1

Organization of Presentation

• Overview of Issues Involving International Labor Standards

• First examine different models of international labor standards

• Examine how three trading blocs have addressed labor standards within the bloc– NAFTA– ASEAN– MERCOSUR

• Conclude with Observations

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Definition of “Labor Standard”

• A governmentally established procedure, term or condition of employment, or employer requirement that is universal (covering all employers within the jurisdiction except those excluded via statute) and that is designed to protect employees from treatment at the workplace that society considers unjust. Standards are mandatory. Employer failure to comply the standards brings legal sanctions upon the employer. (Block, Roberts, and Clarke, 2003)

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International Labor Standard

• A procedure, term or condition of employment, or employer requirement that is established by an international body and that is designed to protect employees from treatment at the workplace that society considers unjust. Standards are mandatory. The failure of a nation to apply that standard to the employers within the nation brings legal sanctions upon the nation and/or the employers in that nation.

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International Labor Standards

• Obligations on countries to provide internationally agreed-upon, legally enforceable minimal labor standards for employees in the country– European Union

• The only true international labor standard• Directives

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Why has the issue of international labor standards generated so much

controversy?

• Sovereignty• Economics

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Sovereignty• Matters relating to labor and employment

traditionally seen as matters of domestic policy– Workers are citizens– Interest Group Politics

• Employers• Unions

• Value Laden– U.S. – Neoclassical Model– Europe – Imperfect Competition and Countervailing

Power– Asia – Confucianism and mutual obligations

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Two Basic Models of International Labor Standards

• Voluntary Assumption– International Labor Organization (ILO)

• Imposed– European Union

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ILO

• A tripartite organization created in 1919 to address labor conditions throughout the world

• Initially part of League of Nations• Transferred to UN when UN created after

WWII• Membership consists of countries• Each member country may send labor,

management, government delegates to ILO

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ILO (continued)

• Enacts “conventions” which are labor standards• As of November, 2008, there are 188 conventions• Fundamental Human Rights Convention

– Anti-discrimination (2 conventions)– Forced Labor (2 conventions)– Child Labor (2 conventions– Freedom of Assoc./Collective Bargaining (2

conventions)

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Sample Country Ratifications• Ratifications of Fundamental ILO Conventions• United States, 2 of 8

– Forced labor, child labor

• Canada – 4 of 8, at least one in all four categories. • Iran – 4 of 8

– No collective bargaining

• United Kingdom, 8 of 6• India - 4 of 6, at least one in all four categories• Japan - 6 of 8

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Implications of Convention Ratification

• Countries that ratify a convention agree to abide by the convention

• What does it mean to “abide by” a convention?– Flexibility vs. “universality”

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Enforcement• Complaints by another member state who ratified,

governing body, or a delegate– Commission of Inquiry (by a member state)

• Recommended Actions • ICJ• 11 Established

– Example: Myanmar and forced labor convention

– Moral Suasion and Pressure

• Representations by labor or employer representatives– Tripartite Committee Appointed– Publication of Findings

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Basic Principle of ILO

• Voluntary Assumption of Labor Standards– Ratification by a country is voluntary– Compliance is “required” but enforcement is

based on “moral suasion”

• Fairly effective with smaller, less developed countries that wish to be part of broader global community

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History of EU• Discussions began in 1950 in wake of WWII

– Belgium, Federal Republic of (West) Germany, France, Italy, Luxembourg, Netherlands

• Treaty of Rome in 1957– European Economic Community

• Free movement of goods, services, and workers within community

• Expansions to 15 Members (“EU 15”)– 1973: Denmark, Ireland, United Kingdom– 1981: Greece– 1986: Spain, Portugal– 1995: Austria, Finland, Sweden

• 10 New Members in May 2004– Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,

Slovakia, and Slovenia • 2 New members in January 2007

– Bulgaria, Romania

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Other Treaties• Merger Treaty of 1965• Single European Act of 1987• Treaty of European Union (Maastricht) in

1992• Treaty of Amsterdam in 1997 • Treaty of Nice in 2000• All moving toward closer economic

integration within EU

EU Legislation

• EU enacts directives (legislation) that are binding on the member countries– Internal laws must conform to EU directives– European Court of Justice may overturn national

laws

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Selected Areas in Which EU Legislates

• General, financial and institutional matters• Customs Union and free movement of goods• Agriculture• Fisheries• Freedom of movement for workers and social policy• Right of establishment and freedom to provide services• Transport policy• Competition policy• Taxation• Economic and monetary policy and free movement of capital• External relations• Energy• Industrial policy and internal• Environment, consumers and health protection• Science, information, education and culture• Undertakings

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Social (Labor and Employment) Policy

