17 July 203
As the second largest employer in the US and one of the world’s most influential businesses, Amazon attracts criticism on a range of issues. Some of the most serious of these relate to working conditions and trade union rights.
The topic grew in prominence over the course of 2022, after Amazon workers at a large fulfilment centre on Staten Island made history by voting to form the first Amazon union. Since then, the union has faced widespread and well-publicised opposition and anti-union interference from the company. An alleged $14 million was spent by Amazon on efforts to quash union drives at the company, including $4 million spent on anti-union consultants, brought in to dissuade people from joining the union.1 We are told that intimidation, retaliation2 and surveillance3 were commonplace.
There have also been concerns about the company’s approach to unions closer to home. In April this year Amazon was on the verge of being forced to recognise a trade union in the UK for the first time, after more than 50% of workers (the typical threshold for mandatory union recognition) was reached at a fulfilment centre in Coventry.
Amazon’s response was reminiscent of its activities in the US. Managers allegedly intimidated the wider workforce, organising compulsory closed meetings with workers and even accompanying union representatives to the toilet to control who they could speak to. The company flooded the site in Coventry with temporary workers, such that the crucial 50% threshold could not be reached and the paperwork for union recognition had to be withdrawn.4
Freedom of Association and Collective Bargaining - context
The rights to Freedom of Association and Collective Bargaining are International Labour Organisation (ILO) Core Conventions and a key part of the ILO Declaration on Fundamental Principles and Rights at Work. This means that they are internationally recognised as Human Rights norms that should be upheld, regardless of local legislation.
In practical terms, the rights translate to the ability of workers to speak freely to whoever they like about their work, and to organise as unions and elect representatives to negotiate with management on their behalf. The rights are considered ‘fundamental’ because without them, other rights – such as living wages, health and safety, and working environments free of intimidation and harsh treatment – are harder to achieve.
Furthermore, the UN Guiding Principles on Business and Human Rights (UNGPs) set out the expectation that businesses respect human rights in their global operations and supply chains. The UNGPs explicitly and unambiguously require companies to adhere to the international standard where national law differs.
Amazon’s own policy documents on Human Rights recognise these rights and even reference the UNGPs. However, the activities described above illustrate that the company’s practices fall far short of its policy commitments.
Engaging with Amazon
As shareholders, we believe that we have a duty to try to put this right. We also believe that Amazon itself has much to gain from supporting its workers’ efforts to organise. Evidence suggests that trade unions can result in higher corporate productivity, lower staff turnover, a better health and safety record, and greater innovation.5
At the end of 2022, we co-signed a letter to Amazon, calling for the Board of Directors to commission an independent, third-party assessment of Amazon’s adherence to its stated commitment to workers’ freedom of association and collective bargaining rights as outlined in its Global Human Rights Principles. Six weeks later, having received no meaningful response, we escalated the engagement by co-filing a shareholder resolution at the company for its 2023 annual general meeting.
The proposal went to vote on 24 May. Our resolution achieved 34.6% of the overall vote and 41.8% of independent shareholders’ vote. This was down on the 47% of independent shareholders vote from a similar resolution in 2022, despite having been filed by a much larger international group of investors. This may be symptomatic of the politically charged ESG-backlash in the US.
The resolution may not have passed, but we will continue to engage with Amazon on its approach to worker rights. Next, we will write a collective open letter to Amazon, and will continue to support efforts to organise in the UK. We have had productive discussions with several other investors, and we look forward to reporting back in due course.