What a Good SA8000 Auditor Should Know: Use of Recruitment Agencies

Question: The tendency to work with recruitment agencies is growing in Western and Eastern Europe. In your opinion, when factories chose to recruit workforce through an agency, are they posing higher risk to brands they work with? Do they shift the focus of attention and at the same time shift responsibility? Brands rarely audit the agencies, however, and real or potential violations in this sector multiply: types of contracts are signed from which workers do not benefit, deductions are taken from the wages, workers are employed in two companies and work twice as much, etc. As auditors, what can we do to protect workers today?

Sanjiv Singh: There is an issue here - will brands be willing to dig as deep as looking at the paperwork that goes into hiring and the historical problem of recruitment agents especially when it concerns migrant workers? You are correct in saying that brands rarely audit the recruitment agents, but we know of some that do.

Two kinds of employment arrangements are mostly seen. From my experience in Europe, employees are hired through recruitment agencies and such employees stay on the payroll of the agency and are paid wages by the agency. Workers could be from the country where the company in question is located or they could be foreign workers. This has a different set of risks. The other type of arrangement is when the factory uses recruitment agents in a foreign country and pays them a fee to hire workers - those employed are paid directly by the factory. This is common in the Middle East and several parts of Asia.

A good auditor should understand the reason why factories hire through recruitment agents. The reasons are different for the two types of arrangements cited above.

The fact that employers increasingly use recruitment agents as opposed to directly hiring workers can lead to exploitation in and of itself. Top management at factories use the service of labor suppliers to identify, screen, interview and recommend workers rather than send their own HR team to do all of this directly. Such an approach is expensive. But some employers lack the capacity to do it themselves. A couple of things happen here - recruitment agents most often take a fee for each worker from the factory (which is OK) and they also often ask workers to pay them excessively large sums as a condition to being employed (which is not OK). In some instances HR staff in factories connive with the recruitment agent and get a kickback from the agent. I have known HR staff to be treated lavishly by agents in the donor country and provided favors that are unmentionable here. The key problem is that workers do not know the factory or what it stands for with regards to human rights practices and deal with the agent directly.

I am not sure how much audits at the recruitment agents premises will help or be utilized - but a thorough background check is always recommended.

 So what can auditors do to prevent such practices and what evidence should be brought to a customer brand's attention? Here are a few of the checks auditors can use, depending on the situation: 

1. Auditors should read through the terms of engagement/MoU's signed between factories and agents for providing the service.
2. Verify whether or not the agent is registered with local authorities and meets ALL requirements of local law for providing services. (There is a separate set of rules for labor agents and most often the government monitors it very closely, as they are aware of the exploitation that takes place).
3. Speak to stakeholders and other interested parties, including local NGOs and unions.
4. Ask HR staff to explain the process and see if it meets the written arrangement/MoU.
5. Ask workers how much they pay recruitment agents.

If HR malpractice is identified, it will require a very tactful and astute auditor to break the news to top management.

While there is nothing wrong with temporary work provided there's no exploitation of workers' rights in the system, we need to understand that this is a situation of supply and demand - in many places right now the supply of workers is larger than the availability of jobs and this creates a particularly volatile situation.

The ILO has several recommendations and guidelines for member States to tackle this. Depending on the country, there is a 'Trafficking in Persons' (TIP) report providing information of trafficking issues that are of serious concern specially when hiring through recruitment agents. No brand wants a trafficked employee hired unknowingly through an agent to be working in a factory where its goods are produced.

About Sanjiv Singh

Sanjiv is an SAI Lead Trainer and Authorized Representative based in the UAE. Sanjiv provides training on labor law interpretation and implementation to business sectors ranging from construction, manufacturing, services and trading. He also trains the labour inspectors at the UAE's Ministry of Labor on inspection methodology, social interaction, essential business skills and health and safety. He specializes in migrant workers rights and has been responsible for developing the 5-point social performance measurement tool for the Ministry of Labour, UAE.
  Sanjiv comes from a background of 10 years in tea plantation management and has been a leader in promoting corporate social responsibility to business and governments in the Middle East. Based in Dubai, he is the Founder of the consulting firm, Workplace Internal Regulatory Establishment (WIRE). Sanjiv trains in English and Hindi. 

This Q & A was adapted from a question that was originally posted on LinkedIn's 'CSR and Human Rights Consultants' group. If you have a question, please let us know by contacting Joleen Ong -  jong@sa-intl.org.