Management approach: Labor practices

A sustainable approach starts at home, with safe workplaces, mutual respect and common values. Our Electrolux, the corporate-wide vision and values program, helps the Group realize this approach and comprises both operational and core values.

Conduct and policies

Operational values – ethics, integrity, respect, diversity, safety and sustainability – affirm the Group's corporate culture and commitment to sound and universal ethical business practices. Electrolux aligns its management of labor and human rights with its operational values through Group codes and policies, both internally and along the supply chain.

Codes include the Electrolux Code of Ethics and the Workplace Code of Conduct, supported by procedures such as the Workplace Standard. All sustainability-related policies and procedures affirm the Group’s support of the UN Global Compact principles on human rights, labor, the environment and anti-corruption. These policies and values form the basis for the Electrolux management approach to labor practices and human rights.

Electrolux has four ways of ensuring the Workplace Code of Conduct is applied:

  • Code of Conduct Assessment (formerly known as ALFA)
  • Ethics at Electrolux program
  • Internal Code of Conduct audits
  • Values training.


The fulfillment of the requirements outlined by the Workplace Standard (and therefore the Code of Conduct) lies with line management. Each unit appoints a person whose responsibility for the Workplace Code of Conduct includes communicating Code requirements within the unit and overseeing reporting mechanisms for suspected breaches. Responsibility includes ensuring that human rights and labor practices, such as freedom of association, forced labor and fair compensation align with the Code. Suppliers are required to uphold the same standards, and are audited, based on risk, as described in the Human Rights section.

Monitoring – Code of Conduct assessment

The Code of Conduct assessment (previously known as Awareness-Learning-Feedback-Assessment – ALFA) is carried out annually. Its dual purpose is to:

  • Ensure line managers understand what is expected of them and
  • Assess the level of Code implementation.

The assessment helps ensure sufficient management attention to the Workplace Code of Conduct and Standard and identifies improvement areas.

In 2011, the assessment was revised to focus more on human rights content of the Code. As the accompanying graph shows, implementation levels for management requirements of the Workplace Standard are well beyond 90% for every area. Some units recognize the need for greater clarification of the requirements local sub-contractors are expected to fulfill. Overtime hours can be an issue in peak season for a few units, and corrective actions developed and implemented as part of the internal audit process. These are being followed up.

Training and awareness – Ethics Program

An Ethics Program is being launched Group-wide, region by region. Ethics at Electrolux is an educational campaign bringing policies and operational values to life, and uses scenarios to explore ethical dilemmas employees may face.

The program is organized through Human Resources in each business sector, with the support of Group Legal and Sustainability Affairs.

To help monitor performance, the program is supported by the new ethics helpline – a confidential channel for employees to report concerns, either though a third party call center or online. The helpline ensures any trends are tracked and misconduct is dealt with appropriately. See Management approach, Society, SO2-4 Anti-corruption and the relevant case study for more information.

Internal Code of Conduct Audits

In addition to the broad overview given by Code of Conduct assessments, Electrolux needs a deeper understanding of Workplace Code of Conduct compliance and the annual, tailored internal Code of Conduct audit program is designed to achieve this.

The selection of units for audit is based on factors such as the human rights risk level of the country, historic audit performance of the unit, helpline calls, customer requests and the nature of activities.

The assessment team combines auditors from the Code of Conduct group and external, independent auditors. Findings form the basis for action plans and follow-up. Electrolux has 29 sites in high risk countries; 14 of which have been audited in 2011.

Achievements and objectives

For 2011 achievements and future objectives for ongoing operations, refer to the performance reviews of People and operations (Ethical Business), and to SO1, 9 and 10 Community for insights into the Group’s approach to shifting production to low-cost regions.

For an example of how Electrolux integrates new acquisitions into Group Codes and policies, refer to case study LA10-12 Olympic strength.


Among the Group’s most relevant labor issues is building a strong people culture that reflects the Electrolux vision, values and strategy. This encompasses safety and health, freedom of association and competence-related priorities. Group-wide systems are in place for talent management, leadership programs and health and safety in production. Electrolux has processes for aligned performance talks, as well as collecting group-wide and consistent measurements and monitoring performance for many key GRI indicators.

