The ability of the client to fully address these risks will depend upon the client’s level of
management control or influence over its primary suppliers. Where remedy is not possible,
the client will shift the project’s primary supply chain over time to suppliers that can
demonstrate that they are complying with this Performance Standard.
_____________________________________________
15
The potential risk of child labor and forced labor will be determined during the risks and impacts identification
process as required in Performance Standard 1.

GN93. Supply chain refers to materials, components, goods or products for use in ongoing operations. A
supply chain of goods may include suppliers of raw material and suppliers of pieces or components for
assembly and production. The supply chain of multinational corporations can be extensive and may be
global in nature, whereas the supply chain of national or smaller enterprises will be smaller in scale and
may be local in nature, involving local companies, and home-based workers. The term primary supplier
refers to those suppliers who are providing goods, and materials essential for the core business
processes of the project. The supply chain requirements of Performance Standard 2 do not apply to
material or components used in the construction phase of the project.

GN94. A company’s supply chain can be complex and include a large number of suppliers in different
tiers. Although it might not be feasible to assess the entire supply chain, the client should identify the
areas of risks and impacts related to paragraphs 27 and 28, whether due to (i) suppliers’ operating
context (e.g., inherent risk in country, region or sector); (ii) the particular materials, components, or
products supplied (e.g., inherent risk in production, agricultural commodities or extracting process); or
(iii) other relevant considerations, and prioritize assessment of those suppliers. The first step is to
undertake a mapping of the supply chain. This will include the identification of suppliers, identification of

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the potential significant adverse risks and impacts associated with the supply chain, and prioritization of
suppliers by levels of risk. Due to the dynamic character of most supply chains, this process needs to be
updated periodically. Tracking of suppliers’ performance should be integrated into the overall
management system. This will help clients to determine whether procedures and mitigation measures are
being implemented correctly. It also provides feedback on new areas of risk and concern.

GN95. The effectiveness in addressing the supply chain will depend on the leverage that the client will
likely be able to exercise. In situations where there is an integrated chain of suppliers that depend on the
client for their business viability, this leverage and client risk from supplier nonperformance will be high.
As the supply chain extends into commodity markets where the client’s operation has little significance,
the client’s supply chain review will simply reflect sectoral issues, rather than opportunities for project-
specific mitigation. Where the client has complex operations with multiple tiers of suppliers, its leverage
will diminish toward the more distant tiers of suppliers.

GN96. With regard to child labor and forced labor as defined in Performance Standard 2, the client
needs to exercise due diligence in its supply chain to avoid benefit or financial gain from these practices.
Clients should make particular effort and engage in additional diligence when such practices are
prevalent or known to exist within certain stages of the supply chain, in specific industries or in
geographic areas. Financial gain from child labor is a specific risk when the cost of labor is a factor in the
competitiveness of the client’s goods or materials. Clients should utilize their influence to the fullest extent
to eradicate child labor and forced labor in their supply chain. Clients should also take steps to ensure
that life-threatening situations (for example, exposure to significant fall and crushing hazards, exposure to
hazardous substances, and exposure to electrical hazards) are either prevented or removed from the
supply chain.

GN97. Where the client discovers forced labor and child labor in the supply chain, the client should seek
professional advice on the appropriate steps to take to address this issue. In the case of child labor,
immediately removing children from their work is likely to worsen their financial condition. Rather, clients
should immediately remove children from tasks that are dangerous, harmful, or inappropriate given their
age. Children who are over the national school-leaving age should be moved to non-harmful tasks.
Children under the national school-leaving age must only work in legal activities outside school hours,
and in some cases it may be appropriate to provide compensation to cover their loss of wages.
Implementing processes such as purchasing procedures will ensure that specific requirements on child
labor, forced labor and work safety issues are included in orders and contracts with suppliers.

