Labour Law and Worker Protection in Developing Countries [1 ed.] 9789290148951, 9789290148944

Citation preview

TEKLÈ

AND

IN DEVELOPING COUNTRIES

This important new study shifts the focus of scholarly and policy debates on the role of labour law in an era of globalization away from the countries and labour law systems of the North to those of the global South. Placing its analysis within the context of the current scholarly debates on the challenges and future of labour law, the book critically reviews the relevant literature and reflects upon the way in which workers’ protection tends to be conceptualized, as well as on the adequacy of the legal categories and tools used to further it, with special attention given to the effectiveness of labour legislation in promoting gender equality. The book argues that, in addition to problems in the application of labour law, there is a mismatch between the realities of the developing world and the social, economic and political underpinnings of labour law. This dates back to its development in post-colonial African and South Asian countries and, to a lesser extent, in Latin American ones. The divergence persists, while new manifestations have appeared due to globalization, leaving a significant number of workers outside the scope of labour law and in need of protection. Against this background, the book explores regulatory and policy responses at different governance levels to enhance the scope and application of labour regulation in Latin America, South Asia and southern Africa.

LABOUR LAW AND WORKER PROTECTION IN DEVELOPING COUNTRIES

LABOUR LAW WORKER PROTECTION

ILO

TZEHAINESH TEKLÈ

LABOUR LAW WORKER PROTECTION

AND

IN DEVELOPING COUNTRIES

Labour law and worker protection in developing countries

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Labour law and worker protection in developing countries

EDITED

BY

TZEHAINESH TEKLÈ

HART PUBLISHING • OXFORD AND PORTLAND, OREGON INTERNATIONAL LABOUR OFFICE • GENEVA

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Copyright © International Labour Organization 2010 First published in 2010 by Hart Publishing 16c Worcester Place Oxford, OX1 2JW and International Labour Office CH-1211 Geneva 22, Switzerland

Teklè, Tzehainesh (ed.) Labour law and worker protection in developing countries Hart Publishing, Oxford, 2010; International Labour Office, Geneva, 2010

Workers rights / gender equality / labour law / law reform / application / developing countries 04.02.5 ISBN 978-1-84113-887-9 (Hart); 978-92-9014-894-4 (ILO) ILO Cataloguing in Publication Data

Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: [email protected]. The International Labour Office welcomes such applications. Libraries, institutions and other users registered with reproduction rights organizations may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications and electronic products can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by email: [email protected] Visit our website: www.ilo.org/publns

Photocomposed in Switzerland Printed in Switzerland

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Contents

Acknowledgements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ix

List of contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xi

Table of international instruments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xiii

Table of domestic legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xix

Table of cases  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xix

List of abbreviations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xxxii

Introduction 1. Labour law and worker protection in the South: An evolving tension between models and reality Tzehainesh Teklè  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.1 Strengthening the presence of southern perspectives in the current debates on labour law  . . . . . . . . . . . . . . . . . . . . . 1.2 An analytical approach to studying the impact of labour law in the South  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 The structure of the book  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 The challenge of the mismatch between socio-legal categories and reality  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.1 The structural features of the world of work and labour law  . 1.4.2 A world of work in evolution  . . . . . . . . . . . . . . . . . . . . . . 1.5 The problem of enforcement: Structural and new dimensions . . . .

3 3 9 11 12 12 20 32 v

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1.6 Labour law and gender equality  . . . . . . . . . . . . . . . . . . . . . . . . 1.6.1 The gendered construction of the law  . . . . . . . . . . . . . . . . . 1.6.2 Labour law and the promotion of gender equality at work  . . 1.6.3 The interaction of labour law with other branches of law and non-state sources of law  . . . . . . . . . . . . . . . . . . 1.6.4 The impact of globalization  . . . . . . . . . . . . . . . . . . . . . . . 1.7 Conclusions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36 36 37 39 40 42

PART I Worker access to labour law protection: Historical challenges and the impact of globalization 2. The effectiveness of labour law and decent work aspirations in the developing countries: A framework for analysis Rachid Filali Meknassi  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51

2.1 Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 The ineffectiveness of labour law as an expression of socio-legal pluralism  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1 One labour law, many labour law systems  . . . . . . . . . . . . . 2.2.2 Inadequate integration into the dominant trade networks: The main source of legal ineffectiveness in the southern countries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 The ineffectiveness of labour law: A symptom of the decent work deficit  2.3.1 The ineffectiveness of workers’ rights and poor overall effectiveness of law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.2 A fair globalization: A factor in promoting decent work and effective rights  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84

3. Trade liberalization, labour law and development: A contextualization Adelle Blackett  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93

3.1 Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 The foundations of multilateral trade: Embedded liberalism and the convenience of colonialism  . . . . . . . . . . . . . . . . . . . . . . 3.3 The inherent tension between trade liberalization, labour law and the role of the contemporary state in post-colonial developing economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51 55 56

63 69 70

93 94

97

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3.4 The terrain of labour law reform in developing countries  . . . . . . 3.4.1 Mexico  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.2 The Caribbean Community (CARICOM)  . . . . . . . . . . . . 3.4.3 Mauritius  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.4 Cambodia  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.5 The Republic of Korea  . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Towards global distributive justice  . . . . . . . . . . . . . . . . . . . . . .

108 108 112 117 120 125 128

PART II Labour law and worker protection in the South: Regional perspectives 4. Labour law in Latin America: The gap between norms and reality Graciela Bensusán  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.1 Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 The evolution of labour law and the economic and political context  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Worker protection under labour law: Old and new problems  . . . 4.3.1 The limited scope of labour law  . . . . . . . . . . . . . . . . . . . . . 4.3.2 Recent responses to changing forms of work . . . . . . . . . . . . . 4.3.3 Problems relating to enforcement mechanisms  . . . . . . . . . . 4.4 Gender equality: The case of Mexico  . . . . . . . . . . . . . . . . . . . . . 4.4.1 The legal framework and the situation of women workers in the labour market  . . . . . . . . . . . . . . . . . . . . . . 4.4.2 The situation in the export-oriented maquila garment industry  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Conclusions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135 135 137 142 142 146 147 161 162 166 170

5. Labour law: A southern African perspective Colin Fenwick, Evance Kalula and Ingrid Landau  . . . . . . . . . . . . . .

175

5.1 Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 The evolution of labour law in southern Africa . . . . . . . . . . . . . . 5.2.1 Colonization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Post-independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.3 Economic liberalization . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.4 Democratization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

175 177 177 178 180 181 vii

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5.2.5 The role of the ILO  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.6 Regional integration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.7 Concluding remarks  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 The challenges facing labour law in southern Africa  . . . . . . . . . . 5.3.1 The socio-economic environment  . . . . . . . . . . . . . . . . . . . . 5.3.2 The relationship of labour law to economic objectives  . . . . . . 5.3.3 The scope of the employment relationship and changing patterns of work  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.4 The limited capacity of labour law institutions  . . . . . . . . . . 5.4 Gender equality in Lesotho: A case study  . . . . . . . . . . . . . . . . . 5.4.1 The legal and policy framework  . . . . . . . . . . . . . . . . . . . . 5.4.2 The role of labour law in reinforcing the existing gender inequalities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.3 Proposed labour law amendments . . . . . . . . . . . . . . . . . . . 5.4.4 The enforcement of labour laws . . . . . . . . . . . . . . . . . . . . . 5.4.5 Complementarities between labour laws and other laws  . . . . 5.4.6 Concluding remarks  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Conclusions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

183 184 186 186 186 194 198 208 212 213 216 217 218 220 222 222

6. Labour law in South Asia: The need for an inclusive approach Kamala Sankaran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

225

6.1 Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Historical evolution  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 Labour law in South Asia: Features and proposals for reform  . . . . 6.3.1 Features of labour law in the South Asia region  . . . . . . . . . 6.3.2 Current debates around labour law  . . . . . . . . . . . . . . . . . 6.4 Law and gender equality: The case of India  . . . . . . . . . . . . . . . . 6.4.1 The gendered notion of “work”  . . . . . . . . . . . . . . . . . . . . . 6.4.2 The gendered notion of labour law  . . . . . . . . . . . . . . . . . . 6.4.3 The gendered impact of “neutral” laws: Examples  . . . . . . . . 6.4.4 The nature of labour law for women: Equality or protection?  . . 6.4.5 Night work by women  . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 Conclusions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

225 226 228 228 241 252 252 254 255 257 258 259

Bibliography  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261

Index  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

291

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Acknowledgements

M

y first and warm thanks go to the contributors to this book for their participation in the research project that I carried out at the International Institute for Labour Studies of the ILO and from which this book originates. I am also grateful for the comments made by Jane Hodges, Jean-Claude Javillier, Emmanuel Reynaud, Corinne Vargha and Maria-Luz Vega to earlier versions of the papers of which this volume is comprised. Special thanks are due to the two anonymous reviewers for their insightful comments. Finally, I wish to thank Charlotte Beauchamp for her coordination and supervision of the publication process. Tzehainesh Teklè

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List of contributors

Graciela Bensusán is a research professor at the Universidad Autónoma Metropolitana since 1976 and is a member of the Sistema de Investigadores. She is the author of many papers and books examining labour institutions, policies and organizations from a comparative perspective, and has been published in Mexico and in other countries. Adelle Blackett is an associate professor and William Dawson Scholar at the Faculty of Law, McGill University in Montreal, Canada. Her research and teaching focus on labour law and international trade law, with an emphasis on post-colonial approaches to development and identity. She is the convenor of the Labour Law and Development Research Network, and a research co-coordinator for the Interuniversity Centre on Globalization and Work (CRIMT). Colin Fenwick is an associate professor at Melbourne Law School, where he was formerly director of the Centre for Employment and Labour Relations Law. He was also an editor of the Australian Journal of Labour Law. At present, Colin is on leave of absence and engaged as a labour law specialist at the ILO in Geneva. Rachid Filali Meknassi is a professor at the Law Faculty of the University Mohammed V Agdal in Rabat, Morocco, teaching labour law and social security law. He is the author of many academic publications on labour law and social security, corporate social responsibility and human rights. He has recently been appointed a member of the ILO’s Committee of Experts on the Application of Conventions and Recommendations. xi

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Evance Kalula is a professor and director of the Institute of Development and Labour Law, University of Cape Town. His main areas of research and teaching interest are international and comparative labour law, labour market regulation, and social security. Ingrid Landau has worked as a researcher in the Centre for Employment and Labour Relations Law, and in the Asian Law Centre, both at Melbourne Law School. She now works as a researcher for the Australian Council of Trade Unions. Kamala Sankaran is an associate professor at the Campus Law Centre, Faculty of Law, University of Delhi. Her research interests include constitutional law, international labour standards and the informal economy. Tzehainesh Teklè is a researcher at the ILO, Geneva, currently on secondment to the International Training Centre of the ILO, where she is a senior programme officer in the Standards and Fundamental Principles and Rights at Work Programme. Her research interests include international and comparative labour law, equality and non-discrimination at work, and human rights.

xii

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Table of international instruments

Caribbean Community (CARICOM) 2001 Revised Treaty of Chaguaramas establishing the Caribbean Community, including the CARICOM single market and economy 112 European Community (EC)/African, Caribbean and Pacific (ACP) countries 1975 EC–African, Caribbean and Pacific (ACP) Lomé Partnership Agreements (also known as the Lomé Conventions), revised 1981, 1985, and 1986 31, 115, 118 European Union (EU)/African, Caribbean and Pacific (ACP) countries 2000 EU–African, Caribbean and Pacific (ACP) Cotonou Partnership Agreement, revised 2005 114, 118 European Union (EU)/Morocco 1996 EU–Morocco Association Agreement 1996 Art. 52 87 General Agreement on Tariffs and Trade (GATT) 1947 General Agreement on Tariffs and Trade (GATT) 94, 95, 96, 97, 99, 113 Preamble 96 Art. III 113 1974 Multi-Fibre Agreement (MFA) 99, 118, 121, 122, 124

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International Labour Organization (ILO) 1919 Constitution 19, 32, 45, 76 Preamble 74 Minimum Age (Industry) Convention, 1919 (No. 5) 80 Minimum Age (Agriculture) Convention, 1921 (No. 10) 80 Minimum Age (Trimmers and Stokers) Convention, 1921 (No. 15) 80 Forced Labour Convention, 1930 (No. 29) 184, 245, 246 Old-Age Insurance (Industry, etc.) Convention, 1933 (No. 35) 81 Night Work (Women) Convention (Revised), 1934 (No. 41) 259 Underground Work (Women) Convention, 1935 (No. 45) 81, 164 Hours of Work and Manning (Sea) Convention, 1936 (No. 57) 80–81 Minimum Age (Sea) Convention (Revised), 1937 (No. 59) 81 Minimum Age (Non-Industrial Employment) Convention, 1937 (No. 60) 81 1944 Declaration of Philadelphia 32, 47, 74, 76 para. II (a) 44 Medical Examination of Young Persons (Industry) Convention, 1946 (No. 77) 81 Medical Examination of Young Persons (Non-Industrial Occupations) Convention, 1946 (No. 78) 81 Night Work of Young Persons (Non-Industrial Occupations) Convention, 1946 (No. 79) 81 Labour Inspection Convention, 1947 (No. 81) 212 Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) 19, 45, 157, 158, 165, 184, 208, 245, 246, 247 Night Work (Women) Convention (Revised), 1948 (No. 89) 259 Right to Organise and Collective Bargaining Convention, 1949 (No. 98) 19, 45, 157, 158, 165, 184, 208, 245, 246, 247 Equal Remuneration Convention, 1951 (No. 100) 19, 38, 45, 79, 164, 184, 245, 248, 256 Equal Remuneration Recommendation, 1951 (No. 90) 79 Abolition of Forced Labour Convention, 1957 (No. 105) 184, 245 Discrimination (Employment and Occupation) Convention, 1958 (No. 111) 19, 45, 79, 164, 184, 245, 248 Discrimination (Employment and Occupation) Recommendation, 1958 (No. 111) 79 Minimum Age (Underground Work) Convention, 1965 (No. 123) 81 Medical Examination of Young Persons (Underground Work) Convention, 1965 (No. 124) 81 Minimum Age Convention, 1973 (No. 138) 81, 82–83, 83, 184, 245, 248 xiv

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Table of international instruments

Labour Relations (Public Service) Convention, 1978 (No. 151) 159 Workers with Family Responsibilities Convention, 1981 (No. 156) 19, 45, 79, 165 Workers with Family Responsibilities Recommendation, 1981 (No. 165) 79 Part-Time Work Convention, 1994 (No. 175) 19 Home Work Convention, 1996 (No. 177) 19 Private Employment Agencies Convention, 1997 (No. 181) 19, 143 1977 Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, revised 2000 86, 116 1998 Declaration on Fundamental Principles and Rights at Work 53, 75, 76, 83, 86, 106, 243, 245, 247 Worst Forms of Child Labour Convention, 1999 (No. 182) 81, 83, 184, 245, 248 Maternity Protection Convention, 2000 (No. 183) 165 2001 Code of Practice on HIV/AIDS and the World of Work 190 Employment Relationship Recommendation, 2006 (No. 198) 19, 25, 54, 198 2008 Declaration on Social Justice for a Fair Globalization 32 International Trade Organization (ITO) 1948 Havana Charter 95, 96 Ch. III 96 League of Nations 1924 Geneva Declaration of the Rights of the Child 81 Organization of African Unity 1991 Treaty establishing the African Economic Community 195 Southern African Development Community (SADC) 1992 Treaty establishing the Southern African Development Community 184 1996 Protocol on Trade 195 1997 Code on HIV/AIDS and Employment 189, 190, 223 paras 1–12 190 1997 Declaration on Gender and Development 215 1998 Draft Protocol on the Facilitation of Movement of Persons 185, 194 2003 Charter of Fundamental Social Rights 185 Art. 4 185 Art. 5 185 xv

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Art. 11 185 Art. 11(a) 185 Art. 13 185 Art. 15 185 Art. 16(1) 185 United Nations (UN) 1948 Universal Declaration of Human Rights (UDHR) 78, 81 Art. 2 77 Art. 7 78 Art. 10 78 Art. 12 78 Art. 16 77 Art. 17 78 Art. 18 78 Arts 21–23 78 Art. 25 77 1966 International Covenant on Civil and Political Rights (ICCPR) 76, 78 Art. 3 78 1966 International Covenant on Economic, Social and Cultural Rights (ICESCR) 76, 78, 81 Art. 3 78 Art. 7 78 Art. 10 78 Art. 10(3) 81 1979 Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) 215 1989 International Convention on the Rights of the Child (UNCRC) 82 Art. 32 82 1999 Global Compact 86 United States (US)/Canada/Mexico 1994 North American Agreement on Labor Cooperation (NAALC ) 108, 109, 110, 111, 167, 168, 169 Art. 22 108 Art. 23 108 1994 North American Free Trade Agreement (NAFTA ) 108, 115, 116, 161, 166, 167

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Table of international instruments

United States (US)/Cambodia 1996 US–Cambodia Agreement on Trade Relations and Intellectual Property Rights Protection 121 2006 US–Cambodia Trade and Investment Framework Agreement 124 World Trade Organization (WTO) 1994 Marrakesh Agreement Establishing the World Trade Organization Preamble 97, 132 Art. 9 99 1995 Agreement on Textiles and Clothing (ATC) 99, 101, 118, 119, 121 1995 General Agreement on Trade in Services (GATS) 98 Art. IV 115

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Table of domestic legislation

Angola Constitutional Law 1992 182 Bangladesh Apprentices Ordinance, 1962 236 Dock Workers (Regulation of Employment) Act, 1980 236 Employees’ Social Insurance Ordinance, 1962 227 Employment of Labour (Standing Orders) Act, 1965 227 EPZ Worker Association and Industrial Relations Act, 2004 234, 242 s. 14 234 s. 15 234 Export Processing Zones Authority Act, 1980 234 Factories Act, 1965 229, 236 Industrial Disputes Act, 1947 227 Industrial Relations Ordinance, 1969 s. 3(a) 229 Inland Water Transport Workers (Regulation of Employment) Act, 1992 236 Labour Act, 2006 229, 230, 231, 234, 235, 240, 242 s. 1 231 s. 2(xxxi) 230 s. 211(8) 234 Minimum Wage Ordinance, 1961 227 Newspaper Employees (Condition of Service) Act, 1974 236 Penal Code, 1860 226 xix

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Road Transport Workers Ordinance, 1961 227, 236 Shops and Establishment Act, 1965 236 Suppression of Violence against Women and Children Act, 2000 248 Tea Plantation Labour Ordinance, 1962 227, 236 Working Journalists (Conditions of Service) Ordinance, 1960 227, 236 Botswana Constitution 1966 Ch. II 182 Employment Act No. 29 of 1982 205 § 2 205 Brazil Constitutional Amendment (Emenda Constitucional) 45, 30 December 2004 155 Burundi Labour Code 22 Cambodia Labour Code 1972 121 Labour Code 1992 121 Labour Code 1997 121 Cameroon Civil Code 1981 39 Labour Code 1992 22 Chad Labour Code 16 Chile Act No. 20,005 of 2005 38 Act No. 20,123 of 2006 38 Labour Code 1994 38 China Code of Civil Procedure 1982 70 Code of Criminal Procedure 1979, revised 1997 70 xx

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Table of domestic legislation

Criminal Code 1979, revised 1997 70 Dominican Republic Labour Code 1992 152 France Labour Code (Code du Travail) 66 Guinea Labour Code 22 India Beedi and Cigar Workers Act, 1966 235 Bonded Labour System (Abolition) Act, 1976 249 Charter Act, 1726 226 Child Labour (Prohibition and Regulation) Act, 1986 235 s. 3 255 Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 235 Constitution 1949 238, 257 art. 15(1) 257 art. 15(3) 257 Contract Labour (Regulation and Abolition) Act, 1970 230, 231 Defence of India Rules, 1941 237 Dock Workers (Regulation and Employment) Act, 1948 235 Employees’ Provident Fund and Miscellaneous Provision Act, 1952 227 Employees’ State Insurance Act, 1948 227, 245, 255 Employers’ and Workmen’s (Disputes) Act, 1860 226 Equal Remuneration Act, 1976 255, 256 Essential Services Maintenance Acts 246 Factories Act, 1948 229, 235, 258 s. 66(2) 258 Industrial Disputes Act, 1947 227, 229, 230, 243, 255 Ch. V-B 242 s. 9A 242 Industrial Employment (Standing Orders) Act, 1946 229 Industrial Relations Ordinance, 1969 s. 7(2) 235 s. 22 235 xxi

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Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Central Establishments) Act, 1988 249 Legal Services Authority Act, 1987 251 Maternity Benefit Act, 1961 255 Micro, Small and Medium Enterprises Development Act, 2006 245 Mines Act, 1952 235 Motor Transport Workers Act, 1961 235 Penal Code, 1860 226 Plantations Labour Act, 1951 235 Shops and Establishments Acts of various states 235, 258 Special Economic Zone Act, 2005 234 Trade Disputes Act, 1929 227 Trade Unions Act, 1926 227, 229, 240 Trade Unions (Amendment) Act, 2001 240 Unorganised Workers Social Security Act, 2008 245 Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 235 Workmen’s Compensation Act, 1923 227 Korea, Republic of Labour Standards Act, No. 5309 of 1997 127 Lesotho Constitution 1993 214 Ch. II 182 art. 18 214 art. 26 214 art. 29 214 art. 30 214 art. 31 214 Labour Code (Codes of Practice), Government Notice No. 4 of 2003 (the Labour Code Codes of Practice) 215, 218 § 16(13) 218 § 51(4)(b)(i) 215 §§ 55–70 215 Labour Code Order No. 24 of 1992 (the Labour Code) 214, 215, 216, 217, 219, 220 § 5 219 § 5(1) 215 xxii

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§ 5(2) 215 § 5(3) 215 § 5(4) 215 § 12 219 § 14 219 § 16 219 § 16(a) 219 § 17(1) 220 § 21(1)(c) 220 § 22 219 § 46B 219 § 133 216 § 133(4) 217 § 134 216 § 135 217 § 136(1) 216 § 136(1) 217 § 136(2) 216 Local Government Elections (Amendment) Act 2005 221 Malawi Constitution 1994 209 Ch. IV 182 Employment Act No. 6 of 2000 209 Labour Relations Act No. 16 of 1996 209 Trade Unions Act No. 32 of 1958 180 Mauritius Constitution 1968 Ch. II 182 Occupational Health and Safety Act 2005 118 Mexico Constitution 1917 19, 161 art. 123.A 162, 163 art. 123.B 163 Decree issuing the Federal Law for the Prevention and Elimination of Discrimination (Decreto por el que se expide la Ley Federal para Prevenir y Eliminar la Discriminación), D.O., 11 June 2003 111 xxiii

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Federal Labour Law (Ley Federal de Trabajo, or LFT), D.O., 20 April 1970 164, 169 arts 47–50 163 arts 164–172 163 art. 166 162 art. 169 164 arts 311–330 164 art. 312 164 arts 331–343 164 arts 351–353 169 Law of the Institute of Security and Social Services for State Workers (Ley del Instituto de Seguridad y Servicios Sociales para los Trabajadores del Estado, or ISSSTE), D.O., 31 March 2007 163 Regulations on Unhealthy and Dangerous Work for Women and Minors (Reglamento Federal de Seguridad, Higiene y Medio Ambiente de Trabajo), 29 November 1934 164 Social Security Law (Ley del Seguro Social, or LSS), D.O., 21 December 1995 163 art. 92 164 art. 190 163 Morocco Labour Code 2003 73 art. 532 73 Mozambique Constitution 1990 Pt II 182 Namibia Constitution 1990 (as amended) Ch. 3 182 Labour Act No. 6 of 1992 197 Labour Act No. 11 of 2007 183, 197 § 1 205 § 128 197 § 137 183 § 137(3) 183 National Code on HIV/AIDS and Employment, 1998 190 xxiv

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Nepal Child Labour (Prohibition and Regulation) Act, 2000 248 Civil Service Act, 1993, as amended in 2005 240 Essential Services Act, 1957 246 Factories Act, 1959 227 Kamaiya Labour Prohibition Act, 2002 248–249 Labour Act, 1992 228, 229, 238 Trade Union Act, 1992 s. 30 240 Pakistan Anti-Terrorism Act, 1997 240 Bonded Labour System (Abolition) Act, 1992 249 Employees’ Old Age Benefits Act, 1976 227 Employees’ Social Insurance Ordinance, 1962 227 Employment of Children Act, 1991 248 Schedule, Pts I and II 248 Employment of Labour (Standing Orders) Act, 1965 227 Essential Services (Maintenance) Act (ESA), 1952 246 Factories Act, 1934 229 Industrial Disputes Act, 1947 227 Industrial Relations Ordinance, 2002 228, 235, 238, 240, 248 Minimum Wage Ordinance, 1961 227 Penal Code, 1860 226 Road Transport Workers Ordinance, 1961 227 Tea Plantation Labour Ordinance, 1962 227 Trade Union (Amendment) Ordinance, 1960 241 Workers Welfare Fund Ordinance, 1971 227 Working Journalists (Conditions of Service) Ordinance, 1960 227 Peru Employment Act, 1992 143 South Africa Basic Conditions of Employment Act No. 75 of 1997 25, 29, 207 § 83A 206 Basic Conditions of Employment Amendment Act No. 122 of 2002 § 50(1) 197 Constitution 1996 40 xxv

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art. 9 191, 192 Constitution Act No. 108 of 1996 § 9 191 Employment Equity Act No. 55 of 1998 191, 192 § 6(1) 191 § 9 191 § 57(1) 207 Extension of Security of Tenure Act No. 62 of 1997 22 Labour Relations Act No. 66 of 1995 25, 183, 192, 211 § 187(1)(f) 191 § 198 207 § 198(4) 207 § 200A 206 § 213 206 Skills Development Act No. 97 of 1998 27 Skills Development Levies Act No. 9 of 1999 27 Wage Act No. 5 of 1957 207 Sri Lanka Code of Criminal Procedure, 1898 226 Emergency (Maintenance of Exports) Regulations, No. 1 of 1992 234 Emergency (Miscellaneous Provisions and Powers) Regulation, No. 1 of 2000 240, 246 Factories Ordinance, No. 45 of 1942 229 Industrial Disputes Act, No. 43 of 1950 227, 238 Industrial Disputes (Amendment) Act, No. 32 of 1990 228 Penal Code, 1883 226 Trade Union Ordinance, No. 14 of 1935 227 Women, Young Persons and Children Act, No. 47 of 1956 248 Workmen’s Compensation Ordinance, No. 19 of 1934 227 Tanzania, United Republic of Employment and Labour Relations Act No. 6 of 2004 25, 206 Tunisia Labour Code 1996 73 art. 142 73

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United States African Growth and Opportunity Act of 2000 (AGOA) 118, 195 § 104(a)(1)(f) 118, 195 National Labour Relations Act of 1935 (the Wagner Act) 116 Trade and Development Act of 2000 Title I 118 Uruguay Freedom of Association, Standards for Protection (Libertad sindical normas para su Protección), Law 17.940 of 2 January 2006 158 Venezuela, Bolivarian Republic of Constitution 1999 144, 158 Law of Collective Work Relations (Ley de relaciones colectivas de trabajo), Law 25.593 of 2 July 1992 144 Zimbabwe Labour Act No. 16 of 1985 198 Labour Relations Act No. 16 of 1985 180, 190 Zimbabwean Labour Relations (HIV and AIDS) Regulations, 1998 (SI 202 of 1998) (the Zimbabwean Code on HIV/Aids and Employment) 190 reg. 1 190

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Table of cases

Brasil Enunciado 331, Upper Employment Tribunal (Tribunal Superior del Trabajo) 156 Costa Rica Case No. 5000, 8 October 1993, Supreme Court of Justice (Corte Suprema de Justicia) 157 Decision No. 1317/98, 27 February 1998, Constitutional Chamber of the Supreme Court of Justice (Sala Constitucional de la Corte Suprema de Justicia) 157 ILO Committee on Freedom of Association (CFA) (Bangladesh): Complaint against the Government of Bangladesh presented by the International Textile, Garment and Leather Workers’ Federation (ITGLWF), Rep. No. 337, Case No. 2327 235 (India): Complaints against the Government of India presented by Centre of Indian Trade Unions (CITU), Rep. No. 211, Case No. 1024 246 (Korea, Republic of): Complaints against the Government of the Republic of Korea presented by the Korean Confederation of Trade Unions (KCTU), the Korean Automobile Workers’ Federation (KAWF), the International Confederation of Free Trade Unions (ICFTU) and the Korean Metalworkers’ Federation (KMWF), Rep. No. 331, Case No. 1865 126–127, 128 (Nepal): Complaints against the Government of Nepal presented by the International Confederation of Free Trade Unions (ICFTU) and the Nepal Government Employees’ Organization (NEGEO), Rep. No. 340, Case No. 2412 240 xxix

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India Bangalore Water Supply v. A Rajappa 1978 2 SCC 213, AIR 1978 SC 548, 1978 3 SCR 207, Supreme Court 229, 255 Divisional Manager, New India Assurance Co. Ltd. v. A. Sankaralingam 2008 (10) SCC 698, Supreme Court 230 State of Karnataka v. Ameerbi 2007 I LL J 996 (SC), Supreme Court 253 Steel Authority of India Ltd. v. National Union of Waterfront Workers 2001 (7) SCC 1, Supreme Court 230 Vasantha R. v. Union of India 2001 II LL J 843 (Mad.), Madras High Court 258 Vishaka v. State of Rajasthan 1997 6 SCC 241, AIR 1997 SC 3011, 1998 BHRC 261, 1997 3 LRC 361, 1997 2 CHRL D 202, Supreme Court 259 Korea, Republic of Case 87 DA KA 2132 (23 May 1989), Supreme Court 127 Mexico Amparo Directo en Revisión 1124/2000, Second Chamber of the Supreme Court of Justice (Suprema Corte de Justicia, Segunda Sala), 1 May 2001 155 Judgment No. 43/1999, Supreme Court of Justice (Suprema Corte de Justicia), 27 May 1999 155 NAALC National Administrative Office (NAO) Human Rights Watch (HRW), the International Labor Rights Education and Research Fund (ILRF, now the International Labor Rights Forum), and the National Democratic Lawyers Association (Asociación Nacional de Abogados Democráticos, or ANAD) of Mexico, Submission No. 9701 (gender discrimination), filed 16 May 1997, submission for review 14 July 1997, public hearing in Brownsville, Texas 19 November 1997 110 Namibia African Personnel Services Pty Ltd v Government of the Republic of Namibia, Supreme Court of Namibia, Case No. 51/2008, 14 December 2009 198 South Africa Denel (Pty) Ltd v Gerber (2005) 26 ILJ (SA) 1256 (LAC), Labour Appeal Court 206 Hoffmann v. South African Airways (CCT 17/00) [2000] ZACC 17; (2001) (1) SA 1; 2000 (11) BCLR 1235 (CC) (28 September 2000), Constitutional Court 191, 192 Wyeth SA (Pty) Ltd v Manqelea (2005) 26 ILJ (SA) 749 (LAC ), Labour Appeal Court 206 xxx

