GRI 401: EMPLOYMENT 2016 GRI 401 Contents Introduction 3 GRI 401: Employment 5 1. Management approach disclosures 5 2. Topic-specific disclosures 7 Disclosure 401-1 New employee hires and employee turnover 7  Disclosure 401-2 Benefits  provided to full-time employees that are not provided to temporary or part-time employees 8 Disclosure 401-3 Parental leave 9 Glossary 10 References 12 About this Standard Responsibility This Standard is issued by the Global Sustainability Standards Board (GSSB). Any feedback on the GRI Standards can be submitted to standards@globalreporting.org for the consideration of the GSSB. Scope GRI 401: Employment sets out reporting requirements on the topic of employment. This Standard can be used by an organization of any size, type, sector or geographic location that wants to report on its impacts related to this topic. Normative This Standard is to be used together with the most recent versions of the following references documents. GRI 101: Foundation GRI 103: Management Approach GRI Standards Glossary In the text of this Standard, terms defined in the Glossary are underlined. Effective date This Standard is effective for reports or other materials published on or after 1 July 2018. Earlier adoption is encouraged. Note: This document includes hyperlinks to other Standards. In most browsers, using ‘ctrl’ + click will open external links in a new browser window. After clicking on a link, use ‘alt’ + left arrow to return to the previous view. 2 GRI 401: Employment 2016 Introduction A. Overview An organization then selects from the set of topic- specific GRI Standards for reporting on its material This Standard is part of the set of GRI Sustainability topics. These Standards are organized into three series: Reporting Standards (GRI Standards). These Standards 200 (Economic topics), 300 (Environmental topics) and are designed to be used by organizations to report 400 (Social topics). about their impacts on the economy, the environment, and society. Each topic Standard includes disclosures specific to that topic, and is designed to be used together with The GRI Standards are structured as a set of GRI 103: Management Approach, which is used to interrelated, modular standards. The full set can be report the management approach for the topic. downloaded at www.globalreporting.org/standards/. GRI 401: Employment is a topic-specific GRI There are three universal Standards that apply to every Standard in the 400 series (Social topics). organization preparing a sustainability report: GRI 101: Foundation GRI 102: General Disclosures B. Using the GRI Standards and making claims GRI 103: Management Approach There are two basic approaches for using the GRI Standards. For each way of using the Standards there GRI 101: Foundation is the starting point for using is a corresponding claim, or statement of use, which the GRI Standards. It has essential information an organization is required to include in any published on how to use and reference the Standards. materials. Figure 1 1. T  he GRI Standards can be used as a set to prepare Overview of the set of GRI Standards a sustainability report that is in accordance with the Standards. There are two options for preparing Foundation Starting point a report in accordance (Core or Comprehensive), for using the depending on the extent of disclosures included in GRI Standards the report. GRI 101 An organization preparing a report in accordance Universal with the GRI Standards uses this Standard, Standards GRI 401: Employment, if this is one of its General Management material topics. Disclosures Approach GRI GRI 2. S elected GRI Standards, or parts of their content, 102 103 can also be used to report specific information, without preparing a report in accordance with To report contextual To report the the Standards. Any published materials that use information about management approach an organization for each material topic the GRI Standards in this way are to include a ‘GRI-referenced’ claim. See Section 3 of GRI 101: Foundation for more Economic Environmental Social information on how to use the GRI Standards, Topic- specific and the specific claims that organizations are Standards GRI GRI GRI required to include in any published materials. 200 300 400 Select from these to report specific disclosures for each material topic GRI 401: Employment 2016 3 C. Requirements, recommendations and guidance Conditions of work are also covered in detail in other Standards: The GRI Standards include: • GRI 402: Labor/Management Relations Requirements. These are mandatory instructions. • GRI 403: Occupational Health and Safety In the text, requirements are presented in bold font • GRI 404: Training and Education and indicated with the word ‘shall’. Requirements are • GRI 405: Diversity and Equal Opportunity to be read in the context of recommendations and guidance; however, an organization is not required to • GRI 406: Non-discrimination comply with recommendations or guidance in order to claim that a report has been prepared in accordance In addition, Disclosure 102-8 in GRI 102: General with the Standards. Disclosures requires information on employees and other workers performing an organization’s activities, such as Recommendations. These are cases where a particular the total number of employees by employment contract course of action is encouraged, but not required. In the (permanent and temporary), by gender. text, the word ‘should’ indicates a recommendation. Guidance. These sections include background information, explanations and examples to help organizations better understand the requirements. An organization is required to comply with all applicable