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Thailand is one of the countries where Britain's leading retailer Tesco has found it difficult to live up to its corporate principles of good labour relations. When the Tesco Lotus workers created a trade union some years ago, the British retail giant was not prepared to accept it and resorted to repression instead of dialogue. Workers report on poor employment conditions, with pay levels that don't support a decent life. Similar messages come in from Turkey, where the company refused to accept a government decision that recognised UNI Commerce affiliate Tez-Koop-IS as a negotiating partner. In South Korea, Tesco Homeplus is considered as a strongly anti-union employer. And in the United States, the retail giant is trying to establish itself through a non-union convenience store chain, in an attempt that will most likely fail.

Tesco's approach to trade unions and social dialogue puzzled the participants of last week's UNI Commerce Conference in Geneva. The highly successful British retailer is known as a good employer in its home country and has developed an innovative social partnership agreement with UNI Commerce affiliate Usdaw.

Tesco refused to talk with US commerce union

Therefore it came as a surprise that Tesco has consistently refused to meet with the large UNI Commerce affiliate UFCW, prior to its recent entry to the United States market. Instead, indications are that the retail giant is tempted to build up a non-union convenience store chain, thus avoiding to enter into a collective agreement relationship. In the country of Wal-Mart, this sends all the wrong signals.

If keeping UFCW out is indeed Tesco's intention, chances are very big that the company will fail. The cards are stacked against Britain's number one retailer, particularly as they have chosen California, Nevada and Arizona as their first investment targets. This is union heartland, and a hostile approach to organising and collective bargaining will surely not be tolerated by the trade union movement, nor by the communities.

The four month long supermarket conflict two years ago, where over 70,000 UFCW members successfully defended their collective agreement and health care benefits in Southern California, should speak its clear language about what the company could encounter. And recently, the three large supermarket chains that were on strike restored most of the lost benefits for their workers in a collective agreement deal which was hailed both by management and the UFCW-organised workers.

Is Tesco stepping back from union relations and social dialogue?

Both UNI and Usdaw have tried to show to Tesco that both parties would benefit from a constructive social relationship and dialogue. Tesco itself has recognised these principles: Only two years ago the company came strongly out in support of a ground-breaking corporate social responsibility agreement between UNI Commerce and the retail employers' European Union organisation EuroCommerce.

Social dialogue and cooperation between Tesco and UNI Commerce has a good track record. Among the many results are innovative social partnership agreements in Poland and Hungary, which would not have come about without this relation. Now, it seems that Tesco is signalling that they are not interested in pursuing a European or international level social dialogue.

The British retailer, the fourth largest in the world after US multinational Wal-Mart, French Carrefour and German Metro, has obvious problems with living up to its own principles also in countries such as Turkey, Thailand and South Korea. Labour relations here are marked by low levels of wages and benefits, which essentially amounts to social dumping. In Korea, the company has a very large proportion of non-regular workers among its workforce, which shows a lack of consideration for their employment security and social benefits.

Huge profits but poor employment conditions in developing markets

At the same time, Tesco takes in huge profits from its operations. Against this background, poor employment conditions in developing economies or in countries with large population groups living on or under the poverty line can hardly be ethically or morally defended.

A negative attitude to unionisation in these countries raises serious questions of whether the company does not violate both International Labour Conventions on freedom of associations, and the OECD Guidelines for Multinational Companies.

So it was no wonder that the 200 delegates to the UNI-Europa Commerce Conference were puzzled by the conflicting messages sent by the London-based retail giant's corporate behaviour. Now would be the time for Tesco, Usdaw and UNI to sit down around a table and resolve these issues before an all-out conflict erupts, which seems inevitable if the present situation persists.