International and Comparative Employment Relations - Essay Example

INTERNATIONAL AND COMPARATIVE EMPLOYMENT RELATIONS By Location Table of Contents Introduction 4 Discussion 4 International Labour Organization 4 Corporate codes 5 International Framework Agreements 6 legislative approach 8 The trade sanction strategy 8 Multilateral enforcement 10 The tutelary approach 10 Independent organizations or international labour unions 11 Effectiveness of current approaches 12 Conclusion 14 International and Comparative Employment Relations Introduction Globalization has had numerous effects on the manner in which business organizations operate. Some of these effects can be said to be positive while others are positive. One of the aspects of business that are affected by globalization is the regulation of labour standards (Seidman 2007, p. 23). Some Critics of globalisation argue that it poses barriers to the regulation of labour standards and creates a race to the bottom in labour standards. At the moment there are some approaches to regulating labour standards that are being applied with the aim of making sure that labour standards are maintained (Locke 2013, p. 57). These approaches have various effects on the labour standards. This paper analyses the approaches to regulating labour standards in a particular context of Multinational corporations (MNCs). Multinational corporations are business organizations that operate in at least one country apart from their home country. The paper will also consider the effectiveness of current approaches and their sustainability over the long-term. Discussion International Labour Organization In response to the race to the bottom in labour standards the International Labour Organization decided to focus on what they thought had articulated as core labour standards. This led to a Declaration on Fundamental Principles and Rights at Work which defined the fundamental rights of workers to be: freedom to associate and the right to collectively bargain to be recognized; illegalization of any type of compulsory or forced labour; abolition of underage labour; and illegalization of discrimination when it comes to occupation and employment (Weil & Mallo 2007, p. 799). International Labour Organization’s member states are supposed to make sure that these fundamental rights are promoted within their territories. This can be said to have been the beginning step toward making sure that the race to the bottom in labour standards is properly dealt with. However, there have been some concerns with regard to the ability of the International Labour’s ability to influence the regulation of labour standards. Despite the fact that the ILO is charged with the responsibility of setting international labour standards it has been observed that these role is in most cases educational, promotional, and normative (Williams & Williams 2014, p. 123). This is because they can only encourage member states to adopt the international labour standards that they propose. They can also be of assistance when it comes to the implementation of these labourstandards. Therefore, it should be noted that enforcing these norms is still a big challenge. Corporate codes Corporate codes of conduct are one of the strategies that have also been used in curbing the race to the bottom in labour standards globally. Corporate code of conducts is a term that is commonly used with reference to organization policies for establishing labour standards practices and principles for transnational supply chain suppliers. This is a strategy that emerged as a result of mounting pressure from labour rights NOGs and labour movements (Lee & Mccann 2011, p. 145). As a result many organizations that have transnational supply change have their own corporate codes as part of their Corporate Social Responsibility programs. Corporate codes can be said to be important because of the manner in which they outline labour standard principles. Corporate codes also include labour standards regulation practices around information dissemination, worker representation, and resolution of grievances. It can be said that these codes build on the principles that had been initially outline by the International Labour Organization (Fransen 2011, p. 366). These codes also build on organizational commitment towards social responsibility. It is a common practice for business organizations to availsome level of disclosure of public information with regard to labour standard practices. In the recent past it was also noticed that some companies began developing their codes through consulting labour rights NGOs by using multi-stakeholder initiatives and using independent auditors to monitor the labour standards practices of suppliers. The use of external auditor is strategically done so that the whole process could be more credible. Despite the fact that corporate codes have good intentions towards improving global labour standards, their effectiveness can be questionable at some point. Looking at these codes your will notice that there is a variation in content, scope, and regulatory activities that are associated to the corporate codes (Hassel 2008, p. 244). The codes can also be said to be voluntary and in mostcases unilateral. This implies that these codes are always developed by individual business organizations at their own discretion. Despite the fact that there has been the involvement of labour rights NGOs in the recent past it can be said that the process can still be compromised because TNCs still have high levels of control over the terms of engagement that are applied in the process (Locke, Amengual & Mangla 2009, p. 352). International Framework Agreements Due to the fact that IL O standards are not easily enforced and the corporate codes have inherent weaknesses, some Global Union Federations saw that negotiating for International Framework Agreements. Just like corporate code, International Framework Agreements are meant to regulate transnational supply chains’ labour standards. International Framework Agreements bind the signatories to local labour policies (Locke 2013, p. 207). International Framework Agreements usually result from intensive negotiation between GUFs and TNCs, and are mostly developed for the primary purpose of establishing a continuous process of dialogue and consultation between the involved parties. Labour unions globally also see International Framework Agreements as a strategy that can be used to make sure that unionization across a supply chain is promoted through providing framework for negotiation of local agreements and putting pressure on suppliers to respect freedom of association rights (Ahlberg 2008, p. 133). At the moment there are more than 80 International Framework