Worker Rights and Protections

Three Categories of Workers, Three Levels of Obligation

PS2 does not treat all workers the same. It recognizes that a company's relationship with its workforce varies - some workers are on the payroll, others come through contractors, and others are buried deep in the supply chain. The standard creates three categories, each with different requirements.

Direct workers are people employed directly by the client. They get the fullest protections under PS2, covering everything from working conditions to occupational health and safety (paragraphs 8-23).

Contracted workers are engaged through third parties to perform work related to core business processes for a substantial duration. The client does not employ them directly, but they work on the client's site or under the client's effective control. Requirements in paragraphs 23-26 apply.

Supply chain workers are employed by the client's primary suppliers. The client has the least direct control here, but PS2 still imposes obligations where there is high risk of child labor or forced labor (paragraphs 27-29).

The pattern is clear: as you move from direct to contracted to supply chain, the client's obligations narrow but never disappear entirely. The two absolute prohibitions - child labor and forced labor - apply across all three categories.

The ILO Core Conventions Underpinning PS2

PS2 is grounded in the eight fundamental ILO Conventions. These are the international labor standards that define the floor - no project can fall below them, regardless of what national law permits.

These conventions apply even in countries that have not ratified them. PS2 treats them as a universal baseline - the client must respect these principles regardless of the host country's legal framework.

Disguised Employment

A critical nuance from the Guidance Notes: workers who are presented as independent contractors but who function as employees are still covered by PS2. If a worker operates under the client's direction, works fixed hours, uses the client's equipment, and depends on the client for income, that relationship is employment in substance - regardless of the contractual label. Clients cannot evade PS2 obligations by classifying workers as contractors, consultants, or freelancers when the reality of the relationship says otherwise.

Working Conditions

For direct workers, the client must develop and implement HR policies and procedures appropriate to its size and workforce. This is not about having a thick manual sitting on a shelf. It means workers receive documented information about their rights, covering:

• Terms and conditions of employment (written, in a language they understand)
• Wages, hours of work, overtime arrangements, and compensation for overtime
• Benefits such as leave entitlements, medical coverage, and pension contributions
• Any applicable collective agreements

Workers must be paid regularly and on time. Deductions from wages are only permitted as allowed by national law or with the worker's consent. No surprises on payday.

Migrant Workers

PS2 gives special attention to migrant workers. They must receive terms and conditions that are "substantially equivalent" to those of non-migrant workers performing the same work. This means you cannot bring in migrant labor at lower wages or with fewer benefits simply because they are from another country.

Migrant workers must also be provided employment terms in a language they understand before they leave their home country.

Worker Privacy

The Guidance Notes establish seven principles for handling worker personal data. In an era of digital HR systems and surveillance technology, these are not optional - they define how the client must manage worker information:

1. Legitimate purpose - collect data only for purposes directly relevant to employment
2. Proportionality - collect only the minimum data needed for that purpose
3. Transparency - inform workers about what data is collected, how it is used, and who has access
4. Consent - obtain worker consent for data collection and processing, especially for sensitive information
5. Accuracy - keep personal data up to date and allow workers to correct inaccuracies
6. Security - protect data against unauthorized access, loss, or misuse through appropriate technical and organizational measures
7. Accountability - designate responsibility for data protection and establish clear procedures for data handling

These principles apply to everything from personnel files and payroll records to biometric data, health screening results, and any workplace monitoring systems.

Right to Organize and Non-Discrimination

The client must respect workers' rights to form and join workers' organizations and to bargain collectively, where national law allows it. Where national law substantially restricts these rights, the client must not block workers from developing alternative mechanisms to express their grievances and protect their rights.

Non-discrimination is straightforward in principle: employment decisions - hiring, compensation, promotion, termination - must not be based on personal characteristics unrelated to inherent job requirements. This covers gender, race, nationality, ethnic background, religion, disability, age, sexual orientation, union membership, and political opinion.

Retrenchment

When business conditions require workforce reductions, the client cannot simply hand out pink slips. PS2 requires a structured approach:

1. Analyze alternatives first - can you avoid layoffs through natural attrition, retraining, or reduced hours?
2. Develop a retrenchment plan if layoffs are unavoidable, based on principles of non-discrimination
3. Consult with workers and their organizations about the plan before implementation
4. Comply with collective agreements where they exist
5. Ensure no discrimination in deciding who is let go

The Guidance Notes add further detail on retrenchment requirements:

• Selection criteria must be objective and non-discriminatory - criteria such as skills, qualifications, performance, and length of service are acceptable. Criteria based on union membership, gender, ethnicity, or pregnancy status are not
• Adequate notice and severance pay - workers must receive sufficient advance notice and severance compensation consistent with national law or good international practice, whichever is more favorable
• Outplacement assistance - where feasible, the client should provide support such as job placement services, retraining programs, or assistance with finding alternative employment
• Worker consultation - the retrenchment plan should be developed in genuine consultation with workers and their representatives, not simply announced as a fait accompli

Grievance Mechanism

Every client must provide a grievance mechanism for workers. This is not optional and not decorative. The mechanism must be:

