The Zara Case in Brazil: Juridical Effectiveness of Soft Law Measures Concerning Decent Work in Global Supply Chains

Abstract

The new economical context and the so called “Industry 4.0”, besides changing social and production logics, brings with it an acceleration of globalization. New technologies help to overcome our cultural, linguistic and geographical barriers, making it easier for industries to find new markets with the aim of maximising their profits; driven by the need to low production costs, production delocalisation usually means to move the production line to – or outsourcing and entering into commercial relations with subcontractors from – countries where the labor law legislation is week and wages are low. In this context, the significance of the international framework law, ILO conventions and sot law measures which have among their objectives hinder social dumping, by establishing minimal work standards applicable to all productive and commercial sites of a single multinational company (in many cases extended to their subcontractors), is increasingly accentuated. By an in-depth study of an emblematic Brazilian labor case in which Zara (a multinational company part of a INDEXIT group) was severely fined and condemned for slave-like work conditions found in one of its subcontractors’ fabric, this paper intends to discuss the judicial affectivity of soft law measures, ILO conventions and how court has interpreted such instruments. Furthermore it will be seem how soft law measures together with strong labor legislation have had decisive impact on the judges decisions when considering decent work conditions in subcontractors companies. Finally, this article analyses how Zara decision has pierced the metaphysic corporate veil that separates the contractor and the supplier, discussing this issue by comparing Zara case to an interesting British case law (Chandler v Cape [2012]) where the parent company was found to own a duty of care to the employees of a supplier, setting out guidelines for ascertaining the existence of a duty of care owned by a parent company to the employees of a subsidiary company.