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Annex A

Content of a Labor Assessment

A labor assessment may be carried out at different levels, depending on the initial assessment of the
project risk posed by labor practices. It may take place as part of a social and environmental assessment
process or as a stand-alone exercise. Any labor assessment should include a review of the potential
client’s employment policies, the adequacy of existing policies, and management’s capacity to implement.

The assessment may include the following:

 Description of the workforce – This includes numbers of workers, types of jobs and skills, and
composition of the workforce (gender, age, minority status, etc.) and numbers employed
through contractors and other third parties.
 Description of working conditions and terms of employment – A copy of the client’s policies
and procedures covering labor relations and human resource management should be
provided. The client should indicate whether the workers are organized and to which workers’
organization(s) they belong. All collective bargaining agreements that apply to the project
should be included.
 Description of types of employment relationships – A description of the structure of the
client’s supply chain will be included and an assessment of the likely labor risks in the supply
chain. Description of the way in which terms and conditions are determined, including an
assessment of the degree to which wages and other conditions compare to other comparable
employers in the sector.
 Description of the working environment and identification of any work place health and safety
issues – This includes mitigation measures to protect the welfare of the workforce or address
identified risks. Both risks that arise from normal functions and operations as well as less
common circumstances and accidents that are known to be a risk within the industry or
locality should be covered. The assessment should identify work areas, equipment and
processes that may require redesign, risk reduction or hazard control measures.
 Compliance with national employment and labor law – An explanation of the nature of any
violations of applicable labor law, copies of reports from national inspectorates or other
enforcement bodies and a description of remediation steps taken.
 Description of conditions in the client’s project - The nature of the project, sector or country
might pose risk of violation of employment and labor law or the requirements of Performance
Standard 2 in the client’s project or by key contractors and suppliers. This should be set out
against the requirements of the Performance Standard.
 Identification of the client’s employment policy where improvements may be needed in light of
the requirements of Performance Standard 2 or national law – The client should take this
opportunity to identify weaknesses in its policies or employment practices and changes that
could improve the firm’s performance.

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Annex B

Content of HR Policies

Companies need to develop their HR policies taking into consideration their type of business processes.
Companies should not simply copy a template for such a wide-ranging strategic document. However a
good start is to use the elements of Performance Standard 2 as the outline for labor and working
conditions in writing HR policies. Companies need to make sure that each policy statement is in
alignment with the respective element and guiding principles of Performance Standard 2. Here is the
outline of Performance Standard 2 for reference, but it should not be limited by this.

1. Working Conditions and Management of Worker Relationship

a. Human Resources Policy
b. Working Relationship
c. Working Conditions & Terms of Employment
d. Workers’ Organizations
e. Non-Discrimination & Equal Opportunity
f. Retrenchment
g. Grievance Mechanism
2. Protecting the Workforce
a. Child Labor
b. Forced Labor
3. Occupational Health & Safety
4. Workers Engaged by Third Parties
5. Supply Chain

HR policies can flow directly from Performance Standard 2. Companies need to clearly and simply state
their policies with respect to each element of Performance Standard 2. They do not have to be long and
technical like a legal document. Companies can simply paraphrase the guiding principles of Performance
Standard 2 and customize the language for the company.

Additional information on how to develop HR policies can be found in IFC’s Measure & Improve your
Labor Standards Performance Handbook.

Content of HR Procedures

Procedures need to be clearly written. They need to explain step-by-step how everyone will implement
the principles of Performance Standard 2 and the HR policies. They need to be clearly communicated to
workers at all levels of the company, in all of the languages spoken in the company.
HR procedures should not be an isolated set of activities layered on to the company’s existing business
procedures. They should be integrated in the day-to-day business operations.
Additional information on HR procedures can be found in the IFC Handbook noted above.