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List of abbreviations

ACP AFD

African, Caribbean and Pacific French Development Agency [Agence Française de Développement] AGOA African Growth and Opportunity Act (United States) ANAD National Democratic Lawyers Association [Asociación Nacional de Abogados Democráticos] (Mexico) ANC African National Congress (South Africa) APSA American Political Science Association ARLAC African Regional Labour Administration Centre ASIL American Society of International Law ATC Agreement on Textiles and Clothing (WTO) BEPZA Bangladesh Export Processing Zones Authority BPO business process outsourcing CAFOD Catholic Agency for Overseas Development CARICOM Caribbean Community CARIFORUM Caribbean Forum of African, Caribbean and Pacific States CDB Caribbean Development Bank CDHDF Mexico City Human Rights Commission [Comisión de Derechos Humanos of Mexico City] CEACR Committee of Experts on the Application of Conventions and Recommendations (ILO) CEDAW Convention on the Elimination of All Forms of Discrimination against Women (United Nations) xxxi

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CEDLAS

Centre for Distributional, Labour and Social Studies [Centro de Estudios Distributivos, Laborales y Sociales] (Universidad Nacional de La Plata, Argentina) CEMEFI Mexican Philanthropic Centre [Centro Mexicano para la Filantropia] CEPAL Economic Commission for Latin America and the Caribbean [Comisión Económica para América Latina y el Caribe] CFA Committee on Freedom of Association (ILO) CIE Confederation of Indian Employers CLC Commission for Labor Cooperation (NAALC) CMEJ Moroccan Centre for Legal Studies [Centre Marocain des Etudes Juridiques] COMESA Common Market for Eastern and Southern Africa COMPTRASEC Centre for Comparative Labour Law and Social Security [Centre de Droit Comparé du Travail et de la Sécurité Sociale] CONAPRED National Council for the Prevention of Discrimination [Consejo Nacional para Prevenir la Discriminación) (Mexico) COSATU Congress of South African Trade Unions CRNM Caribbean Regional Negotiating Machinery CRS Congressional Research Service (US Library of Congress) CSIS Center for Strategic and International Studies CSME CARICOM Single Market and Economy CTAG Caribbean Trade and Adjustment Group CURAPP Centre for Administrative and Political Research [Centre Universitaire de Recherches Administratives et Politiques de Picardie] (Université de Picardie Jules Verne, France) DBSA Development Bank of Southern Africa DDPR Directorate of Dispute Prevention and Resolution (Lesotho) DFID Department for International Development (UK Government) DPRU Development Policy Research Unit (University of Cape Town) DRC Democratic Republic of Congo DSB Dispute Settlement Body (WTO) ECIPE European Centre for International Political Economy ECLAC Economic Commission for Latin America and the Caribbean (United Nations) ELS Employment and Labour Sector (SADC) ENS National School for Trade Unions [Escuela Nacional Sindical] (Colombia) xxxii

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List of abbreviations

EPA EPZ EUROBAN EUROFOUND

economic partnership agreement export processing zone European Banana Action Network European Foundation for the Improvement of Living and Working Conditions (European Union) FCE Economic Culture Fund [Fondo de Cultura Económica] (Mexico) FDI foreign direct investment FEDOTRAZONAS Federation of Free Trade Zone Workers [Federación Nacional de Trabajadores de Zonas de Libre Comercio] (Dominican Republic) FES Friedrich Ebert Foundation [Friedrich Ebert Stiftung] FIDH International Federation for Human Rights [Fédération internationale des ligues des droits de l’homme] FLACSO Latin American Faculty of Social Sciences [Facultad Latinoamericana de Ciencias Sociales] GAO General Accountability Office (US Government) GATS General Agreement on Trade in Services (WTO) GATT General Agreement on Tariffs and Trade GDP gross domestic product GEM Group for a Worldwide Economy [Groupe d’Economie Mondiale] (Sciences Po Paris) GUFs global union federations HDI Human Development Index (United Nations) HRSDC Human Resources and Social Development Canada HRW Human Rights Watch HSRC Human Science Research Council (South Africa) IACML Inter-American Conference of Ministers of Labor IBRD International Bank for Reconstruction and Development (World Bank Group) ICCPR International Covenant on Civil and Political Rights (United Nations) ICESCR International Covenant on Economic, Social and Cultural Rights (United Nations) ICFTU International Confederation of Free Trade Unions ICTSD International Centre for Trade and Sustainable Development IDB Inter-American Development Bank IDLL Institute of Development and Labour Law (University of Cape Town) xxxiii

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IFC IFIs IILJ

International Finance Corporation (World Bank Group) international financial institutions Institute for International Law and Justice (New York University School of Law) IILS International Institute for Labour Studies (ILO) IIRA International Industrial Relations Association ILANUD United Nations Latin American Institute for the Prevention of Crime and the Treatment of Offenders [Instituto Latinoamericano de las Naciones Unidas para la Prevención del Delito y Tratamiento del Delincuente] ILO International Labour Organization ILRF International Labor Rights Forum (formerly the International Labor Rights Education and Research Fund) ILSSA Project for Improving Labour Systems in Southern Africa (ILO/ Switzerland) IMF International Monetary Fund IMSS Mexican Social Security Institute [Instituto Mexicano del Seguro Social] IPPR Institute for Public Policy Research IRRA Industrial Relations Research Association (now LERA) ISSSTE Institute of Security and Social Services for State Workers [Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado] (Mexico) ITUC International Trade Union Confederation LaRRI Labour Resource and Research Institute LASA Latin American Studies Association LDC least developed country LERA Labor and Employment Relations Association LFT Federal Labour Law [Ley Federal de Trabajo] (Mexico) LSS Social Security Law [Ley del Seguro Social] (Mexico) MFA Multi Fibre Agreement (GATT) MIT Massachusetts Institute of Technology MNC multinational corporation MSEs micro and small enterprises NAALC North American Agreement on Labor Cooperation NAFTA North American Free Trade Agreement NAMA non-agricultural market access NAO National Administrative Office (US Government) NCEUS National Commission for Enterprises in the Unorganized Sector (Government of India)

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List of abbreviations

NEDLAC NEF NEPAD NEPRU NES NGO NLLA NSSO NUNW OAS OECD ORIT OTM PCIR PILDAT PREALC PUEG SAAT SACU SADC SADCC SAFAC SAHRIT SAPs SEWA SHDSP SLASA SMEs SWAPO TES TNCs TUAC

National Economic Development and Labour Council (South Africa) Namibian Employers’ Federation New Partnership for Africa’s Development Namibian Economic Policy Research Unit National Employment Service (Lesotho) non-governmental organization National Labour Law Association (India) National Sample Survey Organisation (India) National Union of Namibian Workers Organization of American States Organisation for Economic Co-operation and Development Inter-American Regional Organization of Workers [Organización Regional Interamericana de Trabajadores] Organization of Mozambican Workers [Organização dos Trabalhadores de Moçambique] Presidential Commission on Industrial Relations Reform (of the Republic of Korea) Pakistan Institute of Legislative Development and Transparency Regional Employment Programme for Latin America and the Caribbean [Regional de Empleo para América Latina y el Caribe] University Programme of Gender Studies [Programma Universitario de Estudios de Género] (UNAM) South Asia Multidisciplinary Advisory Team (ILO) Southern African Customs Union Southern African Development Community Southern African Development Coordination Conference (now the SADC) Southern African Forum against Corruption Human Rights Trust of Southern Africa Structural Adjustment Programmes (World Bank/IMF) Self Employed Women’s Association (India) Social and Human Development and Special Programmes (SADC) Project for Strengthening Labour Administration in Southern Africa (ILO/Switzerland) small and medium-sized enterprises South-West Africa People’s Organization (Namibia) temporary employment service transnational corporations Trade Union Advisory Committee (OECD) xxxv

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UAM UDHR UN UNAIDS UNAM UNCRC UNDESA UNDP UNESCO UNFPA UNCHR UNICEF UNIFEM UNRISD USAID USTR WCSDG WHO WRWC WTO

Metropolitan Autonomous University [Universidad Autónoma Metropolitana] (Mexico) Universal Declaration of Human Rights (United Nations) United Nations United Nations Joint Programme on HIV/AIDS National Autonomous University of Mexico [Universidad Nacional Autónoma de México] United Nations Convention on the Rights of the Child United Nations Department of Economic and Social Affairs United Nations Development Programme United Nations Educational, Scientific and Cultural Organization United Nations Population Fund United Nations Commission on Human Rights United Nations Children’s Fund United Nations Development Fund for Women United Nations Research Institute for Social Development United States Agency for International Development United States Trade Representative World Commission on the Social Dimension of Globalization (ILO) World Health Organization worker representation and welfare committee World Trade Organization

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Introduction

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1

An evolving tension between models and reality TZEHAINESH TEKLÈ

1.1 Strengthening the presence of southern perspectives in the current debates on labour law The last decade has witnessed rich reflections among labour law academics on the present and future role of labour law as a tool of worker protection. The perceived “crisis” of labour law, its fundamental concepts, and questions about its future have been recurrent themes (see, for example, Supiot, 2001; Davidov and Langille, 2006; Deakin, 2006). At the root of these debates is the acknowledgement that a significant and, in certain contexts, increasing number of workers fall outside the coverage of labour law. Scholars seem to agree that an explanation lies in the gap between the social, economic, and political model around which labour law has developed and its current realities. In industrialized countries, the traditional socio-economic and political “pillars” on which labour law has rested – that is, the Fordist mode of production, the union providing collective representation of workers, and the nation state having sovereign control, including sovereign regulatory competence, over the political and economic sphere – are being challenged (Supiot, 2001; D’Antona, 2002; Klare, 2002). As the literature has made abundantly clear, labour law has traditionally been concerned with full-time, permanent, unionized workers inserted into a bilateral employment relationship, characterized by the subordination of these workers to an integrated and hierarchical enterprise, and the performance of work in the employer’s premises under his or her direct supervision. The model of worker to whom labour law protection has traditionally been accorded has also had a specific gender connotation: the paradigmatic worker is a man – the head of a household, without childcare 3

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responsibilities. As the chapters in this book show, labour laws in the South 1 are based on similar premises: Bensusán (Chapter 4); Fenwick, Kalula and Landau (Chapter 5); and Sankaran (Chapter 6). In the North, however, these basic premises have been confronted during the last two decades by the increasing participation of women in the labour market, unemployment trends, and the emergence of patterns of production that do not correspond to the Fordist model and which give rise to work arrangements that escape the conventional conceptualization of the employment relationship – that is, the fundamental legal category that determines the applicability of labour law. Casualization and externalization are among the trends that are challenging the full-time and permanent character of employment, and the single and unitary nature of the employer. The validity of the binary divide between self-employment and employment has also been called into question by the growth not only of “disguised” forms of employment, but also of working patterns that are in a sort of grey area in which workers, while legally independent, are economically dependent on one or more clients. Casualization and externalization have also impacted on the collective organization of workers because of the fragmentation of the workforce that they trigger. Globalization, in its economic, political, and ideological dimensions, has been considered a key determinant of these developments in both the North and the South (see, for example, Klare, 2002). Trade and financial liberalization, intensified competition for markets and foreign direct investment (FDI) have contributed to the spread of work arrangements falling outside (de jure or de facto) the scope of labour law. Scholars have maintained that concerns with trade competitiveness, enhancing the attractiveness of FDI and avoiding production relocations lead to the adoption by employers and states of strategies based on low labour costs. In particular, the mobility of capital has modified the relation between the private and the public sectors (Klare, 2002). The emergence of transnational actors, and the transnationalization of employment and labour relations, have defied the regulatory power of the nation state (see Moreau, 2006). Arthurs, for example, maintains that most states “suffer from a failure of will – they are afraid to alienate transnational corporations (TNCs) and risk losing investment, revenues, and jobs; or they suffer from a failure of imagination. They cannot see how to regulate TNCs more aggressively because so many key activities and actors lie beyond their juridical space” (2002, pp. 471–72). The political support gained by economic theories promoted by the international financial institutions (IFIs), 1 Th is term is used interchangeably in the book with the terms “developing countries” or “developing world”. 4

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among others, according to which labour law can create labour market “rigidities” that hamper employment creation by discouraging the hiring of workers (particularly the most disadvantaged, such as women and young people), has also weakened the regulatory function of the state and has challenged the normative role of labour law as a means of promoting social goals. Against this background, labour lawyers have been engaged in a process of rethinking the personal and substantial scope, and the conceptual underpinnings, of labour law (see Hepple, 1995; Mitchell, 1995; Supiot, 2001; Conaghan, Fischl, and Klare, 2002; Collins, 2003; Barnard, Deakin, and Morris, 2004; Stone, 2004; Arup and Mitchell, 2006; Davidov and Langille, 2006). As Arup and Mitchell have put it: There is an appreciable group of lawyers who now believe that the labour law paradigm dominant in the second half of the 20th century lacks both “explanatory and normative power” in the context of changing labour market practices (both external and internal to the enterprise), new economic theories about labour market institutions, and possibly even broad changes to the structure of society overall. (Arup and Mitchell, 2006, p. 3)

This analysis is complemented by a concern with workers beyond the employment relationship and, as a consequence, an interest in stretching the traditional (personal) borders of labour law, as well as in rethinking the substantial boundaries of the discipline. Freedland provides a recent attempt to rethink the scope of labour law in a way that is more responsive to the realities of the labour market. He considers that the employment contract can no longer be considered to be the central category for the application of labour law; likewise, approaches extending the scope of labour law only to relationships that are close to the contractual employment are insufficient, albeit essential. Freedland therefore advocates a move “from the Contract of Employment to the Personal Work Contract as a central organizing category for the discussion of the law of the individual relationship” (2006, p. 2), and argues for an inclusion of other forms of work relation (not necessarily contractual) in the domain of labour and employment law. Thus, he has constructed a family of “personal work nexuses”, which include the personal work relationships of standard employees, public officials, those engaged in “liberal professions”, individual entrepreneurial workers, “marginal” workers (such as casual, temporary, part-time workers and volunteers) and “labour market entrants” (such as trainees or apprentices) (Freedland, 2007). While not dismissing concerns that the inclusion of relationships normally seen through the lens of general private contract 5

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and commercial law may dilute the normative nature of labour law as a protective instrument of workers, Freedland argues that: our generally shared belief in the worker-protective values of employment law is apt to lead us to imagine the law of and applying to the contract of employment as a kind of an oasis of social justice regulation in a desert of neo-liberal laissez faire for contracts in general. … That … overlooks the considerable and fast-developing body of regulation addressing issues of unfairness in the making and performance of contracts in general, a kind of regulation which has its most important starting points in the law of consumer contracts but by no means ends there. (Freedland, 2006, p. 24)

Another well-known and pivotal contribution to reflections on the scope and paradigms of labour law is the work of a multidisciplinary group of experts on labour law and the transformation of work in Europe (Supiot, 2001). The consequent report (known as the “Supiot Report”) is playing an influential role in stimulating new thinking within labour law. In the light of the evolutions taking place in the world of work, the Supiot Report holds that there is a need to overcome the traditional model around which Western labour law has developed. Instead of the traditional, narrow concept of “employment”, the report proposes the elaboration of a new occupational status based on a broader concept of “work”. The consequence of this shift of perspective would be the establishment of a common labour law, certain branches of which might be adapted to cover the different kinds of work relationship. This implies opening the scope of labour law to include not only wage work, but also other types of contract involving the performance of work for others, and even non-market forms of work.2 The other innovative aspect of this approach is that this new occupational status would encompass career breaks and changes of occupation,3 and would carry with it different clusters of rights: (i) some of which may be specific to wage employment; (ii) others of which would be common to all forms of employment; and (iii) others of which would be inherent to non-occupational work. A further category of rights would complement this bundle of rights – that is, (iv) universal social rights. The principle of gender equality would apply to all four clusters of rights. Moreover, workers would be entitled to a type of “social drawing rights”. 2 For a critical view on the pertinence of regulatory provisions based on strict distinctions between paid and unpaid work, employed and self-employed, employment and unemployment, see also Benjamin (2002); Conaghan (2002); Williams (2002). 3 Dependent and autonomous work, and periods of unemployment, as well as time for training, family life, and voluntary work would all fall under this reformulated labour law. 6

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These are connected to work that has permitted the accumulation of credit (for example, working in the family sphere, or receiving training) and their nature is such that they may be exercised (under or outside an employment contract) “on a discretionary basis rather than in the unexpected occurrence of risks”, as a “way of coping with the demand for ‘active security in uncertain circumstances’” (Supiot, 2001, p. 223). Academic interest in broadening the personal scope of labour law and including workers beyond employment is complemented by proposals aiming to widen the areas covered by labour law and to include new subject matters, such as social security; training and education; taxation law; labour placement and mobility; job creation; immigration law (Mitchell, 1995; Collins, 2003; Arup and Mitchell, 2006); commercial, competition, company, and family law; “active labour market polic[ies], in so far as they seek to regulate, or have the effect of regulating the conditions under which individuals enter the labour market” (Deakin and Wilkinson, 2005, p. 2, cited in Arup and Mitchell, 2006, p. 6); human rights law; and even housing policy (Sciarra, 2004). Two of the main advocates of a reconceptualization of labour law in terms of “labour market regulation” explain it in the following terms: Now, protection cannot be guaranteed by regulation that fi xes on the employment relation. The problems of “working life” must be addressed in a variety of ways. It follows that the debate which affects the interests of “labour” and “workers” today, in addition to the debate concerning employment conditions and job regulation (labour law), substantially occurs in legal and regulatory categories that do not directly regulate the employment relationship itself. (Arup and Mitchell, 2006, p. 13)

Another perspective is that of Arthurs, who is pessimistic about the chances of a successful “project of boundary definition” in the current context of weak governments, public policies giving low priority to workers, a discourse in which “the very concepts of ‘worker’ and ‘protection’ no longer have the resonance once they did”, and domestic and international political economies that are “no longer congruent with labour markets” (2006, p. 387). He argues that the issue of the boundaries of labour law, while important, may actually not be the best angle from which to address the problem of unprotected workers. Arthurs contends that “[t]he greatest gains for workers might perhaps come, not from securing access to a fi xed array of legally enforceable protections and benefits, but from being regarded as an indispensable component of every calculus of public policy which might affect them” (ibid., p. 388). 7

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Other scholars, drawing on the work of Amartya Sen, have argued that the extension of the social function of labour law to workers beyond the employment relationship can be based on a conceptualization of labour law as a means of enhancing capabilities (see, for example, Deakin and Wilkinson, 2005; Hepple, 2005). As Bob Hepple has put it, labour law can thus be conceived of as a tool to realize “an equality of capabilities”: This embraces the substantive freedoms that individuals need in order to survive and prosper, including freedom to pursue education and training and a career of their choosing, freedom of association and freedom to participate in economic and political decision-making that affects their lives as well as the capacity to obtain decent work. (Hepple, 2005, p. 31)

Recently, Trebilcock (2006) has explored the potential not only of the human capability perspective, but of two other development paradigms – the “sustainable livelihoods approach” and “an empowerment approach” – as frameworks within which to consider the social goals of labour law in the context of developing countries. As this brief literature review reveals, much of the ongoing academic rethinking of labour law focuses on industrialized countries. With the exception of Latin America, very few labour law studies have looked at other regions (see, for example, on southern Africa, Kalula, 1993, 2004; Benjamin, 2002; Fenwick and Kalula, 2005; Fenwick, 2006, 2007; on francophone Africa, COMPTRASEC, 1999, 2005; and on East Asia, Cooney, Lindsey and Mitchell, 2002b), or have included the perspectives of those regions (a notable example is Davidov and Langille, 2006). There also seems to be a gap in terms of South–South comparative studies. Yet the trends concerning the organization of production and work described in the beginning of this section are also manifest in the developing world. Some of the labour market features that are relatively new to the North have long been a reality for developing countries, including the importance of self-employment, casual work, and mass unemployment. In this regard, it is important to keep in mind that in developing countries the problem of the scope and application of labour law has deep structural features,4 and affects a considerable proportion of the workforce that is numerically more significant than in 4 A caveat is needed here. The problem of work arrangements at the margins of the scope of labour law is not a new phenomenon even in industrialized countries, and therefore should not be ascribed only to technological and economic changes: see Deakin (2006). 8

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industrialized countries of the North and often represents the (vast) majority of workers. The purpose of this book is therefore to enhance the presence of the southern perspectives in the current debates on the challenges and possible evolution of labour law as a tool of worker protection. To this end, this volume presents a reflection on labour law’s ability, in its present form, to protect workers’ rights and to secure decent working conditions in the developing world, and it identifies the challenges that must be addressed and their relevant causes. The book argues that there is a historical mismatch between the realities of the developing world and the dominant labour law model, with its underlying assumptions. This divergence persists and new manifestations of the mismatch have appeared, as a result of globalization. The result is a high, and even increasing, number of workers who remain outside the protective reach of labour law. Against this background, the chapters in this book look at the main regulatory and policy responses adopted at different governance levels, and reflect on routes to extending protection.

1.2 An analytical approach to studying the impact of labour law in the South Comparative law literature and systems theory 5 provide useful analytical tools for studying the effectiveness of labour law’s protection of workers. This literature has underscored the importance of the relationship between the law and its social, political, economic and cultural context, in order to understand the effectiveness of the law – that is, its capacity to influence other social systems. Despite the differences that can be found within and between comparative law literature and systems theory, both have pointed out that the regulatory capacity of the law is strictly dependent on the extent of its connection with the other social systems. In this respect, Teubner’s work seems particularly interesting. From a systems theory perspective, he has argued that the social world is composed of different systems of communication that, each having their own structure, logic and process, interfere with each other. Such interferences are then interpreted by each system according to its own categories (Teubner, 1993a). If the links of law to other social systems are too weak, therefore, the risk is that of “mutual 5 A study applying this analytical framework to the study of labour law has been recently conducted in relation to East Asia: see Cooney et al. (2002a). For an application of this analytical framework to the study of human rights protection in sub-Saharan Africa, see Teklè (2003). 9

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indifference” and thus the ineffectiveness of the law. As comparative law literature has argued, this risk is even higher in the case of “legal transplants” (see Watson, 1978, 1983, 1993) – that is, in the case of legal norms and institutions that are “borrowed” from external legal models. In this regard, it is important to take into consideration that, in many developing countries, labour law has existed as a “transplanted” law. It was imposed during the colonial period and, at independence, the new leadership maintained the labour laws of former colonial powers. More generally, the legal systems of countries of the North remained the major reference. The controversial issue is that of the outcome of such transplants. Watson has argued that legal borrowing is a very common way in which legal change happens and that transplants can successfully occur regardless of the socio-economic, political, or cultural features of the recipient system. Conversely, Kahn-Freund (1974) contends that the degree of transferability of legal institutions is variable, and depends on the strength of the link between law and society. Kahn-Freund cautions that “any attempt to use a pattern of law outside the environment of its origin continues to entail the risk of rejection”.6 Other comparative law academics7 have since continued to argue that the (political, social, economic and cultural) context influences the effectiveness of legal imports. Systems theory in general and Teubner’s work in particular have further contributed to the reflection on the outcomes of legal transfers. The particular value of Teubner’s work is that it shows that the result of a legal transfer cannot be reduced to the dichotomy of success–failure, in which failure is a “rejected transplant” (Teubner, 1998). For Teubner, the metaphor of the legal transplant is misleading, because it implies that legal transplants, like organ transplants, can have only two outcomes: successful integration or rejection. Instead, he suggests that the law operates as an “irritant” vis-à-vis other social systems, which triggers coevolutionary and unexpected dynamics.8 The other interesting insight provided by Teubner’s theory is that neither the law, nor other social systems, are unitary entities. He believes that where the law is “loosely coupled” with social systems, it is likely that it will have a limited impact. However, law is not tied to society as a whole, but rather to different social worlds or sub-systems within society. There will therefore be a range of different outcomes according to the particular law and social subsystems that are at play. Arguably, therefore, the impact of labour law can differ according to the social groups that are taken into consideration. It 6 See, before him, the seminal work of Montesquieu, De l’esprit de lois, 1748, Book I, Ch. 3 (“Des lois positives”), cited in Kahn-Freund (1974). 7 For a sceptical view of the feasibility of legal transplants from a culturalist perspective, see Legrand (1997, 2001). 8 See also Ewald (1994, 1995). 10

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is consequently extremely important to understand the structure and functioning of the society that the law intends to regulate. Starting from the hypothesis that the capacity of (labour) law to exert its function is influenced by the nature of its relationship with the context in which it is inserted and on which it is intended to impact, the following variables appear to be particularly relevant: the labour market structure; the socio-political structure; the state legal framework (beyond labour law); the legal culture;9 non-state regulatory systems and social norms; and the economic and ideological environment. A “law in context approach” is consequently crucial, and, in turn, the context needs to be considered in its local, national, regional and international – often interrelated – dimensions. It is an analytical approach that also involves a historical perspective. As Deakin has put it (2006, p. 91): “We can understand better the limitations of existing models if we improve our knowledge of the conditions under which they emerged and then developed. The study of the origins will help to reveal whether their weaknesses are structural and deep-rooted, or merely contingent and temporary.” The essays in this volume have all adopted a historical and contextualized approach to labour law, and have explored the above variables to various degrees, depending on the perspective adopted and the features of the countries and regions examined.

1.3 The structure of the book The book comprises two parts: Part I looks at the effectiveness of labour law to protect workers (including the challenges, the relevant regulatory and policy responses, and possible ways in which to broaden protection) from a general southern perspective; Part II expands on the theme using case studies from different regions of the global South. In Part I, Rachid Filali Meknassi (Chapter 2) identifies the main structural and globalization-related challenges that the countries of the developing world have in common. Notably, he looks into the factors that lie behind the disjuncture between labour law rules and their practical application, and the vast number of workers who are excluded from labour law protection. Adelle Blackett (Chapter 3) focuses on one of the main challenges identified by Filali Meknassi, trade liberalization, and investigates the impact that this has on labour law, its underlying reasons and its processes. Considering various labour regulatory experiences, she critically revisits 9 Friedman (1994, p. 118) has defined legal culture as the “ideas, attitudes, expectations and opinions about law, held by people in some given society”. 11

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the relationship between trade liberalization and labour law. Both of these chapters offer insights that are then given a regional context in Part II. To understand better the differences and similarities within the developing world, the chapters in Part II examine old and new challenges to the effectiveness of labour law in promoting social goals from three different regional perspectives: that of Latin America (Graciela Bensusán, in Chapter 4); that of southern Africa (Colin Fenwick, Evance Kalula and Ingrid Landau, in Chapter 5); and that of South Asia (Kamala Sankaran, in Chapter 6). Each of these chapters follows a similar structure. They describe first the historical evolution of labour law in the respective region, going on to examine the factors that impinge on labour law’s capacity to protect workers, as well as the responses to this limited capacity, and conclude with a national case study on the effectiveness of labour legislation in promoting one specific social goal – namely, gender equality. Bensusán considers Mexico; Fenwick, Kalula and Landau look at Lesotho; and Sankaran studies India. The regions have been selected to represent both low-income countries and middle-income countries characterized by high levels of income and other social inequalities, in which the problem of informality – that is, the lack of de jure or de facto labour law coverage – is more significant. Moreover, the regions have been selected on the basis of their shared option for economic and trade openness, which Part I identifies as an important variable in understanding the ability of labour law to pursue distributive justice goals. Drawing from the essays included in Parts I and II, and from other literature, the following sections of the present chapter review the common and specific (structural and newly emerged) challenges impinging on the protective ability of labour law in the different regions of the developing world. The chapter concludes by focusing on the relationship between the realities of the world of work in the South, and the socio-economic model and legal categories around which labour law is shaped, and explores the relevant conceptual and policy implications against the background of globalization.

1.4 The challenge of the mismatch between socio-legal categories and reality

1.4.1 The structural features of the world of work and labour law One of the main challenges facing worker protection in the South is the discrepancy between the realities of the world of work and the socio-economic 12

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assumptions that constitute the foundations of labour laws. This mismatch has both structural and more recent features. In the South, a great part of the active population – which is actually the majority in many countries – has never performed work that corresponds to the industrial employment model around which “conventional” labour law protection is shaped. Self-employed, agricultural workers, homeworkers, contributing family workers, domestic workers, unpaid care workers within the family and community workers have traditionally represented the largest part of the workforce in the developing world. These groups typically escape the legal categories that determine the applicability of labour law, are explicitly excluded by labour law coverage (in whole or in part), or are subject to special regulations with lower levels of protection. Even in Latin America, where wage employment is still predominantly “standard” wage employment, this represents, at best, no more than half of the labour force (Bensusán, Chapter 4). Moreover, even “wage employment”, as standardized and protected by labour law, is not representative of the various forms that it takes in the South. All regions show that the standard employment model represents only a portion – a minority, in many countries – of the labour force. The following sections will sketch the reasons why contributing family workers, domestic workers, community workers and even some wage workers do not conform to the legal categories of labour law, and will outline the ways in which they operate in social and economic contexts that are different from those that constitute the de facto preconditions for its application.