requirements in order to claim that its report has been prepared in accordance with the GRI Standards. See GRI 101: Foundation for more information. D. Background context In the context of the GRI Standards, the social dimension of sustainability concerns an organization’s impacts on the social systems within which it operates. GRI 401 addresses the topic of employment. This includes an organization’s approach to employment or job creation, that is, an organization’s approach to hiring, recruitment, retention and related practices, and the working conditions it provides. GRI 401 also covers the employment and working conditions in an organization’s supply chain. An employment relationship is a legal relationship between a worker and an organization that confers rights and obligations to both parties. This relationship is usually the means for determining whether employment or labor law is applicable or whether commercial law is applicable. These concepts are covered in key instruments of the International Labour Organization, the Organisation for Economic Co-operation and Development, and the United Nations: see References. The disclosures in this Standard can provide information about an organization’s impacts related to employment, and how it manages them. 4 GRI 401: Employment 2016 GRI 401: Employment This Standard includes disclosures on the management approach and topic-specific disclosures. These are set out in the Standard as follows: • Management approach disclosures (this section references GRI 103) • Disclosure 401-1 New employee hires and employee turnover • Disclosure 401-2 B  enefits provided to full-time employees that are not provided to temporary or part-time employees • Disclosure 401-3 Parental leave 1. Management approach disclosures Management approach disclosures are a narrative explanation of how an organization manages a material topic, the associated impacts, and stakeholders’ reasonable expectations and interests. Any organization that claims its report has been prepared in accordance with the GRI Standards is required to report on its management approach for every material topic, as well as reporting topic-specific disclosures for those topics. Therefore, this topic-specific Standard is designed to be used together with GRI 103: Management Approach in order to provide full disclosure of the organization’s impacts. GRI 103 specifies how to report on the management approach and what information to provide. Reporting requirements 1.1 The reporting organization shall report its management approach for employment using GRI 103: Management Approach. GRI 401: Employment 2016 5 Management approach disclosures Continued Reporting recommendations 1.2 The reporting organization should describe: 1.2.1 its policies or practices covering the relationships under which work is performed for the organization; 1.2.2 actions taken to determine and address situations where work undertaken within its supply chain does not take place within appropriate institutional and legal frameworks; 1.2.3 actions taken to determine and address situations where persons working for suppliers are not provided the social and labor protection that they are entitled to receive by national labor law; 1.2.4 actions taken to determine and address situations where working conditions in its supply chain do not meet international labor standards or national labor law; 1.2.5 actions taken to determine and address situations where work undertaken in its supply chain is inadequately remunerated; 1.2.6 actions taken to determine and address situations of disguised employment relationships where workers in its supply chain are falsely considered to be self-employed or where there is no legally recognized employer; 1.2.7 actions taken to determine and address situations where work undertaken in its supply chain that is performed at home is not subject to legally recognized contracts. Guidance Guidance for clause 1.2 Adequately remunerated work is work where wages Policies or practices covering the relationships under and compensation for a standard working week, which work is performed for an organization can excluding overtime, meet legal and industry minimum include recognized employment relationships, the use standards, and are sufficient to meet the basic needs of employees of other organizations (such as workers of workers and their families, and to provide them with supplied by agencies), and the extent to which work some discretionary income. Actions taken to address is performed on a temporary or part-time basis. situations where work is inadequately remunerated A description of policies and practices can include can include: policies and practices with respect to discrimination, •  dialogue with suppliers regarding the relationship compensation, promotion, privacy, human resource of the prices paid to suppliers and the wages development and industrial relations. paid to workers; Work taking place within an appropriate institutional • changes to an organization’s procurement practices; and legal framework usually entails a recognized • support for collective bargaining to employment relationship with an identifiable and legally determine wages; recognized employer. •  determining the extent that overtime is used, Conditions of work can include compensation, working whether it is mandatory, and whether it is time, rest periods, holidays, disciplinary and dismissal compensated at a premium rate. practices, maternity protection, the workplace environment, and occupational health and safety. They can also include the quality of living accommodations where provided, and welfare matters, such as safe drinking water, canteens and access to medical services. 