• Traditionally difficult for EU to enact– Different national norms– Employer and UK resistance

• Three types of issues– Free movement of labor - easiest– Labor standards – moderately controversial

• Health and safety used as basis

– Labor-management relations

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Social Directives• Free Movement of Workers (EC Treaty)• Individual Employment Contracts

– Workers must be informed of H & S risks (’89)– Er’s responsible for ee H & S– Nondiscrim against pt/temp workers– Er must inform ees of essential aspects of job

• Wages– No EC-wide minimum wage

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Social Directives and Other Legislation (continued)

• Working Time– By regulation rather than overtime “penalty”

• 11 hours rest in 24• Rest/meal period after 6 hours work• Max average of 48 hours over 7-day period

– Paid-Time Off• Paid vacation/annual leave 4 weeks minimum required

• Unemployment Insurance and Workers Comp– No EU directives

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Social Directives and Other Legislation (continued)

• Discrimination– Same as U.S. plus sexual orientation covered

• Unjust Dismissal– Charter of Fundamental Rights

• Safety and Health– Worker consultation– Informing employees– Training obligation– Psychological factors

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Social Directives and Other Legislation (continued)

• Employee Consultation– EU Directive 94/45/EC of 22 September 1994

• Establishes employee right to information and consultation in “community-scale undertakings

– European Works Council (EWC) or an employee consultation procedure in every large (more than 1,000 employees) organization that has at least 150 employees in each of two member states

– all European companies, companies established under the Statute for European Company, must establish negotiating committees consisting of elected employee representatives with which the company must consult

Employee Consultation in EU (cont.)• Two methods

– If an existing employee representative – voluntary agreements by Sep. 22, ’96

– Special Negotiating Body after Sep 22 ’96

• Two Models– German Model – EWC composed of only

employee reps (37% in 2005)– French Model – EWC composed of management

and workers reps and usually chaired by management (63% in 2005)

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Information and Consultation• EU Directive 2002/24, 2002• Criteria for Information/Consultation

Structures– ensure that the timing, method and content thereof are appropriate

to understand the situation;– at the relevant level of management and representation;– on the basis of information supplied by the employer in

accordance with Article 2(f) and of the opinion which the employees' representatives are entitled to formulate;

– in such a way as to enable employees' representatives to meet the employer and obtain a response, and the reasons for that response, to any opinion they might formulate;

– with a view to reaching an agreement on decisions

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Information and Consultation (cont.)• Subject Matter

– information on the recent and probable development of the undertaking’s or the establishment’s activities and economic situation;

– information and consultation on the situation, structure and probable development of employment within the undertaking or establishment and on any anticipatory measures envisaged, in particular where there is a threat to employment;

– information and consultation on decisions likely to lead to substantial changes in work organisation or in contractual relations.

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Social Directives and Other Legislation (continued)

• Parental Family Leave– 3 months of parental leave for each child up to age 8

• Changes of Ownership– successor must abide by the employment “contract,” the

basic terms and conditions of employment provided to the employees by the predecessor

– employees are protected from dismissal due solely to the change in ownership

– employees entitled to information and consultation with their representatives

– if there is a collective agreement in place, it must be honored

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Collective Bargaining and EU• No EU-Level collective bargaining

legislation– EU Charter requires members to protect

freedom of association and collective bargaining

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Social Partners – Treaty of Amsterdam (1997)

• Article 137– A Member State may entrust management and labour, at their joint

request, with the implementation of (social policy) directives adopted pursuant to paragraphs 2 and 3.

• Article 138 – 1. The Commission shall have the task of promoting the consultation of

management and labour at Community level and shall take any relevant measure to facilitate their dialogue by ensuring balanced support for the parties.

– 2. To this end, before submitting proposals in the social policy field, the Commission shall consult management and labour on the possible direction of Community action.

– 3. If, after such consultation, the Commission considers Community action advisable, it shall consult management and labour on the content of the envisaged proposal. Management and labour shall forward to the Commission an opinion or, where appropriate, a recommendation.

