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Liability Models in Supply Chains: The Flow of an Innovative Regulatory Idea in a Global Legal Space

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Transnational, European, and National Labour Relations

Part of the book series: Europeanization and Globalization ((EAG,volume 4))

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Abstract

On both transnational and national levels, a variety of hard and soft law, legal and law-like initiatives are applied and proposed to address the impact of subcontracting on labour rights. The basic idea of all subcontracting-related regulatory experimentations is to make actors other than the direct employer co-responsible or liable for ensuring some (or all) labour and social rights of workers employed in the supply chain. This ‘co-responsibility’ can be advanced by ways of both soft law and hard law. The contribution offers an overview of these emerging mechanisms within the global legal space and tries to highlight their implications, interconnectedness and ‘spill over’ effects in terms of labour law.

The chapter reviews a number of layers of the global legal space dealing with the idea of some sorts of joint liability in supply chains. As such, related self-regulatory CSR measures, contractual liability models, soft law measures and public policy proposal, EU law and national law developments, and judicial tactics are assessed in order to demonstrate that innovative liability ideas are flourishing on the regulatory agenda.

The chapter aims to explore how the basically voluntarily developed, transnational (self-)regulatory ideas of chain responsibility might percolate into regulatory proposals and hard laws. The final argument that the chapter makes is that the blooming and convergence of various regulatory experiments of chain liability within the global legal space are promising tendencies, and in the long run they might have the potential to substantially improve the legal situation of workers in subcontracting networks.

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Notes

  1. 1.

    For a seminal discussion, see: Glynn (2011), pp. 101–135.

  2. 2.

    Cf Davidov (2010) and Zahn (2012).

  3. 3.

    See for further details: Hajdú (2012).

  4. 4.

    Subcontracting might ‘foster race to the bottom in working conditions’. European Parliament, 26 March 2009, (2008/2249(INI)).

  5. 5.

    De Luca-Tamajo and Perulli (2006) and Morin (2005).

  6. 6.

    See for basics in law and economics: Coase (1937).

  7. 7.

    Glynn (2011), p. 103.

  8. 8.

    Cf James et al. (2007), p. 166.

  9. 9.

    Fenwick and Novitz (2010), pp. 585–617.

  10. 10.

    Ter Haar (2013), Abstract.

  11. 11.

    Cf Mückenberger (2011), pp. 99–116.

  12. 12.

    Estlund (2011), p. 354.

  13. 13.

    For a full description, see: Lobel (2005).

  14. 14.

    Black (2001).

  15. 15.

    Ter Haar (2012), pp. 24–28.

  16. 16.

    Cf Doorey (2012).

  17. 17.

    Weiss (2013), p. 19.

  18. 18.

    Ter Haar (2013), based on: Trubek and Trubek (2007).

  19. 19.

    Morin (2005), p. 12.

  20. 20.

    In extreme cases, corporate power can represent a form of economic violence, a ‘new form of blackmail’. ORSE (2007).

  21. 21.

    Cf Corazza and Razzolini (2014).

  22. 22.

    About the notion of the employer, see in details: Prassl (2013) and Fudge (2006).

  23. 23.

    Glynn (2011), p. 114.

  24. 24.

    The idea of chain-responsibility might also be associated with the legal doctrine of ‘enterprise liability’. Under this idea, individual entities (for example, otherwise legally unrelated corporations) can be held jointly liable for some action on the basis of being part of a shared enterprise.

  25. 25.

    Saage-Maaß (2011), p. 10.

  26. 26.

    Davidov (2012), p. 137.

  27. 27.

    Martin and Barré (2013).

  28. 28.

    Cited by Corazza and Razzolini (2014), p. 12.

  29. 29.

    Anner et al. (2013), p. 8.

  30. 30.

    Cf Knegt (2008).

  31. 31.

    Cf Richardi (1988).

  32. 32.

    Cf Freedland and Kountouris (2011, 2012), Perulli (2003) and Gyulavári (2011) etc.