Contributing family workers The case of contributing family workers is exemplary of work situations that are either de jure excluded by the scope of labour law or which face a problematic application of labour law not only from an enforcement perspective but also from that of the legal definition of the underlying relationships. Such workers include the wife, the children and the other relatives who contribute to the work of the family head without receiving any remuneration. The family circle involved in the activity can be so large as to give rise to micro- or small enterprises (MSEs) (Filali Meknassi, Chapter 2). In countries in which contributing family workers are not covered by labour law, the lack of coverage is justified by the respect for the private sphere of the family. But even when labour law is applicable to work relationships between family members – as is the case in a number of African countries, such as Cameroon, Gabon, Chad, Benin, Côte d’Ivoire and Senegal – its application is controversial. Social norms or customary law, rather than state law, regulate these relationships 13

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and those within the extended family or the kinship. The social perception of the relationships between the head of the household and contributing family members is not conducive to the application of labour law. Work relationships are mixed up with personal relationships, and the perception of the latter tends to prevail over the former. In the case of a dispute, therefore, the relatives tend to use mediation within the family, instead of claiming their rights before state bodies or through collective relations. Even the academic literature resists the qualification of the relationships within the family in terms of work relations. It argues that it is difficult to establish whether the precondition for the application of labour law exists – that is, subordination – and that, if subordination exists, it is difficult to ascribe this to work rather than to patriarchal family relationships (see Pougoué and Tchakoua, 2006). This raises the question of what types of intervention can be more effective in guaranteeing the protection of contributing family workers. As Pougoué and Tchakoua (2006) have observed in relation to francophone sub-Saharan Africa, the expectation is that the scope of this phenomenon would have diminished with the shrinking of the “extended” family – but that this is not the case. On the contrary, the phenomenon persists, is assuming new features, and it is even widening (ILO, 2007a, 2009b). In situations of increasing scarcity of employment, jobs are often obtained through family networks. According to the International Labour Organization (ILO) Employment survey and the informal sector in Cameroon, published in 2005, 45 per cent of the unemployed use family or other networks to find a job. Others opt for direct contact with the potential employer, or for an application to public or private placement services, or for public competitive entry examinations. The phenomenon of work obtained through kinship, ethnic, religious and other networks based on identities is lively in other regions as well. In India, as in francophone sub-Saharan Africa, labour market dynamics – notably, unemployment and growing informality – reinforce the role of networks shaped around shared identities as tools for entering the labour market (or markets, more generally). In turn, social norms based on these identities regulate access to markets and assets, working conditions, training, and dispute resolutions (see Harriss-White, 2003). Deregulatory processes in a context of heightened market competition and privatization further reinforce social regulation. As HarrissWhite has put it: In this competitive process, when states are unable to regulate markets, and when social groups based upon identity supply the preconditions for engagement in markets and/or ration entry to markets, then old discriminating forms of regulation can actually be expected to intensify and indeed to be a solid basis for market order. 14

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Indeed, they can confidently be expected to provide the idiom through which market order evolves. (Harriss-White, 2003, p. 468)

Further, as Filali Meknassi observes (Chapter 2), it is difficult to counter customary forms of living, work and solidarity that provide some form of security to the most disadvantaged while the labour market is not able to provide people with “formal” jobs.

Domestic workers Domestic workers, or people working in the domestic sphere, are another numerically important category that tends to be de jure or de facto unprotected.10 The personalization of the employer–employee relationship and a high dependency of the worker on the employer make domestic workers one of the categories that is most vulnerable to a lack of protection. Cohabitation, when it exists, strengthens dependency on the employer that is both factual and psychological in nature, and reinforces the ambiguity surrounding the nature of the relevant relationship by creating the false perception that the domestic worker belongs, in some way, to the family. The very legal exemption from labour law protection is often explained by alleging the principle of non-intervention in the private sphere and in personal relationships. Moreover, domestic work – when performed by women – has traditionally not been perceived as “work”, but rather as an extension outside the home of the typical care-giving functions of women. In other words, domestic work has ended up “occupying some twilight zone between market and non-market relations” (Anderson, 2003), and domestic workers have been considered outside of the productive working class. As a result, domestic work is characterized by de jure or de facto non-recognition, undervaluation, low wages, excessive hours of work without compensation, lack of benefits or social security, unfair termination of employment, sexual and moral harassment, and lack of organization. The legal denial of freedom of association is also an expression of the perception of domestic work as something outside the sphere of “work” (ILO, 2004a). Community workers Another form of work that tends to escape labour law coverage is community work. Traditionally, this is work that is performed without remuneration in 10 For example, in South Africa, the 1.2 million or so domestic workers have been covered by labour legislation only since 1994: see Benjamin (2007). 15

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the general interest of the community and in certain contexts it is performed upon request of the traditional chief, as, for example, in sub-Saharan francophone Africa (see Pougoué and Tchakoua, 2006, who talk in this regard of travail coutumier, or customary work). These practices pre-date the creation of post-colonial states, yet they are still alive and are currently accompanied by new forms of community work performed, for example, in the framework of anti-poverty and employment-promotion projects. In these latter cases, although work is remunerated, the underlying relationship is, in fact, placed outside a precise legal framework (see Filali Meknassi, Chapter 2). Concerning the traditional forms of community work, it is interesting to note that certain countries have taken the “precaution” of stating by law that this is not forced labour (see, for example, the Chadian Labour Code); others (such as Benin, Cameroon, Côte d’Ivoire and Senegal) do not exclude that such work can constitute forced labour. Community workers have specific gender dimensions (Chen et al., 2005, p. 31; Sankaran, Chapter 6). An important part of it is performed according to socially ascribed gender roles and takes the form of (unpaid) care work performed by women for the community. In many developing countries, women’s unpaid community work is the main – or even the only – form of health or welfare support. Epidemics such as HIV/AIDS have increased the role of such work. Women thus find themselves with an increased amount of unpaid work to be performed for the family and the larger community, which in turn limits their opportunities to find or keep a remunerate job in the labour market – and this leads to an increase in their levels of poverty.

The non-standard nature of “standard” wage employment Even wage employment has structural characteristics that diverge from the “standard” employment paradigm that underlies labour law. As described in the preceding sections, labour law, in its conventional form, has been the law of a specific type of worker – that is, the industrial wage worker who is involved in a fulltime, permanent employment relationship with one single employer. This pattern of employment, however, cannot really be considered as “standard” in the South: employment is heterogeneous, and the working lives of wage employees are more complex than assumed in the standard model. As the literature on the informal economy has shown, a frequent phenomenon in the developing world is the “transit” of workers from one employment status to another. Many workers (the majority, in certain countries of the South) move through subordinate employment, to self-employment and/or 16

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unemployment.11 Moreover, employees do not necessarily work for one employer. In addition, being engaged in an informal activity or relationship does not preclude workers from being engaged in other activities or relationships, not necessarily all of which will be informal (ILO, 2002a). The frequent realities of developing countries’ labour markets are not reflected in an employment paradigm that is founded on the assumption of a linear working life in wage employment.

At the roots of the mismatch The process through which labour law has evolved, and the relevant socio-economic and political context, explain the reasons for the mismatch between the features of the world of work of developing countries and the legal category (that is, the bilateral employment relationship) that determines the entitlement to, and content of, legal protections. The mismatch is obviously more or less important according to the regions and countries, as the regional essays in this volume show. Labour laws in South Asia (see Sankaran, Chapter 6) and Africa (see Filali Meknassi, Chapter 2; Fenwick, Kalula and Landau, Chapter 5; Pougoué and Tchakoua, 2006) have developed along similar paths. The labour law systems of the countries of both regions have been largely shaped around the legal models of the respective colonial powers. As Kamala Sankaran states (Chapter 6), “the origins of much existing law in the subcontinent [South Asia] lies in the British system of the common law” and “[t]he British law of master and servant laid the foundation for much of the present labour law”. The logic of certain provisions, which are still in force, reveals this origin, in that they are deeply rooted in a colonial rationality. For example, the fact that the breach of a contract is followed by a claim for the performance of the contract and not for a claim for damages finds its rationale in the need for labour in the colonies. Likewise, at independence, former colonies in francophone and anglophone Africa retained the labour laws that were imposed by colonial powers. This had two important implications. Firstly, as in South Asia, labour laws were moulded on a production model that did not reflect African realities: wage workers were an exception, rather than the paradigm, and the socio-political underpinnings of labour laws imported from Europe were not present in Africa – that is, a strong trade union movement, a well-established and functioning state administration, 11 The transit through different employment statuses can even occur in the course of a day. A survey in India of 5,000 members of the Self-Employed Women’s Association (SEWA) showed that only 20 per cent of them are engaged in one type of work a day: 40 per cent undertake two types of work; 25 per cent, three types of work; and 14 per cent, four or more types of work (Jhabvala, 2001, p. 245). 17

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the rule of law, and respect for civil and political liberties. Secondly, a certain “colonial” rationality is still featured in today’s legal systems. During colonization, labour law did not serve a protective function for the “indigenous” workforce and some remnants of the “repressive” nature of colonial labour law remain in the present-day labour laws of many countries of southern Africa – particularly as far as collective relations are concerned (see Fenwick, Kalula and Landau, Chapter 5). The reasons behind the retention of the European-originated model of labour law are different, and two of these appear to be predominant. Firstly, the maintenance of the model had a symbolic value: it meant the extension of protections previously denied to, or hardly conquered by, “indigenous” workers (see Blackett, Chapter 3). Secondly, it represented the adherence of post-colonial states to a set of values and rights widely shared by the international community, and enshrined in international labour standards and human rights norms (see also Filali Meknassi, Chapter 2). The fact that workers covered by these “imported” laws represented only a small proportion of the workforce was not perceived as a problem, because the economic and productive model underlying these “transplanted” labour laws corresponded to the industrialization development strategies that developing countries pursued. This was consistent with the belief that growth would be triggered by the modern industrial sector and that “gradually the dual economy would be consolidated with the formal sector” (Sankaran, Chapter 6; see also Jhabvala, 2001). In sum, developing countries were to “develop” and resemble northern societies. As Sankaran highlights (Chapter 6), the lack of organization of, and therefore demands from, non-wage industrial workers are very likely also to be part of the reason why these workers were neglected or explicitly excluded by the law. In this latter regard, the case of India is very interesting. Its legal system provides for the explicit exclusion of various sectors of the economy or “industries”; establishments not having a minimum level of employment; workers performing certain types of work (for example, domestic work); or workers earning above a certain level. Casual workers, or workers hired by a contractor, are also excluded (at least from some labour laws). As Sankaran underlines, the system is such that while the law may cover an enterprise (due to the size and industry to which it belongs), it may not cover part of its workforce. In Latin America, labour laws, which developed in the first half of the twentieth century, were not the result of a colonial “transplant”. They were, however, influenced by foreign legislations and scholarship, particularly those of Europe, and by ILO standards – notably, on working hours, the night work of women, occupational safety and health, and minimum age – which also reflect 18

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the European experience12 (see Goldin, 2007a). Latin American legislations also influenced each other: the labour provisions of the Mexican Constitution of 1917 were a central source of inspiration for the great majority, if not all, of the labour laws of the region (Bensusán, Chapter 4; Bronstein, 1998). The Mexican Constitution, for most of its part, incorporates legal provisions from the United States and Europe (Bensusán, 2000). The result is that Latin American labour laws were also based on the employment paradigm and have historically accorded a privileged attention to a specific type of worker – that is, the (male) worker in wage “standard” employment. In some Latin American countries, certain numerically important categories of worker have even been expressly excluded from the coverage of all or part of labour laws, including: workers in micro-enterprises; workers in family enterprises; casual workers in agriculture; domestic workers; homeworkers; and construction workers (Bensusán, Chapter 4). Further, social security has traditionally neglected non-wage workers (Mesa-Lago, 2007). This legal approach was complementary to an economic model that prevailed until the 1980s, and which consisted of an economy oriented towards the domestic market and the assignment of an important role to the state and to large formal enterprises. But the socio-economic model around which labour protection was organized did not completely mirror the reality of the labour market. Looking at Brazil, Cardoso and Lage (2006) have observed that the modern market economy has never been able to penetrate and shape all 12 International labour standards have been an important reference for the development of national labour laws in other regions of the developing world as well (see Fenwick, Kalula and Landau, Chapter 5; Sankaran, Chapter 6). According to the literature, international labour standards – particularly those of the first four decades – have contributed to the special attention given by national labour legislation to workers in wage “standard” employment, because they have revolved around the normative model of industrial employment (Fenwick and Kalula, 2005; Vosko, 2006; on the history of international labour standards, see Valticos, 1983). Besides provisions included in the ILO Constitution, notable exceptions are the ILO Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), Right to Organise and Collective Bargaining Convention, 1949 (No. 98), Equal Remuneration Convention, 1951 (No. 100), Discrimination (Employment and Occupation) Convention, 1958 (No. 111), and Workers with Family Responsibilities Convention, 1981 (No. 156) (referring to “atypical” workers) and respective recommendations, as well as international labour standards on occupational safety and health, and on social protection (for a more detailed list, see Marín, 2006, fn. 6). But even some of these standards have raised questions among legal scholars as to their inclusiveness and complete responsiveness to the needs of developing countries (see, e.g., Sankaran, Chapter 6; Filali Meknassi, 2006c; Vosko, 2006). Acknowledging the need to enlarge the personal scope of the international labour law system, since the 1990s, the ILO has played a growing role in the discussion of, and research into, the protection of workers in situations deviating from the standard employment model, notably because of time, place, and status (see Marín, 2006; Vosko, 2006). These debates have led to the adoption of the ILO Part-Time Work Convention, 1994 (No. 175), Home Work Convention, 1996 (No. 177), Private Employment Agencies Convention, 1997 (No. 181), and, more recently, the Employment Relationship Recommendation, 2006 (No. 198). (For a critical analysis of the contribution of these standards to the protection of work situations different from the standard employment relationship, see Marín, 2006; Vosko, 2006.) 19

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economic relations; Bensusán (Chapter 4) has observed the same in relation to the other countries of the region.

1.4.2 A world of work in evolution The last two decades have witnessed a trend in many countries towards informalization – that is, an increasing number of workers fall outside labour law, de jure or de facto.

Externalization One of the processes behind this trend is the externalization of either production or labour. In the former case, a given enterprise will decentralize its activities or operations, subcontracting or outsourcing part of the production process, while retaining some “core” activities in-house. Alternatively, it will transfer part of itself to satellite enterprises, which then provide goods and services exclusively to the transferring company. Productive decentralization also includes instances in which an enterprise transfers certain functions to a third party that are then performed using the third-party space and technology of the enterprise. In the case of the externalization of labour, the enterprise will use a labour force that is not directly employed, but rather supplied by intermediaries, either through staff leasing, temporary assignments or staff sharing. Common to all of these different forms of productive decentralization is the transfer of the risks and responsibilities that are linked to an employment relationship from the enterprise receiving the product or service to third parties (either enterprises or workers). Externalization tends to be justified as a way of concentrating on the core functions in the enterprise, but, in reality, it is often used as a strategy for saving on labour costs. Both of the arrangements described above give birth to a network of units and contractual relationships of different legal nature. This phenomenon challenges the socio-economic pillars and the legal categories on which “traditional” labour law is based (see Davies and Freedland, 2004). Relationships within the “network” are characterized by “autonomy in subordination and allegiance in independence” (Supiot, 2002, p. 154) instead of legal subordination. Productive decentralization defies the validity of the assumption that employment-related relationships are necessarily bilateral. Externalized arrangements challenge the appropriateness of the identification of the employer with an enterprise conceived of as an economic and social organization under a single economic management. Such arrangements question the unity of the enterprise, and raise the issue of 20

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how to determine responsibility for working conditions and terms of employment (Morin, 2005). Marie-Laure Morin describes the complexity of this task well when she writes that: inter-enterprise relationships tend to be relations of “controlled autonomy” in which hierarchy is determined less by the exclusive economic dependence of a subcontractor on a prime contractor than by specific requirements pertaining to quality, delivery deadlines, training etc., which can directly impact on working conditions without entailing any responsibility whatsoever on the part of the prime contractor. (Morin, 2005, p. 12)

There is thus not necessarily a coincidence between the nominal employer and the subject with the real decision-making power. Moreover, the boundaries between commercial and civil law, on the one hand, and labour law, on the other, get blurred. In fact, externalized arrangements involve a relationship that is regulated by a commercial contract, even though the equality of bargaining power that is intrinsic to this type of contract is missing and the client holds the power to determine the terms of the work to be performed. Externalization arrangements also undermine the “conventional” forms of collective representation, action, and bargaining. The fragmentation of the workforce within contractual or enterprise networks makes the identification and expression of collective identities and interests difficult (Teubner, 1993b). The same happens as a result of casualization13 – another familiar phenomenon that is on the rise in many developing countries (see Part II). Despite the fact that much of the literature examining these trends is produced in the North, the trends are also identifiable in the South. In South Africa, for example, externalization “has become the primary mechanism for informalisation” during the last ten years (Theron, Godrey and Visser, 2007). In turn, the main mechanism through which the externalization of labour and services has spread is the use of temporary employment services (TESs) (Benjamin, 2006a). Moreover, since the late 1980s, firms have focused on their core business, while outsourcing industrial cleaning or transport and other “ancillary” activities (Theron, Godfrey and Visser, 2007). Globalization, including intensified global integration and competition, as well as technological progress, seems to be a driving force behind these trends. In regard to South Africa, Theron, Godfrey and Visser (2007) argue that, since the early 1990s, trade liberalization has contributed to “rampant” externalization 13 This term refers to the shrinking of the number of permanent full-time employees. 21

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of labour in the more labour-intensive sub-sectors of the agricultural sector, in which a great part of the workforce are employed through intermediaries. Trade liberalization also seems to have been a determinant factor of the processes of productive decentralization in various forms of subcontracting, including homework operations in the clothing sector (ibid.). Externalization is thus a strategy for lowering risks and costs in a more competitive market. According to some scholars, externalization is also a product of “flexible” production methods encouraged at the upper end of the production chains by international retailers. Exports from developing countries are increasingly channelled through global production chains dominated by TNCs and big retailers. The business model that they apply to southern producers has been identified as a factor that can encourage informalization. Barrientos, Kritzinger and Rossouw (2004) highlight in their work on export horticulture in South Africa that flexible and tight production schedules, payment made on a consignment basis and prices agreed only once fruits reach the distribution centres are the main factors that push South African growers to reduce labour costs by using more seasonal and contract workers.14 Various forms of productive decentralization are also present in other subSaharan African countries. A study conducted on francophone western and central Africa has singled out various forms of externalization, some of which are more recent than others, including work supplied through TESs and the outsourcing of “non-core” functions – especially security – to external enterprises (Pougoué and Tchakoua, 2006). Others are older, such as the tâcheronnat. The tâcheron was an intermediary who would stipulate a contract with an entrepreneur for the performance of a job, or the provision of a service, in return for payment of a lump sum and the recruitment of labour. The law regulated this form of subcontracting, with only the Labour Code of Burundi not envisaging it and the Labour Code of Guinea prohibiting it. The other codes in the region used to provide the liability of the prime contractor for all obligations arising out of the contract of employment if work was carried out on its premises; otherwise, its responsibility was confined to the payment of wages. Following labour law reforms carried out in the 1990s, some codes have contemplated more limited forms of liability of the principal employer (Perspectives, 1995). Moreover, even before the reforms, the principal employer’s liability was limited to financial obligations. A different approach is that of the 1992 Labour Code of Cameroon, which excludes the liability of the principal employer if the tâcheron is registered 14 According to Theron, Godfrey and Visser (2007), the incidence of contract labour in agriculture is also due to the extension of employment legislation to the agricultural sector and the adoption of the Extension of Security of Tenure Act No. 62 of 1997 following the fall of the apartheid regime. 22

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and is paying registration taxes. Although the rationale behind this norm is to protect workers, scholars regard the exclusion of the responsibility of the prime employer as unjustified, because registration is not a guarantee per se that the obligations deriving from the contract of employment will be met – especially in the case of enterprises constituted with fraudulent purposes by the principal employer (Pougoué and Tchakoua, 2006). Also in Latin America, subcontracting and outsourcing have increased in the last two decades. A country in which the phenomenon is particularly significant is Chile, where more than 30 per cent of workers are in subcontracting and temporary arrangements (see Bensusán, Chapter 4; Valenzuela, 2006). More specifically, the region has featured a growth in the externalization not only of “noncore” functions, but also of functions more clearly connected to the core business, such as the supply of materials that are then assembled by the principal enterprise (for example, in the automobile and clothing sectors in Mexico). Work provided through intermediaries is also growing, but this is not a new pattern in Latin American labour markets, where it has long been used in the construction sector. What is new is its extension to new sectors, as well as the appearance of “new” intermediaries, including agencies with an international character or cooperatives (see Bensusán, Chapter 4; Vega, 2005; Goldin, 2007a). In India, the increase in the number of contract workers in the manufacturing formal sector has been dramatic during the last two decades. It has risen from 12 per cent in 1990 to about 23 per cent in 2002. In certain states, it has gone from 42 per cent to 60 per cent (Sharma, 2006, p. 2081). The phenomenon of externalization – particularly in Latin America and South Asia – while not confined to export production, is particularly used in export-oriented sectors and it is very much linked to “the emergence of international suppliers of goods who rely less and less on direct production within a specific location and more on sub-contracting a greater part of their production activities” (Ghosh, 2003, p. 452). The forms of subcontracting can differ: subcontracted units “vary in size and manufacturing capacity, from medium-sized factories to pure middlemen collecting the output of home-based workers” (ibid., p. 453). As Filali Meknassi underlines (Chapter 2), subcontracting in developing countries constitutes the link between the “formal” and the “informal” economy. An enterprise can still comply with the law and yet use work arrangements that are outside its direct reach. Enterprises directly connected to international suppliers tend to comply better with labour laws, but the more distant enterprises are from the international supplier within the production chain, the more insecure is the application of labour legislation and the worse are working conditions (for Latin America, see Bensusán, Chapter 4). Externalization arrangements 23

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also challenge the adequacy of social security systems based on a lifecycle model that does not reflect the precarious forms of employment that decentralization processes have been helping to foster. Moreover, externalization is also having an impact on collective relations. Bensusán (Chapter 4) and Sankaran (Chapter 6), in relation to Latin America and South Asia respectively, speak of the breaking of the workers’ community and, consequently, the weakening of the ability of workers to represent their interests and claim their rights collectively. A central concern when looking at externalization arrangements is that they may deepen labour market segmentation by creating an “underclass” of workers who are particularly vulnerable to employment and income insecurity, who lack collective representation, and who benefit from far less protection of their working conditions than workers performing the same (or equivalent) work within the same enterprise (or network of enterprises) and/or subject to factual control from the same entity. As a result, new inequalities may emerge, or existing inequalities may be reinforced, because certain social groups tend to be over-represented in externalization arrangements (Fudge, 2006a, p. 297). Evidence of these trends already exists. For example, in South Africa, data show that wages of workers in externalized employment – notably, those hired through TESs – are lower than those of workers directly employed in the client enterprises (Clarke, Godfrey and Theron, 2002; Benjamin, 2007). Namibia has also witnessed an increase in labour market segmentation due to the de facto rise in the flexibilization of labour relations and the externalization of work, through subcontracting, outsourcing, independent contracting, and the use of TESs (Klerck, 2002). Certain countries are starting to address the questions that externalization arrangements have raised about how to protect effectively workers who are in triangular employment relationships created either by subcontracting arrangements or hiring through TESs. Recently, Chile and Uruguay have adopted new laws on subcontracting arrangements (see Bensusán, Chapter 4) that demonstrate an awareness that changes in the organization of production and work require new legal and institutional answers to the demand for worker protection (for more details, see Bensusán, 2007). These new laws tackle three fundamental issues arising from triangular employment relationships – that is, “who the employer is, what rights the worker has, and against whom those rights can be enforced” (see ILO, 2006a, p. 73). What remains to be seen is how effective this legislation will be and whether it will meet its objectives, which – as the history of Latin America shows – will also heavily depend on the institutional capacity of both state enforcement structures and workers’ organizations. The latter are, in turn, faced with the challenge of adapting to a workforce that is further segmented by externalization arrangements. 24

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The growth of self-employment Another trend that can be identified in different countries of the South is the growth of self-employment, partly due to externalization trends, which is likely to further increase as a consequence of the current economic and financial crisis (ILO, 2009b). Self-employment absorbs a greater proportion of informal employment outside agriculture than wage employment in all developing regions and in most countries this proportion is greater for women than for men (UNRISD, 2005).15 For example, in Latin America, informal workers represented 42.8 per cent of total non-agricultural employment in 1990, which increased to 48.9 per cent in 2005, the majority being in self-employment (25.1 per cent), in micro-enterprises (17 per cent) and in domestic work (6.3 per cent) (see Bensusán, Chapter 4). An increase in self-employment has also been recorded in southern Africa (Fenwick, Kalula and Landau, Chapter 5). In South Asia, more than 50 per cent of the 90 per cent of workers in the informal sector16 are self-employed (Sankaran, Chapter 6). Self-employment raises two sets of issues: the first is the real legal nature of work that is qualified as self-employment; the second is whether self-employed workers enjoy, and should enjoy, any legal protection. The first issue has been at the heart of the discussions that have led to the adoption of the ILO Employment Relationship Recommendation, 2006 (No. 198), which addresses situations of disguised, ambiguous or triangular employment relationships (see ILO, 2006a) and which has been part of the debates on the informal economy held at the 2002 International Labour Conference (see ILO, 2002a). It has also been the object of academic reflections and legislative interventions at national level. In South Africa, for example, in 2002, a rebuttable presumption of employment was introduced into the Labour Relations Act No. 66 of 1995 and the Basic Conditions of Employment Act No. 75 of 1997.17 The growth of ambiguous forms of selfemployment may also be behind the constitutional reform adopted in Brazil in 2004, which extended the competence of labour courts to work relations going beyond the employment relationship (Cardoso and Lage, 2006). In the case of developing countries, there are several instances in which selfemployed workers are not in a situation of legal subordination, but are economically dependent on one or more clients. Th is is the case of beedi (hand-rolled 15 Women are often over-represented in situations in which the employment relationship is ambiguous, or work is performed under a commercial contract with an intermediary, who, in turn, is contractually linked directly, or through other intermediaries, with a retailer (for South Africa, see Theron, Godfrey and Visser, 2007; Godfrey et al., 2005). 16 This covers workers in agriculture, small-scale establishments, the self-employed, and casual and temporary workers in the formal sector. 17 Following the South African example, similar provisions were adopted in Tanzania in 2004 (see the Employment and Labour Relations Act No. 6 of 2004). 25

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cigarettes) workers in India. Despite the fact that these workers operate in their home, according to Indian case and statutory law, the provision of raw materials and goods by the client, and the determination by the client of the amount and nature of the work to be performed, are factors that entail supervision and which therefore give rise to an employment relationship (see Sankaran, 2006). Similar situations can be found elsewhere. In Latin America, one example of self-employed workers who are actually in a disguised employment relationship is itinerant traders, who, in fact, can be economically dependent on the selling enterprise. Itinerant trade is an old feature of Latin American labour markets, the importance of which is increasing, because it provides some source of income for workers and enables employers to save on labour costs. Hawkers, street vendors and itinerant traders have always been common in African labour markets (Touba, 2006; Fenwick, Kalula and Landau, Chapter 5). What is more recent is their connection with large formal retailers, distributors and manufacturers, including multinationals, on which they depend for the supply of goods (ibid.). Another typical situation of disguised employment in Africa is that of taxi drivers who rent their taxis and are obliged to pay a fi xed rental to the owner (Pougoué and Tchakoua, 2006). Their uncertain legal status also hinders the adoption of relevant regulations. An emblematic case is the debate in South Africa that has spanned two decades about who has the administrative responsibility for regulating the maximum driving hours of professional drivers. On the one hand, the South African Department of Transport has consistently refused any recommendation for their regulation, arguing that this is a matter that should be dealt with by labour legislation and collective bargaining. The Department of Transport seems therefore not to acknowledge that many professional drivers are not employees. On the other hand, the South African Department of Labour considers taxi drivers to be self-employed and does not intervene, because it holds that its mandate is limited to employees, as defined by labour legislation (Benjamin, 2007). Independently of the qualification of self-employment as disguised dependent employment, the insecurities and the disadvantages of many selfemployed workers raise the issue of the protection of these workers. According to a recent case study carried out in South Africa, the self-employed generally have more insecure jobs and incomes than wage workers, and, in general, women are more likely to be self-employed than men and to earn less. According to this study, the only partial exception to this trend is constituted by wage workers in the least formal segments of wage employment (Lund and Ardington, 2006, cited in Benjamin, 2007). Other studies in both industrialized (see Fudge and Owens, 2006) and developing (see Chen et al., 2005) countries have shown that 26

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people working in precarious and low-paid conditions are often found among the self-employed. An investigation conducted in six developing countries of Latin America, Africa and Asia shows that informal, non-agricultural, own-account workers and domestic workers “have significantly lower hourly earnings compared to all forms of formal employment and lower earnings relative to all categories of informal employment” (ibid., p. 47). This situation challenges the portrait of self-employment that scholars such as Maloney have made, according to which “a worker with few skills that would be rewarded in salaried work may prefer to be independent … , the informal option may actually offer a measure of dignity and autonomy that the formal job does not” (2004, cited in Trebilcock, 2006, p. 71). But, as Trebilcock notes, “[w]hile this is probably true at the high end of the informality continuum, it is a far cry from reality of most people in the informal economy” (2006, p. 71). The fact that the self-employed tend to be ignored by labour law (with some exceptions, such as, for example, in the field of occupational safety and health) raises doubts about the adequacy of a model of protection that is built around the needs and conditions of wage workers in “standard employment”. An example of questionable exclusions faced by the self-employed because of labour-related legislation constructed around the contract of employment is the South African legislation on skills development. The Skills Development Act No. 97 of 1998 and the Skills Development Levies Act No. 9 of 1999 have put in place a number of institutions and incentives aimed at developing the skills of the South African workforce as part of the strategy to redress the effects of the apartheid system. The beneficiaries are workers with a contract of employment (already existing or established in order to access learnership), with the net result that all workers who are not in such an employment relationship are excluded from benefiting from skills development programmes, which “exacerbates the inequalities between the formal sector and the rest of the economy” (Benjamin, 2007, p. 12) and more general social inequalities that the post-apartheid legislation aims to address. Fudge’s assessment of women’s self-employment in the North can be extended to both women’s and men’s self-employment in the South – that is, that much of self-employment “challenges the prevailing stereotype” and as a consequence “its association with independence and entrepreneurship”, and that it “challenges basic legal norms that determine the scope of employment and labour protection” (2006b, p. 201). In light of this, Fudge observes (ibid., p. 217): “[T]he growth of self-employed not only contributes to the problem of mapping legal definitions onto the reality of self-employment, it also raises the crucial normative question: is it justifiable to limit labour protection to subordinate employers 27

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and to exclude the self-employed?” The significant presence of women in selfemployment adds an egalitarian goal to the inclusion of the self-employed among the workers protected by law. In conclusion, a model in which protection is accorded on the basis of the binary divide (employment–self-employment) is increasingly challenged by the ambiguous, if not disguised, nature of much of today’s self-employment, the transit of workers between subordinate employment and self-employment in the course of their working lives, and the fallacy of the idea that the self-employed do not need protection against various insecurities. In some ways, India can be seen as a laboratory in which ideas for guaranteeing rights and protections to workers beyond wage employment are tested (see Sankaran, Chapter 6), with the Indian government mandating various commissions to study this matter.18 In 2002, the Second National Commission on Labour recommended the adoption of umbrella legislation with a universal coverage, including the self-employed within certain income limits (see Sankaran, 2006; ILO, 2002a).