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European Foundation for Employment and Living Conditions

• Established by EU in 1975• Research on social and economic matters

to inform EU policy• Funded by EU

European Union

• Corporatist/Social Partnership Model

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Labor Standards and Trading Blocs

• NAFTA• MERCOSUR• ASEAN

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Conclusion on EU

• The member states of the EU have surrendered some sovereignty to the EU– Interests are protected by internal EU decision-

making process

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NAFTA

• U.S., Canada, Mexico• No imposition of labor standards• North American Agreement on Labor

Cooperation (NAALC)– Each country promises to enforce the labor

standards it domestically enacts– Commission of Labor Cooperation

• Ministers• Secretariat

Enforcement

• Each country has a National Administrative Office as first point of contact– U.S. – Division of Trade Agreement Administration

and Technical Cooperation in ILAB• Administers labor components of NAALC and other

bilateral agreements (Chile, Singapore)

– Receives “submissions” from interested parties• NAO may decide to investigate• If noncompliance found, may involve “ministerial

consultations”

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Penalties Under NAALC

• If noncompliance with occupational safety and health and traditional labor standard – 3-member person Evaluation Committee of

Experts to develop a draft report to ministers– 5-member arbitration panel– Final step

• Fines for violations

• If noncompliance with collective bargaining– ministers the final step

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Submissions Summary (September 2007)

• U.S NAO– 21 submissions (19 against Mexico, 2 against Canada), some involved multiple issues

• 19 involved freedom of assoc./right to collective bargaining/right to strike• others involved discrimination, labor standards, OSH• Results

– 10 accepted – 4 withdrawn– 6 not accepted– 1 in process

• Canadian NAO– 5 submission (3 against Mexico, 2 against US)

• Mexican NAO– 8 submission (5 against Canada, 3 against US)

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MERCOSUR

• Common market established in 1991 to promote economic integration– Argentina, Brazil, Paraguay and

Uruguay– “open regionalism”

• No specific reference to labor standards at MERCOSUR founding

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Labor Standards Pressures Within MERCOSUR

• Pressures from national federations of labor from member states led tothe creation of an advisory committee to do research and make recommendationsabout labor standards

– a voluntary approach– 1992-98

• proposals for harmonization of labor standards on the basis of an agreed upon set of ILO conventions discussed but not adopted by MERCOSUR

– 1998 • Sociolabor Declaration is adopted by MERCOSUR in support of ILO Conventions• Sociolabor Commission also created but has no

enforcing power

– 1999-2002

• Economic problems in MERCSOUR due to financial instability and crises inBrazil and Argentina

• interruption in the political process of promotionregional harmonization of labor standards

Association of Southeast Asian Nations (ASEAN)

• 10 Countries– Indonesia, Malaysia, Philippines, Singapore,

Thailand (all 1967)– Brunei Darussalam (1984)– Vietnam (1995)– Lao PDR and Myanmar (1967)– Cambodia (1969)

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Purpose of ASEAN (1967)

• Accelerate economic growth, cultural development, and social progress

• Promote peace and stability• Collaboration and mutual assistance on matters of

common interest in economic, social, cultural, technical, scientific fields

• Mutual assistance in training and research• Collaborate in agriculture• POINT: Not originally a free trade agreement

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ASEAN Economic Community• institute new mechanisms and measures to strengthen

the implementation of its existing economic initiatives including the ASEAN Free Trade Area (AFTA), ASEAN Framework Agreement on Services (AFAS) and ASEAN Investment Area (AIA);

• accelerate regional integration in priority sectors• facilitate movement of business persons, skilled labor

and talents; • strengthen the institutional mechanisms of ASEAN,

including the improvement of the existing ASEAN Dispute Settlement Mechanism

• NOTE: Labor Standards Not Referenced

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ASEAN SOCIO-CULTURAL COMMUNITY

• standard of living of disadvantaged groups and rural populations

• Workforce and human resources development through education, training, technology, job creation, and social protection (emphasis added)

• POINT: NO SPECFIC REFERENCE TO LABOR STANDARDS

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Labor Shortages and Surplus

• Established an Ad-Hoc Working Group on progressive labor– Met on 10/3/07– Member states placed emphasis on establishing an

institute to test and certify laborers in each country • Purpose to enhance skills• Encourages movement of workers from more populous countries

(ex. Indonesia, Lao PDR/Laos) to countries that need workers (Thailand)

• Attempting to raise wages in labor surplus countries

ASEAN Members States Ratifications

• Indonesia and Cambodia first Asian Pacific countries to ratify all fundamental ILO conventions– But still low

• ASEAN – average = 5 fund. conventions ratified• World – average = 7 fund. conventions ratified

• ASEAN states have a relatively low rate of all ILO conventions

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Conclusions• True international labor standards rare

– If ILS defined as • Internationally imposed• Mandatory• Enforceable

– EU has adopted only true labor standards• All member countries must comply with standards in

directives• Directives legally enforceable within the country by ECJ

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Conclusions (cont.)• ILO

– Depends on voluntary country ratification of conventions– Questions of

• Universality• Enforceability

• Other trading blocs– NAFTA

• Only requires U.S., Canada, and Mexico to enforce own standards– ASEAN

• Moving toward labor standards– MERCOSUR

• May be moving toward labor standards

• Sovereignty must be ceded before true ILS can be adopted