  33. 33.

    See the links to the concept of CSR.

  34. 34.

    Cf Doorey (2012).

  35. 35.

    Cf Harper (1998).

  36. 36.

    Rogers (2010).

  37. 37.

    Glynn (2011), p. 105.

  38. 38.

    Amon (2010), p. 235.

  39. 39.

    van Opijnen and Oldenziel (2010).

  40. 40.

    RSCM is also often associated with the concepts of SERP (Socially and environmentally responsible procurement) and SSCM (Sustainable supply chain management). Hoejmose and Adrien-Kirby (2012); Promoting occupational safety and health through the supply chain (2012), p. 6.

  41. 41.

    As for partnerships, see for example: The Business Social Compliance Initiative (BSCI) unites over 1500 companies around one common Code of Conduct and support them in their efforts towards building an ethical supply chain.

  42. 42.

    See for further details: Sobczak (2003) and Compa and Hincliffe-Darricarrére (1995).

  43. 43.

    Glynn notes that reputation can easily cut in the opposite direction: “It may be easier (and far cheaper) for a visible firm to maintain its reputation as a “good employer”—i.e. offering generous pay and benefits to its workforce—if it offloads low-skilled/low-wage work onto others.” Glynn (2011), p. 114.

  44. 44.

    This is the so-called ‘cut and run’ method (which is highly debated, since it is rather mechanical and, after all, can create unemployment by the discontinuation of the supplier contract).

  45. 45.

    ORSE (2007).

  46. 46.

    The examples are mentioned by: Anner et al. (2013), p. 35.

  47. 47.

    Hoejmose and Adrien-Kirby (2012), p. 237.

  48. 48.

    Morin (2005), p. 21.

  49. 49.

    See in details: Corporate Social Responsibility: National Public Policies in the European Union, Compendium (2014).

  50. 50.

    See for the general description of the role of soft law in labour law: Duplessis (2008) and Blanpain and Colucci (2004).

  51. 51.

    Cf Dumas (2013), pp. 67–92.

  52. 52.

    Cf Senden (2004).

  53. 53.

    Cf Garcia-Munoz Alhambra et al. (2011).

  54. 54.

    Anner et al. (2013), p. 5.

  55. 55.

    Anner et al. (2013), p. 34.

  56. 56.

    For a full description of responsible contracting: Bibby (2011).

  57. 57.

    About this, see in general: Schömann et al. (2008), Hammer (2005) and Papadakis (2008).

  58. 58.

    Promoting occupational safety and health through the supply chain (2012). p. 27.

  59. 59.

    Martin and Barré (2013), p. 15.

  60. 60.

    http://bangladeshaccord.org/.

  61. 61.

    Anner et al. (2013), p. 3.

  62. 62.

    Anner et al. (2013), p. 42.

  63. 63.

    “Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework”, UN, 21 March 2011. 13.

  64. 64.

    Saage-Maaß (2011), p. 17.

  65. 65.

    26 March 2009, (2008/2249(INI)).

  66. 66.

    Amon (2010), p. 234.

  67. 67.

    Commission Green Paper on Modernising Labour Law to Meet the Challenges of the twenty-first Century, at 3, COM (2006) final 708 (Nov. 11, 2006).

  68. 68.

    http://www.law.ed.ac.uk/euenterpriseslf/ (Last visited: 31.05. 2013).

  69. 69.

    For details see: Proposals for “Enhancing Direct Liability of Parent Companies” and for “Establishing a Parental Company Duty of Care”, European Coalition For Corporate Justice (ECCJ) Legal Proposals to Improve Corporate Accountability for Human Rights Abuses (2008).

  70. 70.

    See: earlier Article 25 of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (the so-called ‘Classic Directive’): In the contract documents, the contracting authority may ask or may be required by a Member State to ask the tenderer to indicate in his tender any share of the contract he may intend to subcontract to third parties and any proposed subcontractors. However, this indication shall be without prejudice to the question of the principal economic operator’s liability.