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Annex C

Information Provided to Individual Workers

The information provided to workers on the commencement of their employment will normally be
covered by rules concerning such information or contracts of employment contained in national law,
however initial documents and contracts should also include information on the following:

 The name and legal domicile of the employer;

 The worker’s job title;
 The date employment began;
 Where the employment is not permanent, the anticipated duration of the contract;
 The place of work or, where the work is mobile, the main location;
 Hours of work, leave entitlements and other related matters;
 Rules relating to overtime and overtime compensation;
 The levels and rules relating to the calculation of salary, wages and other benefits, including
any rules related to deductions;
 The pension and other social security arrangements applicable to the worker;
 The length of notice which the worker can expect to give and receive on termination of
employment;
 The disciplinary procedures which are applicable to the worker, including details of
representation available to the worker and any appeals mechanism;
 Details of grievance procedures, including the person to whom grievances should be
addressed;
 Any collective bargaining arrangements which apply to the worker.

This information should ideally be provided to the worker upon commencement of employment, but if
not, should be provided as soon as possible thereafter.

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Annex D

Grievances - Principles of Grievance Mechanisms

There is no prescribed form for internal grievance mechanisms and such matters are rarely dealt with by
national law – although there may be provisions in collective agreements which are relevant. There are,
however, various principles that should underpin an effective grievance mechanism.
 Provision of information: All workers should be informed about the grievance mechanism at the
time they are hired, and details about how it operates should be easily available, for example,
included in worker documentation or on notice boards.
 Transparency of the process: Workers must know to whom they can turn in the event of a
grievance and the support and sources of advice that are available to them. All line and senior
managers must be familiar with their organization's grievance procedure.
 Keeping it up to date: The process should be regularly reviewed and kept up to date, for
example, by referencing any new statutory guidelines, changes in contracts or representation.
 Confidentiality: The process should ensure that a complaint is dealt with confidentially. While
procedures may specify that complaints should first be made to the workers’ line manager, there
should also be the option of raising a grievance first with an alternative manager, for example, a
human resource (personnel) manager.
 Non-retribution: Procedures should guarantee that any worker raising a complaint will not be
subject to any reprisal.
 Reasonable timescales: Procedures should allow for time to investigate grievances fully, but
should aim for swift resolutions. The longer a grievance is allowed to continue, the harder it can
be for both sides to get back to normal afterwards. Time limits should be set for each stage of the
process, for example, a maximum time between a grievance being raised and the setting up of a
meeting to investigate it.
 Right of appeal: A worker should have the right to appeal to a higher level of management if he
or she is not happy with the initial finding.
 Right to be accompanied: In any meetings or hearings, the worker should have the right to be
accompanied by a colleague, friend or union representative.
 Keeping records: Written records should be kept at all stages. The initial complaint should be in
writing if possible, along with the response, notes of any meetings and the findings and the
reasons for the findings.
 Relationship with collective agreements: Grievance procedures may be included in collective
agreements. Any additional processes should be consistent with these.
 Relationship with regulation: In some countries, grievance processes are set out in
employment codes. Workplace processes should be compliant with these.

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Annex E

Contents of a Retrenchment Plan

Consider Costs and Alternative Solutions to Retrenchment

 Retrenchment of workers should be considered as a last resort and only implemented after other
alternatives have been exhausted.
 Companies should first consider the costs of, and alternatives to, retrenchment.
 Possible alternatives to retrenchment, including those proposed by employees, management and
owners, and those suggested by other stakeholders through preliminary consultations should be
considered.

Description of Anticipated Retrenchment and Rationale

 Anticipated magnitude, rationale, and timeframe characteristics of the labor force (number of men
and women employed by skill level and type of contract)
 Adequacy of current staffing levels and need for retrenchment from a business point of view
 Size of the planned retrenchment (number of men and women to be retrenched by skill level and
type of contract)
 Retrenchment schedule.

Relevant Economic Context

 Situation of the local economy, as it relates to the retrenched workers' ability to find new jobs or
start new businesses
 Importance of the firm/enterprise in the local economy
 Main trends in the sector in which the firm operates (e.g., projected growth, level of employment,
wages, foreign and domestic investment).