Agreements negotiated by various global union federations. Despite the fact that there are some successful implementations, International Framework Agreements can be said to have a number of limitations. One of the limitations comes from the fact that they are voluntaryagreements. TNCs have no legal obligations that expect them to negotiate or implement International Framework Agreements. This is an implication that they always do so only if they wish to (Amengual 2010, p. 411). International Framework Agreements have shown high levels of success in sectors that have traditionally high levels of unionization. Such sectors include construction, industrial manufacturing, and resource industries. This is an indication that sectorial union strength and sectorial union density play very important roles during negotiation of International Framework Agreements. Therefore, there is likely to be high resistance by employers in sectors with low unionization in supply chains. Such sectors include global garment industry. Even if you imagine that International Framework Agreements are respect by all suppliers, you cannot be sure that there will be uniformity in applying and enforcing the framework agreement in all the supply chains. Despite the fact that International Framework Agreements lead to the establishment of dialogue between global unions and TNCs, their effective implementation should be complemented by localized and strong workplace-based representation and organization. legislative approach The use of legislative approach to regulation of labour standards has also been successful to some extent. The legislative approach usually involves enacting and enforcing labour standard using legislative bodies of a union of nations.Social policies relating to employment and labour are usually categorized into three areas. These areas are: preventing dumping through low labour standards, dialogue between management and employees, and free movement of labour. This approach has been particularly very effective in the European Union. This is also the approach that is in most cases adapted by the International Labour organization. Despite that fact that the international Labour organization has the mandate to give directive with regard to any area that affect the quality of labour standards, the meaning of the compliance is left to the discretion of every member country (Seidman 2007, p. 201). This implies that the use of such bodies can be in some circumstances be very ineffective. For instance, it will be very hard for ILO policies to work effectively in a country where the government is not committed to the organization’s policies. The trade sanction strategy For the past two decades there has been a link between international trade and labour standards. The most relevant example of the link between labour standards and international trade can be found in the United States of America’s Trade Acts of 1974. This Act led to the creation of the Generalized System of Preferences. Under the Generalized System of Preferences, the United States of America was permitted to give nonreciprocal tariff preference to developing countries. The permission was to be based on certain product or country eligibility criteria. This was aimed at promoting their economic growth and development. The country eligibility criteria included affording workers in the country some rights that are internationally recognized. These rights were same to the four core conventions that were introduced by the International Labour Organization. If in any case there was a complaint filed against a beneficiary of Generalized System of Preferences then the compliant will have to be processed through the Office of the United States Trade Representative. Since the Generalized System of Preferences was introduced there are a total of eight countriesthat have been suspended from the program. These countries include: Liberia, Burma, Maldives, Nicaragua, Mauritania, Syria, Pakistan, and Sudan. Four countries were suspended and later reinstated. These countries include: Chile, Central Africa Republic, Romania, and Paraguay (Singh2008, p. 171). The fact that the suspension of non-compliant countries and industries has worked shows that this can be an effective way of enhancing global labour standards. However, the fear involved in this approach is that the approach can be used by developed countries politically against some developing countries. The trade sanction strategy that is used in the United States of America has been successful and acts as an encouragement to other countries to use the same in making sure that the global labour standards are not compromised. However, this strategy cannot be said to be a guarantee solution to the global labor standards problem. This is because it has its basis on external complains rather than monitoring. This measure can be said to have mixed success because a low percentage of the trade partners do provide substantive standards. However, there is a common opinion that if the strategy would be picked up by other developed country then there would be a significant improvement of global labour standards (Yu 2008, p. 522). Therefore, it can be concluded that this strategy have not proved to be completely effective but is likely to be veryeffective in the next five years if it will be adopted by the other developed countries and even the developing ones. Multilateral enforcement Another approach that has been widely used in regulating labour standards in a particular context of MNCs is multilateral enforcement. This approach opposes any form of common standard schemes imposition. This approach requires the signatories to international agreements such as the North American Agreement on Labour Cooperation to assertive commitments to labour standard structures within their territories. The unique attribute of thin approach is that it does not dictate policy in any way. Instead, this approach asserts for the inclusion of workers’ right baseline. This approach requiresmembers to make sure that they have administrative bodies that are charged with the responsibility of judging whether or not the measures that the countries have put in place for domestic labour standards are continuous and effective (International Labour Conference 2010, p. 142). As much as this approach does not encourage uniformity in the labour standards it has enable member countries to individually make sure that the local labour standards are improved. The tutelary approach The tutelary approach is believed to be a by-product of government activities that are aimed at combating corruption that involve officials charged with regulatory responsibilities. They achieved this through the by limitation of “powers or rules of procedure” available to the local labour inspectors. Labour and legislatures ministries aimed at minimizing the possibility of “high-handed action” taken at the expense of their private sectors. Continental labour inspectors had no option but cajole, coax, and harass labourers in order for them to comply with the laws(Fenwick, Howe, Marshall& Landau, 2008, p. 191). However, this approach has proved to be highly ineffective, especially given the fact that different countries have different laws. This is one of the many approaches that economists believe that will be impractical in the near future. There is an approach that is always pursued by groups such as Social Accountability International (SAI). This approach involves the creation and administering of voluntary codes of conduct that are built into certification-based systems. Third-party auditors, who follow the guidelines given to them by multiparty organizations such as SAI, carry out auditing and then certify business organizations that comply with their standards. Business organizations with a will to meet these standards can decide to source from ‘approved’ business organizations instead of committing to ongoing external or internal monitoring. This approach is effective to some extent because it avails a neutral player who has the power of monitoring players in the various industries and determines whether or not they are complying to labour standards (Ahlering & Deakin 2007, p. 902). The fact that they have the power to certify means that many players in the global economy will strive in order for them to be certified by the organizations in question. Independent organizations or international labour unions There is another approach regulating labour standards which operates through independent organizations or international labour unions that usually respond to complaints from the labourers. A good example of such independent organizations is Workers Rights Consortium (WRC). Having workers’ complaints as their basis unions or organizations such as the WRC organize public campaigns aimed at raising public understanding and pressure on those retailers and brands drawing on those suppliers. This pressure is applied through private negotiations with the parties (Rogowski 2013, p. 201). This is done with the main aim of changing conditions within those business organizations and the supply chains that are associated to them. Effectiveness of current approaches One thing that is clearly notable when you look at these strategies is that there as an enforcement gap. The principles and norms that are proclaimed in the codes, framework agreements, and conventions have turn out to be very challenging to enforce. The common problem is bridging the gap between local practices and international standards. This means that there is a need to develop strategies that will make sure that international standards can be enforced locally (Deakin, Lele & Siems 2007, p. 144). This is necessitated by the fact that the international standards have not been as effective as they were expected to be. If someone was to go with the most straightforward understanding of deliberation regarding labour standards you will realize that there is a broad, international support for clear standards of decent working. The major disadvantage in this case is that it will be challenging to make sure that all the employers globally abide with these norms. With such considerations, international public agreements can avails a firm foundationupon which organizations from different countries and NGOs can interpret, monitor, adjudicate, and implement working standards (Cabrelli 2014, p. 121). Therefore, it can be said that the deliberation process will occur in two levels. One of the most used approaches in classification and analyzing of national institutions to emerge in the 1990s has been theory of legal origins. The theory of legal origins was first introduced in the late 1990s. It was a result the efforts of a group of economists based principally at Yale and Harvard Universities. There was also the involvement of the World Bank. In a number of articles with high influence, these groups asserted that there is a strong empirical relationship between a nations’ regulatory strategyand the origin of their legal system (Vosko 2008, p. 138). This approach has been specifically prominent in comparative economics and comparative law. The journal in which the approach was written has been one of the most cited literature materials with regard to regulation of labour standards. Business organizations can always be brought into compliance with labour standards without business competitiveness or efficiency being compromised. The sole responsibility of these standards is to make sure that labourers are not denied their rights. However, there are some case where compliance to labour standard should be prioritised even if it implies that it will be at the expense of the competitiveness and profitability of a business organization (Blanpain & Bamber 2010, p. 187). This is particularly advocated for by the Latin approach to regulating labour standards. Because of the absence of international institutions entrusted with the regulation of labour standards and requirements, all of these efforts squarely rely on privately owned organizations for the achievement of the same. Some types of monitoring usually involve companies or a number of companies coming to agreement to certain codes of conduct which is followed by monitoring their covered supply base on their own. Other types also use codes of conduct agreed upon by stakeholders, but then involve external,third-party groups such as private companies, NGOs, not-for-profit groups, and labour unions in the process of monitoring adherence to these codes. This enhances positivity towards these codes due to the involvement of third parties. Conclusion As shown herein there are various approaches that have been applied in different contexts with the sole aim of regulating labour standards. What is evidently clear is that not all of these approaches have proved to be fruitful. Some of the approaches such as corporate codes of conduct were effective only for a certain period of time. Another thing that was notable is the fact that some of the international bodies such as the ILO who have been entrusted with the responsibility of regulating labour standards are not that strong. It has been observed that they do not have the mandate of forcing member countries to comply with certain standards. If these bodies would be made more powerful, it is most likely that the labour standards would have improved a great deal in the next five years. 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