Business Case for the Labour Principles

The promotion of the four labour principles can have a positive impact on a company's shareholder value in the following ways:

• Higher productivity
• Increased retention of employees
• Improved reputation among consumers
• Lower training costs
• Fewer fines
• A safer workplace
• Improved relations (with government, other businesses, civil society)

The Global Compact does not suggest that employers change their industrial relations frameworks. But, as the International Organisation for Employers has indicated, some 'high performance' companies have recognised the value of using dialogue and negotiation to achieve competitive outcomes. Studies indicate that the results from freedom of association can set in motion a "decent work"-cycle that increases productivity, incomes and profits for all concerned.

The ILO Declaration aims to ensure that social progress goes hand in hand with economic progress and development. These fundamental principles and rights provide benchmarks for responsible business conduct, and were incorporated into the ILOs own Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (link to this document). The OECD's Guidelines for Multinational Enterprises (link to document) also emphasize the principles and rights found in the ILO Declaration.

Businesses' adoption of policies that promote respect for universally acknowledged labour rights and principles does not eliminate governments' responsibilities and duties. Rather, respecting and promoting the four labour principles can provide a tool to help define and manage risk and create a more competitive business model.