Retrenchment Methods and Procedures

 Methods anticipated (e.g., voluntary retirement, severance packages, lay-offs)
 Consultation and negotiation (e.g., with labor organizations, workers’ representatives, community
organizations, government representatives, and NGOs)
 Selection criteria for worker dismissal
 Strategies to prevent the disproportionate representation of a social group (e.g., women or
members of a particular ethnic or religious group) among the retrenched workers.

Management Arrangements
 Person or people who will direct/supervise the retrenchment process
 Grievance and appeal procedures.

Legal/Institutional Framework
 Legislation that applies to early retirement, provision of severance packages and lay-offs
 Legal role of trade unions or other representative bodies in the retrenchment process
 Relevant agreements with labor unions or other labor representatives
 Compliance of planned retrenchment with applicable legislation and agreements
 Coverage of retrenched workers by unemployment insurance or any other welfare programs
 Eligibility of part-time or contract workers to receive benefits or assistance.

Anticipated Impacts on Retrenched Workers and Communities

 Prospects for retrenched workers (market demand for their skills and alternative sources of
income/employment) eligibility of retrenched workers for unemployment or other benefits

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 Impacts on wider communities and remedial measures proposed.

Compensation and Any Additional Assistance to Be Provided to Retrenched Workers

 Compensation anticipated by skill level and type of contract
 Training programs
 Career counseling
 Assistance to set up micro-enterprises.

Monitoring of the Retrenchment Process

 Indicators to be monitored (e.g., situation of the retrenched workers, payment of entitlements,
outcomes of assistance provided)
 Frequency of monitoring activities
 Party or parties that will carry out the monitoring activities.

Supporting Documentation
 References of written materials, record of consultations with affected workers, tables, and the like
included in an annex.

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Annotated Bibliography

International Agreements

Several of the requirements in Performance Standard 2 are partly guided by standards set by the
following international agreements negotiated through the International Labour Organization (ILO)
and the United Nations (UN), noted in each case:

 ILO Convention 87 on Freedom of Association and Protection of the Right to Organize

 ILO Convention 98 on the Right to Organize and Collective Bargaining
 ILO Convention 29 on Forced Labor
 ILO Convention 105 on the Abolition of Forced Labor
 ILO Convention 138 on Minimum Age (of Employment)
 ILO Convention 182 on the Worst Forms of Child Labor
 ILO Convention 100 on Equal Remuneration
 ILO Convention 111 on Discrimination (Employment and Occupation)
 UN Convention on the Rights of the Child, Article 32.1

A list of the eight ILO conventions and the countries that have ratified them is available at the ILOLEC
Database of International Labour Standards: http://www.ilo.org/ilolex/english/index.htm. The text of
the ILO conventions and list of ratifying countries are available at http://www.ilo.org/
ilolex/english/convdisp2.htm.

In 1998, the members of the ILO agreed on a “Declaration on Fundamental Principles and Rights at
Work” (http://www.ilo.org/public/english/standards/relm/ilc/ilc86/com-dtxt.htm), which declares that “all
Members, even if they have not ratified the Conventions in question, have an obligation arising from
the very fact of membership in the Organization, to respect, to promote and to realize, in good faith
and in accordance with the Constitution, the principles concerning the fundamental rights which are
the subject of those Conventions.” A large majority of countries have ratified at least some of the eight
ILO conventions that comprise the four core labor standards. In addition, most countries have labor
laws in place that reflect the eight core standards, whether or not they have ratified the conventions.
Where these standards have not been expressly incorporated into national law, clients should identify
and implement the relevant standards as described in the Performance Standard 2 and its
accompanying Guidance Note.

Other references to ILO documents in Guidance Note 2 include the following:

 ILO Convention 155 on Occupational Safety and Health

 ILO Protocol 155 of 2002 to the Occupational Safety and Health Convention
 ILO Convention 162 on Asbestos
 ILO Convention 174 on Prevention of Major Industrial Accidents

Several of the topics covered by Performance Standard 2 (noted in relevant sections) are also within
the scope of the following international agreements negotiated through the United Nations:

 UN Universal Declaration of Human Rights

 UN International Covenant on Economic, Social, and Cultural Rights
 UN International Covenant on Civil and Political Rights
 UN Convention on the Rights of the Child

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 UN Convention on the Elimination of All Forms of Racial Discrimination

 UN Convention on the Elimination of All Forms of Discrimination against Women.