  71. 71.

    Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC.

  72. 72.

    The same provisions have been included in Directive 2014/25/EC.

  73. 73.

    For further details: Van den Abeele (2014).

  74. 74.

    Jorens et al. (2012), p. 5.

  75. 75.

    Directive 2014/67/EU of the European Parliament and of the Council of 15 May 2014 on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services and amending Regulation (EU) No 1024/2012 on administrative cooperation through the Internal Market Information System (‘the IMI Regulation’).

  76. 76.

    Amon (2010), p. 244.

  77. 77.

    Cf European Parliament Resolution on the social responsibility of subcontracting undertakings in production chains 26 March 2009 (2008/2249(INI)), 9. See for further details: Jorens et al. (2012) and Houwerzijl and Peters (2008).

  78. 78.

    Jorens et al. (2012), Executive Summary p. 3.

  79. 79.

    Jorens et al. (2012), p. 44.

  80. 80.

    For further details, see: Glynn (2011), p. 104.

  81. 81.

    Cf Amon (2010), pp. 247–255.

  82. 82.

    About responsive regulation: Ayres and Braithwaite (1992).

  83. 83.

    Hess (2007), p. 470.

  84. 84.

    Jorens et al. (2012), p. 158.

  85. 85.

    Jorens et al. (2012), p. 157.

  86. 86.

    The concept of joint and several liability also seems to be accepted by the European Court of Justice, at least in principle. Cf Jorens et al. (2012), Executive Summary.

  87. 87.

    Davidov (2011), p. 189.

  88. 88.

    Corazza and Razzolini (2014), pp. 5–14.

  89. 89.

    Case C-242/09, Albron Catering BV v. FNV Bondgenoten, John Roest, October 21, 2010.

  90. 90.

    Case C-60/03, Wolff & Muller Gmb H. v. Felix, 2004 E.C.R. I-9553.

  91. 91.

    Case C-433/04, Judgment of 9.11.2006, Commission v Belgium.

  92. 92.

    http://www.bangladeshworkersafety.org/.

  93. 93.

    Anner et al. (2013), p. 37.

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Authors and Affiliations

  1. Faculty of Law, Department of Labour Law and Social Security, Károli Gáspár University of the Reformed Church in Hungary (KRE), Budapest, Hungary

    Attila Kun

  2. Faculty of Political Sciences and Public Administration, Institute of Human Resources, Hungarian National University of Public Service (NKE), Budapest, Hungary

    Attila Kun

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  1. Attila Kun
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Editors and Affiliations

  1. Hochschule für öffentliche Verwaltung und Finanzen Ludwigsburg, University of Applied Sciences, Ludwigsburg, Germany

    Gerald G. Sander

  2. General Court of EU, Luxembourg, Luxembourg

    Vesna Tomljenović

  3. Faculty of Law, University of Rijeka, Rijeka, Croatia

    Nada Bodiroga-Vukobrat

Additional information

The research was conducted within the framework of the MTA (Hungarian Academy of Sciences)-PTE Research Group of Comparative and European Employment Policy and Labour Law.

Disclaimer: The manuscript was closed in 2016! This paper is an extended, updated and revised version of the following Conference Paper from the author: From transnational soft law to national hard law? – regulating supply chains, 10th European Conference of the International Labour and Employment Relations Association (ILERA), 20–22 June 2013, Amsterdam, Symposium 4.4: The Effectiveness of Transnational Self-regulatory Ideas and Forms in Labour Law, published as Kun A (2015) From transnational soft law to national hard law: regulating supply chains, Pécsi Munkajogi Közlemények (PMJK) 8(12):53–68.

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Kun, A. (2018). Liability Models in Supply Chains: The Flow of an Innovative Regulatory Idea in a Global Legal Space. In: Sander, G., Tomljenović, V., Bodiroga-Vukobrat, N. (eds) Transnational, European, and National Labour Relations. Europeanization and Globalization, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-319-02219-2_8

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