6 GRI 401: Employment 2016 2. Topic-specific disclosures Disclosure 401-1 New employee hires and employee turnover Reporting requirements The reporting organization shall report the following information: Disclosure a. Total number and rate of new employee hires during the reporting period, by age group, gender and region. 401-1 b. Total number and rate of employee turnover during the reporting period, by age group, gender and region. Standard 2.1 When compiling the information specified in Disclosure 401-1, the reporting organization Interpretation shall use the total employee numbers at the end of the reporting period to calculate the rates of new employee hires and employee turnover. Reporting recommendations 2.2 When compiling the information specified in Disclosure 401-1, the reporting organization should use data from Disclosure 102-7 in GRI 102: General Disclosures to identify the total number of employees. Guidance Guidance for Disclosure 401-1 A high rate of employee turnover can indicate levels An organization can use the following age groups: of uncertainty and dissatisfaction among employees. It can also signal a fundamental change in the structure • Under 30 years old; of an organization’s core operations. An uneven • 30-50 years old; pattern of turnover by age or gender can indicate • Over 50 years old. incompatibility or potential inequity in the workplace. Turnover results in changes to the human and Background intellectual capital of the organization and can impact The number, age, gender, and region of an organization’s productivity. Turnover has direct cost implications new employee hires can indicate its strategy and ability either in terms of reduced payroll or greater expenses to attract diverse, qualified employees. This information for the recruitment of employees. can signify the organization’s efforts to implement inclusive recruitment practices based on age and gender. It can also signify the optimal use of available labor and talent in different regions. GRI 401: Employment 2016 7 Disclosure 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees Reporting requirements The reporting organization shall report the following information: a. Benefits which are standard for full-time employees of the organization but are not provided to temporary or part-time employees, by significant locations of operation. These include, as a minimum: i. life insurance; ii. health care; Disclosure 401-2 iii. disability and invalidity coverage; iv. parental leave; v. retirement provision; vi. stock ownership; vii. others. b. The definition used for ‘significant locations of operation’. 2.3 When compiling the information specified in Disclosure 401-2, the reporting organization shall exclude in-kind benefits such as provision of sports or child day care facilities, free meals during working time, and similar general employee welfare programs. Guidance Background Data reported under this disclosure provide a measure of an organization’s investment in human resources and the minimum benefits it offers its full- time employees. The quality of benefits for full-time employees is a key factor in retaining employees. 8 GRI 401: Employment 2016 Disclosure 401-3 Parental leave Reporting requirements The reporting organization shall report the following information: a. Total number of employees that were entitled to parental leave, by gender. b. Total number of employees that took parental leave, by gender. Disclosure c. Total number of employees that returned to work in the reporting period after parental 401-3 leave ended, by gender. d. Total number of employees that returned to work after parental leave ended that were still employed 12 months after their return to work, by gender. e. Return to work and retention rates of employees that took parental leave, by gender. Reporting recommendations 2.4 When compiling the information specified in Disclosure 401-3, the reporting organization should use the following formulas to calculate the return to work and retention rates: Total number of employees that did return to work after parental leave Return to work rate = x 100 Total number of employees due to return to work after taking parental leave Total number of employees retained 12 months after returning to work following a period of parental leave Retention rate = x 100 Total number of employees returning from parental leave in the prior reporting period(s) Guidance Guidance for Disclosure 401-3 The application of legislation varies according to interpretation by government, employers and Employees entitled to parental leave means those employees. Many women are discouraged from taking employees that are covered by organizational policies, leave and returning to work by employer practices that agreements or contracts that contain parental leave affect their employment security, remuneration and entitlements. career path. Many men are not encouraged to take To determine who returned to work after parental the leave to which they are entitled. leave ended and were still employed 12 months later, Equitable gender choice for maternity and paternity an organization can consult records from the prior leave, and other leave entitlements, can lead to the reporting periods. greater recruitment and retention of qualified employees. It can also boost employee morale and Background productivity. Men’s uptake of paternity leave options Many countries have introduced legislation to provide can indicate the degree to which an organization parental leave. The aim of the legislation is to allow encourages fathers to take such leave. Men taking employees to take leave and return to work in