A list of the six UN conventions and the countries that have ratified each of them is available at
http://www2.ohchr.org/english/law/index.htm. The ratification status of each convention by country is
available at http://treaties.un.org/Pages/Treaties.aspx?id=4&subid=A&lang=en.

Also see the UN’s “Convention on the Rights of Persons with Disabilities,” which elaborates in detail
the rights of persons with disabilities and sets out a code of implementation:
http://www.un.org/ disabilities/convention/conventionfull.shtml. Furthermore, see the UN’s “Optional
Protocol to the Convention on the Rights of Persons with Disabilities” at
http://www.un.org/disabilities/convention/optprotocol.shtml.

Guidance, Recommendations, and Adjudications

Resources issued by the following organizations provide useful additional guidance:

ILO (International Labour Organization). 2006. Tripartite Declaration of Principles Concerning

Multinational Enterprises and Social Policy. 4th Edition. Geneva: ILO. This book, available to
download, offers guidance on employment, training, conditions of work and life, and industrial
relations. http://www.ilo.org/empent/Publications/WCMS_094386/lang--en/index.htm.

———. 2007. “The Employment Relationship: An Annotated Guide to ILO Recommendation No.
198.” ILO, Geneva.
http://www.ilo.org/public/english/dialogue/ifpdial/downloads/guide-rec198.pdf.

———. 2011a. “Committee on Freedom of Association.” ILO, Geneva.

http://www.ilo.org/global/standards/applying-and-promoting-international-labour-standards/
committee-on-freedom-of-association/lang--en/index.htm. This committee investigates
claimed violations of the right to organize or bargain collectively. This nine-member tripartite
(government, employer, and trade union) body reviews complaints on country compliance
with the principles of freedom of association and collective bargaining, whether or not a
country has ratified ILO Conventions 87 and 98. To review cases, go to
http://www.ilo.org/ilolex/english/index.htm and click on “Cases of the Committee on Freedom
of Association.” Cases are sorted by country and by case.

———. 2011b. “International Labour Standards.” ILO, Geneva.

http://webfusion.ilo.org/public/db/standards/normes/appl/index.cfm?lang=EN.
This site reviews member countries’ implementation of ratified labor conventions periodically.
A searchable database can access the findings of the Committee of Experts on the
Application of Conventions and Recommendations on country and issue violations.

IOM (International Organization for Migration). 2011. Homepage. IOM, Geneva.

http://www.iom.int/jahia/jsp/index.jsp. IOM, an intergovernmental organization established in
1951, is committed to the principle that humane and orderly migration benefits migrants and
society.

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OECD (Organisation for Economic Co-operation and Development). “Guidelines for Multinational
Enterprises.” OECD, Paris.
http://www.oecd.org/topic/0,2686,en_2649_34889_1_1_1_1_37439,00.html. This resource
offers guidance on employment and industrial relations, human rights, environment,
information disclosure, combating bribery, consumer interests, science and technology,
competition, and taxation.

IFC and World Bank Resources

IFC and the World Bank have published a number of resource materials, including the following:
IFC (International Finance Corporation). 2002. “Addressing Child Labor in the Workplace and Supply
Chain.” Good Practice Note 1, IFC, Washington, DC.
http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_childlabor/$FILE/ChildLabor.pdf.
This note provides good practice approaches that businesses have successfully applied in
managing risks associated with child labor in their own workplaces and those of their vendors
and suppliers.

———. 2005. “Managing Retrenchment.” Good Practice Note 4, IFC, Washington, DC.
http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_Retrenchment/$FILE/Retrenchment.
pdf. This 28-page note provides guidance on how to plan and manage the process of
retrenchment where significant job losses are anticipated.

