1.25 business management
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Lecture3_HRMG3203_InternationalLabourStandards11.pptxInternational Labour Standards
Godspower Onah
Lecturer in International HRM,
Leicester Business School, DMU
HRMG 3203
Learning Outcomes
By the end of the lecture students should be able to:
To understand the role pf the International Labour Organisation (ILO) and other transnational regulatory bodies in regulating work and employment
To understand the core international labour standards and the Decent Work agenda of the ILO
To critically assess different approaches to promoting international labour standards and the prospects of convergence or divergence in labour standards
Globalisation and Labour Standards
Social dumping is a practice of employers to use cheaper labour than is usually available at their site of production or sale e.g., by using:
Migrant labour – EU Posted Workers
Offshoring and outsourcing production
as a result, governments are tempted to enter a social policy regime competition by reducing their labour and social standards to ease labour costs and retain or attract MNCs
Power of Multinational Corporations
Regime Shopping: MNCs use their power and size to dominate political systems and nation-states through the promise of investment (setting up workplaces and factories) and disinvestment (closing down workplaces and factories).
Whipsawing: the process by which MNCs play different subsidiaries off against each other making coercive comparisons and threatening plant closures if productivity fails to reach the levels achieved elsewhere in the firm's global network.
What is the impact on employees and local communities?
Martinez Lucio (2014); Klein (2000); Marginson et al (1995)
Race to the Bottom of Labour Standards
Race to the Bottom: A concern over globalisation is that as nations compete for mobile firms (MNCs), they will relax labour standards as a method of lowering costs and attracting investment
a race to the bottom in which governments seek to attract foreign direct investment (FDI) by removing policies that, although potentially socially desirable, are viewed as unattractive to firms (MNCs)
Davies and Vadlamannati (2011); Hurtado and Argerey (2008)
Globalisation and Labour Standards
Institutionally incompleteness: In an increasingly interconnected global economy, national economies tend to be institutionally incomplete i.e., all the institutional arrangements relevant to shaping the behaviour of employment actors such as MNCs are not necessarily located in the same national economy
The need for international cooperation in regulating MNCs
Deeg & Jackson, 2007; Bamber et al, 2016
Globalisation and Labour Standards
Is providing a minimum set of international labour standards through global regulation the solution?
International Labour Standards
Hotly debated:
Human Rights Argument
Social Justice Argument
Economic Case Argument
Rubery & Grimshaw, 2003
International Labour Standards
Human Rights Argument: Labour standards are a matter of human rights and should be universal to all societies e.g., protection against forced labour
But…is this a disguised form of protectionism to protect Western developed economies and businesses from competition from lower-cost producers?
Rubery & Grimshaw, 2003
International Labour Standards
Social Justice Argument: Labour standards should be dependent on context or level of development e.g., should child labour be banned?
What may be a fair level of labour standards in one country may be unfair in other countries
Dependent on culture, current wealth, living standards in the society etc
But…is this a disguised form of avoiding global regulation by developing countries?
Rubery & Grimshaw, 2003
International Labour Standards
Should child labour be banned?
Should all countries regulate child labour in the same way?
ILO action against child labour
International Labour Standards
Economic Case: Labour standards may be a source of comparative advantage as employers enhance labour productivity through skill upgrading and better health and safety provision (a race to the top?)
But…should labour standards (e.g., forced labour and modern slavery) be dependent on the market?