Labour law reforms and the changing purpose, boundaries and content of labour law It is not only economic dynamics but also labour law reforms that lag behind the evolution in structure of the labour market and work organization; labour market and work organization changes are therefore also the result of political choices. Globalization, in its ideological dimension, has also corresponded to the dominance (particularly until the end of the 1990s) of a school of thought – especially among IFIs – that sees labour law as a source of rigidity for the market and as an obstacle to the creation of employment. Consistent with this thinking, deregulation and the flexibilization of labour relations has been part of the policy package that IFIs have recommended to developing countries, often as a condition to aid (in relation to francophone Africa, see Perspectives, 1995). These policy prescriptions have enormously impacted on labour law reforms in all developing regions and have often been part of a broader reform package, including structural adjustment, privatization, trade, and financial liberalization. Despite disillusionment with not only the social19 but also the employment effects of the labour law reforms inspired by a logic of flexibilization and 18 The most recently appointed is the National Commission on Enterprises in the Informal and Unorganized Sector, which is also mandated to look at social security. 19 For example, the structural segmentation of African labour markets was broadened by Structural Adjustment Programmes (SAPs), which imposed labour law reforms introducing more flexible employment, among the conditions for financial assistance (Perspectives, 1995). 28

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deregulation (for Latin America, see Marshall, 1994), coupled with the correction of certain of these labour laws and the adoption of projects aimed to enhance worker’s protection (in Argentina, for example), the “IFI” school of thought on labour law continues to be present in the policy debates (for example, in India, Namibia and Mexico, described in Part II) and are even reflected in recent reforms.20 The search for competitiveness, in turn, explains the labour law reforms that, during the last twenty years, have seen established export processing zones (EPZs), which are exempted from the application of all, or part, of labour law. The content of labour law, its personal boundaries and even its application are therefore shaped by the purposes assigned to it, which, in fact, can be multiple (see Collins, 1997) and subject to change. The “neoliberal” discourse has attributed to labour law an instrumental role vis-à-vis the objective of growth and employment creation; in line with this discourse, protections can be reduced in its name. The World Bank’s Doing business report – which evaluates laws, including labour law, in the light of their economic efficiency – is one of the most powerful tools through which this conception of labour law has been promoted. In this regard, Supiot (2005) observes that, under this conception, the law is virtually viewed as a product in a global market of norms, where a sort of natural selection is operated that sacrifices those laws that are not adapted to the needs of the market.

The role of international trade law There is a general recognition that one of the major challenges facing national labour law today is international economic integration and, notably, one of its dimensions – that is, trade liberalization. The impact of trade liberalization on employment, wages and workers’ rights in both developing and industrialized countries is a highly contentious issue. Concerning developing countries, schematically it can be said that two opposite positions have been expressed.21 Some argue that there is no conflict between workers’ rights and conditions, and trade liberalization. According to this view, trade liberalization is beneficial to economic growth and job creation. In the long run, trade liberalization produces positive overall effects on employment and on working and living conditions. Conversely, others (including the authors of the essays in this book) point out that the current rules and practices that govern trade liberalization impinge upon the capacity 20 Fenwick, Kalula, and Landau (Chapter 5) cite the 2002 amendments to the South African Basic Conditions of Employment Act No. 75 of 1997, which created different regulations on certain matters for MSEs. 21 For a review of the different arguments, see Lee (1995). 29

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of nation states – particularly in the developing world – to pursue social goals, including through labour law. According to this view, pressures to produce goods for export and to compete in the global market force developing countries to lower their labour costs through the under-enforcement of labour laws or through working arrangements that escape labour law’s coverage. Thus, trade liberalization confronts states with contradictory requests: on the one hand, they can be requested by their partners to respect collective and individual labour rights; on the other hand, competitive pressures encourage developing countries to revert to strategies that are based on lower labour costs. Without contradicting this assessment, a recent ILO–WTO study points out that the employment impact varies across countries and that “[t]he existing empirical evidence on the relationship between trade and the informal economy is still limited and inconclusive” (Jansen and Lee, 2007, p. 71), and more empirical studies are needed. The need for a contextualized approach to understanding the relationship between labour law and trade liberalization is also advocated by Blackett (Chapter 3), who argues that the relationship between trade liberalization – and, more particularly, trade law – and labour law “are ripe for less deterministic analysis”. She underscores that this can be possible if the role of regulatory action across governance levels (national, international and regional) is considered. It is exactly the role played by national social institutions that differentiated the impact of multilateral trade on industrialized countries (at least until the early 1980s) and developing countries. In her historical review of the foundations of multilateral trade, Blackett shows how countries in the North, unlike many low-income countries in the South, historically developed a relationship between trade and labour law that was moulded by state action and social institutions. This means that while economies liberalized, states in the North charged themselves with a social welfare function. The only limitation is that non-citizens were left outside the reach of welfare provisions, despite their contribution to the competitiveness of export sectors of industrialized countries. At the international level, the multilateral trade framework presents fundamental, and still unresolved, contradictions that favour industrialized countries – the most flagrant being the heavy subsidization of northern markets, while total openness is demanded of southern markets, which are then left exposed to the volatility of commodities’ prices.22 Trebilcock and Howse observe that “increased 22 Trebilcock and Howse (2001, pp. 367–86) show how the movement of many developing countries towards export-oriented development strategies in the 1980s was due to a number of factors, including the disappointing results of import-substitution approaches, the debt crisis, the decline of Marxist-inspired development ideologies, the success of the Asian economies, and the conditionality of loans on a number of reforms including trade liberalization. They highlight the paradox that the reference models for trade liberalization in the South were East Asian economies, which liberalized under very different conditions. For 30

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competition from abroad is not immediately offset by greater access for developing country products in global markets” and that the result is “often widespread labour dislocation” (2001, p. 386). Supiot (2005) provides the poultry market in Africa as an example. The dismantling of the protections accorded by the Lomé agreements between the European Community and the Africa, Caribbean and Pacific (ACP) countries in 2000, in order to conform to the rules of international trade, exposed African poultry markets to competition, with cheaper products coming from the North and disregarded by northern consumers. The net result has been the destruction of African markets, which is also a motivational factor behind workers’ migration. Supiot’s example shows that an understanding of the juridical determinants of workers’ conditions requires looking beyond the borders of state law, and international trade law appears to be an important regulatory area that must be considered. In Supiot’s example, the concerned workers were self-employed – that is, workers not even covered by labour law. International trade law therefore explains their situation better than can national labour regulation. Looking at “regulatory action across governance levels” also demonstrates that “asymmetrical liberalization”, as Blackett (Chapter 3) designates it, does not preclude the existence of some space for state action either at national or regional levels to address the pressures that the mobility of products and capital can produce on labour standards. As Blackett’s chapter shows, Mauritius is a case in point – even though it also illustrates that the state’s efforts to maintain a social welfare system in a context of a weakening export sector is counterbalanced by the exclusion from its purview of migrant workers, who bear the costs of the heightened trade competition. The case of those Caribbean Community (CARICOM) countries that have adopted a labour law harmonization project, and have declared unwelcome any investor threatening to relocate in another island of the Community if the labour relations practice of voluntary trade union recognition were applied, is a powerful demonstration of what regional communities can do to defend labour rights successfully from the threats posed by market competition and the easy mobility of capital and production, thus resisting the “race to the bottom” that these can engender. Blackett offers other illustrations of how the exclusion of distributive concerns from the current multilateral trade framework can be corrected.

example, East Asian countries “while reducing tariffs and other barriers to trade and reforming exchange rate regimes, … also initiated or activated a wide range of alternative government policies aimed at encouraging exports, including significant subsidies and loans to export-oriented industries” (ibid., p. 282). Moreover, neither the sustainability of the East Asian experience or its “generalizability”, given national institutional, social, and cultural characteristics, were considered. 31

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Beyond specific solutions, a major rethinking of the nature of the relationship between trade and work seems to be a precondition for avoiding the negative impact of international trade on employment or working conditions. Supiot has strongly emphasized how the existence of an international trade framework that allows the production of negative social effects is the expression of a school of thought that constitutes a reversal of the perspective that the ILO advocated in its 1944 Declaration of Philadelphia (annexed to its 1919 Constitution). This not only proclaims that “all human beings, irrespective of race, creed or sex, have the right to pursue both their material well-being and their spiritual development in conditions of freedom and dignity, of economic security and equal opportunity”, but also states that “all national and international policies and measures, in particular those of an economic and financial character should be judged in this light and accepted only in so far as they may be held to promote and not to hinder the achievement of this fundamental objective”. Thus, the Declaration of Philadelphia offers clear guidelines on how to look at trade regulations and policies, and labour law: the former should be considered as instrumental to social goals, and therefore should be evaluated and, if needed, corrected or adjusted in the light of their achievements. The recently adopted ILO Declaration on Social Justice for a Fair Globalization (2008) has reaffirmed this vision and the role of the ILO in the examination of “international economic and financial policies in the light of the fundamental objective of social justice”.

1.5 The problem of enforcement: Structural and new dimensions Enforcement is another old and persistent problem in the South, which has assumed new dimensions linked to the processes of globalization. The greatest levels of under-enforcement have traditionally been found in relation to the following categories of worker: domestic workers; homeworkers; rural workers; and workers in MSEs (Daza, 2005). The unclear understanding of the employment nature of domestic work and the tight relationship of dependency that can be established with the employer can impinge upon domestic workers’ capability to claim their labour rights. Other factors limiting the enforcement of labour laws are the lack of declaration on the part of the employer and the lack of legal power of the labour inspector to enter private homes to conduct inspections. The same problems arise in relation to homeworkers, but in their case other obstacles are present as well: the employment 32

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relationship may be disguised in the form of commercial contracts or subcontracts, or only one person may be registered, while family members are not. The problems faced by rural workers are numerous. Among the most acute is the lack of knowledge of the law, often linked to a high rate of illiteracy, which is particularly significant in multi-ethnic or multilingual countries. In these contexts, many workers may not master the official language and work relations may be more informed by social norms than by statutory laws. Moreover, given the frequently seasonal nature of rural work, registration formalities may be perceived as too costly and burdensome. The dispersed nature of workplaces, in the cases of domestic workers, homeworkers and rural workers, are further important challenges to enforcement – particularly in countries with few, and poorly paid, labour inspectors with few material resources with which to conduct inspections across the country. In the case of small enterprises, the main difficulties of enforcement agencies lie in even finding the enterprises and also identifying the real nature of the relationships between the people operating in them. The paradox is, therefore, that more enforcement is carried out where there are higher levels of compliance – that is, in large enterprises. As the essays in this book show, this is a common problem across regions. This phenomenon may even be fostered by practices that attempt to enhance enforcement. Th is is the case in Brazil, where incentives linked to productivity lead inspectors to concentrate their work on large enterprises located in the same area (Cardoso and Lage, 2006). The extent of the enforcement problem among MSEs has been particularly highlighted by a recent ILO study (Daza, 2005), according to which only 10 per cent of ILO member States have legislated exclusions from general regulations of enterprises on the basis of their size. Some of the exclusions concern only certain sectors, such as agriculture; more frequent are exclusions from specific areas of labour legislation, such as occupational safety and health, and social security.23 The lack of enforcement of labour laws is also connected to the extent to which workers are aware of their rights and are capable of and willing to use existing enforcement machineries. An ILO survey has shown that workers may think that labour law does not apply to them (ILO, 2002a). In addition, workers may not feel able to turn to enforcement bodies because their priority is to find and keep a job (for Brazil, see Cardoso and Lage, 2006; for francophone sub-Saharan Africa, see Pougoué and Tchakoua, 2006). Trade unions may consequently accept downsizing, the suspension of trade union rights for limited periods, and freezes in 23 According to Daza’s study (2005), there are three situations: (i) MSEs excluded from any labour law coverage; (ii) MSEs covered by laws on conditions of work (sometimes only provisions on wages and working hours); and (iii) MSEs covered by labour laws with the exclusion of social security laws. 33

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allowances and benefits, among other things (for India, see Sharma, 2006). Poverty pushes workers to accept work under any conditions – as is the case in Namibia (see Klerck, 2002; for southern Africa more generally, see Fenwick, Kalula and Landau, Chapter 5) – and workers may even go as far as to ask inspectors not to visit the enterprises in which they work (Goldin, 2007b, on Argentina). The effectiveness of labour law, including collective labour law, is thus conditioned by existing socioeconomic conditions, and precariousness and unemployment are powerful obstacles to its enforcement. In those circumstances, workers tend to raise (individual) claims only if work relations are interrupted (Auvergnon, 2006, p. 11). A number of other reasons may explain workers’ reluctance to claim their rights in countries of the South, including non-legal or economic costs such as fear of social ostracism (Pougoué and Tchakoua, 2006) or, as discussed in relation to contributing family workers and domestic workers, the perception that the relationship underlying the relevant work relations is merely personal. Another factor behind under-enforcement may be inadequate enforcement strategies. For example, talking about Latin America, Bensusán (2006a, and Chapter 4) argues that one of the most striking problems in the region is the contradiction between norms that imply high compliance costs and a weak enforcement strategy. Following political changes that occurred in the last decade, certain Latin American countries – the most advanced case being Brazil – have made efforts to strengthen their enforcement capacity by intervening in both labour inspection and the judicial system. In Chapter 4, Bensusán illustrates in detail the relevant changes. What is important to observe here is the diversity of approaches that are today tested in Latin American countries: on the one hand, the “traditional” approach is based on sanctioning the lack of compliance; on the other hand, particularly since the 1990s, another approach has privileged prevention and education. Academics do not share the same diagnosis of the effectiveness of these two methods. As Bensusán suggests, there is a need to continue studying the actual impact of the different methods, even though, arguably, a combination of the two seems to be the most effective strategy. The “enforcement pyramid”, developed by Ayres and Braithwaite (1992),24 suggests that behavioural change can be obtained by a set of strategies that are responsive to the features of the subject that has to apply the regulation, with sanctions always provided and placed at the upper end of the pyramid as the recourse of last resort.25 24 For an application of the pyramid to MSEs, see Centre for Employment and Labour Relations Law (2006). 25 Other features of this approach include the intervention of actors other than the state and, notably, the participation of those affected by regulation, or their representatives, in the design and monitoring of the enforcement strategies. 34

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Structural political and institutional weaknesses can also be at the root of enforcement deficiencies. The lack of the rule of law, an extended culture of anomie (for Latin America, see Bensusán, 2006a; Goldin, 2007a), and the absence of independence or corruption of enforcement institutions (see Fenwick, Kalula and Landau, Chapter 5) may constitute a disincentive to workers’ contacting enforcement institutions or may influence the institutions’ actions. Various authors from different regions have underlined the current weakening of the actors charged with ensuring the application of labour law, including labour ministries, or even the suppression and dispersion of their powers (see Arthurs, 2006; Goldin, 2006a). The limited, or lack of, independence of trade unions also helps to explain the law–practice gap, as does the lack of organization of informal economy workers and the inadequacy of trade unions’ organization’s strategies. Globalization seems to have played a contradictory role vis-à-vis labour law enforcement. The spread of global production networks and the growth of subcontracting arrangements, with the corresponding web of work relations and the home-based nature of some of the work that is performed, have made it objectively difficult to ensure the application of labour law. Moreover, labour market developments that occurred in the last two decades, including flexibilization and externalization processes, privatization of the unionized public sector and the decentralization of bargaining, have also weakened trade unions (for Latin America, see Bensusán, Chapter 4; for India, see Sharma, 2006). In addition, the pressures exerted on developing countries by global integration and, notably, trade liberalization have led many developing countries to pursue competitiveness and avoid job destructions through low-labour-cost strategies, including de jure exemptions of certain sectors from the application of labour laws, or “low visibility practices” of which under-enforcement is part and parcel (see Blackett, Chapter 3). In the context of a “dominant ideology of liberalization and globalization”, several Indian states have amended their labour laws to introduce more flexible enforcement practices – for example, by providing that enforcement can be carried out only with the prior consent of a public officer of the rank of labour commissioner or district magistrate, or by exempting establishments from labour inspections (Sharma, 2006). The case studies on Mexico, Lesotho and India in Part II show very well the enforcement inertia that has characterized export-oriented sectors in these countries. The idea that flexibilization and deregulation contribute to employment creation has further reduced the level of protections, and, more generally, the political and social legitimacy of labour law. Bensusán (Chapter 4) reports that undeclared work has increased in the Latin American countries concerned by labour law reforms inspired by flexibilization goals (Argentina and Brazil, in the 1990s, are cases in 35

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point). The explanation given by the scholarship is that not only are the new laws inadequate, given the nature of Latin American labour markets, and the procedures involved in the new contracts that these laws have introduced complex, but that there has been a loss of legitimacy of, and support for, labour legislation generally. Globalization does, however, have other dimensions that seem to explain enhanced worker protection. Countries of the North often put pressure on trade partners of the South to enforce their labour legislation better. For example, the attention that Central American countries have placed on enhancing enforcement can also be attributed to pressures coming from the United States in the context of trade agreements. In turn, these are the result of demands coming from US trade unions and consumer groups. These contradictory strains imposed on developing countries may create contradictory results within that same country. As Filali Meknassi argues (Chapter 2), on the one hand, the workforce operating in an enterprise that is directly connected to the external markets of the North tends to enjoy rights and good working conditions. On the other hand, another portion of the workforce remains outside the reach of labour law, because it is in work arrangements that fall outside its scope, or because enforcement does not reach them in the production chain, or it may be affected by deteriorating working conditions due to intensified competition with external producers. As Blackett shows with her case study of Mauritius (Chapter 3), when nation states try to provide protection to their workers despite the exposure to global competition, the risk is that the costs of this exposure may simply be shifted and borne by more vulnerable workers, such as migrants.

1.6 Labour law and gender equality

1.6.1 The gendered construction of the law At the roots of the complex relationship between labour law and gender equality is the fact that labour law is about protecting workers performing a market activity and has thus tended not to accord any recognition to the non-market work traditionally assigned to women. In this sense, it has been constructed on the gendered assignment of roles in the family and in the labour market, with women having a reproductive and care-giving function, and men a breadwinner role ensured by their insertion into the paid workforce (Owens, 1993). It has validated the idea that women’s reproductive work and work in the home is non-productive, and “assumed by its ‘invaluable’ character to be a labour of love without worth on 36

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the labour market” (Blackett and Sheppard, 2003, p. 9). Yet this work has “real monetary value”, because “it contributes to household income either explicitly (if products are sold) or implicitly (if households consume what they produce)” (Chen et al., 2005, p. 49). Moreover, it is strictly interlinked with productive work because of its labour-reproductive value, and because it conditions the opportunities and methods of access of unpaid care-givers to the labour market. Despite this, labour law is built on “distinctions such as public and private, work and family, production and reproduction” (Conaghan and Rittich, 2005, p. 3), which have justified the exclusion from legal and redistributive consideration of unpaid work traditionally performed by women within the family and the community. The effects of the binary divide between productive and non-productive work extend to the labour market in the form of occupational segregation, and to labour law in the form of its exclusion of market work sharing similar features with the work that women perform at home. This is the case of domestic work (see Blackett, 1998a), as well as work performed by family members and homeworkers. The proximity of these types of work to the work that women traditionally perform in the private domain, because of the content of the work or the worksite, is an explanation of their de jure non-recognition or de facto devalidation. Women are not only “assigned” to certain occupations, but also “their” occupations are not legally covered, are less protected, and/or are lower paid than those of equal value performed by men. The example of the gendered attribution and evaluation of agricultural tasks in India given by Sankaran in Chapter 6 is exemplary of this latter tendency. The quantitative impact of the gendered construction of the law on women’s lives in the South is evident if one looks at the data on women’s employment. The UNIFEM study cited above on six developing countries (Costa Rica, Egypt, El Salvador, Ghana, India and South Africa) has shown that, with regard to non-agricultural informal employment, “women are more likely to work as own-account workers, domestic workers and unpaid contributing workers in family enterprises than men” (Chen et al., 2005, p. 44).26 According to a recent ILO report, the share of women in non-agricultural wage employment and total paid employment has increased in all regions by approximately 2 per cent. In many regions, however, the share of unpaid female labour remains considerable and in sub-Saharan Africa it has even increased. Moreover, South Asia remains the region with the highest share of women working without pay, despite showing the most significant declining trends (ILO, 2007a, p. 18). 26 In Latin America, domestic work is the principal source of non-agricultural employment for women and, in 2003, 15 per cent of all economically active women were in domestic work (Abramo and Valenzuela, 2006). 37

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1.6.2 Labour law and the promotion of gender equality at work The entry of women into the labour market and international labour standards have contributed to the integration of gender equality among the social goals pursued by labour law. Its inclusion has been expressed by the incorporation of antidiscrimination and equality provisions (including affirmative and positive action), maternity protection, and the reconciliation of family and work norms.27 But Part II of this book shows that, in many countries of the South, the consideration of women’s presence in the labour market is still confined to general affirmations of the principle of equality – sometimes not in full conformity with the terms of the ILO Equal Remuneration Convention, 1951 (No. 100) – and to maternity protection provisions. One exception is Chile, where amendments (under Act No. 20,005 of 2005) to the 1994 Labour Code punish sexual harassment, require employers to include relevant provisions in enterprise regulations, and provide for regular monitoring by management, staff delegates and bipartite committees. It is also worth mentioning the recent Chilean law (Act No. 20,123 of 2006) that amended the Code to grant outsourced workers equal treatment with workers directly hired by the user enterprise. It also provides the principle of equal treatment in relation to maternity protection (ILO, 2007a). A further problem is that provisions related to gender equality may prove ineffective or insufficient, or may even produce negative effects. Fenwick, Kalula and Landau (Chapter 5) underline the disadvantages suffered by women in a country such as Lesotho, where maternity leave is not paid. Pougoué and Tchakoua (2006), however, observe how in Cameroon the fact that maternity leave is paid constitutes, de facto, a disincentive for employers to hire women. Filali Meknassi (Chapter 2) reaches similar conclusions when he observes the differential impact of equality provisions on different social classes. He argues that, in the South, the “elites” are those who have claimed for equality provisions and who take full advantage of them. Conversely, such provisions may have no impact or may even have “perverse” effects on women belonging to the poorest segments of societies, because the wielders of patriarchal power tend to respond to reforms with reactionary practices that may challenge the progresses already made on the front of 27 For a feminist critique of an approach to gender exclusively based on these provisions, see, e.g., Conaghan (1986). The critique rests on the fact that they do not challenge the fundamental social and legal construction of work around a “male” normative model. Th is literature contends that an approach that does not integrate care responsibilities into the very conceptualization of work will never achieve equality (Fredman, 1997; Conaghan and Rittich, 2005; Vosko, 2006) and advocates a long-term equality agenda that is based not on the equalization of treatment, but on the recognition and integration of differences, and the realization of changes in the organizational and occupational structures, practices, cultures, norms, and values (Bercusson and Dickens, 1996; Cockburn, 1991). 38

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gender equality. This confirms that the capacity of the law to shape the behaviours of national and local actors is affected by tradition and social norms. In turn, it has to be recognized that these norms may be influenced by pressures associated with globalization, including those deriving from the market and, more generally, from the international community, and those promoting the application of international labour standards. The interplay of the pressures associated with endogenous claims for gender equality with social or religious norms may bring about different effects in terms of actual application and also the perceived (subjective) legitimacy of labour standards. The “irritation” (to borrow from Teubner’s image) exerted by international labour standards produces different effects: variations can be found among countries and within countries, according to the segments of the economy and social groups taken into consideration. This obviously raises questions in terms of which strategy to promote equality would be most effective. Filali Meknassi argues that in particularly complex, non-homogenous societies like the ones in South, it is most appropriate to adopt promotional measures that accompany the change pursued.

1.6.3 The interaction of labour law with other branches of law and non-state sources of law Equality at work cannot be addressed without looking at the interaction of labour legislation with legislation in other spheres. Sankaran hints, in Chapter 6, at the negative impact on women’s opportunities and capabilities at work of inheritance laws that discriminate against them. Fenwick, Kalula and Landau report (in Chapter 5) the persistence in the legal system of Lesotho of statutory and customary provisions that confer on women a minority status. In Cameroon, the 1981 Civil Code provides that the husband, as family head, can object, in the interest of the family, to the fact that his wife performs a profession of her own. In certain contexts of the developing world, where non-state forms of regulation are still lively, these can constitute an obstacle to the effectiveness of labour law in general (see Filali Meknassi and Sankaran, Chapters 2 and 6 respectively) and of gender equality principles in particular. Much of the literature on human rights (see, for example, Okin, 1999) and development (World Bank, 2001; Morrisson and Jütting, 2004, 2005) has highlighted the negative effects that customary norms and practices have on gender equality, including at work. The complexity of developing countries’ societies, particularly in Asia and Africa, is also a reason for their featuring a plurality of (legal and social) regulatory systems. The example of Lesotho cited above is a case in point: state-based law coexists and 39

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interacts with other regulatory systems. The compliance with, and enforcement of, labour laws can be conditioned by the vitality of traditional laws (customary or religious) and social norms, directly or indirectly shaping the world of work with their distinct set of norms, sanctions and dispute resolutions systems. Other authors have argued that local customary norms and institutions feature both setbacks and opportunities for gender equality (Nyamu-Musembi, 2002), and have drawn attention to the flexible and dynamic nature of these norms and institutions. Scholars arguing for cross-cultural dialogue have also underscored the fact that all cultures have principles of fairness, justice and human dignity (An’Naim, 1990, 1992, 2002). These perspectives on “traditional cultures” suggest the importance of studies that explore not only the negative impact that customary norms can have on gender equality at work, but also whether these norms could be used to draw principles and build institutions that can support an equality agenda. This approach could also provide answers to those who contest gender equality principles in the name of a flawed conception of culture as a static, homogeneous whole, the interpretation of which rests in the hands of the wielders of political and/or patriarchal power. A further caveat seems appropriate: the role of traditional (legal) culture should not be overemphasized to the extent of overshadowing the responsibility of statutory law and therefore of political choices made by the state. State law can play an active role in reinforcing and legitimating gender-biased norms based on tradition or religion. This is the case with those African constitutions that allow for exemptions of personal laws from constitutional scrutiny (such as Lesotho).28

1.6.4 The impact of globalization The relationship between labour law and gender equality has to be seen in the context of globalization. Globalization is the framework within which international pressures have been exerted on developing countries to apply international labour standards, and a human rights discourse – including that on gender equality – has acquired strength internationally. But gender equality at work has not necessarily been promoted everywhere in the South. For example, the 1980s and the beginning of the 1990s marked, for sub-Saharan Africa, a move towards democracy and the market economy. The language of rights has figured prominently in the accompanying reform agenda of the region’s 28 For a different approach, see the Constitution of the Republic of South Africa, which establishes the prevalence of the Bill of Rights over customary norms that may be inconsistent with it. 40

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countries, heavily inspired by the Bretton Woods institutions, but the emphasis has mostly been on civil and political rights, which were seen as instrumental to the creation of liberal-democratic systems and a business-friendly legal environment. Th is has been accompanied by constitutional and legislative reforms, as well as by the mushrooming of human rights commissions and ombudspersons. Nevertheless, social and economic rights have been kept at the margin of the reform agenda, like any policy seen as potentially clashing with the needs and functioning of the market (Nyamu-Musembi, 2005). Fenwick, Kalula and Landau’s consideration of gender equality in Lesotho in Chapter 5 confi rms that the promotion of gender equality is “now firmly on the national agenda”, but the work-related dimension of the pursuit of gender equality remains underestimated and, more particularly, labour legislation is very much neglected in the policy debate taking place on gender equality in this country.29 Moreover, the debate over the adoption of separate legislation for domestic workers and employees of small and medium-sized enterprises (SMEs) raises some concerns regarding the consequences that this can have on the protection of these workers, many of whom are women. The growth of “atypical” work arrangements that globalization has brought about also has gender implications. The intensified mobility of capital and production that is associated with globalization has opened employment opportunities for women. These constitute the majority in jobs in export-oriented sectors in countries such as Mexico and Lesotho (studied in Part II), and in East and South-East Asian countries (Ghosh, 2003). Nevertheless, the increase in employment opportunities has not necessarily been accompanied by work practices that respect women workers’ rights, including maternity protection and nondiscrimination based on marital status and pregnancy (see Blackett, Chapter 3; Bensusán, Chapter 4; Fenwick, Kalula and Landau, Chapter 5). The situation is made more complex by the fact that, as seen above, public authorities may tend to adopt a practice of tolerance towards non-compliance as a strategy for retaining foreign investment. The problem of weak enforcement especially affects exportoriented sectors,30 home-work operations (see Godfrey et al., 2005) and MSEs (see Sankaran, Chapter 6), in which the presence of women is important. As the literature has described, there are signs of setbacks even in the level of women’s employment that globalization has fostered. Bensusán (Chapter 4) reports that, in the garment export-oriented sector in Mexico, women continue to 29 Th is obviously does not mean underestimating the importance for gender equality at work of envisaged reforms in the area of personal law. 30 See the cases of the maquiladora sector in Mexico and the textile sector in Lesotho described in Chapters 4 and 5 respectively. 41

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constitute the majority of workers. There is, however, an increase of men workers because they are increasingly willing to accept lower paid jobs. Even in East and South-East Asia, the feminization of export employment has to be nuanced. This “peaked somewhere in the early 1990s (if not earlier in some countries) and that thereafter, the process was not only less marked, but may even have began to peter out” (Ghosh, 2003, p. 452). The increasingly fierce competition – including that with new actors such as China – and, in the case of Asia, the adjustment phase that followed the financial crisis are among the most powerful factors behind the growing informalization in export-oriented sectors (ibid.). Women have been particularly affected: they tend to find themselves in very small firms or in homebased operations at the lowest end of subcontracting chains, which are either not covered by labour legislation, or are more difficult to control because of their “invisible” nature. The de-feminization of export-oriented sectors has also meant that women are “even back to unpaid housework” (ibid., p. 445). In sum, the typology of jobs accessible to women in the current globalized economy gives the problem of the scope and application of labour law a specific gender dimension.