The Electrolux approach to managing its employees is organized through each business area, with group-wide sustainability-related codes, policies and tools available for guidance. Restructuring is covered in the Society section of this report.

In addition to Codes and Standards, Electrolux has various human resource-related policies. They include the Grandparent Principle and the Recruitment Policy, designed to ensure fair and transparent hiring practices, and the Compensation Policy defining a consistent approach to remuneration.

In addition, the Group applies tools for leadership development, talent management and succession planning to foster an innovative and forward-looking culture.

Labor and management relations

For Electrolux, as regulated by Swedish law, labor relations start at the top. The Board of Directors comprises non-executive members, the President and three employee representatives together with their three deputies. Labor relations are primarily managed at the national and local-site levels in accordance with the Workplace Code of Conduct and Workplace Standard.

The Workplace Code of Conduct stipulates that all Electrolux employees are free to exercise their legal rights to form, join or refrain from joining organizations representing their interests as employees. In addition, Electrolux insists that all operations and those of its suppliers respect employees’ right to collective bargaining.

Workers forums

In those regions where worker associations are not possible due to national praxis, each unit and supplier is expected to find appropriate and legal mechanisms through which workers can effectively express workplace concerns to management. Records are to be kept from these formalized consultations and made available upon request.

In 2010 Electrolux signed the International Framework Agreement (IFA) with the Swedish trade unions IF Metal, Unionen and IMF. Since that time, Code compliance is reviewed and discussed with employee representatives on an ad hoc and annual basis. The dialog covers outcomes of the Code of Conduct assessment and internal audits, trends in the cases reported through the Ethics Helpline and general improvement areas.

The IFA emphasizes the importance of freedom of association in a side-agreement, in which Electrolux bans all support of inactive so-called ‘yellow’ unions - established specifically to block the opportunity of forming or joining genuine unions.

The first IFA dialog took place in December 2011, one year after the agreement was signed, and the next is planned for December 2012.

Occupational health & safety

Electrolux has a long-term goal to operate 25% of its plants at best-practice levels for manufacturing industries by 2016. The accident rate was reduced by 42% this year, taking the company a few steps closer to realizing its vision of accident-free facilities.

The Group’s work with OHS primarily focuses on the safety of workers in production.

OHS performance is monitored for facilities belonging to Major Appliances and three of four Small Appliances facilities through the Electrolux Manufacturing System, the Group’s management system that standardizes production and improves production processes.

Electrolux Professional, consisting of some 2,700 employees,  has its own program aligned with Group ambitions, yet tailored to operational challenges of dealing with more hand-crafted products. Performance, however, is disclosed in Group-wide data collection.

OHS data collated in this report covers all Group factory facilities and warehouses included in the scope of 2011 reporting.

Forward focus

In 2010 Electrolux defined a year-on-year 10% improvement rate on the total number of OHS incidents (TCIR) for sites with a TCIR rate greater than 1.0. The rate was realized in 2011.

Each facility develops a three- to five-year safety action plan based on minimum global standards. Each month, the management team at each facility meets with employees to review safety and environmental incidents and develop prevention actions. They identify both risks on site and mitigation plans.

A global safety team is responsible for the development and implementation of the health and safety recording system that collects safety statistics and incident reports for every manufacturing facility on a monthly basis. It identifies commonalities between production groups, regions and/or by product line.

Another focus is on setting minimum standards in high-risk areas across the business. As a minimum requirement, facilities are required to produce an emergency response plan.

Safety training and awareness

Global Safety Day, designed to engage employees and demonstrate management commitment, was launched in 2011. At this event ‘best performing’ and ‘most improved’ regional facilities were recognized. 2011 also saw the launch of the first global Environment, Health and Safety Culture Survey distributed to manufacturing employees at 30 facilities. (See case study: LA6-9 Better safe than sorry).

Diversity and equal opportunity

A global company built on diversity, Electrolux aims to attract people who reflect the Group’s global market and consumer base. This is an area that requires continued improvement, particularly in finding gender balance. Female representation among senior management teams is 14% (14).