• Accessible to all workers without barriers
• Transparent in its process and timelines
• Free from retribution - workers must not fear retaliation for filing complaints
• Open to anonymous complaints - some workers will only speak up if they cannot be identified
• Not a substitute for legal remedies - the mechanism must not impede access to judicial or administrative remedies

Forced Labor Red Flags

The Guidance Notes identify specific indicators that may signal forced labor. Practitioners conducting due diligence should watch for these warning signs:

• Retention of identity documents - passports, work permits, or other papers held by the employer or recruiter
• Withholding of wages - systematic delays, unauthorized deductions, or wages paid to a third party instead of the worker
• Restriction of movement - workers confined to the workplace or accommodation, or unable to leave without permission
• Threats of violence or penalties - physical abuse, intimidation, or threats of deportation used to maintain control
• Debt bondage - workers forced to work to repay inflated recruitment fees, travel costs, or advances
• Deceptive recruitment - workers recruited under false promises about the nature of work, conditions, wages, or location

The presence of even one of these indicators warrants immediate investigation. Multiple indicators together strongly suggest a forced labor situation requiring urgent remedial action.

Child Labor

PS2 prohibits the employment of children in any manner that is economically exploitative, likely to be hazardous, or that interferes with the child's education. Specifically:

• Children under 18 must not perform hazardous work (work that could harm their health, safety, or morals)
• The minimum age for employment follows national law, but must not be below 14 (or 15 in countries that have ratified ILO Convention 138)
• All child labor requirements apply to direct workers, contracted workers, and are monitored in the supply chain

Child Labor Age Thresholds

The Guidance Notes provide a clear age framework that goes beyond what the standard text states:

"Hazardous work" includes work underground, underwater, at dangerous heights, with heavy machinery, with hazardous substances, in unhealthy environments (extreme temperatures, noise, vibration), or for excessively long hours. There are no exceptions to the age-18 minimum for hazardous work - not for developing countries, not for family businesses, not for cultural practices.

Occupational Health and Safety

The client must provide a safe and healthy work environment, taking into account industry-specific hazards. This means:

• Identifying potential hazards, including those that could lead to life-threatening situations
• Providing preventive and protective measures, including modifying work processes and providing personal protective equipment
• Training workers on hazards and safe work practices - in a language they understand
• Documenting and reporting occupational accidents, diseases, and incidents
• Providing emergency prevention and preparedness arrangements

OHS obligations apply to both direct and contracted workers on the client's site.

The OHS Hierarchy of Controls

The Guidance Notes specify that OHS measures must follow a strict hierarchy - not a menu where the client picks the cheapest option:

1. Eliminate the hazard - remove the danger entirely (e.g., replace a manual lifting task with automation)
2. Substitute - replace hazardous processes or materials with less dangerous alternatives (e.g., use water-based solvents instead of volatile organic compounds)
3. Engineering controls - isolate workers from the hazard through physical barriers, ventilation systems, machine guards, or containment
4. Administrative controls - implement safe work procedures, training programs, job rotation to limit exposure, and exposure monitoring
5. Personal Protective Equipment (PPE) - provide helmets, respirators, gloves, eye protection, hearing protection, and other equipment as a last resort, not a first response

Worker Accommodation

When the client provides or arranges worker accommodation - common on remote construction or extractive projects - it must meet minimum standards. Worker housing is not a fringe benefit to be managed casually. The Guidance Notes require:

• Adequate living space - sufficient floor area per person, with separation between sleeping, cooking, and sanitary areas
• Clean water and sanitation - reliable access to potable water and functioning toilet and washing facilities at appropriate ratios
• Ventilation and temperature - adequate natural or mechanical ventilation, protection from extreme heat or cold
• Fire safety - fire detection and suppression systems, clearly marked emergency exits, evacuation plans, and regular drills
• Privacy - reasonable personal space and privacy, particularly separate facilities for men and women
• Maintenance - regular cleaning, pest control, waste management, and upkeep of all facilities

These standards apply whether accommodation is owned by the client, managed by a contractor, or provided by a third party. The client cannot delegate this responsibility by outsourcing housing management.

Contracted Workers

The client's responsibility does not end when work is outsourced. For contracted workers, the client must:

• Take commercially reasonable efforts to ensure third-party employers are reputable and legitimate enterprises
• Verify that contracted workers' terms and conditions meet PS2 requirements
• Ensure contracted workers have access to a grievance mechanism
• Require third-party employers to maintain appropriate ESMS (Environmental and Social Management Systems)

Supply Chain Workers

For supply chain workers, PS2 focuses on the most severe risks: child labor and forced labor. Where there is a high risk of either in the primary supply chain, the client must:

• Identify those risks through assessment
• Monitor primary suppliers (not just accept their word)
• If child or forced labor is identified, take steps to remedy the situation - which could mean working with the supplier to fix the problem or, if necessary, shifting to a different supplier

The standard recognizes that clients have limited leverage over supply chains, so it focuses obligations where the stakes are highest and the abuses most severe.