Short term contracts and job security: Response from adidas

Summary: adidas has adopted policies that seek to protect the rights of contract workers. But much more needs to be done to ensure these are implemented as recent research shows excessive use of short-term contracts and violations of workers’ rights is still a major issue.

adidas’ policies include statements about protecting rights for contract workers. Policies state that “contract workers must receive at least the minimum wage or the prevailing industry wage, whichever is higher, and all legally mandated benefits.” The use of contract workers must also be clearly defined and cannot be a means for suppliers to continuously engage workers in multiple short-term contracts. Although adidas’ does not prohibit the use of recruitment agents, the company holds suppliers responsible for making responsible recruitment decisions and suppliers are not “allowed to use employment agencies which manage the entire employment relationship.”

Some work has been taking place in adidas’s supply chain to implement these policies. In adidas’s major supplier in the Philippines, adidas reported that contract labour has gone from 90% down to 1% of the total. However, a number of examples where adidas’s policies have not been implemented in factories have been uncovered during investigations by union federations such as ITGLWF.

Play Fair’s view:

Play Fair was pleased to hear about the success of the project in the Philippines on this subject, but, as research by ITGLWF revealed, the problem is not isolated in one country alone. Although adidas has adopted policies on contracting, more needs to be done to ensure that these are implemented at factory level. adidas must address the systemic issues around this problem and take a proactive approach to dealing with this, including in work on purchasing practices, and respect for the right to organise and bargain collectively.

adidas could also go further in its policy stipulations. The company does not commit to requiring automatic open-ended contracts for workers after 2 fixed term contracts or two years’ employment. This would be a step forward. There is also more room for stronger requirements on the use of recruitment agents, and on remediation processes for when policies are breached.