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COMMENT: Dispute Systems Design in labour rights violations? Compensation systems in practice similar to slavery 

 


The persistent issue of practices similar to slavery continues to plague the global landscape, with 27.6 million individuals subjected to forced labour in 2021. These exploitative practices manifest themselves in various forms, from subjecting individuals to degrading working conditions to restricting their mobility through debts incurred with employers or agents.

 

This commentary explores the intersection of Dispute Systems Design (DSD) and compensation systems in the context of such labour rights violations, emphasizing the need for tailored approaches and examining the potential integration of DSD for enhanced outcomes.


Challenges to addressing labour rights violations in Brazil 


Brazil grapples with a “perfect storm” for practices similar to slavery, stemming from its continental size and internal demand for diverse labour. Combating such practices requires a multifaceted approach. 


For instance, the Ministry of Labour and Employment conducts regular inspections, listing offending companies on the "Dirty List.” Criminal charges and fines are imposed on violators, showcasing the commitment to combatting such abuses.  


Labour Law in Brazil addresses these issues, providing legal recourse for victims’ compensation, but evidentiary issues arise from the lack of documentation and residency status of illegal immigrants. 


Another obstacle to addressing labour rights violations is that the country suffers from a backlog of lawsuits in the judiciary, which can take more than 5 years to be resolved. In Brazil, there are over 5 million active labour lawsuits.


The consequence of the massive number of lawsuits in Brazil is the lack of equality regarding the quantum of compensation , as it differs widely in similar cases. Depending on the court, victims receive between €4,000.00 and €85,000.00 whilst being victim of the same crime. 
An alternative to individual judicial proceedings   is the initiative of the Public Prosecutor’s Office. After the Ministry of Labour and Employment finds labour rights violations during an inspection, the Public Prosecutor’s Office brings the offender to the table to develop and sign a collective agreement . 


In high-profile cases, the Public Prosecutor’s Office proposes the creation of compensation schemes to compensate workers from the same company. The Salton Winery case is an example of a high-profile case in Brazil in 2023. The company, which had approximately €280,000,000.00 in revenue in 2022 submitted 207 workers to more than 15-hour workdays, physical violence, rotten food, and perilous shelter. Another example was Operation Rescue III, one of the biggest inspections in Brazil as part of which 2077 workers were rescued in 2023.


Challenges in compensation schemes


Despite commendable efforts to address labour rights violations in high-profile cases, challenges persist in the compensation procedures for victims of forced labour. The current focus often leans towards collective damages, as evidenced by the payment of €1,300,000.00 in moral damages for the collective  and only €185,185.00 for individual damages to be divided among the 207 victims in the Salton Winery case.


When we focus on the individual damage, the distribution of the amount  overlooks individual nuances . Factors such as the time worked in conditions analogous to slavery, the extent of abuse faced, the age of the victim (including minors and the elderly), the victim's job position, the number of hours worked, and the amount actually received can vary among victims in the same case.


Even with such significant differentiation on a case-by-case basis, collective agreements often entail the same payment for each victim, undermining equality in the specific case.
Not only that, but just as in labour courts, the amount of compensation varies greatly from one collective agreement to another, from under €3,000.00 in the Salton Winery case and above €26,000.00 in Operation Rescue III case. 


Inconsistencies between cases and individuals highlight the need for a more comprehensive and equal approach . This prompts crucial questions about eligibility criteria, agreement entry, compensation parameters, future employment prospects, and handling visa/passport issues.


Dispute Systems Design (DSD): a tailored approach


DSD emerges as a potential solution to enhance the effectiveness of compensation systems in addressing practices similar to slavery. Crafted specifically for complex disputes, DSD involves intentional organization and design of procedures. It can provide a systematic approach to preventing, managing, and resolving disputes when applied to labour rights violations.


Steps of DSD: from initiative to evaluation


The steps of DSD involve an iterative process, from assessing present dispute resolution channels to designing and implementing new processes: 


1. Initiative: Check present dispute resolution channels and mechanisms in place to understand if DSD is necessary.


2. Diagnosis: Assessment of the underlying causes of disputes, the needs of the parties  and which parties are directly and indirectly involved.


3. Conception/Design: Designing processes for negotiation, mediation, arbitration, or even litigation, considering stakeholders' needs and preferences.


4. Implementation: Integrating the new processes into the existing organizational or community structures, training individuals who will manage or facilitate these processes, and creating awareness among stakeholders about how to use the new system.


5. Evaluation and Revision.


In the context of practices similar to slavery, the preparation for DSD includes mapping stakeholders, defining key issues, and utilizing negotiation and tailored mediation to resolve compensation issues. The dispute system crafted for the problem would consider, for instance, the aforementioned individual nuances in an optimized way.


The idea is to create a voluntary alternative to the labour court – a treadmill of negotiation processes to resolve claims with effectiveness to the parties involved.  The goal is to resolve these processes seamlessly, fostering awareness and facilitating resolution.


Beyond compensation: a complete DSD approach


DSD can go beyond mere compensation, offering a holistic approach to address the multifaceted challenges posed by practices similar to slavery. For instance, immediate safety and security measures can be implemented to relocate victims and ensure their protection. Providing information to families, legal assistance, documentation support, determination of residency status, educational and professional support, and social reintegration are integral components of a comprehensive DSD approach. 


These are the “plug-ins” a compensation system could have for practices similar to slavery:

 

1. Immediate Safety and Security
• Relocate victims to a safe location, away from potential harm or retaliation.
• Engage local law enforcement and social services for safe housing.


2. Information for the Family (spouse and next of kin)


3. Legal Assistance
• Provide a public defender or legal counsel to represent and guide victims through legal processes.

• Ensure transparency on rights.


4. Documentation
• Facilitate the production and/or renewal of essential documents like National Identification, passports, and other relevant papers.

• Assist in creating a bank account.
• Prepare for compensation.


5. Determine Residency Status
• Regulate the person’s residence status or explore alternative options.


6. Educational and Professional Support
• Offer professionalization courses.


7. Social Reintegration


Conclusion


In conclusion, the convergence of DSD and compensation systems presents an opportunity to enhance the resolution of labour rights violations, specifically practices similar to slavery. By tailoring dispute resolution channels to the unique needs of affected individuals, DSD can contribute to a more just and efficient system. Addressing the challenges inherent in compensation procedures requires a nuanced approach, and the integration of DSD principles can pave the way for a more equitable and effective resolution of disputes in the digital age.

 

Roberto Baumgarten Kuster, External PhD Candidate at Radboud University Nijmegen, Partner at Faleck & Associates, Lecturer at INSPER.