———. 2006a. “Labor and Working Conditions.” Guidance Note 2, IFC, Washington, DC.
http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/pol_GuidanceNote_2/$FILE/Guidance
Note2.pdf. The General Environmental, Health and Safety Guidelines as well as the sector-
specific IFC Environmental Health and Safety Guidelines apply to all places of work
associated with IFC projects and provide guidance for general and specific aspects for
occupational health and safety.

———. 2006b. “Non-discrimination and Equal Opportunity.” Good Practice Note 5, IFC, Washington,
DC.
http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_NonDiscrimination/$FILE/NonDiscri
mination.pdf. This note provides guidance to IFC clients and other employers in emerging
markets on promoting both equality and diversity, and overcoming discriminatory practices,
while acknowledging that this topic can often be controversial and difficult.

———. 2007. “Environmental, Health, and Safety General Guidelines.” IFC, Washington, DC.
http://www.ifc.org/ifcext/sustainability.nsf/ Content/EHSGuidelines. The guidelines contain the
performance levels and measures that are normally acceptable to IFC and are generally
considered to be achievable in new facilities at reasonable costs by existing technology.

———. 2010. Measure and Improve Your Labor Standards Performance: Performance Standard 2
Handbook for Labor and Working Conditions. IFC: Geneva. This book is intended to be a
practical reference and aims to provide an understanding of the management systems and
internal staff capabilities required for improving the labor standards performance in a
company and its supply chain.

IFC (International Finance Corporation) and EBRD (European Bank for Reconstruction and
Development). 2009. “Workers’ Accommodation: Processes and Standards. Guidance Note,
IFC, Washington, DC, and EBRD, London.

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World Bank. 2009. “Good Practice Note: Asbestos—Occupational and Community Health Issues.”
World Bank, Washington, DC.
http://siteresources.worldbank.org/EXTPOPS/Resources/AsbestosGuidanceNoteFinal.pdf.
This note discusses health-risks related to asbestos exposure and provides resources for
international best practices.

———. 2011a. “Active Labor Market Programs and Activation Policies.” World Bank, Washington,
DC. http://go.worldbank.org/MVGTO42OA0. This website offers useful information for clients
confronting large-scale retrenchments.

———. 2011b. “Core Labor Standards Toolkit.” World Bank, Washington, DC.
http://go.worldbank.org/1JZA8B2CO0. This toolkit offers general information on the
International Labour Organization's four fundamental principles and rights at work. The
website also provides links to other useful information sources.

Country Reports on Labor Practices

ICFTU (International Confederation of Free Trade Unions). 1997–2006. “Country Reports: WTO and
Labour Standards on Trade and Labour Standards.” ICFTU, Brussels.
http://www.icftu.org/list.asp?Language=EN&Order=Date&Type=WTOReports&Subject=ILS.
This website offers many country reports on labor rights performance.

U.S. Department of State. 1999–2010. “Country Reports on Human Rights Practices.” U.S.
Department of State, Washington, DC. http://www.state.gov/g/drl/rls/hrrpt/index.htm. These
reports are issued on almost all countries. Section 6 of these reports covers many of the
labor issues included in Performance Standard 2.

Supply Chain Management

CIPS (Chartered Institute of Purchasing and Supply). 2011. Homepage. CIPS, Mansfield, England.
http://www.cips.org/. This group promotes and develops high standards of professional skill,
ability, and integrity among all those engaged in purchasing and supply-chain management.

IFPSM (International Federation of Purchasing and Supply Management). 2011. Homepage.

http://www.ifpmm.org/. IFPSM is the union of 43 national and regional purchasing
associations worldwide. Within this circle, about 200,000 purchasing professionals can be
reached.

ISM (Institute for Supply Management). 2011. Homepage. ISM, Tempe, AZ. http://www.ism.ws/.
Founded in 1915, the ISM is the largest supply management association in the world.

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