1.7 Conclusions Despite differences among and within regions, depending on regional and national characteristics relating to the legal systems and culture, political and economic situations, and social dynamics, the literature reviewed in the preceding sections provides an overview of the significant proportion of workers everywhere in the South who are vulnerable to lack of protection. The sections above have demonstrated that this situation has both structural and emergent reasons. Besides problems with the application of labour law, the structural reasons are rooted in an original mismatch between the realities of the world of work and the socio-legal construct around which labour protection has been shaped. The result of this original gap is that, historically, various categories of worker have been left outside the scope of labour law and therefore of any legal protection. But globalization has not corrected this reality; on the contrary, it has engendered developments in the organization of work – sometimes supported by labour law reforms – that have triggered a proliferation of work arrangements that are clearly outside the coverage of labour law, or are in a sort of grey area between employment and self-employment, or which, while being within the reach of 42

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labour law, give rise to a number of questions relating to the identification of the liable employer and relevant obligations. Heightened competition for markets and investments, as well as a “neoliberal” discourse on labour law, has also impacted on its application and enforcement by national actors. In some cases, dynamics linked to globalization have been grafted onto old features of southern labour markets, reinforcing old problems of work situations escaping the reach of legal protection. The sections above have, for example, highlighted the persistence of some low-income occupational figures, which, while remaining outside the boundaries of protection, have become connected to the globalized economy. Moreover, in a context in which the formal labour market does not guarantee employment to a large proportion of the workforce, the role of the family, or of informal networks based on common identities, in ensuring some form of economic security or in permitting access to the labour markets, remains important. Consequently, social norms end up regulating work relationships in place of labour law. The combination of all of these phenomena has produced a number of challenges for worker protection. Drawing from Goldin (2006a), it is possible to categorize them schematically, as follows: ● a normative weakening, produced by flexibility and deregulatory processes, as well as more limited content of protections; ● a subjective weakening – that is, a shrinking personal scope of labour law – due to unemployment, informality, productive decentralization, ambiguous or disguised relationships, and transformation of dependent relationships into autonomous ones; and ● an applicative weakening of labour law, which impacts on its effectiveness. Why is this situation worrying? The exclusion of old and new categories of worker from labour law coverage, de jure or de facto, creates new, or deepens existing, labour market segmentations and income inequalities, often along gender or ethnic lines. In many cases, there is a correspondence between being outside the reach of labour law, or at its margins, and being exposed to lower incomes and economic insecurity. The chapters in this book and other literature show that many working poor are those who are in occupations that are not covered by labour and social security law, or in those that are only partially covered.31 31 Th is can be demonstrated a contrario by the South African experience with the regulation of domestic work. Even though domestic workers continue to be the lowest paid category in South Africa, their legal coverage since 1994, followed by the determination of minimum wages, has led to an increase of the real wages, average monthly earnings, and total earnings of all domestic workers (Hertz, 2005, cited in Benjamin, 2007). 43

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Against this background, it appears that the levels of intervention that should be adopted to address the problem of lack of protection are different because its manifestations and causes are diverse. Focusing on only two among these levels of intervention, the first – the “subjective weakness” of labour protection – refers to the issue of who is entitled to labour law protection. The preceding analysis of the relationship between evolving work patterns and the socio-legal construction of the model of worker to whom labour law protections have traditionally been accorded shows that there is a need to rethink the very conceptualization of the terms of reference of labour protections beyond employment. This approach is consistent with the perspective on worker protection included in the ILO Declaration of Philadelphia of 1944, which, as seen above, talks of the right of all human beings to pursue their material well-being and spiritual development in freedom and dignity, and in conditions of economic security and equal opportunity. This view has been reaffirmed by the ILO in 1999, with the elaboration of the “decent work” paradigm, which encompasses the goal “to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity” (ILO, 1999, p. 3) for all workers (and those who seek work), including wage workers, the self-employed and homeworkers, in the formal or informal economy, “wherever work might occur, whether in the formal or informal economy, whether at home, in the community or in the voluntary sector” (ibid., p. 4). With the paradigm of decent work, the ILO has affirmed a holistic perspective on work and has indicated that the universal objective that it encompasses can be effectively translated into reality only by taking into due consideration the diversity of national situations (Ghai, 2005). 32 As summarized above, labour law literature – including its feminist strand – has shown how the traditional paradigm of labour law is the result of a “standardization” of one specific work model. This has been possible because, as Alan Hyde (2006) has underlined, the premise was that it was in wage work that the greatest social oppression, inequalities of power, and conflicts were found. But, he observes (from a northern perspective), the “standard” employment 32 In this sense, the decent work concept has been the response to “the criticism that has been levelled against ILO’s traditional work on standards, employment, social security and industrial relations … that it is based on the model of industrial market economies and is applicable at best only to the formal sectors in other countries, thereby excluding large swathes of their economies and working people” (Ghai, 2005, p. 2). Decent work is also the background of the consensus achieved among ILO constituents at the 2001 and 2002 International Labour Conferences on the need to extend labour and social protection to workers in the informal economy. Moreover, the decent work paradigm is influencing academic reflections on international labour standards: see the work carried out by a team of academics from different disciplinary backgrounds and geographical origins on “the possible legal ramifications of the ‘new consensus’ on social security reached by representatives of States, employers and workers” (Supiot, 2006, p. 119). 44

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relationship is “no longer the site of the greatest oppression, or the greatest inequality of bargaining power, or the most revolting excess of power, or the greatest social conflict” (ibid., 2006). And, it can be added, even in the past – at least in the South – oppression and inequality of bargaining power were features that could be found in other work situations. The challenge today is to correct such biases, while defending the protection of wage employees, by developing an inclusive paradigm that is based on a larger notion of “work” rather than “employment”, and which integrates the various patterns of the real working lives of men and women, rather than a standardized version of them. Extending the borders of protection beyond “employees” confronts academics and policy-makers with fundamental questions such as “which rights should be expanded (or created) for which categories of workers” (Benjamin, 2006a, p. 190; see also Arthurs, 2006),33 through which institutions and legal techniques, and how the objective of inclusiveness can be reconciled with the diversity of situations. Concerning the first set of questions, both the ILO Constitution and various international labour standards 34 already give some guidelines for the identification of rights that belong to all workers, or even human rights. But the effort that is required is deeper: it demands examining the constructs that are used to think of “work”.35 The literature reviewed in this chapter provides very useful and insightful ideas for the contexts of developing countries (see Benjamin, 2006a, 2007),36 but they obviously need to be read through the lens of the national specifics of the South. In addition, they cannot replace original studies and frameworks of analysis emerging from the countries themselves, rooted in a proper knowledge of the working and living patterns, legal cultures, value systems, histories, levels of economic development, distribution of material resources, and national and local forms of labour protection. The mobilization of local knowledge (see Diawara, 2006) should operate as a bulwark against temptations towards more or less mechanical transplants of analytical frameworks 33 Benjamin (2007) suggests that this question also entails an assessment of the forms of insecurities that are associated with different working statutes. 34 See Conventions Nos. 87, 98, 100, 111, and 156, and respective recommendations, and international labour standards on occupational safety and health, and social protection. 35 In this regard, Jhabvala (2001, p. 244) has highlighted how the major question with which developing countries are faced today is whether there is “a different way of looking at the informal sector worker, the small producer, which recognise the employment relations on the ground, her/his contribution to the economy and her/his needs for security as well as entrepreneurship”. 36 For a more cautious reading, see Goldin (2006a, p. 130), who thinks that the “highly sophisticated institutional constructions”, like the one by Supiot, entail “financial mechanisms” that “seem far out of the reach at present in countries of Latin America, given its scarcity of economic and organizational resources”. Nevertheless, Goldin also thinks that they “may serve to lead the way and explain the direction of the intermediary stages in a sequence of conceiving a new design which labour law will hardly be able to prevent”. 45

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and solutions developed in the North for northern societies. History has already proved the limitations of such a model, which hides a socio-evolutionist conviction that southern societies are bound to evolve in such a way that they will conform to legal constructions built or borrowed, irrespective of actual conditions of these societies. Normative reflections should thus be nurtured by field studies of all of the socio-economic and organizational features of the world of work, social dynamics (including the interrelationship between the private and public spheres) and the various legal sources and regulatory regimes (beyond labour law and, more generally, statutory law) that determine the opportunities and conditions of people in the world of work,37 taking into consideration the diversity of experiences of men and women.38 Moreover, in order to enhance and extend the protection of workers, labour law needs to be seen in synergy with law and social policies intervening in domains other than the labour markets.39 The second level of intervention relates to the rules that govern today’s globalized economic processes. All of the essays in this book identify, in the heightened competition for markets and investments, a source of significant pressures for developing countries, the costs of which are often paid by workers in terms of employment instability, casual, undeclared and externalized employment, and weakened protections. It would therefore be unrealistic to expect that all of the answers can be found in a reconsidered labour law. The capacity of employers to observe the obligations imposed by legislation, of nation states to enforce labour law and of workers to claim the respect of their rights also depends on the economic situation, which, in turn, also bears on the conditions under which globalization takes place. In this regard, the sections above have argued that economic integration is not neutral; rather, it follows specific rules, which are socially and politically constructed. This means that the enhancement of worker protection also requires rethinking the current globalization model, and the rules and practices that sustain such a model. These should be corrected in light of their impact on the achievement of social goals, and the same can be said for national policies. Following this vision, “the well-being of workers would not be simply the externality accidentally generated by deliberations convened for other purposes; 37 The need to carry out socio-legal mappings at national level, examining how different laws and legal regimes impact on the juridical conditions of workers, was one of the conclusions reached at the ILO workshop organized by the author and attended by all of the contributors of the present volume, along with Jan Theron (University of Cape Town) and Paul-Gèrard Pougouè (University of Yaoundè), held in Geneva, 24–25 Oct. 2006. 38 In the context of globalization and rising labour migration, the study by Blackett and other literature show the importance of also considering the characteristics of men and women migrants’ working experiences. 39 See also Arthurs (2008). 46

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rather it would be an explicit and important concern for all decision-makers … an indispensable component of every calculus of public policy which might affect them” (Arthurs, 2006, p. 388). Adapting labour law to a world of work that is more complex than that represented by the “traditional” employment paradigm and pursuing a “fair” globalization (WCSDG, 2004) seem to be preconditions for the realization of the world envisaged by the ILO Declaration of Philadelphia, in which the rights of all human beings to pursue both their material well-being and their spiritual development are recognized, and conditions of freedom and dignity, economic security and equal opportunity are guaranteed.

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PART I

Worker access to labour law protection Historical challenges and the impact of globalization

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2

A framework for analysis RACHID FILALI MEKNASSI

2.1 Introduction The effectiveness of law is a subject that is currently attracting a great deal of interest, largely because the global context of today favours both the extension of the rule of law and flexible regulation. But the enthusiastic attention that it is receiving in legal literature is not necessarily helping to resolve the misunderstandings that it often still generates. The problem lies first in the etymological ambivalence of the terms “effectiveness” and “effective”, which can mean both something that exists and something that has an effect.1 It also stems from the often polysemous usage of these terms. Formally speaking, an effective rule means a rule that is applicable or in force – in other words, a rule that is intended to have legal effects on the action or fact in question. In practical terms, however, the same expression is used to refer to the “implementation” or “application” of the rule (Cornu, 2000). The difference between the two meanings is considerably narrowed if we consider that the effective application of the rule may involve the production of other rules, such as implementing regulations. Consequently, a rule might be said to be effective when it is ready to be applied in practice, but above all, when the social behaviour that it governs is influenced by its existence. 1 The term comes from the Latin effectus, meaning “actually existing”, and effectivus, meaning “producing an effect”, or “resulting in actual deeds”. Like the adjective “effective”, it is invariably used to refer to something that actually exists or something that has an effect (see the Concise Oxford Dictionary). This is why, even though the term is different from “efficacy”, it comes close to it when it is used to mean “having an effect” (Concise Oxford Dictionary). There is similar equivalence of meaning in French: effectif, efficace, and efficient mean “having an effect”, but the term effectif also means “effective”, “real”, or “in force”. 51

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The polysemous usage of this term and the other related expressions2 does not, however, appear to create legal uncertainty, since it is most commonly used not to determine a legal outcome, but to reflect how legal rules influence social behaviour. Its scope is defined more by sociological observation than by normative analysis. This is why it is related to the “realistic approach to law”, focusing on the practical effects of behavioural rules, and describing these in terms of effectiveness, efficacy and efficiency (Mincke, 1980, p. 18ff; Richard, 2003, p. 30); that is, “effectiveness expresses the use of law as the legislature intended, or else the effects of law in aggregate” (Richard, 2003, p. 32). Finally, the concepts of legal effectiveness and ineffectiveness are used to reflect the observation of living law and the extent to which it adheres to, or departs from, the rules formally set out. As Touscoz (1964, p. 2) puts it: “In legal terms, the concept of effectiveness expresses the relationship between a certain situation in practice, a certain reality, and a rule or a certain legal situation.” In order to establish this relationship, the legal rules in question could be taken as a starting point, leading on to an analysis of the social practices covered by them and an evaluation of the impact that these have on society. It is also possible to imagine this the other way around, starting with the social behaviour and then going on to determine how this has been shaped by the rules in question. Lawyers will automatically follow the first approach, with their work simply becoming an extension of their usual formal normative analysis; sociologists, on the other hand, will tend to use the second approach. The effectiveness of law is always a major concern for decision-makers and is a focal point in the evaluation of public policies. It is studied not only by lawyers and sociologists, but also by all specialists who can shed light on the relationship between the rules applied, and the development of the areas and communities that they govern. The approaches involved here are consequently becoming increasingly complex, but what they all have in common is that they take account both of the formal rule and of the corresponding reality.3 They are referred to as “socio-legal” approaches out of linguistic convenience, but they actually involve all of the social, human and information sciences. 2 In the thesis that he wrote on this subject, Vincent Richard (2003, p. 10) points out that legal dictionaries and vocabularies help to perpetuate the confusion over the choice of terms. He notes that, in Vocabulaire capitant, “effectiveness” is not clearly distinguished from “efficacy” or “efficiency”, and has two definitions depending on whether it refers to a rule or a situation: “Effectiveness is first of all the nature of a rule of law which produces the intended effect or which is applied in practice. A second meaning refers to the nature of a situation which actually exists in reality. The term ‘effective’ therefore refers to something that ‘produces the desired effect’, something realized or accomplished, or to something that ‘corresponds to reality’. It changes meaning depending on the subject to which it is attached: rule or situation.” 3 On how to evaluate effectiveness, see, in particular, Rangeon (1989). 52

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Of all of the legal fields that best illustrate the gap between the formulation of a rule of law and its practical application in society, labour law is top of the list. Some authors even think that the ineffectiveness of its rules is a distinguishing feature of this field.4 The demand for the “social clause” over the last ten years, as a way of protecting economies from the competition that was leading some countries to ignore fundamental labour standards, appears to confirm that ineffectiveness is still a problem. Even the reactions in international legal and political circles to the International Labour Organization (ILO) 1998 Declaration on Fundamental Principles and Rights at Work and the concept of “decent work”, which promote the follow-up of sustainable normative policies and countries’ effective implementation of them, have to be seen in this light. These innovative instruments also confirm the technical peculiarities of labour law, which has always had conflicting objectives, leading to a constant need to find a balance between law and fact, including the balance between mandatory rules and private ordering through contract, individual and collective subjects, compliance with rules and demanding changes to them. In fact, while formal legal analysis tends to ignore any situations that are not covered by the provisions in question and classifies as ineffective the rules that society most ignores or best evades, in labour law account has to be taken of principles, techniques and practices that are constantly shaping the rules to the different needs of those subject to them. Th is sometimes means that the rules fail, although the situations created cannot be put down to their ineffectiveness.5 This can be inferred from the very name “labour law”: does it cover all human labour or only employment relationships? To judge from the literature, there is some uncertainty here – probably because people tend, for didactic reasons, to equate the concept of labour law to an academic discipline developed around a legal and institutional mechanism designed to govern relations between employers and 4 By way of illustration, the handbook by Rivero and Savatier (1978) states, under the title “General nature: Basic characteristics of labour law”, that “the fragmentation of labour law does not make it easy for those subject to it to understand it and makes it particularly difficult to monitor ... which is why we also find, in the margins of labour law, that spontaneous practices are being applied which reflect the needs of the moment; these escape legal analysis but may pave the way for future rules”. Deprez (1997) comments on this subject: “[Y]ou have to remember that the debate on the effectiveness or ineffectiveness of legal rules has now become commonplace, yet for a long time it was ignored by teachers and even scholars, among lawyers at least. Now that it has become a topic of theoretical research and sociological investigation, it has become part of the whole legal debate.” Deprez cites the main bibliographical references on the subject, dating back to Carbonnier (1958). 5 Ballester Pastor (2005), professor at the University of Valencia, notes: “[T]he first question raised by the issue of legal effectiveness in Spain undoubtedly concerns the relationship between the law and its environment. Social coverage forms concentric circles whose extent depends, in each case, on the size that the other circles reach: at the centre there is the traditional hard core of labour law; around that there is lowintensity labour law characterized by insecure and atypical employment relationships; the circle around that contains contractual relationships involving the provision of services, but which cannot be classified as work, and the area around all of them incorporates forms of service-provision which do not exist as far as the law is concerned (underground economy and work by illegal immigrants).” 53

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their workers. But if we try to verify this assertion by looking at the rules and institutions dealing with human labour, there are plenty of arguments to contradict it. If we start with international law, the economic and social rights proclaimed in the International Bill of Human Rights and the instruments governing the ILO (and many of those produced by it) relate to all workers, not only employees. National legislation and the remits of the institutions responsible for putting it into practice cover the same interests, even though the rules on employment relationships are the main focus. The ILO core Conventions make this point when they ban child labour and forced labour, and uphold equality and non-discrimination, or freedom of association and collective bargaining – subjects that concern all work relationships, not only those covered by a contract of employment.6 When it comes to the links between national law and international labour law, the failure of national legislation to comply with international labour standards could be a significant indicator of their ineffectiveness. On closer analysis, however, the fact that legislatures in the developing countries take little account of these standards may reflect their desire to ensure that their legislation is effective by incorporating only those supranational rules that have a chance of being adopted and respected by the social fabric for which they are intended. Ineffectiveness is closely linked to legal pluralism,7 how public authorities operate (see Auvergnon, 1996; Deprez, 1997), and dissident practices by various bodies in society, particularly where rules have been transferred and “transplanted”8 into a social and economic organization with a different structure (see Souhair, 1986; Filali Meknassi, 1989, 1990, 2006a; Tebbaa, 1990). In such situations, it is not unusual to find rules being rejected, evaded, ignored or changed in practice, particularly in the field of work relations. In the decolonized countries, labour law is modelled on, or “borrowed” from, the legislation of the former colonial power. It tends to be updated to suit the demands of the most highly qualified industrial wage-earners, although this is also encouraged by the trend towards international standard-setting seen in the international organizations and association agreements, or free-trade agreements. But it is very difficult for such labour law to govern economies made up of 6 The ILO nevertheless appears to feel that legal protection for workers should be broadened mainly by extending the rules applicable to employment relationships, usually in the sense of wage employment. This at least appears to be the implication of the ILO Employment Relationship Recommendation, 2006 (No. 198) (see also ILO, 2003d). 7 On this concept, see Le Roy (ed., 2003), in particular, the chapter by Younes (2003, p. 41), which says that “pluralism has also enabled me to understand an often neglected aspect of state law. In identifying a certain form of ineffectiveness, as well as the existence of areas of rule-making which it does not cover or with which it has had to compromise, pluralism paradoxically demonstrated that State law is significant in the way it is discussed and represented”. 8 On the concept of legal transplants, see Teklè (Chapter 1). 54

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both undertakings operating to international standards and a whole multitude of companies of different sizes which are often only viable because of their reliance on human exploitation. Work relationships in traditional activities or within the family, in particular, fall outside the legal categories that make labour legislation applicable, yet they often account for the majority of the working population. The ineffectiveness of labour law thus appears to stem from a legal pluralism that is fostered and maintained by labour market structures, and by current socio-cultural practices, which will be examined first. It will then be seen that this ineffectiveness can be diminished by reducing the decent work deficit, and harmonizing legal rules with the most widely shared social and cultural values.

2.2 The ineffectiveness of labour law as an expression of socio-legal pluralism Developing countries usually feature two forms of economic and social organization, existing side by side within the same spatial framework: one accommodating a dense population of poor people in a general state of chaos; the other comprising wellorganized production units and housing modelled on the industrialized countries. This contrast, which economists, sociologists, and town planners often describe as “dualism”, naturally extends to the legal forms adopted in the underlying social relations. It may be mirrored in the way in which institutions are organized, or else it may remain rather hazy if the legal system is unitary and if positive law is generally applied. It is therefore through a critical analysis of the existing rules and sociological observation that we can identify and examine the normative and institutional flexibility that such countries need to adopt if they are to be able to accommodate such different social relations and lifestyles within a single formal legal structure. But this approach will only help us to understand the more obvious expressions of a complex social evolution that affects, and is affected by, how behavioural rules are formulated and how they are applied in practice. Work-related legislation, in particular, is highly sensitive both to the respective situations of the parties concerned and to the economic interests of all those whom it affects. Its adoption inevitably reveals all of the surrounding socio-economic tensions, and it ultimately stands or falls on its effects in social practice. Legal scholarship pays little attention to these issues. It is based on formal legal analysis, both because that is what people expect and because of current research and teaching methods, and so it inevitably tends to focus on the rules governing the most advanced socio-economic relations and to ignore the legal 55

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situation of workers who fall outside this group, even though they may be in the majority.9 It thus looks at employment relationships that have most in common with international law and comparative law, often using the same conceptual and terminological approach found in these fields. The effect of this is to reduce the scope of labour law to formal wage employment relationships, even though these may be outnumbered by other socio-occupational relationships that do not easily fit in with this normative framework of reference. If we look at this legal pluralism, we can easily see the types of social exclusion that it causes and the socio-legal manifestations that these have, particularly rendering the rules in question ineffective.

2.2.1 One labour law, many labour law systems From the perspective of the scope of labour law, work relationships refer only to wage employment. From the social protection perspective, however, there are many other workers whose social integration would be sure to extend and increase respect for social rights. If we take both of these two imperatives together, we can identify, in essence, three very different levels of regulation: ● at the top, there is the reference system of laws that gives labour law its unitary image; ● at an intermediate level, there are a number of legal statutes that allow, or provide, for less strict levels of regulation; and ● below that, the other concurrent work relationships have no statutory protection, because the law and society do not regard them as the same as those covered by the ordinary system.

A reference or dominant system of laws Labour law is generally developed around a body of general law that is often codified. Even though it exists as a separate system of laws, derogating rules have also sprung up to take account of the particular working conditions in certain sectors, such as mining, the merchant navy and the civil service. There nevertheless remains a coherent scholarship in this field, thanks to general principles to which all special laws are subject and common provisions to which reference must be made wherever the legislature does not specifically provide otherwise.10 9 For an illustration of the situation in Morocco, see Filali Meknassi (1990). 10 The existence of a common body of laws and rules derogating from them is not peculiar to labour law, although it is very commonly found in this field. Goldin (2001) suggests a description that also applies in many other countries. 56

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This view has been so commonly held, both historically and institutionally, that people never looked beyond the supposed concordance between membership of the wage-earning classes and enjoyment of the benefits of labour legislation. In the past, therefore, legal analysis tended to focus on how labour law applies to an abstract worker, ignoring the fact that many workers are excluded because of their colour, gender or national origin. Even today, it still regards the main system of labour law as the sole reference point for workers’ rights and obligations, even though other provisions exist that could neutralize its effect. In the developing countries, in particular, it is not unusual for different systems of labour law to exist side by side. The main labour law around which institutional relationships are developed, and on which scholarship and organized social movements are based, relates only to some wage earners. The rest may be covered by less strict laws or may not be covered by any special rules at all, although this does not mean that their situation is not governed by law. Legal pluralism can then appear to be something that helps to prevent labour law from being ineffective and to promote its general application.11 In most countries in the South, labour law does not date back beyond the twentieth century and, in many decolonized countries, politicians only took it up after the Second World War. The colonial regimes that gave many of the developing countries their first labour regulations were entirely free to define the scope of these regulations according to the interests that they wanted to protect. They could, for example, make them applicable only to certain industries and prevent certain groups of workers, such as indigenous, unskilled or temporary workers, from benefiting from them. Labour law thus tended to apply mainly to the microsociety linked to the colonial power and its institutional apparatus, including through professional associations. It was also attached to a higher legal system that legitimized the choices made and encouraged their social acceptance. Once they had gained independence, public policy in these countries tended to carry on with the same legal structures. The recovery of political sovereignty inevitably meant that statutory protection was extended to indigenous workers. Labour law became very important, practically and politically, both for strengthening the new elites in their social positions and for mobilizing workers to drive forward the development that seemed to follow naturally from decolonization. This extension of the scope of labour law was hugely symbolic and was therefore difficult for people to criticize, if only to say that it was not effective. 11 For the different manifestations of “legal pluralism” in Latin America, southern Africa and South Asia, see the chapters by Bensusán (Chapter 4), Fenwick, Kalula and Landau (Chapter 5), and Sankaran (Chapter 6). 57

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The international context also contributed to this outcome. Firstly, the great strides made by the ILO after the Second World War and the social progress recorded in the advanced economies encouraged similar progress in standardsetting in the South. Secondly, the spread of human rights in the context of East–West competition bolstered the universal application of economic and social rights as most visibly expressed through labour law. More recently, globalization led, first of all, to deregulation following concerns about flexibility. Then the scale of offshoring resulting from the free movement of capital and economic competition, with its negative impact on working conditions, led to an opposite reaction, with demands for the social clause, eventually resulting in a sort of compromise on the need to respect fundamental rights. The whole of this process has strengthened the formal coherence of labour law, but as the recent introduction of international follow-up measures implicitly suggests, the protection that it promotes is only general. Where it tries to apply identical rules everywhere, without distinction, it tends to be adapted to the production and working conditions on the ground. Otherwise, in order to be effective it has to be adapted by having rules that alter its impact.

The multiplicity of statutes determining the legal situation of workers It is often the case that many workers in the developing world are excluded from the benefits of labour law and social security. Because other bodies of law cover them, however, we need to distinguish their situation from that of workers whose rights are simply ineffective. The most common form of this pluralism has historical roots, and results from the development of rules that are peculiar to industrial and commercial undertakings. Simply by existing, this law marginalizes wage employment relationships that do not entirely meet the relevant criteria, thereby revealing the existence of a parallel, earlier system of rules that may be based on ordinary contract law or customary law. As the state starts to make provision for the situation of these groups of workers, they may come to be covered by special regulations that mainly have the effect of confirming their exclusion from the general rules of labour law. But they can also give these workers individual and collective rights corresponding to their particular situations, or to the economic, social and political context at the time. Such rules have been developed in particular sectors, such as agriculture, craft trades and commerce. In colonial or protected territories, they have taken the form of legal pluralisms based on nationality or sector, with both approaches often relating to the same target populations. 58

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Statutory derogations that marginalize groups of workers from legal protection are another common example of legal pluralism.12 In its most usual form, this exclusion may apply to all undertakings with a small workforce or in a particular geographical location. It can encourage the proliferation of micro-businesses and the subsequent marginalization of large numbers of workers. A similar outcome is produced if the employment relationships in question are removed from the responsibility of the labour inspectors and the jurisdiction of the labour courts: having disputes handled by other authorities acts as an effective deterrent. It is also not unusual for novel applications of the law to be developed here, particularly those that are based on custom. Such derogations may also relate to particular areas of labour law, such as wages, occupational accidents, occupational health, and working time.13 Depending on the type of work in question and the structure of the labour market, even minor adjustments of this sort can sometimes lead to major changes in how the law is applied. One recent example of this legal pluralism is export processing zones (EPZs). EPZs are given extraterritorial status, are exempt from labour legislation, cannot be freely accessed by individuals or inspectors, and are covered by international agreements designed to benefit investors – all of which are aspects of a legal pluralism that the dogmatic approach to labour law usually ignores. If we take this further, we can see that defining the scope of social security can also have a similar effect. If the existing legislation in this field excludes some employees, it creates a certain insecurity in the legal situation of workers, which then has a knock-on effect on other labour standards and institutions. In all of these situations, behaviour that is not consistent with the reference legal model cannot be seen in terms of legal ineffectiveness, because that behaviour is still subject to the law in force. It is clear, however, that the proliferation of legal statuses undermines the political impact of the main social protection system and can lead to less favourable regulation. It also makes it common for workers to have no legal protection, particularly where some of the active population work in areas in which the law is not applied.

Unprotected employment relationships Labour law naturally has no role to play in non-wage work relations, but this often means the avoidance of other statutory obligations relating to social insurance or 12 An example of this approach is India: see Sankaran (Chapter 6). See also Bensusán (Chapter 4) for the situation in Latin America. 13 For concrete examples of this type of derogation in different regions, see Part II. 59

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workplace design, for example, and even general conditions governing the conduct of commercial or professional activities. The positioning of the employment relationship then becomes a fundamental legal and economic factor that has a direct influence on the level of statutory protection, its effectiveness and the future prospects for labour law. This situation has often been described, explained and justified by contrasting the “modern economy” with the “traditional economy”. This duality is a convenient way of explaining how, historically, labour law was transferred from its industrial roots and established in the exchange economy, but it still oversimplifies what is inevitably a more complicated situation in reality. In the past, it ignored the colonial relationships that had resulted in “modern law” not being applied to some (or all) workers because of their origin or nationality. Today, it conceals the high degree of interpenetration between professional and commercial activities, the unification of national law, and the problems generated for producers and for the overall operation of the economy. The most common examples of this form of exclusion are those that are legitimated by dominant socio-cultural values, those that are poorly integrated in the market economy, and those that are unprofitable. But the fact that they are socially accepted and tolerated tends to encourage practices that go beyond the traditional forms, thus increasing the risk that the effects of labour law will be neutralized still further.