the advantage of leave entitlements positively impacts same or a comparable position. women to take such leave without prejudicing their career path. GRI 401: Employment 2016 9 Glossary This Glossary includes definitions for terms used in this Standard, which apply when using this Standard. These definitions 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. benefit direct benefit provided in the form of financial contributions, care paid for by the organization, or the reimbursement of expenses borne by the employee Note: Redundancy payments over and above legal minimums, lay-off pay, extra employment injury benefit, survivors’ benefits, and extra paid holiday entitlements can also be included as a benefit. employee individual who is in an employment relationship with the organization, according to national law or its application employee turnover employees who leave the organization voluntarily or due to dismissal, retirement, or death in service impact In the GRI Standards, unless otherwise stated, ‘impact’ refers to the effect an organization has on the economy, the environment, and/or society, which in turn can indicate its contribution (positive or negative) to sustainable development. Note 1: In the GRI Standards, the term ‘impact’ can refer to positive, negative, actual, potential, direct, indirect, short-term, long-term, intended, or unintended impacts. Note 2: Impacts on the economy, environment, and/or society can also be related to consequences for the organization itself. For example, an impact on the economy, environment, and/or society can lead to consequences for the organization’s business model, reputation, or ability to achieve its objectives. material topic topic that reflects a reporting organization’s significant economic, environmental and social impacts; or that substantively influences the assessments and decisions of stakeholders Note 1: For more information on identifying a material topic, see the Reporting Principles for defining report content in GRI 101: Foundation. Note 2: To prepare a report in accordance with the GRI Standards, an organization is required to report on its material topics. Note 3: Material topics can include, but are not limited to, the topics covered by the GRI Standards in the 200, 300, and 400 series. parental leave leave granted to men and women employees on the grounds of the birth of a child 10 GRI 401: Employment 2016 standard benefit benefit typically offered to the majority of full-time employees Note: Standard benefits do not need to be offered to every single full-time employee of the organization. The intention of reporting on standard benefits is to disclose what full-time employees can reasonably expect. supplier organization or person that provides a product or service used in the supply chain of the reporting organization Note 1: A supplier is further characterized by a genuine direct or indirect commercial relationship with the organization. Note 2: Examples of suppliers can include, but are not limited to: • Brokers: Persons or organizations that buy and sell products, services, or assets for others, including contracting agencies that supply labor. • Consultants: Persons or organizations that provide expert advice and services on a legally recognized professional and commercial basis. Consultants are legally recognized as self-employed or are legally recognized as employees of another organization. • Contractors: Persons or organizations working onsite or offsite on behalf of an organization. A contractor can contract their own workers directly, or contract sub-contractors or independent contractors. • Distributors: Persons or organizations that supply products to others. • Franchisees or licensees: Persons or organizations that are granted a franchise or license by the reporting organization. Franchises and licenses permit specified commercial activities, such as the production and sale of a product. • Home workers: Persons at home or in other premises of their choice, other than the workplace of the employer, who perform work for remuneration and which results in a product or service as specified by the employer, irrespective of who provides the equipment, materials or other inputs used. • Independent contractors: Persons or organizations working for an organization, a contractor, or a sub-contractor. • Manufacturers: Persons or organizations that make products for sale. • Primary producers: Persons or organizations that grow, harvest, or extract raw materials. • Sub-contractors: Persons or organizations working onsite or offsite on behalf of an organization that have a direct contractual relationship with a contractor or sub-contractor, but not necessarily with the organization. A sub-contractor can contract their own workers directly or contract independent contractors. • Wholesalers: Persons or organizations that sell products in large quantities to be retailed by others. supply chain sequence of activities or parties that provides products or services to an organization worker person that performs work Note 1: The term ‘workers’ includes, but is not limited to, employees. Note 2: Further examples of workers include interns, apprentices, self-employed persons, and persons working for organizations other than the reporting organization, e.g., for suppliers. Note 3: In the context of the GRI Standards, in some cases it is specified whether a particular subset of workers is to be used. GRI 401: Employment 2016 11 References The following documents informed the development of this Standard and can be helpful for understanding and applying it. Authoritative intergovernmental instruments: 1. International Labour Organization (ILO) Convention 102, ‘Social Security (Minimum Standards) Convention’, 1952. 