GRI 402: Labor/Management Relations 2016 contains disclosures for organizations to report information about their impacts related to labor/management relations, and how they manage these impacts.
The Standard is structured as follows:
The rest of the Introduction section provides a background on the topic, an overview of the system of GRI Standards and further information on using this Standard.
Background on the topic
This Standard addresses the topic of labor/management relations. This covers an organization’s consultative practices with employees and their representatives, including its approach to communicating significant operational changes.
An organization’s consultation practices are expected to be aligned with relevant international norms and standards.
Collective bargaining can play an important role in an organization’s consultation practices. Collective bargaining refers to all negotiations that take place between one or more employers or employers' organizations, on the one hand, and one or more workers' organizations (e.g., trade unions), on the other, for determining working conditions and terms of employment or for regulating relations between employers and workers.1
These concepts are covered in key instruments of the International Labour Organization and the Organisation for Economic Co-operation and Development: see Bibliography.
Reporting on collective bargaining is covered in more detail in GRI 407: Freedom of Association and Collective Bargaining 2016. In addition, Disclosure 2-30 in GRI 2: General Disclosures 2021 requires reporting on the percentage of total employees covered by collective bargaining agreements.
System of GRI Standards
This Standard is part of the GRI Sustainability Reporting Standards (GRI Standards). The GRI Standards enable an organization to report information about its most significant impacts on the economy, environment, and people, including impacts on their human rights, and how it manages these impacts.
The GRI Standards are structured as a system of interrelated standards that are organized into three series: GRI Universal Standards, GRI Sector Standards, and GRI Topic Standards (see Figure 1 in this Standard).
Universal Standards: GRI 1, GRI 2 and GRI 3
GRI 1: Foundation 2021 specifies the requirements that the organization must comply with to report in accordance with the GRI Standards. The organization begins using the GRI Standards by consulting GRI 1.
GRI 2: General Disclosures 2021 contains disclosures that the organization uses to provide information about its reporting practices and other organizational details, such as its activities, governance, and policies.
GRI 3: Material Topics 2021 provides guidance on how to determine material topics. It also contains disclosures that the organization uses to report information about its process of determining material topics, its list of material topics, and how it manages each topic.
Sector Standards
The Sector Standards provide information for organizations about their likely material topics. The organization uses the Sector Standards that apply to its sectors when determining its material topics and when determining what to report for each material topic.
Topic Standards
The Topic Standards contain disclosures that the organization uses to report information about its impacts in relation to particular topics. The organization uses the Topic Standards according to the list of material topics it has determined using GRI 3.
Using this Standard
This Standard can be used by any organization – regardless of size, type, sector, geographic location, or reporting experience – to report information about its impacts related to labor/management relations.
An organization reporting in accordance with the GRI Standards is required to report the following disclosures if it has determined labor/management relations to be a material topic:
See Requirements 4 and 5 in GRI 1: Foundation 2021.
Reasons for omission are permitted for these disclosures.
If the organization cannot comply with a disclosure or with a requirement in a disclosure (e.g., because the required information is confidential or subject to legal prohibitions), the organization is required to specify the disclosure or the requirement it cannot comply with, and provide a reason for omission together with an explanation in the GRI content index. See Requirement 6 in GRI 1: Foundation 2021 for more information on reasons for omission.
If the organization cannot report the required information about an item specified in a disclosure because the item (e.g., committee, policy, practice, process) does not exist, it can comply with the requirement by reporting this to be the case. The organization can explain the reasons for not having this item, or describe any plans to develop it. The disclosure does not require the organization to implement the item (e.g., developing a policy), but to report that the item does not exist.
If the organization intends to publish a standalone sustainability report, it does not need to repeat information that it has already reported publicly elsewhere, such as on web pages or in its annual report. In such a case, the organization can report a required disclosure by providing a reference in the GRI content index as to where this information can be found (e.g., by providing a link to the web page or citing the page in the annual report where the information has been published).
Requirements, guidance and defined terms
The following apply throughout this Standard:
Requirements are presented in bold font and indicated by the word 'shall'. An organization must comply with requirements to report in accordance with the GRI Standards.
Requirements may be accompanied by guidance.
Guidance includes background information, explanations, and examples to help the organization better understand the requirements. The organization is not required to comply with guidance.
The Standards may also include recommendations. These are cases where a particular course of action is encouraged but not required.
The word ‘should’ indicates a recommendation, and the word ‘can’ indicates a possibility or option.
Defined terms are underlined in the text of the GRI Standards and linked to their definitions in the Glossary. The organization is required to apply the definitions in the Glossary.
An organization reporting in accordance with the GRI Standards is required to report how it manages each of its material topics.
An organization that has determined labor/management relations to be a material topic is required to report how it manages the topic using Disclosure 3-3 in GRI 3: Material Topics 2021 (see clause 1.1 in this section).
This section is therefore designed to supplement – and not replace – Disclosure 3-3 in GRI 3.
1.1 The reporting organization shall report how it manages labor/management relations using Disclosure 3-3 in GRI 3: Material Topics 2021.
The reporting organization shall report the following information:
Guidance for Disclosure 402-1
Minimum notice periods can be found in corporate policies and standard employment contracts. Different policy statements can exist at a regional level.
An organization can identify the collective bargaining agreements referred to in Disclosure 2-30 of GRI 2: General Disclosures 2021, and review the notice period clauses within these documents.
Background
Organizations are expected to provide reasonable notice of significant operational changes to employees and their representatives, as well as to appropriate government authorities. Minimum notice periods are a measure of an organization’s ability to maintain employee satisfaction and motivation while implementing significant changes to operations.
This disclosure provides insight into an organization’s practice of ensuring timely discussion of significant operational changes, and engaging with its employees and their representatives to negotiate and implement these changes, which can have positive or negative implications for workers.
This disclosure also allows an assessment of an organization’s consultation practices in relation to expectations expressed in relevant international norms.
The essence of consultation is that management takes the views of workers into account when making specific decisions. Therefore, it is important that consultation takes place before a decision is made. Meaningful consultation includes the timely provision of all information needed to make an informed decision to workers or their representatives. Genuine consultation involves dialogue; opinion surveys and questionnaires are not considered consultation.
Timely and meaningful consultation allows the affected parties to understand the impacts of the changes, such as possible loss of employment. It also gives an opportunity for them to work collectively to prevent or mitigate negative impacts as much as possible (see references [11] and [12] in the Bibliography). Consultative practices that result in good industrial relations help to provide positive working environments, reduce turnover, and minimize operational disruptions.
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This glossary provides definitions for terms used in this Standard. The organization is required to apply these definitions when using the GRI Standards.
The definitions included in this glossary may contain terms that are further defined in the complete GRI Standards Glossary. All defined terms are underlined. If a term is not defined in this glossary or in the complete GRI Standards Glossary, definitions that are commonly used and understood apply.
entity with which the organization has some form of direct and formal engagement for the purpose of meeting its business objectives