Traditional forms of unprotected work The most common forms of unprotected work are based on the negation of the wage-earning relationship. The family provides the most appropriate “home” for these forms, but there are others, often based on tradition, which result from different types of personal tie. In employment statistics, people carrying out an unpaid economic activity under the authority of the head of household are classified as “family helpers” or similar. The classic example here is the farmer’s wife and children, who live with him and help with work on the farm, but such relationships are also increasingly being found in market activities. In occupations such as dressmaking, catering, bakery and confectionery, small-scale retail, and repairs, it is not unusual for the head of household to have permanent help from members of the immediate or extended family. The family relationship thus becomes packaged with the occasional or permanent provision of labour, concealing the real volume of work done for the head of the business and its economic value. As the work increases, the family circle may be extended to include cousins, parents-in-law, and their children and parents, with the business sometimes reaching the size of a small to medium-sized enterprise (SME). 60

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The home can also be the location of work relationships that, de jure or de facto, pass labour law by. In many countries, those working in a domestic setting are not subject to labour inspection or covered by labour law. The personal nature of the relationship between the worker and the family employing that worker means that they share a closeness and a daily life together, so that the worker is hardly perceived as an employee, thus helping to place the individual outside the law. Among the wealthy, the occupations involved here include caretaking, housekeeping, chauffeuring, gardening, childcare and help for the elderly, while among the middle classes and the poor, the work often has to do with the activities of the head of household or their family. Apprentices have also long been in this rather ambivalent position. Community work is another area in which professional activities can be carried out outside the framework of labour law. Here, because the workers are not personally providing labour for an employer they do not fulfil the legal requirements for a contract of employment, and labour law therefore does not cover their employment relationship. Historically, the purpose of community work and statute labour was often to provide a free service in the general interest of the group to which the workers in question belonged. The work could also take the form of group forced labour for the government and/or people in public authority. In many countries, the work is now of a social nature, combating poverty or reducing unemployment. In return for payment in cash or in kind, village communities or ad hoc associations engage people to carry out or maintain public works outside any specific employment framework. It is not unusual for anti-poverty programmes to encourage these sorts of project and employment relationship, even for work in which people have a shared private interest, including small-scale irrigation, transport and education. The requirement for legal subordination and the personal provision of labour is also not fulfilled where the work takes the form (even unlawfully) of a partnership. The status of farmers who are paid with part of the harvest has, for example, been classified as equivalent to a farm management contract in order to evade labour legislation. The same sort of thing has been done with share-fishermen, mineworkers, and even collectors of natural products, such as vegetable horse-hair, wood, seaweed or shellfish, for processing companies. In fact, as long as the official or formal labour market fails to provide most of the active population with work that gives them an income consistent with the standards laid down in labour legislation, it is difficult for the state and society to combat the sorts of traditional lifestyle, work and mutual assistance that enable those that are worst off to be productive, to be consumers, and to provide for their basic needs. But the proliferation of these sorts of activity and their legitimation inevitably means that they spill over into the economic areas that are covered by labour law, so that activities 61

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which are economically and legally difficult to classify as normalized14 wage employment become mixed up, within the same economic and occupational relationships, with activities that should be easy to classify but tend not to be. The general institutional and socio-cultural environment thus brings about the coexistence or interpenetration of “formal” and “informal” work – so much so that new activities that are legitimately remunerative can end up without protection.

Recent forms of unprotected work In order to avoid the requirements imposed by labour law, and, above all, to avoid the social and fiscal burden of taking on wage employees, businesses sometimes outsource some of their employment relationships, which may then take the form of commercial contracts, contracts for services or commissions. Ease of communication and more open markets encourage this trend both by offering innovative ways to collaborate and by making the work relationship more complicated through conflicts of laws. The improved social image of these “marketing people”, the attraction of good earnings and the prospect of avoiding social contributions and income tax are all factors that encourage some workers to choose this option. Commission payments are one of the most common forms here. In order to avoid giving workers the status of sales representatives,15 companies merely promise that, for every deal concluded, a payment will be made to the person who arranged it. Most activities make use of this option, including property deals, supply agreements, leasing, training courses, consumer credit and tourism. The effectiveness of the system relies on the image of the product or company, and on the applicants selected and the training that they are given. It is therefore not unusual for a company to encourage competition between applicants and to make them pay for training in-house or with associated undertakings before allowing them to do work for the company, which is then presented as self-employment. The company helps these workers to drum up clients by telephone, through the Internet, or through personal contact at dedicated locations, and provides them with advertising and meeting rooms, either free of charge or in return for payment. Everything is done to ensure that the criteria for a contract of employment

14 The use of the adjective “normalized” in the labour field identifies industrial-type relationships, as enshrined in current law. A normalized employment relationship thus means a relationship that, de jure and de facto, comes under labour law. The adjective is also used to mean formal activities that are subject to the current rules – particularly labour and social security legislation. 15 In much legislation, sales representatives have a special legal status that confirms their situation as employees and adapts the legal protection provided to their particular working conditions: little managerial control over how they work; free and direct contact with clients; pay by percentage; many different employers; no control over working hours; regular travel, etc. 62

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are not met and that an indeterminate number of people work for the company indefinitely, in return for only a percentage of the sales revenue. A more stable form of this sort of representation is found in formulae derived from “concession”, “franchise” and “representation” contracts. A company arranges with a partner to provide a commercial or service activity under its own label and conditions, from premises that the partner equips for that purpose. The activities involved may vary from catering to car servicing, telephone services, training, and so on. The partner is often totally dependent on the company economically and technically, but the arrangement is such that, because they have contractually stated that they are a trader or self-employed, the partner would find it difficult to be classified as anything else. The opportunities offered by teleworking in this respect seem to open up unlimited prospects for removing some workers from legal protection. The most basic form of work involved here is word processing and editing. Translation is also becoming a common example. Similarly, as a result of digital telephony, call centres now seem to be being downgraded in favour of anonymous workers who are paid piece rates and who compete with others around the world. By eliminating the need for a direct, personal relationship in providing a service and receiving payment, modern technologies are undoubtedly paving the way for further forms of exclusion.16 Although this is something that could happen anywhere in the world, there is no doubt that, in the developing countries, the main reason why workers have no legal protection is still because they are not adequately integrated into the dominant trade networks.

2.2.2 Inadequate integration into the dominant trade networks: The main source of legal ineffectiveness in the southern countries A worker’s condition is determined by the extent to which that worker has statutory protection by legal status and by integration in the dominant economy, in the sense of a structured market economy. This combination of legal and practical considerations produces certain types of relationship that are sure to comply with labour standards and others that never will. At first sight, whether workers have legal protection appears to be determined by one objective criterion: whether they are protected wage 16 Even in Europe, the problems of teleworking have, up to now, only been dealt with in professional agreements, as a continuation of a confirmed employee relationship (see de Beer, 2006). 63

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employees. But there is one other socio-economic and cultural criterion that is influential here, namely whether the employment relationship is in the formal economy. This distinction between formal and informal work is not necessarily relevant, however, when it comes to analysing the legal condition of workers, much less assessing the effectiveness of the rights formally given to them. What is more, the instability of the labour markets, caused by technological innovation and fiercer economic competition nationally and internationally, encourages both businesses and workers to resort to their own commercial solutions. This means that the social methods of dealing with workers’ needs that have commonly been used in industrial societies are increasingly being shunned, particularly when they are called into question in the industrialized countries themselves. Businesses and workers are turning away from institutional regulation more and more, because this allows them to opt for commercial solutions that appear to be more viable in an overall context of long-term legal insecurity.

A deceptive duality between normalized work and informal activities The duality identified in the 1970s between the “formal”, “structured” economy and the “informal”, “invisible”, “underground” or “marginal” economy is still extremely relevant today, and is forcing labour lawyers to move away from dogmatic legal analysis when considering the societies of developing countries and to look instead at how the law is applied in practice. But the terms “informal” and “unstructured” obviously relate to shifting behaviours and situations, rather than to fixed economic, spatial or social realities. Furthermore, whether or not rules of law can be applied depends both on the will of the parties concerned and on their overall socio-legal environment. The same company could, for example, have a structure that is totally legal, but resort to subcontracting, undeclared employment or fraudulent practices that stem directly from the informal economy. In addition, it could use either its regular staff or undeclared workers to carry out this unofficial work, in order to reduce the risk of being reported. On the other hand, it is not unusual for an employer to infringe labour regulations not only because that is what it wants to do, but also primarily because there are legal obstacles preventing it from being recognized as an employer. Far from any gap between formal and informal work, or between legal effectiveness and ineffectiveness, it appears that the work relationship is determined, first and foremost, by whether the labour market is unified or fragmented (“labour market” here being understood not as an officially regulated, institutional market governing supply and demand for wage employment, but as the economy’s ability to satisfy a constant demand for work for all workers). Labour law tends to deal with only one section of this market: normalized wage employment. At the very most, it may allow derogations from this in order to extend its 64

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coverage without undermining its fundamental rules. But beyond this normative flexibility, the further it departs from the central focus of labour law, the more the regulation of socio-professional relations also takes the form of ineffective rules and the negation of the employee’s status.

A coherent school of thought on labour law, but differences in the actual legal status of workers The impression of labour law as unitary and effective is strengthened by the fact that it is codified and that professional and political players use it as their main instrument of social reform, because the social and labour fields are so closely linked. The impression is also strengthened by the weight of history, so much so that labour law is used to define what constitutes the working class. The institutional unity provided by the various administrative, judicial and professional bodies maintains this image, and draws a veil over the fact that the condition of workers in law and in reality varies greatly as a result of all of the different sectoral regimes, professional statuses, company regulations, collective agreements and contracts of employment. Labour law cannot, however, have the same ideological force in non-industrial societies, primarily because they do not share the same economic and social history. Even if the political and trade union movements have produced a culture that is largely based on the same ideals and values, its impact has been restricted and undermined by the effects of global liberalism and the implosion of the socialist regimes. Without this discursive and disseminating force, labour law becomes confined to the workers and employers who fall directly within its scope. The first point to make is that these account for only a small proportion of the active population in most countries of the world. The second is that expanding labour law promotes the development of other legislation, which in turn helps to maintain the differences between the employees at whom it is directed. In states with a low level of industrialization, stable wage employment remains confined to the public sector and large, often multinational, companies. Even if the most efficient SMEs are relatively compliant with labour law, in order to retain the loyalty of their most skilled workers most workers are thrown back on insecure work or jobs governed by rules that do not provide the same legal protection. At a lower level, firms tend to produce uncompetitive products, which inevitably makes them less concerned about complying with the rules on employment, product and service quality, taxation and marketing. Foreign direct investment (FDI) places states and workers in direct competition with each other. There are then demands for labour law to be more flexible, and this is achieved by lowering standards and by increasing the number of derogations, both through regulation and through contract law. The result is that the 65

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levels of statutory protection given to workers and the contractual rules relating to them become segmented, making it more difficult for them to know their rights and giving legal pluralism in this area greater legitimacy.17 As this segmentation of statuses becomes more widespread, it becomes difficult to use any given yardstick to measure whether the legal protection of workers has been reduced or increased. We might consequently think that if the apparent unity of labour law is concealing the increasing erosion of workers’ actual conditions, then the ineffectiveness of labour law may simply be seen as an extension of the process of adapting rules of law to the actual situation of those involved.

Legal ineffectiveness: A spontaneous way of adapting rules to social situations Because labour standards are claimed to be a matter of public policy, it may seem paradoxical to argue that they are ineffective because their effects are adapted to social reality. But it is easy to see that labour law is allowing more and more derogations from its rules, in the form of administrative permission or by means of contract. It even appears to provide for infringement of its rules, by limiting the sanctions incurred by anyone refusing to comply with them. In the developing countries, as well as this easing of the normative pressure on contractual relations, there is always a gap between the labour rules and how they are implemented – something that is always seen in, but not confined to, low-income activities. In addition to legal statuses becoming stratified according to sector and company size, there also appears to be relativity in what applicable rules actually say. In structured firms with a large number of skilled workers, compliance with labour standards is the foundation for efficient organization and directors’ accountability to administrators, clients and partners. It is the price of corporate governance and corporate social responsibility. The risk of triggering disputes if these standards are infringed and the resulting market sanctions are also a deterrent against non-compliance. Channels of dialogue and negotiation mean that disputes can be tackled and resolved, or referred to the appropriate bodies. But where a firm is barely viable, staff are easy to come by and it is unlikely to be affected by market or legal sanctions, that firm may be tempted to flout the law – particularly if the practices that it intends to use are accepted in the general socio-cultural context. For example, the minimum wage requirement tends to be observed in large entreprises, the performance of which does not rely on exploiting the workforce and which have reasons to fear a collective reaction, administrative appeal or legal challenge, or simply an adverse effect on their market image. On 17 Regret has been expressed about this segmentation in connection with the French Labour Code (see de Virville 2004). 66

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the other hand, compliance with the minimum wage tends to be less common in companies that do not demand high levels of skills, and it disappears altogether in micro-entreprises, thus putting further pressure on competing formal companies. The workers’ behaviour is dictated by the same considerations. Even where they are perfectly aware of their rights and how to assert them, the workers’ first consideration, in a situation in which work is in very short supply, is to make sure that they have a job. The workers therefore accept the conditions offered and do their best to keep their positions for as long as necessary, by colluding with the employer if there is a risk of external sanction that could lead to job losses. The pressures of unemployment and competition force workers and employers to share risks, often unequally. It is only when viability improves and there are brighter market prospects that they seek to place their activity and respective relations on a firmer footing by establishing legal security, where this is necessary for economic security. This is why in the poorest countries there are not always clear or firm demarcations between domestic work, informal market activities and formal activities. While the formal sector accounts for most national income and enables some workers to pursue and develop competitive activities providing them with “modern” lifestyles, other workers (often the majority) work for SMEs or in fairly unproductive jobs, the instability and poor pay of which reflect their economic and legal insecurity. Although these firms can contribute to the formal sector – particularly by providing occasional undeclared services – they tend instead to be a major outlet for it and a conduit to the internal market. The ineffectiveness of labour law therefore inevitably varies, but in most southern countries, it forms the backcloth to the entire economic fabric, becoming increasingly visible if we look at the economic situation of the most disadvantaged social groups and areas. Access to social rights thus appears to depend on access to decent work. Where there is serious economic insecurity, the need to subsist overrides the need for legal security at work.18

Immediate market profit vs potential legal protection Job and income insecurity also prevent the development of lasting occupational solidarity. Because the rights associated with wage employment are ineffective, needs tend not to be collectivized and so tend not to be dealt with collectively either. This trend is growing much stronger in the current climate of globalization and is changing the scope of the social protection actually provided for workers. 18 The chapters by Bensusán (Chapter 4), Fenwick, Kalula and Landau (Chapter 5), and Sankaran (Chapter 6) show very well, in respect to different regional contexts, how the effectiveness of labour law is closely related to the socio-economic situation of the sectors or enterprises in which workers are inserted and to their own socio-economic conditions. 67

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Needs not collectivized or dealt with collectively In many developing countries, stable wage employment is the exception, while inactivity, unemployment, self-employment and unstable or temporary jobs are the rule. In this context, it is difficult for collective rights to be asserted effectively and the needs that all workers share cannot be expressed through common channels. Those needs can then only be satisfied by sectoral, fragmented solutions, which prevent the pooling of risks and the extension of the social foundations of solidarity. For example, the inadequate structures and poor organization of most businesses hamper the emergence of employers’ organizations, which are representative of the economic base and capable of taking sustainable social measures. Likewise, the small amount of stable wage employment and the few worker concentrations tend to prevent the development of a powerful trade union movement. It is also not unusual for the unions to owe their strength to the public authorities, which in return use them as a way of supervising the population for the government’s benefit. At the enterprise level, the low level of collective representation is accounted for by the size of the trade union movement and the predominance of SMEs. Where social dialogue bodies exist, their activities have little mobilizing effect for a number of reasons, ranging from questions about their legitimacy, to the fact that they have few means of taking action, as well as the obvious lack of a culture of collective consultation and action. For the vast majority of workers – particularly casual workers and workers in micro-entreprises – there are hardly any channels through which they can highlight shared concerns and take collective action to resolve them. Furthermore, competition in finding and keeping jobs tends to fuel mistrust of collective movements, while low income levels often prevent workers from making any material contribution to corporate-type collective projects. This situation inevitably impacts on the social institutions, which have been modelled on those of industrial societies. Mutual associations, welfare services and social insurance schemes find it extremely difficult to keep going and, particularly, to offer their services to all workers. The selective nature of the beneficiaries and the inadequate benefits provided then allow the financial institutions to question their effectiveness and to demand that they be given no more public aid. Globalization and neoliberalism particularly encourage such attitudes. Social protection called into question The bodies running welfare services and social institutions in many southern countries are inefficient and therefore undoubtedly deserve the criticisms levelled at them, particularly where they are financially shaky, and where the advantages that they enjoy discriminate against other, sometimes more needy, citizens. 68

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It is true that where the earned income on which social contributions are based is low or unstable, the pooling of risks does not always benefit the worst-off. It is not unusual for casual workers to be refused entitlement to an old-age pension because they have not completed the qualifying period when they reach the statutory retirement age, or to have their cover suspended during lengthy periods out of the active labour force, including those resulting from illness or unemployment; this perfectly illustrates the dilemmas facing the responsible collective bodies. Nevertheless, abolishing these public institutions and resorting to commercial processes to cover the services that they provided makes it more difficult for working communities to express their shared needs, and neutralizes traditional support for professional solidarity. There is also no guarantee that cover provided by means of market processes and funded from voluntary contributions is any more viable, given that the factors that tend to lead to reform – poor governance, low contribution capacity, irregular income, and so on – still exist. The ineffectiveness of labour law thus seems to express the limitations of trying to transfer to the developing countries a model for regulating professional and social relations that has been successful in the industrial countries because of the large number of wage earners, full employment and deep-seated socio-cultural changes in an overall historical context of steady economic growth. The coexistence within the same economic and social structures of a market economy operating to international standards, and of less competitive activities that nevertheless involve the majority of the active population, creates a legal and socio-legal pluralism that excludes the poorest people from social protection. The decent work deficit explains why the statutory protection provided is inadequate and ineffective, and why the social integration of workers is so poor.

2.3 The ineffectiveness of labour law: A symptom of the decent work deficit Although the relationship between the ineffectiveness of workers’ rights and the scarcity of decent work is clear, it has to be said that it is merely the expression in the employment field of a broader dislocation between social and economic organization and the law. Workers’ failure to exercise their rights may therefore be seen in terms both of the practical impact that this has – particularly in the employment field – and of the more general ineffectiveness of law in the developing countries. But work relations appear to be particularly exposed to this 69

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phenomenon, since they lie at the heart of the production system and in an open market economy are directly influenced by the outside world, particularly when it comes to regulation. Worker rights thus appear to be affected by two conflicting movements: one promoting their broadest possible recognition through reference to universal values; another restricting their exercise in practice, in order to keep up with increasingly dynamic economic competition that excludes the least productive. The ineffectiveness of social rights in the developing world tends to arbitrate between these two forces. Social rights can be made more effective if there is a simultaneous improvement in employment and employment conditions. Although this is achievable in the most efficient economies – especially those that have considerable investment capacity and the ability to be one step ahead of the international markets – it could clearly remain a pipedream for all those seen as losing out in international economic competition, thus deepening their poverty. Just as making economic and social rights more effective depends on decent work, so for many people decent work still depends on strengthening the social dimension of globalization.

2.3.1 The ineffectiveness of workers’ rights and poor overall effectiveness of law The definition of legal rules and their ability to govern work relations vary from one society to another.19 The importance attached to the law does not have the same moral and social value in those countries that have based their political system on the concept of the rule of law and those that are still aspiring to make formal law the basis for the relationship between citizens and the state. The gap between the southern countries’ formal support for fundamental rights and their inclusion in domestic legislation on the one hand and their guaranteed

19 See René David (1973). The basic differences identified between the legal systems are determined by the predominant methods of social organization and socio-cultural values. Their links with modernity can be fundamentally different. Multiculturalism offers some interesting keys here. Semprini (2000, p. 125) notes: “Viewed overall, the problems of multiculturalism all converge on the same issue: the radical challenging of modernity as a philosophical project. Modernists like to point out that such a challenge is only possible within modernity itself, which alone includes the possibility of being criticised among its values. Is modernity an unfinished project, as Habermas’ formula suggests? Can it change and adapt to a new historical order? Or is its role coming to an end? Ultimately it is not about ending or rescuing modernity in itself, but evaluating whether its categories can still encompass the changes that are happening in contemporary societies, explain the old and new problems they are going through and respond to social demands which are now different in type and expressed differently.” 70

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application in practice on the other, is the historical difference that separates the reference model constructed in the industrialized (now democratic) societies and the developing countries which are endeavouring to build their own experiences drawing on those same values.

The rule of law: A work in progress It is worth remembering that: … the concept of the rule of law appears primarily to be a constituent element of the liberal conception of political organization: since its power is limited because it is subject to rules, it means that governments are not above the law, but their work is framed and governed by it; the rule of law is therefore an idea of power that has been slowly forged over the years and has gradually permeated representative bodies and institutions. (Chevallier, 1994, p. 151)

Since the Second World War, the political and ideological ideas that it conveys have spread around the world, strengthening their claim to be universal. A rule of law based on human rights is becoming a means of legitimizing power and a label of democracy everywhere (see Filali Meknassi, 2006b). One look at a list of democratic states shows the gulf that exists between proclaiming the supremacy of law and the problems of putting this into practice. Even where such a proclamation is a genuine expression of political will, it tends to be resisted by communities still clinging to different values and by social or professional groups, the practices of which cannot be made to comply with the rules in question. Legality remains the goal, but its actual scope tends to be limited to relationships that are able to meet the requirements. So measures to promote labour rights are getting through to some circles, but as they become more widespread, they are inevitably helping to make the law more ineffective.

“Composite” societies in a legal environment in transition The legal and socio-legal pluralisms described earlier are never really limited to the field of work relations. Even if they are helped by the particular structure of the labour markets in the countries of the South, which appears to consolidate their individual causes, they often extend into other areas of social relationships and generally shape the legal and political system in place. This is a common situation in which a number of different production and consumption patterns exist side by side within the same economic and social 71

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model, giving it a composite nature.20 Legal pluralisms generally express the accumulation of layers of law over time, containing relics of lifestyles, values and regulations dating from before contemporary law. Their continuation may reflect the fact that the earlier structures have remained unaffected by the changes that have taken place, as is often seen in environments that have remained relatively closed to external influences (such as rural areas, homes and traditional activities), but it also reflects the deep historical roots of the earlier laws and the inability of formal legal reforms to oust them. This is the case particularly where these are applied from outside, using vehicles that have little hold on the populations in question. In addition to these causes, there are usually also more diff use obstacles linked to the internal consolidation of the legal system, its deep-seated interdependence on other rules of social conduct and its heavy dependence on political and social organization. Normative pluralisms, whether legal or non-legal in origin, express economic, social and cultural changes to which social groups are constantly reacting, thereby spontaneously taking ownership of the norms in question. We can therefore see that there may be a clear gap between the rules most firmly enshrined in current legislation and the most common forms of collective behaviour. This gap is rarely confined to particular social relations or areas, but we can identify the fields in which it is likely to occur by determining its main causes. In work relationships, for example, the predominance of SMEs and family businesses means that many company bosses have personal relationships with their workers, workers can be recruited from the same social environment, and best use can be made of family-based behaviours and forms of management. It is not unusual for the employer to exercise authority beyond the working environment and to deal with social issues that are not his or her responsibility. In this context, collective work relations are either non-existent or else come second to this principal relationship. Similarly, individual rights tend to be determined by what the boss wants and by personal request, rather than on the basis of legal rules and objective assessment. It then becomes exceptional for workers to demand their rights. In such situations, conciliation and mediation by family members are the most natural channels of appeal and it is only in desperation that workers resort to institutional conflict resolution procedures. These behaviours and their association with similar behaviours in other fields inevitably have a profound effect on the entire institutional and political 20 The concept of a “composite society” was put forward by Paul Pascon (1971, 1977) on the basis of an analysis of the development of Moroccan society before the colonial era and under the Protectorate. He also analysed the development of law and how it is applied in Morocco in the light of this, in cooperation with Bourdebala (Pascon and Bourdebala, 1970). 72

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framework, and thus on the areas in which the public authorities take action and how they do so. The job of the labour inspector, for example, may naturally evolve towards conciliation and settlement,21 while a local government officer might intervene in the operation of a company, particularly if there is an industrial dispute. The institutions representing the interests in question also change in line with these social and political relationships, thereby affecting the scope of the law. In formal terms, legality moves forward by extending “modern”22 law to relationships that were previously excluded. It also breaks new ground by incorporating vernacular rights, either including them in the current legislation or enshrining them in the form of exceptional or special rules. But its development tends to be fragmented both within the same branch of law, in that branch’s links with neighbouring branches, and within the institutional and legal system as a whole. Even if the supremacy of law is affirmed, the pluralisms through which it is expressed reduce its impact to the point that it becomes just another social value. Its unfamiliarity, technical nature and the academic work often involved in harmonizing its rules so that they can be applied contribute considerably to its marginalization. Vulnerable people are those most affected by these problems, which often impact on other aspects of their working, family and social lives. Their economic vulnerability makes it impossible for them to exercise their rights effectively.

Legality as a goal in work relations In the labour field, legal and socio-legal pluralisms are often indicators of legal insecurity, social inequality and economic discrimination. This is why they are accepted as a necessary evil in both domestic and international labour law, provided that they are based on objective considerations. They have always implicitly been regarded as transitional phenomena that would disappear with time, through the spread of “modern”, “universal” law. Before the developing world became a historical fact, the constituents of the ILO envisaged its mandate in a spirit of universal equality, stating in the Preamble to its 1919 Constitution that “the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries”. At the end of the Second World War, 21 Under the Moroccan and Tunisian Labour Codes, labour inspectors are responsible for conciliation in individual industrial disputes, including settlements: see the Tunisian Labour Code, art. 142, and the Moroccan Labour Code, art. 532. 22 The use of the term “modern” sometimes results from the law itself and the institutions that it creates. It is also used almost spontaneously to identify everything that comes from the North and classifies itself as such: the modern economy, modern industry, modern art, etc. 73

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however, experiences with the countries of Asia and Latin America that had joined the ILO over the previous two decades, and the prospect that other countries would become independent, meant that this view could not be sustained in a world battered by war, ravaged by poverty and at the mercy of East–West rivalry. As early as 1944, therefore, the ILO Declaration of Philadelphia stressed, among the principles on which the ILO’s mission was to be based, that: c) poverty anywhere constitutes a danger to prosperity everywhere; d) the war against want requires to be carried on with unrelenting vigour within each nation, and by continuous and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of governments, join with them in free discussion and democratic decision with a view to the promotion of the common welfare.23

It added, for the benefit of young states, that these principles were: … applicable to all peoples everywhere and that, while the manner of their application must be determined with due regard to the stage of social and economic development reached by each people, their progressive application to peoples who are still dependent, as well as to those who have already achieved self-government, is a matter of concern to the whole civilized world.

The right to social protection was thus recognized for all workers and all peoples. The rules enabling these rights to be enjoyed and exercised effectively could be adopted gradually, at a pace that suited each state, and with the help of the developed countries. The colonial empires interpreted this option by adopting special labour rules for their overseas territories, adapted to suit their economic, political and social situations. Subsequent developments have rarely made it possible to break away from these practices completely, with so many workers living in poverty. Th is is what the substance and practice of labour law in the countries of the South have inherited. Those responsible have to reconcile legitimate imperatives, such as preserving rights acquired by the most advanced workers, ensuring that the law complies with international standards, accepting forms of work that ensure the survival of the majority of disadvantaged workers, and making the country more attractive economically. 23 See the Declaration of Philadelphia, adopted on 10 May 1944 and annexed to the ILO Constitution. 74

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The efforts made to spread human rights and to promote political democratization and economic liberalization also serve to consolidate labour law as it strives to keep pace with international law. Other social movements, such as nongovernmental organizations (NGOs) for women’s rights, sustainable development, and child protection, are also helping with this consolidation. They often achieve spectacular results in terms of legislative and institutional reforms, but the actual implementation of these reforms tends to be rather less dramatic. The rule of law is advancing slowly, but surely, but labour rights – and, more specifically, fundamental rights – are still only being exercised on a limited scale. For workers at least, the gap between the recognition of their rights and the actual application of those rights in practice seems to be widening as compliance with international law and the drawing of inspiration from advanced models is happening more quickly than the pace of economic, cultural and political change in society.

The gap between the recognition of fundamental rights and their application in practice Fundamental principles and rights at work are an excellent way of observing the gap that exists between the formal recognition of universal standards and their application in practice in the countries of the South. Because of the importance that it has gained, the 1998 ILO Declaration on Fundamental Principles and Rights at Work and its follow-up seems to be a general admission of the overall ineffectiveness of economic, social and cultural rights, and the expression of a consensus to focus efforts on promoting only four of them. An examination of the way in which these standards have been transferred to the least developed countries explains why other similar values have met with resistance. Gender equality and child labour are good illustrations of these problems. Human rights and fundamental rights at work Ever since it was unanimously agreed that the civil, political, economic, social, and cultural dimensions of human rights are indissociable, it has been virtually impossible to establish any sort of hierarchy between these values, so that their interdependence has to be taken into account when interpreting them. In this sense, they are all fundamental. Because the ILO’s work is all in this field, we should, perhaps, think twice about following the conventional thematic classification of the collection of Conventions and Recommendations published by the ILO, which for many years classified only standards on equality under the heading 75

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“human rights” 24  – particularly since the two United Nations (UN) Covenants of 1966 25 specifically talk about rights referred to in the ILO Constitution and the Conventions then in force, including rights at work, social security, working time restrictions and safety. There is the same risk of confusion with the Declaration on Fundamental Principles and Rights at Work and its follow-up, which the ILO adopted in 1998. The document’s authors undoubtedly intended to achieve a consensus on essential principles and values in work relations with which all states would be responsible for ensuring compliance. Calling them “fundamental rights” would therefore seem to refer to the fact that they are essential or basic, and certainly does not give them any priority or supremacy over the other economic and social rights set out in the International Bill of Human Rights to which the Declaration refers.26 The 1998 Declaration does ultimately select, nevertheless, from the economic and social rights and the founding principles set out in the ILO Constitution, four values that should, it suggests, be universally respected and promoted, and compulsorily followed up. It also considers that the member States are committed to respect these rights in accordance with the relevant Conventions even if they have not ratified them, because they correspond to human rights and are specifically mentioned in the ILO Constitution. But this argument could also obviously be made for all of the other human rights and constitutional principles, especially when we consider the particular importance that the 1944 Declaration of Philadelphia gave to combating poverty, to full employment and to development cooperation.27 The explanation has more to do with political arguments than standard-setting. The solemn nature of the 1998 Declaration and the legal wording used were certainly intended, in one way or another, to: ● put an end, once and for all, to the “social clause” episode and the question of whether the World Trade Organization (WTO) was competent to deal with social issues; ● affirm that the ILO was capable of mobilizing effective forces and methods to ensure compliance with the social rules; ● set social policy priorities in line with the most widely shared values against a background of liberal globalization and the implosion of the Eastern bloc. 24 The most recent classification was agreed in 2002 (see ILO, 2002b). 25 The International Covenant on Civil and Political Rights (ICCPR), and the International Covenant on Economic, Social and Cultural Rights (ICESCR), GA Res. 2200A (XXI). 26 On “the ambivalent reference to fundamental rights” in Africa, see Auvergnon (1999). 27 To understand the underlying approach here, it is interesting to read Maupain (2005) and also Kellerson (1998). 76

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The turning point will probably be a milestone both institutionally and politically. But neither the innovative approach, nor its links with human rights – much less its reliance on Conventions that have not been ratified by the countries concerned – are likely to make any fundamental difference to the impact of the corresponding standards in the developing countries, where there is strong economic and socio-cultural resistance to them. This is particularly true of gender equality and child labour. Gender equality and child protection are perfect examples of areas in which the international community has made great efforts to recognize universal standards, and to encourage countries to incorporate them into their domestic legislation and to apply them in practice. The ILO’s work in this field, albeit rooted in earlier Recommendations and Conventions, has undoubtedly been facilitated, supported and disseminated by the human rights movement, and particularly by the Declarations and Conventions on eliminating any form of discrimination against women and on the rights of the child.