Rubery & Grimshaw, 2003
International Labour Organization (ILO)
Founded in 1919 with 42 member states - mandate of promoting social justice at work
The ILO associated with the United Nations in 1946
Currently 187 member states
Has a tripartite governing structure – governments, employers, and workers
In 1969 received the Nobel Peace Prize for improving peace among classes, pursuing decent work and justice for workers, and providing technical assistance to developing nations
Campaigning for Social Justice for a Fair Globalization - the social dimension of globalization
ILO Declaration of Philadelphia
The 1944 ILO Declaration of Philadelphia:
The right of all human beings “to pursue both their material well-being and their spiritual development in conditions of freedom and dignity, of economic security and equal opportunity”
Labour is not a commodity
Labour should not be treated like a commodity
Labour market is a special market – has social and human dimensions and functions in a different way from markets for televisions or bananas
Examples of ILO Global Labour Standards
ILO has adopted 189 conventions e.g
Forced labour and child labour
Health and safety
Wages
Job security
Freedom of association
Night work
Maritime sector working conditions
Discrimination
In 2010, the ILO Recommendation concerning HIV and AIDS and the World of Work, 2010 (No. 200), became the first international labour standard on HIV and AIDS. The Recommendation lays out a comprehensive set of principles to protect the rights of HIV-positive workers and their families, while scaling up prevention, voluntary and confidential counselling and testing at work
ILO and Global Labour Standards
ILO has adopted 189 conventions. If these conventions are ratified by enough governments, they come into force. However, ILO conventions are considered international labour standards regardless of ratifications. When a convention comes into force, it creates a legal obligation for ratifying nations to apply its provisions.
Every year the ILO examines a number of alleged breaches of global labour standards. Governments are required to submit reports detailing their compliance with the obligations of the conventions they have ratified.
The ILO registers complaints against entities that are violating its global labour standards however, it does not impose sanctions on governments or MNCs
ILO action to establish freedom of association and collective bargaining
USA and ILO Labour Standards
Despite holding a permanent seat on the ILO Governing Body, the United States is a party to:
Only 14 of the 189 labour conventions
Only 2 of the 8 core conventions
The United States Department of Labor declares that U.S. laws and practices “meet or exceed many ILO conventions.”
There are, however, significant reasons to doubt that self-serving U.S. comment, particularly in regard to the right to organise, the right to bargain collectively, the right to strike, treatment of public employees, rights of noncitizen workers, treatment of children, anti-union discrimination, treatment of women, and complaint procedures
Weissbrodt and Mason (2014)
What are Core Labour Standards?
Core labour standards are those standards that relate to basic human rights and can be established without regard to level of economic development
The 1998 ILO Declaration on fundamental principles and rights at work promotes the following (3 prohibitive and 2 affirmative in character):
Freedom of association
Effective recognition of the right to collective bargaining
The elimination of all forms of forced or compulsory labour
The effective abolition of child labour
The elimination of discrimination in respect of employment and occupation
The standards are qualitative in nature, not quantitative. i.e., they do not involve setting minimum wage levels or maximum working hours, for example
ILO: Decent Work Agenda
ILS enforcement
Hard
State regulation
Labour standards within trade agreements (e.g., WTO, EU social dimension)
Soft
International laws, e.g., ILO’s Core Labour Standards
Corporate codes of conduct
Certification approaches
Reporting initiatives
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Soft forms of CLS regulation
Corporate codes of conduct (most common) e.g., corporate social responsibility (CSR) – self regulation
Certification approaches: external body certifies that products produced meeting labour standards; Social Accountability International’s SA8000 standard; fairtrade logos
Reporting initiatives: companies volunteer to report on enforcement e.g., Global Reporting Initiative (GRI) and the UN Global Compact (focus is on environmental, social and financial reporting issues, requires participating firms to report on their performance in those standards in their annual reports; includes CLS)
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Alternative Methods of Promoting Labour Standards
United Nations (UN) Global Compact (2000) and UN Guiding Principles on Business and Human Rights (2011)
Regional labour standards e.g., EU and NAFTA
Bilateral social clauses in trade agreements e.g., between USA and Singapore
Attempt at a WTO Social Clause
OECD Guidelines for Multinational Enterprises
ISO 26000 Guidance on Social Responsibility
Trade Union Boycotts of supply chain
Consumer Boycotts
Social Labelling
Codes of Conduct
International Framework Agreements (IFA) - Industry wide and negotiated by trade unions
Multi-stakeholder standards – CSR standards involving other NGOs/MNCs
CSR Codes of Conduct by individual MNCs – may apply to their supply chain
Conclusion
Convergence in international employment systems?
Converge around minimum standards?
Converge at the bottom? - Race to the bottom of labour standards?
Converge at the top? - Race to the top of labour standards?
Divergence?
Different countries have different standards…Race to the bottom?