2. International Labour Organization (ILO) Convention 121, ‘Employment Injury Benefits Convention’, 1964. 3. International Labour Organization (ILO) Convention 128, ‘Invalidity, Old-Age and Survivors’ Benefits Convention’, 1967. 4. International Labour Organization (ILO) Convention 130, ‘Medical Care and Sickness Benefits Convention’, 1969. 5. International Labour Organization (ILO) Convention 132, ‘Holidays with Pay Convention (Revised)’, 1970. 6. International Labour Organization (ILO) Convention 140, ‘Paid Educational Leave Convention’, 1974. 7. International Labour Organization (ILO) Convention 156, ‘Workers with Family Responsibilities Convention’, 1981. 8. International Labour Organization (ILO) Convention 157, ‘Maintenance of Social Security Rights Convention’, 1982. 9. International Labour Organization (ILO) Convention 168, ‘Employment Promotion and Protection against Unemployment Convention’, 1988. 10.  International Labour Organization (ILO) Convention 183, ‘Maternity Protection Convention’, 2000. 11. International Labour Organization (ILO) Declaration, ‘Declaration Concerning the Aims and Purposes of the International Labour Organization (Declaration of Philadelphia)’, 1944. 12. International Labour Organization (ILO) Declaration, ‘Declaration of Social Justice for a Fair Globalization’, 2008. 13. International Labour Organization (ILO), ‘Decent Work’, 1999. 14. International Labour Organization (ILO) Recommendation 198, ‘Employment Relationship Recommendation’, 2006. 15. International Labour Organization (ILO), ‘Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy’, 2006. 16. Organisation for Economic Co-operation and Development (OECD), OECD Guidelines for Multinational Enterprises, 2011. 17. United Nations (UN) Convention, ‘International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families’, 1990. 12 GRI 401: Employment 2016 Legal liability This document, designed to promote sustainability reporting, has been developed by the Global Sustainability Standards Board (GSSB) through a unique multi- stakeholder consultative process involving representatives from organizations and report information users from around the world. While the GRI Board of Directors and GSSB encourage use of the GRI Sustainability Reporting Standards (GRI Standards) and related Interpretations by all organizations, the preparation and publication of reports based fully or partially on the GRI Standards and related Interpretations are the full responsibility of those producing them. Neither the GRI Board of Directors, GSSB nor Stichting Global Reporting Initiative (GRI) can assume responsibility for any consequences or damages resulting directly or indirectly from the use of the GRI Standards and related Interpretations in the preparation of reports, or the use of reports based on the GRI Standards and related Interpretations. Copyright and trademark notice standards@globalreporting.org This document is copyright-protected by Stichting Global Reporting Initiative (GRI). The reproduction and distribution of this document for information and/or use in www.globalreporting.org preparing a sustainability report is permitted without prior permission from GRI. However, neither this document nor any extract from it may be reproduced, stored, translated, or transferred in any form or by any means (electronic, mechanical, photocopied, recorded, or otherwise) for any other purpose without prior written GRI permission from GRI. PO Box 10039 Global Reporting Initiative, GRI and logo, GSSB and logo, and GRI Sustainability Reporting Standards (GRI Standards) are trademarks of Stichting Global 1001 EA Reporting Initiative. Amsterdam © 2018 GRI All rights reserved. The Netherlands ISBN: 978-90-8866-112-9 13 GRI 401: Employment 2016 Standard Interpretations Standard Interpretation 1 to GRI 401: Employment 2016 on calculating the rates of new employee hires and employee turnover Responsibility This Standard Interpretation is issued by the Global Sustainability Standards Board (GSSB). Any feedback on the GRI Standards and related Interpretations can be submitted to standards@globalreporting.org for the consideration of the GSSB. Relevant section Clause 2.1 in GRI 401: Employment 2016 Issue Disclosure 401-1 New employee hires and employee turnover in GRI 401: Employment 2016 requires organizations to report the total numbers and rates of new employee hires and employee turnover during the reporting period, by age group, gender and region. Clause 2.1 in GRI 401 further requires organizations to use the total employee numbers at the end of the reporting period to calculate the rates of new employee hires and employee turnover. Feedback from users of the GRI Standards indicated that the required methodology in clause 2.1 is incorrect. Interpretation Statement An organization is not required to comply with clause 2.1 in GRI 401: Employment 2016 (‘The reporting organization shall use the total employee numbers at the end of the reporting period to calculate the rates of new employee hires and employee turnover’). The organization is free to choose the methodology for calculating these rates. Where the basis of measurement/calculation for a disclosure is not apparent, the organization is recommended to explain the basis of measurement/calculation used (see clause 2.7.2 in GRI 101: Foundation 2016). When using ratios or normalized data, the organization is recommended to provide absolute data and explanatory notes (see clause 2.7.3 in GRI 101). Effective date This Standard Interpretation is effective for reports or other materials published on or after 1 July 2018.