Gender equality The issue of equality at work refers historically and legally to all forms of discrimination on the grounds of sex, colour, race, religion, and origin.28 It is one of the most widely shared values and one of the most firmly rooted in international law. Yet despite everything, it remains a serious issue that comes up time and time again, both within individual countries and in international relations. Emigration problems clearly reflect this. Equality for women has, however, become something of a special case, first of all through the UN International Bill of Human Rights, because both the 1948 Universal Declaration of Human Rights 29 and the International Covenants on Civil and Political Rights (ICCPR) and on Economic, Social and Cultural Rights (ICESCR) specifically call on states “to ensure the equal right of men and women to the enjoyment of all civil and political rights”,30 as well as “of all economic, social and cultural rights”31 granted to them. Other provisions refer to equality for women in connection with working conditions of work and remuneration,32 and aim to remove obstacles that might prevent equality.33 Above all, however, exceptional efforts have been made to promote this principle in practice, with a 28 29 30 31 32 33

See UN Universal Declaration of Human Rights (UDHR), Arts 2, 16, and 25. See UDHR, Arts 7, 10, 12, 17, 18, and 21–23. See ICCPR, Art. 3. See ICESCR, Art. 3. See ICESCR, Art. 7. See, in particular, ICESCR, Art. 10. 77

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“Decade for Women”, and subsequent ongoing monitoring in this field both institutionally and in civil society. In legal terms, the new situation of female workers is the outcome of a long process of development that has occurred in the industrialized countries. It is reflected in women’s personal status and the status of the family, and in their involvement in politics and in working life. Even at the start of the last century, most legislation in Europe required the husband’s agreement before the wife could conclude a contract of employment, and it was not until 1964 that French women no longer needed their husband’s permission to bring legal proceedings before a court. The ILO Conventions demonstrate the slow pace of this development. In the first half of the twentieth century, the ILO standards in this field mainly dealt with maternity protection (unless we accept that the ban on night work was also used to overcome social resistance to women having access to paid employment). After the Second World War, female employment in Europe was boosted by demographic considerations and the need for reconstruction, making women workers an established fact in most countries and paving the way for other socio-cultural changes. At the same time as the tight hold on women was being loosened, labour law was also gradually being improved: first demanding equal pay for women, then fighting discrimination as regards employment and occupation, and finally combating more subtle forms of discrimination found in the gender distribution of work. International law thus supported and consolidated a shared cultural, social and economic evolution in most of the industrialized countries, allowing women, step by step, to regain power over their own bodies, their reproduction, their work and their property, so that they could be equal to men and share family responsibilities with them.34 In the southern countries, developments in this field have been very patchy, depending on how soon the country opened up to international trade, whether people belong to the same cultural or religious community, the level of general education and the degree of industrialization. The difference in development is noticeable between countries, but also within societies. Among the wealthy ruling classes, women have had access to education and work, and this has often given them a more important position in society, making it possible to introduce the legislation needed. Changes have happened at a much quicker pace than in the 34 The ILO Equal Remuneration Convention, 1951 (No. 100), the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), the Workers with Family Responsibilities Convention, 1981 (No. 156), and the corresponding Recommendations Nos 90 (1951), 111 (1958), and 165 (1981), mark the main stages in this development. 78

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North, and seem to have been encouraged by the northern socio-cultural model and by the international rules of law enshrining it. Among the disadvantaged classes, however, the changes have been less deep-seated. As long as women remain economically dependent on their parents and husbands, and cultural values, often weighed down with religious dogma, oppose the developments seen elsewhere, their status at work and in society will not change much. Within the same social group, you will find the most extreme examples of female liberation and the most backward-looking forms of total submission. The law can favour the path of progress or conservatism, depending on the political context and how activist the elites are. But its achievements are fragile and, above all, its ineffectiveness cancels out its benefits among those groups that are the least integrated in the global economy and culture. Dramatic institutional and legislative measures have been taken to promote gender equality, but improvements in the segregation by work and pay still seem to be lagging behind. What is more, requirements in terms of normative protection are becoming contradictory. The ruling classes may be calling for all discriminatory measures to be eliminated – even those that are protective, such as the ban on night work – but for women in poverty, who are forced to make their own way to work and have family responsibilities to deal with, this sort of liberalization could actually restrict their access to employment. Likewise, many special measures taken to protect female workers and subsequently to adapt premises appear inappropriate when account is taken of social and urban organization. Obviously, the law can help to speed up social change, but as social rules, its provisions cannot have the required effect unless they are in harmony with the other dominant values in society and they form part of a social dynamic. The law can act as a lever to advance gender equality at work. It can even be argued that the progress made can promote wider developments in other spheres of activity, particularly within the family and the immediate environment. In “composite” societies, however, these reforms can have a very clear impact in the higher echelons of society, but no impact at all – or even a negative one – among broad swathes of the population. The impact appears to depend on other economic, social and cultural changes that, if taken into account in advance, are likely to bring the rules more closely into line with reality and make them more effective. This is why one-off, across-the-board solutions that meet the need for equality before the law often appear inadequate when faced with the complexity of real-life situations and the needs of the different social groups. Promotional measures, on the other hand, can prove a more appropriate way of helping to bring about the desired changes, as we can see even more clearly in the field of child labour. 79

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Child labour: From protecting children to banning their work The historical development of the legal status of children at work clearly shows how industrial societies have moved from managing child labour to banning it, in parallel with the provision of universal compulsory education and the introduction of institutional mechanisms allowing children to be taken away from inadequate parents. The internationalization of the standards on which these developments have been based unquestionably reflects the universal nature of the values they enshrine. But their transplantation into national legislation has in some ways been ineffective, because of the inadequacy of the public system for looking after the needs of the most disadvantaged. In Europe, limiting the working day for children was one of the first measures adopted in the new field of labour law. Other early measures to protect children mainly related to their health and growth. Gradual improvements in these standards had much to do with the requirements of the armed forces, which criticized the physical condition of the young men called up, and with the need to provide more widespread access to education and training in line with industrial progress and with improvements in families’ standards of living. More recently, social security and welfare systems have helped to provide better financial and social coverage of children’s needs, making it possible to apply the ban on child labour for the youngest children more effectively and to penalize infringements to which parents might be party.35 Prohibiting child labour was set as a goal in the ILO Minimum Age Convention, 1973 (No. 138), which states that “each Member for which this Convention is in force undertakes to pursue a national policy designed to ensure 35 The ILO Conventions reflect this trend. ILO Minimum Age (Industry) Convention, 1919 (No. 5) sets the minimum age for working in industry at 14 years. The Minimum Age (Agriculture) Convention, 1921 (No. 10) brings the agricultural sector into line with this, with the requirement that children must be able to attend school as normal. The next measures relate to the maritime sector, with the minimum age for trimmers and stokers increased to 18 under the Minimum Age (Trimmers and Stokers) Convention, 1921 (No. 15) and a medical fitness certificate required for seamen aged under 18. In 1936, the Hours of Work and Manning (Sea) Convention, 1936 (No. 57) increased the minimum age for seamen to 15. In 1937, under the Minimum Age (Sea) Convention (Revised), 1937 (No. 59), the age limit was also increased to 15 in industry and in other activities not covered by other Conventions under the Minimum Age (Non- Industrial Employment) Convention, 1937 (No. 60). It had previously been governed by the Old-Age Insurance (Industry, etc.) Convention, 1933 (No. 35), which set an age limit of 14 for non-industrial work and 12 for light work. After the Second World War, the main standards adopted were on the medical examination of young people up to the age of 18 and night work (Medical Examination of Young Persons (Industry) Convention, 1946 (No. 77); Medical Examination of Young Persons (Non-Industrial Occupations) Convention, 1946 (No. 78); and Night Work of Young Persons (Non-Industrial Occupations) Convention, 1946 (No. 79)). In 1965, the minimum age for underground work was increased to 16 for young boys (Minimum Age (Underground Work) Convention, 1965 (No. 123)); underground work for women, regardless of age, had already been covered since 1935 (Underground Work (Women) Convention, 1935 (No. 45)). A medical examination was also required up to the age of 21 (Medical Examination of Young Persons (Underground Work) Convention, 1965 (No. 124)). 80

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the effective abolition of child labour and to raise progressively the minimum age for admission to employment or work to a level consistent with the fullest physical and mental development of young persons”. More recently, the Worst Forms of Child Labour Convention, 1999 (No. 182) seems to acknowledge that previous Conventions have had little impact in many developing countries and seeks to target the worst forms of child labour still found, in particular child trafficking, and the economic and sexual exploitation of children. Human rights instruments also kept pace with these developments. The Geneva Declaration of the Rights of the Child, adopted by the League of Nations as early as 1924, prohibited the slavery, trafficking and prostitution of minors. The UN Universal Declaration of Human Rights of 1948 recognized children’s right to protection, and special care and assistance, and their right to compulsory free education (at least at an elementary level). The ICESCR refers to the family as the fundamental group unit of society and calls for it to be given the widest possible assistance. In addition to rules on maternity protection, the Covenant recommends that “special measures [of protection and assistance] should be taken on behalf of all children and young persons without any discrimination”, and that they should be protected from economic and social exploitation. In particular, it calls on states to make their employment in work that is harmful to their health or likely to hamper their normal development punishable by law, which means setting “age limits below which the paid employment of child labour should be prohibited”.36 Other provisions deal with children’s health, the provision of compulsory free primary education, and making technical and vocational secondary education generally available through the progressive introduction of free education. The International Year of the Child in 1979 led to a draft international Convention that was adopted unanimously ten years later and immediately signed up to by an unprecedented number of countries. The UN International Convention on the Rights of the Child (UNCRC) raises the age of childhood to 18, unless the law applicable to the child provides otherwise, and highlights the ideas that the best interests of the child should come first and that they have a right to live in dignity; it also refers to the child’s right to be protected from economic exploitation.37 It requires states to take the measures necessary to prevent children from performing any work that is likely to interfere with their education, or to be harmful to their health or physical, mental, spiritual, moral or social development. These human rights instruments thus take an integrated approach to the situation of children, recommending that their best interests should come first 36 See ICESCR, Art. 10(3). 37 See Art. 32 of the UN International Convention on the Rights of the Child (UNCRC). 81

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and that special assistance should be provided to enable them to develop in dignity within the family and in society. Measures to achieve this include free compulsory education, health protection, and a ban on economic exploitation. In the field of wage employment in particular, age limits must be set and infringements must be punishable by law. In the international labour code, on the other hand, standards are set in a whole range of Conventions spread out over time and different sectors of activity. The most recent of these (Convention No. 138) has the broadest scope, but particularly targets forms of exploitation that have been banned for almost a century. It sets the minimum age limit for work at 15, unless compulsory education continues beyond that age, but it also introduces considerable flexibility, by allowing: ● an age limit of 14 in countries in which the education system or institutions make an age limit of 15 impossible; ● the age limit to be increased to 18 for hazardous activities; ● the age limit to be waived for limited categories of employment or work in respect of which special and substantial problems of application arise; ● member States, the economy and administrative facilities of which are insufficiently developed, initially to limit the scope of application of the Convention. The most demanding requirements for countries ratifying the Convention concern the adoption of a full set of statutory rules to implement the principles that it contains and the derogations surrounding them.38 They also relate to how the ILO monitors developments in this policy area. The aim of this process, according to the Recitals of the Convention, is to “gradually replace the existing [instruments] applicable to limited economic sectors, with a view to achieving the total abolition of child labour”. The 1998 Declaration promotes the ratification of Conventions Nos 138 and 182, and thus encourages the introduction of standards to bolster similar efforts by the United Nations Children’s Fund (UNICEF) in the UNCRC, the United Nations Educational, Scientific and Cultural Organization (UNESCO) in promoting education, and other UN bodies and programmes, such as the United Nations Population Fund (UNFPA) and the United Nations Development Programme (UNDP). It is mainly in the fields of labour legislation and criminal law that the reforms launched through these instruments have been most effective in prohibiting heavy 38 For an example in Africa, see Sidibé (1999). 82

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work for those aged under 18 and in fi xing a minimum working age at 15. In relationships not covered by labour legislation, however, there are not usually any special rules governing the situation of children carrying out economic activities, which therefore tends to remain an unrestricted field. In some cases, this freedom applies to paid employment in traditional businesses and employment, in the form of apprenticeships. More generally, it is in family businesses and activities that child labour is still most commonly found. Where a child in poverty does not have the means to be independent, or where they are the eldest in a family that regards them as the breadwinner, the child is forced to perform menial income-generating work that exposes them to forms of abuse that are prohibited under Convention No. 182. This is something that can be seen in most cities in the developing world, including among street hawkers, shoe-shine boys, and beggars. There is no doubt that banning child labour below the age of 15 encourages the displacement of some child workers from activities covered by labour legislation to others that are either not covered at all, or which are covered only partially. The largest number of children and the hardest working conditions are found in agriculture, traditional craft trades, small-scale commerce and work within the family. Among the poor, labour standards seem to have the effect not of eradicating child labour, but of making it less visible. The fact that children are not protected efficiently against economic exploitation can also be seen from the legal pluralism and normative ineffectiveness found in this field. In large industrial and commercial businesses, and in viable SMEs that are linked to the international markets, the ban on child labour tends to be observed even without reliance on the law, because of the technical organizational requirements of the work, the skills needed and the level of productivity demanded. It tends to be observed less in SMEs, the survival of which depends on low labour costs; this is the case in particular where there is large-scale poverty and inadequate education. So it is not unusual for parents who have no money, and no prospects of fi nding training or employment for their children, to be forced to put those children to work in the hope that they will be trained “on-the-job”, while at the same time contributing to the household’s meagre income. Even though all societies disapprove of child labour, life’s demands force the most vulnerable populations to accept certain forms of it. Given that they are excluded from protected work and exposed to every risk if they work on the streets, working within the family, or in people’s homes and micro-undertakings, is the best option for children in poverty. This is a phenomenon that is spreading beyond these marginal situations. 83

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The regulation of child labour is thus limited, de jure and de facto, by poverty and the lack of assistance, and it can only be promoted really effectively if it is backed by an improvement in the living conditions of poor families. It is, in a manner of speaking, closely linked to the state of the world, which allows such a wide gap between what people want and what they actually have.

2.3.2 A fair globalization: A factor in promoting decent work and effective rights As the ILO report on decent work points out: … policies of economic liberalization have altered the relationship between the State, labour and business. Economic outcomes are now influenced more by market forces than by mediation through social actors, legal norms or State intervention. International capital markets have moved out of alignment with national labour markets, creating asymmetrical risks and benefits for capital and labour. There is a feeling that the ‘real’ economy and the financial systems have lost touch with each other. (ILO, 1999, p. 1)

The global economy is freeing itself from legal constraints, but this has not stopped workers from falling into poverty and increasing unemployment around the world.39 In the countries of the South, measures to promote investment that are justified by the lack of jobs sometimes lead to poorer statutory working conditions and the dismantling of established forms of social protection. The result is usually selective forms of protection focusing on the areas and needs of international trade. For economic and social rights to be truly universal in nature, as they are proclaimed to be, all workers must be given access to decent work. The effectiveness of labour rights thus appears to be largely dependent on a fair globalization.

39 This trend is confirmed by statistics from the ILO, which show that global unemployment increased from 161.4 million in 1996 to 185.2 in 2001, then to 188.9 (2003), 192.7 (2004), 194.7 (2005), and 195.2 million (2006) (ILO, 2007b, p. 11). The recent financial and economic crisis has aggravated this situation further, such that unemployment projections have suggested that up to 239 million people might be unemployed worldwide in 2009. Moreover, updated projections of working poverty across the world predicted 200 million workers would be at risk of joining those living on less that USD 2 per day between 2007 and 2009 (ILO, 2009b). 84

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Selective protection that meets the needs of international trade The huge economic and social changes that have taken place over the last 30 years can be put down to two related factors: technological progress on a scale that suggested that work was now a disappearing value (Méda, 1995, 2001; Rifkin, 1997); and the liberalization of the markets, which has enabled them to be exploited on a global scale, both economically and financially. The labour markets, which used to be mainly structured around the national economies and the political regulations that these allowed, were now exposed to the new constraints of a non-material economy and the free movement of capital, forcing states, as well as manufacturing firms, to adopt a passive (or even facilitating) attitude towards investors, particularly the multinationals. This has called into question the content, methods and scope of labour law. Its implementation increasingly relies on local measures allowing real-time adaptations to the problems faced by businesses, but at the same time its concepts and rules need to be able to adopt the perspective of the major economic operators, and, more specifically, the global economy. The resulting clash seems to be resolved by replacing a prescriptive system of laws with incentive-based law, which is more in tune with the economic and political relationships that are actually developing in an open market and a unipolar international political order. “Promotional” law The origins of this trend towards incentive-based law go back more than 20 years, and are closely linked to the growing power of the multinationals and the widening scope of that power. Both states and workers’ organizations – particularly in Europe – realized that the labour market regulation mechanisms that had previous operated on a geographical and individual company basis were being increasingly overwhelmed by an international financial power over which they had no control. In addition, the public was more aware of environmental issues and no longer accepted that these financial interests, in their rush for profit, should cause irreparable harm to the planet and impoverish whole communities. Both the stock markets and civil society advocated the adoption of measures to regulate the activities of the multinationals. In the end, these measures took a form that was best suited to the supranational and commercial nature of the companies involved: voluntary codes of conduct, which both promoted them commercially and encouraged self-regulation, notably in areas in which they had been most heavily criticized, such as human rights, the environment and governance.40

40 See, on this subject, Auvergnon (2005). 85

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Corporate social responsibility, designed and tested by the multinationals, was then able to find its way into non-binding international instruments such as the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy,41 the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises,42 and the UN Global Compact.43 Even where these instruments set up complaint, monitoring and evaluation mechanisms, they are more akin to management performance indicators than genuine channels of appeal through which businesses can be forced to alter their behaviour and compensate for any harm done. The whole process is clearly better suited to complaints and mediation than to legal action and sanction. The weakness of its legal content would seem to militate against substituting this promotional law for the labour law rules, even though the progress that it has made might suggest that that is what is happening. Does the ILO’s 1998 Declaration, which also provides for promotional follow-up, have anything in common with this method? The first basic problem with this comparison is that the target group is states, rather than businesses. The measures that the Declaration advocates are also based on international standards. The use of a promotional follow-up does not undermine the ratification of the corresponding Conventions, but is mainly designed to improve the conditions in which they are implemented. Nevertheless, this new practice seems to take on board the limitations of the international regulation of working conditions in the context of globalization and uses alternative procedures of selective, or “à la carte”, regulation.

“A la carte” normalization Association and free-trade agreements often contain provisions on respecting fundamental rights, the harmonization of legislation, and social protection.44 They are thus a statement of intent to pursue bilateral, regional or multilateral cooperation with a view to harmonizing law in the social field. Where they are concluded between advanced countries and developing countries, however, such cooperation,

41 Adopted by the ILO Governing Body in 1977 and revised in 2000. 42 Adopted in 1976 and revised in 2000. 43 An initiative of the UN Secretary-General, presented to the World Economic Forum in Davos in 1999, to promote nine universal principles, to which a tenth was added on combating corruption: see http:// www.unglobalcompact.org 44 Th is is true of the agreements between the European Union and the southern Mediterranean countries: see, in particular, the EU–Morocco Association Agreement 1996 (in force 2000), OJ L 70/2, Art. 52. 86

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largely based on assistance, tends to produce legal reforms which do not necessarily take international law as a reference, which are not reciprocal and which mainly cover areas that the strongest party has identified as obstacles to the development of bilateral trade. Economic and social rights are not necessarily better recognized, nor more effective, as a result. Some agreements include bilateral mechanisms for resolving disputes arising from failure to comply with conditions of employment. These are usually procedures in which the only issues that can be raised are those affecting trade between the parties, and the solutions found draw on both labour standards and commercial procedures. This appears to confirm the idea that regulation is selective.45 Of course, it is nothing new for labour standards to play a part in the regulation of economic exchanges. The industrialized countries, where these standards represent social progress, are keen to ensure that their competitors comply with them too. But attempts to persuade the southern countries to do so are hamstrung by their political organization and poor standards of living. The scope for transferring standards is limited at every level to the most advanced employment relationships, particularly those involved in international trade. This relative ineffectiveness undermines the claim that the standards apply to all employment relationships. Institutional efforts are thus specifically targeted at those relationships that are most exposed to the reactions of foreign partners and, particularly, those conducive to foreign trade. Trade negotiations and bilateral agreements are used for the same purpose, as are international standards. Firms contribute to these efforts when they place orders, in the way that they select their partners and subject them to their own private monitoring systems, using commercial standards and certification. These policies and practices reflect the desire to stop the erosion of labour rights at an international level, but the techniques that they use are not much different from the social clause so fiercely disparaged by the southern countries, and ultimately define areas of social protection primarily according to economic interest. Above all, they are unlikely to promote the access of the most vulnerable workers to labour rights. They are the most pronounced legal and political expression of the decent work deficit in a globalization that generates and perpetuates inequality.

45 The free-trade agreements between the European Union and Morocco, and between the United States and Canada or Morocco, illustrate this practice. For the example of Morocco, see CMEJ (1997). For the example of Canada, see Verge (2006) – particularly the paragraph on the content of the United States’ multinational labour agreements (see also Verge, 2004). 87

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A fair globalization: The sine qua non for workers to exercise their fundamental rights effectively The reports Decent work by the ILO Director-General (ILO, 1999) and A fair globalization: Creating opportunities for all by the World Commission on the Social Dimension of Globalization 46 (WCSDG, 2004) both stress, each in relation to its own objectives and themes, that the social situation of the majority of workers around the world is unacceptable, and that work needs to be done to ensure that the economic prosperity generated by our present productive potential is used to help human development. The WCSDG report states that: The current process of globalization is generating unbalanced outcomes, both between and within countries. Wealth is being created, but too many countries and people are not sharing in its benefits. They also have little or no voice in shaping the process. Seen through the eyes of the vast majority of women and men, globalization has not met their simple and legitimate aspirations for decent jobs and a better future for their children. Many of them live in the limbo of the informal economy without formal rights and in a swathe of poor countries that subsist precariously on the margins of the global economy … (WCSDG, 2004, p. ix)

Hence the need for a stronger social dimension to globalization based on “universally shared values, and respect for human rights and individual dignity”, in order to achieve a globalization that is “fair, inclusive, democratically governed and provides opportunities and tangible benefits for all countries and people” (ibid.). To that end, the report suggests that measures should be taken in the following fields in an integrated manner: ● individual rights and rights of local communities; ● a democratic and effective state; ● sustainable development; ● productive and equitable markets; ● fair rules for the global economy; ● globalization with solidarity; ● greater accountability to people; ● deeper partnerships; and ● an effective United Nations. 46 The Commission was co-chaired by Tarja Halonen and Benjamin William Mkapa. 88

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It thus stresses the need to build a social and political organization that shows solidarity with the most disadvantaged, and which is sustainable and respects human dignity. Similar concerns are expressed in connection with decent work. In his report on the subject, the ILO Director-General says that the primary goal of his organization today “is to promote opportunities for women and men to obtain decent and productive work, in conditions of freedom, equity, security and human dignity”. To that end, the ILO must be concerned with “all workers” – particularly the selfemployed and wage workers beyond the formal labour market – in order to promote conditions of work that are appropriate for their situation and productive employment: “The goal is not just the creation of jobs, but the creation of jobs of acceptable quality … . The need today is to devise social and economic systems which ensure basic security and employment while remaining capable of adaptation to rapidly changing circumstances in a highly competitive global market” (ILO, 1999, p. 4). The key idea on which the two reports agree is that if workers are to enjoy their fundamental rights and exercise them effectively, they must have access to decent work, which will not be possible for most workers without a stronger social dimension to globalization.

Extending social protection: A means of accessing decent work In most of the southern countries, social protection, like international labour standards, is restricted to wage employment, even though most workers are selfemployed (traders, craftsmen, farmers and suppliers of various services). Social protection comes hand in hand with administrative checks and business and income taxes, so “self-employment” tends to be more attractive to workers while at the same time placing them outside the scope of social protection. Transport, small-scale commercial production, minor services, traditional crafts, sewing, the retail trade, private teaching, construction and many other professional activities generate decent incomes for some workers, but they remain marginalized as far as social protection is concerned. This situation also discourages organization, structured collective relations and social dialogue within these occupations. Extending the existing legislation to cover these occupations concerns social security, which is often focused solely on employees and the formal labour market. In practice, there is no reason why these workers should not be covered by the rules on workplace organization, occupational safety and health, occupational accidents, and rest periods. The issue here is not about extending labour law to workers who are happy to be self-employed or traders, but to come up with an attractive system that both gives them economic security and allows them to 89

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bring their situation into line with that of other companies paying social contributions for their employees. If we look closely at the situation of self-employed workers, we can see that it does in some ways give them an unfair advantage over businesses using employees. One-person businesses are often exempt from requirements to do with working time, workplace organization and even social insurance, for example. At the same time, however, this freedom can work against the self-employed worker or their consumer clients, because the work involves, and the worker is exposed to, a higher level of risk. On the one hand, simply extending the rules of labour law, which are basically designed to limit the employer’s powers over its employees and its liability for the risks that it forces them to face, may be inappropriate or unaffordable. On the other hand, it may be possible to achieve the prevention objectives and required coverage through special arrangements using rules to do with public health, social security, occupational organization, consumer protection, and so on. Taxi drivers are a good example of an occupation that is subject to special rules of this type, on fares, insurance, safety checks and competition. Other issues involved here include training, skills certification and, more generally, supporting workers by improving their employability. Work in the domestic sphere also raises similar questions. It occurs in an extremely wide variety of forms, ranging from wage employment (domestic staff and homeworkers) to contributing family workers. The family circle may also differ in size and the extent to which it is open to the market (for example, small farmers, small commercial producers and craft workers, etc.). Heads of households, and those working for them, must be encouraged to comply with labour standards and to take advantage of the benefits that they bring. Social security, cover for occupational accidents, medical cover and social assistance – particularly for women and children – can all form part of this approach. Here, again, we can see that the measures to be taken are not confined to the work relationship, but include social security, child protection and personal status. Such changes will inevitably lead to new legal and socio-legal pluralisms, but these should reflect the fact that some of the population are no longer totally excluded from social protection and that it has a broader base. They should also mean that communities, both geographical and occupational, have more involvement with social protection and that the various anti-poverty measures are adapted accordingly. Although these measures are likely to improve social legislation policy and promote approaches that are better tailored to working reality in the developing world, they can only do a small amount to help to improve access to decent work, which remains a largely economic and political issue and is thus very closely linked to globalization. 90

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A stronger social dimension to globalization: A basic requirement for developing decent work It is all too easy to blame globalization for the deterioration in the situation of workers. International markets and companies tend to be held responsible for a situation that, in reality, is accepted by states and managed by the international organizations acting on their behalf. Its negative impact – particularly on workers – can be put down to the way in which the global political system that has produced this situation operates. The lack of decent work in the developing countries is the result, to varying degrees, of the international trade system, their poor production capacity and inadequate governance. But the system in place at both national and international levels systematically favours those working for the winners in economic competition and condemns the majority of workers to be losers. The free operation of an economy dominated by financial power, and governments’ acceptance of the social effects of this, are allowing globalization to become a generator of exclusion around the world. If globalization is to be given a stronger social dimension, the first thing that needs to be done is to limit the exclusion of individuals. This should involve the mass creation of jobs around the world – but these must be jobs with working conditions that respect fundamental individual values. There cannot be decent work, therefore, without correcting the causes of the exclusion faced by the most vulnerable communities, nations and states. The WCSDG report (2004) seeks to identify the changes needed and to suggest ways of achieving them: “What is required to change this is not the realization of a Utopian blueprint in one swoop. Rather it is a series of coordinated changes across a broad front, ranging from reform of parts of the global economic system to strengthening governance at the local level.” It is through these changes that decent work can genuinely be promoted. Labour law is merely a normative expression of this, forming part of the whole group of economic, social and cultural rights, but its ineffectiveness could, for a long time to come, continue to be a defining feature of underdevelopment and inadequate social protection. There are two ways in which labour law could be made more effective in the countries of the South: by developing jobs as part of a fair globalization, or by abolishing economic and social rights in a globalization without humanity.

