Questions & Answers
Regarding the differentiation between non-employees and employees of the value chain (ESRS S1-7 and S2), could it be considered that the main difference is that non-employees carry out core activities of the company and employees of the value chain only accessory or supply activities?
- Value chain workers
- non-employees
Background
Annex II Acronyms and Glossary of Terms provides the following definition of non-employees: ‘Non-employees in an undertaking’s own workforce include both individual contractors supplying labour to the undertaking (‘self-employed people’) and people provided by undertakings primarily engaged in ‘employment activities (NACE Code N78).’
Value chain worker is defined as ‘An individual performing work in the value chain of the undertaking, regardless of the existence or nature of any contractual relationship with the undertaking. In the ESRS, the scope of workers in the value chain include all workers in the undertaking’s upstream and downstream value chain who are or can be materially impacted by the undertaking. This includes impacts that are connected to the undertaking’s own operations, and value chain, including through its products or services, as well as through its business relationships. This includes all workers who are not in the scope of “Own Workforce”. “Own Workforce” includes people who are in an employment relationship with the undertaking (“employees”) and non-employees who are either individual contractors supplying labour to the undertaking (“self-employed people”) or people provided by undertakings primarily engaged in employment activities (NACE Code N78).’
ESRS S1 paragraph AR 62 provides the following examples: ‘Examples of contractors (self-employed people) in the undertaking’s own workforce include: contractors hired by the undertaking to perform work that would otherwise be carried out by an employee; contractors hired by the undertaking to perform work in a public area (for example, on a road, on the street); and contractors hired by the undertaking to deliver the work/service directly at the workplace of a client of the organization. Examples of people employed by a third party engaged in “employment activities” whose work is under the direction of the undertaking include: people who perform the same work that employees carry out, such as people who fill in for employees who are temporarily absent (due to illness, holiday, parental leave, etc.); people performing regular work at the same site as employees; and workers who are dispatched temporarily from another EU Member State to work for the undertaking (“posted workers”). Examples of value chain workers (and thus of workers not in the undertaking’s own workforce and reported under the scope of ESRS S2) include: workers for a supplier contracted by the undertaking who work on the supplier’s premises using the supplier’s work methods; workers for a “downstream” entity which purchases goods or services from the undertaking; and workers of an equipment supplier to the undertaking who, at one or more of the undertaking’s workplaces, perform regular maintenance on the supplier’s equipment (for example, photocopier) as stipulated in the contract between the equipment supplier and the undertaking.’
Answer
The ESRS definition is not based on the type of activities performed by employees (i.e. ‘core’ or ‘non-core’) and as such this terminology is not used in the ESRS. The definition is based on the type of contract or labour relation. Non-employees include two types of workers, self-employed workers and persons provided by undertakings primarily engaged in ‘employment activities’ for whom the undertaking should have direct access to data on these types of workers (ESRS S1 paragraph 119; see also Question ID 33 Definitions of non-employees). Value chain workers include all workers who are not in the scope of ‘Own Workforce’ and do not have a contractual relationship with the undertaking. Examples of workers in the value chain may be found in ESRS S2 paragraph AR 3, which include, for example, ‘workers of a supplier contracted by the undertaking.’ ESRS S1 paragraph AR 62 also provides examples of both non-employees and value chain workers.
Relations
Paragraph | Content |
|---|---|
Examples of workers that fall within the scope of this Standard are: | |
This Standard covers all workers in the undertaking’s upstream and downstream value chain who are or can be materially impacted by the undertaking, including impacts that are connected with the undertaking’s own operations and value chain, including through its products or services, as well as through its business relationships. This includes all workers who are not included in the scope of “own workforce” (“own workforce” includes employees, individual contractors, i.e., self- employed workers, and workers provided by third party undertakings primarily engaged in ‘employment activities’). Own workforce is covered in ESRS S1 Own workforce. See AR 3 for examples of what is included in the scope of this Standard. | |
Examples of contractors (self-employed people) in the undertaking’s own workforce include: contractors hired by the undertaking to perform work that would otherwise be carried out by an employee; contractors hired by the undertaking to perform work in a public area (for example, on a road, on the street); and contractors hired by the undertaking to deliver the work/service directly at the workplace of a client of the organization. Examples of people employed by a third party engaged in ‘employment activities’ whose work is under the direction of the undertaking include: people who perform the same work that employees carry out, such as people who fill in for employees who are temporarily absent (due to illness, holiday, parental leave, etc.); people performing regular work at the same site as employees; and workers who are dispatched temporarily from another EU member state to work for the undertaking (‘posted workers’). Examples of value chain workers (and thus of workers not in the undertaking’s own workforce and reported under the scope of ESRS S2) include: workers for a supplier contracted by the undertaking who work on the supplier’s premises using the supplier’s work methods; workers for a ‘downstream’ entity which purchases goods or services from the undertaking; and workers of an equipment supplier to the undertaking who, at one or more of the undertaking’s workplaces, perform regular maintenance on the supplier’s equipment (for example, photocopier) as stipulated in the contract between the equipment supplier and the undertaking. | |
Examples of people that fall within the scope of “Own workforce” are: | |
This Standard covers an undertaking’s own workforce, which is understood to include both people who are in an employment relationship with the undertaking (“ employees ”) and non-employees who are either people with contracts with the undertaking to supply labour (“self-employed people”) or people provided by undertakings primarily engaged in “employment activities” (NACE Code N78). See Application Requirement 3 for examples of who falls under own workforce. The information required to be disclosed with regard to non-employees shall not affect their status pursuant to applicable labour law. | |
Examples of workers that fall within the scope of this Standard are: | |
This Standard covers all workers in the undertaking’s upstream and downstream value chain who are or can be materially impacted by the undertaking, including impacts that are connected with the undertaking’s own operations and value chain, including through its products or services, as well as through its business relationships. This includes all workers who are not included in the scope of “own workforce” (“own workforce” includes employees, individual contractors, i.e., self- employed workers, and workers provided by third party undertakings primarily engaged in ‘employment activities’). Own workforce is covered in ESRS S1 Own workforce. See AR 3 for examples of what is included in the scope of this Standard. | |
Examples of contractors (self-employed people) in the undertaking’s own workforce include: contractors hired by the undertaking to perform work that would otherwise be carried out by an employee; contractors hired by the undertaking to perform work in a public area (for example, on a road, on the street); and contractors hired by the undertaking to deliver the work/service directly at the workplace of a client of the organization. Examples of people employed by a third party engaged in ‘employment activities’ whose work is under the direction of the undertaking include: people who perform the same work that employees carry out, such as people who fill in for employees who are temporarily absent (due to illness, holiday, parental leave, etc.); people performing regular work at the same site as employees; and workers who are dispatched temporarily from another EU member state to work for the undertaking (‘posted workers’). Examples of value chain workers (and thus of workers not in the undertaking’s own workforce and reported under the scope of ESRS S2) include: workers for a supplier contracted by the undertaking who work on the supplier’s premises using the supplier’s work methods; workers for a ‘downstream’ entity which purchases goods or services from the undertaking; and workers of an equipment supplier to the undertaking who, at one or more of the undertaking’s workplaces, perform regular maintenance on the supplier’s equipment (for example, photocopier) as stipulated in the contract between the equipment supplier and the undertaking. | |
Examples of people that fall within the scope of “Own workforce” are: | |
This Standard covers an undertaking’s own workforce, which is understood to include both people who are in an employment relationship with the undertaking (“ employees ”) and non-employees who are either people with contracts with the undertaking to supply labour (“self-employed people”) or people provided by undertakings primarily engaged in “employment activities” (NACE Code N78). See Application Requirement 3 for examples of who falls under own workforce. The information required to be disclosed with regard to non-employees shall not affect their status pursuant to applicable labour law. |