91

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3

A contextualization ADELLE BLACKETT 1

3.1 Introduction This chapter emphasizes institutional analyses of trade law, while engaging with some of the development literature. It focuses, in some senses, on what the mainstream literature may be seen to neglect, but in doing so it recognizes that – from a legal or institutional perspective – the relationship between trade liberalization and labour law is constructed, shaped and redirected by state action. It is not the autonomous market, but rather economic activity embedded into social institutions – institutions that were constructed with a hermetic vision of the scope for national public policy in industrialized market economies of the North. Not only must the development of trade law be appreciated within its historical context to understand its intimate relationship with labour regulation in the North and labour commodification in the South, but the contemporary challenges to labour regulation in low-income settings of the South are also ripe for a less deterministic analysis of the impact of trade regulation once contemporary regulatory action is considered broadly and across governance levels. It is argued that the relationship between trade liberalization and labour law must be understood as constantly reconstructed across governance levels, and as having the potential to foster distributive justice beyond national borders. 1 The author is grateful to Sabaa Khan, an LL.M. candidate at Université de Montréal, for her excellent research assistance. Earlier versions of this chapter were presented at the Inter-university Research Centre on Globalization and Work (Montreal, 2007), and the Law and Society Annual Meeting (Berlin, 2007). The author is grateful to participants in those events, to members of the Labour Law and Development Research Network, and to the anonymous reviewers for their thoughtful comments. Of course, any errors remain my own. 93

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3.2 The foundations of multilateral trade: Embedded liberalism and the convenience of colonialism There is a familiar account of the construction of the international economic order and the foundations of multilateral trade that reminds us that, hand in hand with the construction of the international economic order, there was a “double” movement: embedded liberal policies that enshrined social citizenship rights and social welfare entitlements for the paradigmatic workers in the North, in exchange for the progressive liberalization of the economy (Polanyi, 1944; 2001, pp. 79–80). Social policy remained domestic. As Ruggie (2003, p. 2) argues: “national economies, engaged in external transactions, conducted at arms length … [could be] mediated at the border by tariffs and exchange rates, among other tools.” An important piece of Polanyi’s account that is often overlooked is the importance of colonial exchange in terms not only of the extraction of goods, but also of the commodification of the labour power of colonial peoples.2 When liberal trade was negotiated in the Havana Conference and enshrined in the General Agreement on Tariffs and Trade (GATT) in 1947, colonialism faced an intellectual challenge, but remained very much alive. Although there were some developing countries present and able to direct some attention to the position of less developed regions (notably, Brazil, Chile, China, Cuba, India, Lebanon and the Union of South Africa), most were still subsumed as part of the territories of the main contracting parties of the GATT.3 For many of the industrialized nation states of Europe entering the GATT at the end of the Second World War, colonial preferences enabled the perpetuation of a pattern of exchange (or unidirectional trade) between the colonies and the metropolitan territories. Through the extraction of raw commodities – and through the commodification of the labour power of colonial peoples – these nations could afford to build up embedded liberal policies. Although exchange between colonial territories and the metropole were selectively open to the movement of (primarily) goods, borders for distributive justice – in terms, very literally, of citizenship – remained closed. Preferences accorded to former colonies, which served to retain colonial trading patterns, were considered to be “an expression of modern imperialism” (Culbertson, 1925, cited in Gardner, 1956, p. 18). The important exceptions are the basis for the liberal trade challenge and are at the core of the unsuccessful initiative to establish an International Trade 2 Polanyi’s account, by contrast, is replete with analyses of colonial exchange and the violent impact of the turn to a market economy on colonial peoples, by forcing them to sell their labour power (see, in particular, Polanyi, 2001, p. 171ff ). 3 Opened for signature 30 Oct. 1947, 55 UNTS 187. 94

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Organization (ITO) in Bretton Woods, alongside the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF). The intellectual challenge came most vociferously from the United States, which was (for the most part) not a former colonial power, but rather a former colony. Colonial preferences formed the basis of US insistence on non-discrimination principles, which are the cornerstone of the World Trade Organization (WTO) system today.4 Non-discrimination in trade was consonant with a US view that the least possible interference with the free market mechanisms should be promoted. Beyond this ideological consonance with the land of laissez-faire (England) was also the fact that the United States had become, post-1918, a major exporter of mass-produced industrial products. But these products were vulnerable to tariff preferences and other trade barriers. The United States realized that its competitive advantage would be lost if it were not able to guarantee equal access to foreign markets. As Richard Gardner, US ambassador to the GATT, convincingly argued, the United States was “reluctant to play an Imperial role” (1956, p. 17), but challenged what was referred to as the “fiction of empire” that served to justify its “exclusion from extensive areas of the earth’s surface” (Culbertson, 1925, p. 192). It is no surprise, therefore, that the third of President Woodrow Wilson’s “14 Points” coming out of the Second World War was explained as ensuring that “every nation remained free to determine its own economic policy EXCEPT in one particular, that its policy must be the same for all other nations, and not be compounded of hostile discriminations between one nation and another” (Gardner, 1956, p. 17). The 1948 Havana Charter was a lengthily negotiated5 compromise document between industrialized countries and developing countries. In particular, M’Rini 4 The principles are also central to the law of international arbitration, for different historical reasons: See Anghie (2004, p.252) who argues that: “The ‘right to trade’ and the assessment of non-European government in terms of its recognition of the right to trade has been a continuous theme in the discipline. When companies such as the British East India Company, exercising sovereign rights, administered the territories of non-European peoples, they established systems of law and governance that were directed at furthering the commercial relations that were the very sine qua non of their existence. Commerce and governance were not merely complementary but identical: a corporation exercised the power of government. The governance of non-European territories was assessed principally on the basis of whether it enabled Europeans to live and trade as they wished. Thus, according to Westlake, non-European states were uncivilized unless they could provide a system of government ‘under the protection of which ... the former [Europeans] may carry on the complex life to which they have been accustomed in their homes’. If such government was lacking, Westlake argued, ‘government should be furnished’. Capitulation systems, protectorate arrangements and outright conquest could remedy the situation.” 5 It was the culmination of three years of preparation and 18 months of negotiation: see US Department of State, Pub. No. 2411, Proposals for Expansion of World Trade and Employment 8, 1945, cited in WTO, 1995. M’Rini (2005, p. 26) notes the limited developing country participation at the preparatory level (Brazil, Chile, China, Cuba, India, Lebanon, and the Union of South Africa, alongside 11 industrialized countries), but the greater participation of Latin American, Middle Eastern, and Asian countries at the Havana Conference. The USSR declined to participate. 95

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(2005, p. 27) notes that it did not explicitly contemplate how to reduce the divide between the revenues of inhabitants of developing countries and those of industrialized nation states. This is hardly surprising: the logic of liberalizing access to markets was precisely to encourage a particular form of development – the industrialization of national economies6 – with a view to fostering deeper trade and, as a result, reducing income inequality. A relationship between employment and trade policies was “widely appreciated” in policy circles (Gardner, 1956, pp. 104–106), and explicitly contemplated in the Havana Charter; indeed, even a “social clause” was envisaged in Chapter III.7 The Havana Charter specifically embraced standards of living, ensured full employment and aimed for a large and steadily growing volume of real income.8 The latter principles were retained when multilateral trade was ushered in, not through the Havana Charter and the ITO that it would have created, but rather through a self-executing agreement between “contracting parties” – that is, the GATT – without a permanent secretariat or a clause on unfair labour conditions (McRae, 1996, p. 178). In this sense, the world trading system has not inherited free trade in the strict economic terms; rather, it was meant to foster greater trade liberalization progressively, over time. The GATT initiative sought to instil a rules-based system of multilateralism over pure power politics (Jackson, 1997, pp. 1–2). Yet McRae (1996, p. 13) has noted that, “unlike other international organizations which surrounded themselves with lawyers, lawyers were notably absent from GATT, indeed were often not welcome, and the role of law in dealing with the economic relations of States was controversial”. The world trading system has progressively been “reconstructed”, according to Gardner, to favour world trade rather than preferential trade (Palmeter, 1996). The key political compromise inherent to managed trade operated within a rules-based framework that stressed non-discrimination principles, such as mostfavoured-nation status and national treatment, that preferred tariffs rather than quantitative restrictions (quotas), and that promoted transparency (part of the justification for tariffs over quotas). But the optimistic account of the reality of the system was that it moved progressively, inexorably, forward along the “bicycle”

6 Ibid. 7 The Havana Charter proclaimed: “The Members recognize that … all countries have a common interest in the achievement and maintenance of fair labour standards related to productivity, and thus in the improvement of wages and working conditions as productivity may permit. The Members recognize that unfair labour conditions, particularly in production for export, create difficulties in international trade, and accordingly, each Member shall take whatever action may be appropriate and feasible to eliminate such conditions within its territory.” (See also Hansson, 1983.) 8 See GATT, Preamble; see also Blackett (1999, pp. 5–8). 96

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theory: according to Jagdish Bhagwati (1988), the GATT mechanism and its series of negotiated rounds require a state to keep pedalling – or it will fall off.9 While “pedalling”, developing countries are increasingly challenging whether the direction of liberalization leads to the promised results, as enshrined in the WTO. In addition to the GATT objectives, the Preamble to the 1994 Marrakesh Agreement considers “sustainable development”10 to be one of the underlying goals of world trade. Yet the existing trade bargain calls the ability to accomplish those aims into question. This is starkly witnessed in the imperilled Doha Development Round of negotiations. Indeed, in 2006, WTO DirectorGeneral Pascal Lamy claimed, “[i]n a stinging rebuke to Western leaders … [that] the global trading system ‘disfavours developing countries’ and that some existing rules are ‘remnants of colonialism’” (Halligan, 2006).

3.3 The inherent tension between trade liberalization, labour law and the role of the contemporary state in post-colonial developing economies Multilateral managed trade and “free trade” are subject to essentially the same justification, in that they reduce most obstacles to the movement of goods and capital. The inability to provide a liberal regime for the movement of persons is a key example, however, of the distinction between managed trade liberalization and “free” trade. It is of particular importance to developing countries, the traditional commodity exports (raw goods) of which are situated in the most distorted sectors and which face a further myriad of constraints when their often abundant factor of production – their human labour supply – is restricted from moving as well, or forced to move clandestinely under desperate, dangerous and indecent conditions.11 The movement of persons is an often-overlooked element of contemporary analyses.12 But some recent scholars on trade and development 9 See also Wolf (2004, p. 55), noting how nation states voluntarily abide by panel decisions on “complex issues relating to tariffs, schedules, procedures, matters to which the general public does not usually direct its attention”. 10 1994 Marrakesh Agreement Establishing the World Trade Organization, Preamble. 11 As Polanyi (1944; 2001, p. 185) poignantly observed about the raw implications of the “commodity character of labor”: “It is not for the commodity to decide where it should be offered for sale, to what purpose it should be used, at what price it should be allowed to change hands, and in what manner it should be consumed or destroyed.” 12 Hoekman and Winter (2005) argue that the topic has not been studied sufficiently. For an assessment of the movement of persons within the confines of existing multilateral and regional trade arrangements, see Mattoo and Carzaniga (2003). 97

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law have started to challenge the full discretion of member States to exempt the liberalization of the movement of persons from trade discipline under the WTO General Agreement on Trade in Services (GATS) Mode 4, and instead make the generalized case for reasonable market access for foreign labour to be incorporated within the WTO framework (Lee, 2006, pp. 135–138). Researchers emphasize that liberalizing the movement of persons does not necessarily lead to massive migration,13 and further point to the incidence of “excessively restrictive terms of the acceptance of foreign labor” as an explanation for the prevalence of irregular labour migration (ibid., p. 138). Moreover, analyses of the impact of trade liberalization on employment and the regulation of labour need to consider the implications of disconnecting the worker–citizen–consumer nexus that occurs under temporary migration schemes on labour regulatory frameworks that assumed a level of industrial citizenship. Certainly, temporary migration often fi lls niches in the low-wage, export-oriented economy outside of the industrial model, rendering labour-intensive domestic industries in the North (for example, agriculture) competitive with like products from the South. In other cases – notably, that of migrant domestic workers – the temporary migrant offers so-called non-productive domestic labour that facilitates the formal economy participation of the households with family responsibilities. Yet increasingly, the temporary schemes are employed to staff mainstream employment sectors – notably, in the service economy – in which jobs are difficult to export and must be performed on-site, including jobs that have traditionally been recognized and suitably remunerated as skilled employment, and in unionized sectors as well as newer growth sectors.14 As Sassen (1988, p. 169) reasons: “To say that immigration provides cheap labor is correct, but this oversimplifies the supply and demand relationship. … [L]ow wage jobs are also numerous in highly dynamic growth sectors of the economy.” The current impact on traditional wage and non-wage structures, characterized by Sassen as a “dissolution effect”, requires attention. Further, to address the relationship between trade, labour and development in a manner that promotes decent work requires rigorous attention to renewing and expanding the

13 The limited movement of persons, as recognized and regulated in the EU, is an example that most people do not migrate. Arguably, redistributive factors to build weaker economies were a significant factor. Sassen (1988) investigates the combination of factors, such as poverty, unemployment or underemployment, alongside objective factors (including the existence of temporary legal programmes) as well as ideological linkage, that foster labour mobility. 14 In Canada, for example, temporary migration schemes including pharmacists have been fostered, alongside those in sectors with significant unionization levels, such as ski-lift operators, and in growth areas in the hotel and tourism industry. 98

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bases of labour relations frameworks to recognize migrant workers in a renewed citizenship at work. Another recently addressed distinction between managed trade and free trade that is of significant interest to developing countries was the GATT’s Multi Fibre Agreement (MFA). It fi rst entered into force in 1974 as a “temporary” measure, but was repeatedly renegotiated to ensure quota-based restrictions on trade in wool, cotton and synthetic fibres on entry to countries including Canada, Norway, the United States and those in the European Union (EU). In addition to falling short of the transparency principle, the MFA is an exception to the GATT’s most-favoured-nation principle. It had particularly detrimental consequences for developing countries, against which the quotas were applied almost exclusively by the time that the transitory regime of the WTO Uruguay Round 1995 Agreement on Textiles and Clothing (ATC) replaced the fourth renegotiated MFA. The ATC phased out15 the last of the complex system of bilateral restraints under the GATT’s MFA for Canada, the EU, Norway and the United States,16 and was itself terminated by 1 January 2005.17 Currently, textiles and clothing are integrated into the main multilateral trading framework. The persistent contemporary challenge to multilateral trade – to renegotiate the reduction of protectionist policies put in place by industrialized countries to safeguard their own markets – still remains. Since the successful negotiation of the comprehensive Uruguay Round agreement as a single undertaking that imposed strict disciplines on developing countries, including in a range of new trade issues, industrialized market economies have themselves come under criticism for retaining trade policies that allow significant subsidization of their own markets. Certainly, the contradiction is flagrant. It is seen most starkly in market access for developing countries’ agricultural products.18 Agricultural protectionism, although not a straightforward “win–lose” situation from a North–South perspective, is a strong reminder that while developing countries are often dependent on volatile prices in single commodity 15 It has been noted that the phasing out by stages was rather slow, with a tendency by states to integrate products for which quota utilization had, in any event, already been rather low, and to make extensive use of safeguard measures (Kyvik Nordas, 2004, pp. 14–15). 16 Eleven other countries decided to apply GATT 1994 rules directly to integrate their clothing and textile sectors (Kyvik Nordas, 2004, p. 15). 17 WTO Agreement on Textiles and Clothing, Annex 1A of the 1994 Marrakesh Agreement Establishing the World Trade Organization, Art. 9. 18 Some commentators question the significance of this dimension and point to its multidirectional character. They note that even non-agricultural market access (NAMA) remains challenged. Only recently has one developing country, Brazil, decided that it will extend full duty and quota free market access to 32 LDCs to its economy (see ICTSD, 2006). 99

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trade, industrialized countries subsidize heavily the production and export of their own agricultural products. In so doing, industrial economies preserve a standard of living for their agricultural producers (their “citizens”, at least)19 that respects what economist Max Corden (1997, pp. 73–74) argues is the “conservative social welfare function”. The income-maintenance justification for preserving citizens’ standards of livings – even when it entails maintaining trade tariffs for more than a temporary period – stems from the view that it is “unfair” to allow real incomes to be reduced significantly without unavoidable or particularly compelling justification, although Corden has argued instead for forms of adjustment assistance (1997, pp. 74–77).20 Indeed, Corden acknowledges that some protectionist policies introduced in response to the conservative social welfare function had a trade diversionary, and redistributive, function that privileged regions in the North over those in the South (ibid., pp. 78–79). An analogous, but distinct, analysis would consider that state labour deregulation is a form of subsidy. This is quite the opposite to a neoclassical trade theoretical approach, which would view labour standards, like most other forms of policy activity that are not a spur to trade, as a form of trade distortion.21 An analysis of subsidies in this context encapsulates the concern that full economic liberalization could lead to dramatic decreases in the standards of living of workers in the North.22 While, in the period between the end of the Second World War and the 1980s, policies linked to embedded liberalism ensured that industrialized countries could provide social welfare systems, including labour regulatory mechanisms, that offered protection to the worker-citizen, the case has not been the same for developing countries. Rather, for developing countries, the “privilege of cushioning the adverse domestic effects of market exposure” (Ruggie, 2003, p. 11) was never theirs. As Ruggie observes, “[t]he majority lack the resources, institutional capacity, international support and, in some instances, the political interest on the part of their ruling elites” (ibid., pp. 11–12). And of course, the embedded liberalism model in industrialized market economies is deeply challenged by the

19 The working conditions of migrant agricultural labourers in countries of the North fall far short of this standard and are drawn upon to ensure trade competitiveness (see Blackett, 2007). 20 Note also that Corden has recently argued that the protectionist case against “social dumping” by LDCs is at odds with the humanitarian case (see Corden and Vousden, 2001). 21 For a synthesis of the literature on this topic, see Blackett (2001, pp. 52–56). 22 This kind of concern does not displace, however, scepticism on the basis of data that suggest developing countries remain net importers, even of labour-intensive goods (see Ghosh, 2003, p. 3). 100

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globalization of production chains, technological innovations and financial markets (Supiot, 2001). Economic analyses, such as that of Bernard Hoekman and Alan Winter (2005), suggest that, despite obvious deficits in the existing literature,23 the following conclusions hold. First, they illustrate that “greater trade with developing countries will adversely affect the low wage workers in industrialized nations by ‘effectively’ expanding the stock of unskilled labor, thus lowering wages” (ibid., p. 8). Second, they observe that “unskilled labor has seen its relative remuneration fall generally. Moreover, the skill premium has risen in both developing and OECD countries – rising inequality between the skilled and unskilled is a global phenomenon” (ibid., p. 15). In other words, labour market segmentation occurs across borders, and across the North–South divide, to capture what may be referred to as the “South in the North”.24 This segmentation is intimately related to trade liberalization. The gendered dimensions of this segmentation – particularly as it touches the informal economy – are further reminders that export-led industrialization and accompanying regulatory choices are not neutral: workers’ identity and status matters.25 As Hildegunn Kyvik Nordas (2004) observes in her WTO discussion paper on the textile industry post-ATC, models of liberalization that tend to assume full employment overlook the experience from many of the low-income countries that established export-oriented clothing firms, namely that they “mobilized labour that was previously not in the labour force, first and foremost women”.26 Economist Jayati Ghosh (2003) reaffirms this experience in relation to the South Asian context: trade-related employment may have a differential and dynamic impact not only on women’s levels of employment vis-à-vis those of men, but also on the nature and quality of employment that they occupy, and on where they may be required to work.

23 They note an overwhelming focus on trade in goods despite the importance of services, and a failure to analyse the movement of persons sufficiently. See also the joint study of the ILO and the WTO (2007). 24 This notion is drawn upon to capture the fact that the South and the North are not hermetically sealed; arguably, neither can their labour law systems be hermetically sealed from these impacts. But, the labour law systems can replicate the segmentation, through the growing informalization of work in these sectors (see Blackett, 2007). 25 See Standing (1991, p. 20) noting that “[e]ven more than with import-substitution, this development strategy has relied on low-cost female labour”. See also Trebilcock (2006, pp. 66–67) commenting on the extent of the informal economy and its gendered dimension. 26 On women’s employment in export-oriented sectors in India, see also Sankaran (Chapter 6). For insights on Mexico and Lesotho respectively, see Bensusán (Chapter 4), and Fenwick, Kalula and Landau (Chapter 5). 101

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We have thus observed, in the space of less than one generation, massive shifts of women’s labour into the paid workforce, especially in export-oriented employment, and then the subsequent ejection of older women and even younger counterparts, into more fragile and insecure forms of employment, or even back to unpaid housework. Women have moved – voluntarily or forcibly – in search of work across countries and regions, more than ever before. (Ghosh, 2003, p. 1)27

Guy Standing (1991, p. 20) adds that, with this profound mobilization of labour supply, which includes migrants and children, there has tended to be “only a limited development of a skilled labour force”. Several of the case studies discussed in the regional snapshots below – notably, in the cases of the Republic of Korea and Mauritius – underscore the point that an analysis of trade and employment must consequently engage in gender and ethnic disaggregation to identify how different categories of worker are affected by trade policy, employment and labour laws. Trade liberalization is promoted as a pragmatic means by which to increase standards of living in developing countries over time. The premise is that global welfare will increase and will be redistributed by individual states. It does not explicitly contemplate reducing the standards of living of citizens in the North, nor does it require states in the North to aid development in the South. The adjustments necessary in the North to foster greater welfare enhancement in the South – namely, the liberalization of sectors over which a comparative advantage is likely, including agriculture and textile trade – are forestalled as protectionist measures and are kept in place in those sectors. Yet as Eddy Lee (2005, p. 9) has insisted, there is a “fallacy of composition” effect inherent in simultaneous trade liberalization by all developing countries: “[W]ithout higher growth and greater market access [notably, to industrialized country markets on issues such as agriculture] trade liberalization runs the risk of becoming a zero-sum game that continues to marginalize many low-income countries.” Not surprisingly, the joint International Labour Organization (ILO)–WTO report of 2007 concludes generally, from the existing literature, that “the employment effects of trade have differed significantly across countries” (Jansen and Lee, 2007, p. 6).

27 Ghosh notes the more recent trend of more educated women in the IT-enabled service sectors crossing borders. She notes that, “[w]hile such female migration is still a very small part of the total, it is pointing to a different tendency with different implications both for work patterns and for gender relations in both sending and receiving countries” (2003, p. 9). 102

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If we acknowledge, therefore, that the trade framework within which we model labour law’s effects is a rules-based system of managed trade, it is the nature of the bargain that determines employment levels, wage inequality and other employment patterns. Labour market regulation is not an inherent distortion to the free functioning of the market, nor is the de- or re-regulation of, or competition among, low-labour-cost states necessarily a form of social dumping or unfair subsidization. In other words, the empirical analyses capture the employment effects of an asymmetrical liberalization that favours industrialized market economies. It can be argued that the normative ideal of trade liberalization should actually lead to quite a different outcome – that is, the fostering of distributive justice across state borders. Labour regulatory choices, like broader public policy decisions reflected in the negotiated trade agreements, have an impact on trade’s redistributive character and that impact operates beyond national borders. It is true that celebrated studies by the Organisation for Economic Co-operation and Development (OECD) have argued, on the basis of abstraction, that there is no economic basis for fears that trade liberalization poses a threat to core labour standards.28 Lee (2005) demonstrates that the value of broad generalization of the link between trade liberalization and employment is undermined in light of sharply contrasting employment effects between countries, and suggests that country-specific and contingent factors are important.29 Trade and labour law analyst Kevin Banks (2006) further reminds us of the perils of economic abstraction, including that it tends to assume that regulatory standards will not have offsetting economic advantages for business, either directly, or as an inextricable element of a larger social, political or regulatory environment. Constructively, Hall and Soskice (2001) contend that states may draw on their comparative institutional advantage, which plays a significant role in firms’ decisions on where to locate and invest, to enhance their ability to benefit from trade policies. They classify states as either liberal market economies – that is, the United States, the United Kingdom, Australia, Canada, New Zealand and Ireland – or coordinated market economies – that is, Germany, Japan, 28 Rather, the OECD studies (1996, 2000) maintain that association rights can be seen to have been enhanced. However, see Canadian economist Morley Gunderson (2005), who warned the task force overviewing the reform of the federal labour laws in Canada of “the possibility that higher standards can spur productivity and competitiveness is based on shaky grounds, both theoretically and empirically”; see also Sandra Polaski (2006b), who argues that poor countries, shown to gain from trade liberalization when full employment was assumed, actually experienced smaller gains or actual losses when “more realistic” employment assumptions were made, and argues for an ex post analysis of the impact of trade policy changes on employment that considers the question of net employment effects on an entire labour market in a given country. 29 Th is nuanced analysis is reaffirmed in the recent joint ILO–WTO study of trade and employment, which Lee co-authored. 103

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Switzerland, the Netherlands, Belgium, Sweden, Norway, Denmark, Finland and Austria (ibid., p. v). Those classifications have impacts on the nature and effects of a firm’s location decisions and on forms of innovation and change. Their premise is that “nations may derive comparative advantages from their institutional infrastructure”. On the basis of this, they argue that: Instead of the monolithic movement toward deregulation that many expect from globalization, our analysis predicts a bifurcated response marked by widespread deregulation in liberal market economies and limited movement in coordinated market economies. Th is is precisely the pattern of policy across the OECD in recent decades. (Hall and Soskice, 2001, pp. 58–59).

In other words, globalization has regulatory impacts, but they are not necessarily unidirectional, nor are they independent of labour (or trade) policies across undifferentiated terrain. Moreover, a range of institutions – including informal ones – have an important impact on firm choices. Bob Hepple (2005) draws compellingly on Hall and Soskice’s account to argue that labour laws can be a source of comparative institutional advantage. Hepple argues that Hall and Soskice’s analysis helps to explain why “contrary to many predictions – globalization has not in fact led to across the board deregulation of labour laws or weakening of collective representation of workers” (2005, p. 253). Hepple is careful to recall that labour laws are but “one element of a wider political economy that includes industrial relations, corporate governance, vocational education and training, and interfirm relations” (ibid.). He argues, from an economic theory perspective, that some forms of labour law actually impose no competitive disadvantage but rather add to competitive advantage, because they are dynamic and improve skills and productivity. Yet he recognizes that labour laws that are “redistributive” may tempt employers to relocate (ibid., pp. 255–256). Not surprisingly, those labour laws that are likely to be dynamic are also likely to be redistributive. Hepple cites minimum wage laws that spur employers to invest in skilled workforces and technological innovation, or family-friendly laws that make women’s labour market access possible. In industrialized market economies of both the liberal and coordinated variety, the reactions may themselves be different. But from his analysis of political models, Hepple arrives at the view that regulatory diversity and competition should be understood “not so much as a conflict between state systems of labour law, but as a strategic or political process between different legal orders both within and beyond the state” (ibid., p. 268). While his analysis looks beyond state law from a 104

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pluralist perspective, which acknowledges that labour law encompasses a variety of rule-making actors, including the workers and employers themselves, he recognizes that for states the crucial lesson is that: [H]igh labour standards and investment in vocational education and training can lead to higher productivity, are good for business and in practice attract investment. … [S]tates should concentrate on their comparative strengths for particular kinds of trade and not attempt to impose convergence through unilateral actions. (Hepple, 2005, p. 269)

Hepple adds tellingly that “[i]t is particularly ironic that some developed countries now seek to impose on developing countries standards which they once themselves persistently violated on the path to development” (ibid.). It should be underscored that Hall and Soskice (2001) explicitly limit their analysis to selected developed countries and exclude from the scope of the typology even OECD member states the Republic of Korea and Mexico.30 Indeed, they argue that many low-income developed countries tend to have economies that would engender more ambiguous classifications than the two that they identify.31 An unanswered question, in the light of often fragile institutional arrangements and the sometimes questionable bases on which firms are attracted to invest in low-income settings, is whether the significant pools of low-skilled labour in those developing countries may, rightly or wrongly, be perceived as the primary basis of comparative advantage, as some examples in the case studies considered later in this chapter suggest. That the source of comparative advantage may reside in the existence of low-wage workers raises two important considerations for any extension of the analysis of comparative institutional advantage to labour law in low-income settings. Firstly, institutional analyses admit that both the local context and the trade regulatory context affect whether a downward spiral will take place – that is, they admit that there is a link. In the process, they suggest that it is important to ensure the existence of a normative baseline below which regulatory competition 30 Hall and Soskice (2001, p. 33) are careful to qualify their analysis: “Although many of the developed nations can be classified as liberal or coordinated market economies, the point of this analysis is not simply to identify these two types but to outline an approach that can be used to compare many kinds of economies.” 31 Mediterranean countries, such as France, Greece, Italy, Portugal, Spain and Turkey, are placed by Hall and Soskice (ibid., p. 21) in a more ambiguous position, because they “show some signs of institutional clustering as well, indicating that they may constitute another type of capitalism, sometimes described as ‘Mediterranean’, marked by a large agrarian sector and recent histories of extensive state intervention that have left them with specific kinds of capacities for non-market coordination in the sphere of corporate finance but more liberal arrangements in the sphere of labor relations.” 105

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is considered inadmissible. In this sense, rights become a form of prior claim or entitlement to the redistributive purposes of labour law (Hepple, 2005, p. 264). Fundamental principles and rights at work provide a decent work core upon which reflections about establishing an “equilibrium line” may begin (Blackett, 2002a, 2003).32 Secondly, the analyses serve as a reminder of the importance of considering adjustment costs to offset the temporary impacts of the trade dislocations that may nonetheless occur not only in industrialized countries but between developing countries as well (Rosen, 2005). In this regard, Corden’s preference for “adjustment assistance … to encourage rather than to slow up change, and at the same time to provide some compensation for the industries or factors of production concerned” (1997, p. 13) is one that warrants closer attention in contemporary analyses of trade and employment. Not only do commentators in this tradition caution against looking at the relationship between international economic institutions and labour policy in a manner that separates them from the contexts in which they are embedded, but they also recognize that much of the mainstream literature assumes that labour regulatory choices in developing countries are made without significant input by citizens, in response to capital alone (Lee, 2005, p. 87).33 This approach tends to decontextualize analyses of legislative change from the historical development of modern labour law. Progressive labour laws in developing countries were generally hard-won concessions that accompanied political independence; the move away from forced labour schemes to enfranchisement in the workplace was a corollary to the move from colonial governance to political independence. Citizenship at work was understood to mirror broader political citizenship. Although this idealized dualism is profoundly challenged both in the workplace and political reality of many developing countries, it remains true that governments pay a significant political premium should they decide to reduce labour protections. The decisions are not taken lightly and have destabilized liberalizing regimes across Asia, Africa and Latin America. It is not benign, therefore, that literature emanating from international financial institutions recasts formal sector workers as vested interest groups or 32 See also Moreau (2006), who argues for a vision of fundamental social rights that draws inspiration from comparative constitutional principles, as well as EU law and the 1998 ILO Declaration on Fundamental Principles and Rights at Work. Moreau considers fundamental social rights to be a necessary counterbalance to unconstrained economic power. 33 According to Banks (2006), analytical abstractions may tend to assume that the state responds exclusively to the preferences of capital and not to other constituencies, such as voters, bureaucracies, or interest groups. 106

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societal elites, collecting unrealistically high rents that stifle employment promotion, thereby dividing workers into the “haves” and the “have nots” (World Bank, 2005). The characterizations challenge the vision of labour regulation that couples it with the entitlements of citizenship. It provides a moral ground for re-regulating to remove barriers to economic liberalization. Logically, low-visibility practices to reduce the effectiveness of labour laws are encouraged. Consider, for example, the World Bank’s current methodological advice to states seeking labour market flexibility: that they should re-regulate the apprenticeship contract to introduce lower wages, rather than reducing the minimum wage, because apprenticeship contracts enable labour market flexibility without immediately arousing the ire of trade unions.34 A more familiar lowvisibility strategy to labour law practitioners is governmental “neglect” of labour regulation, through the phenomenon of the under-enforcement of labour laws. Labour inspectors, for example, might simply not be permitted to attend exportoriented factories (which, in any event, are regulated in various countries by trade or foreign affairs ministries, rather than by labour ministries), or their numbers and resources might be so reduced that they could not possibly accomplish much even were they to try.35 It is with this contextualized analysis both of international trade law and of the regulatory challenges facing labour law (primarily enforcement-related) that this chapter offers a literature review of five examples of developing countries of varying income levels and varying degrees of export-oriented growth: from Latin America (Mexico); the Caribbean Community (CARICOM); from Africa (Mauritius); and from Asia (Cambodia and the Republic of Korea). It focuses specifically on contexts that have active governance strategies at national, regional or international levels to address the relationship between trade liberalization and labour law. The development strategies vary, as do the trade impacts. The attention placed on democratic values and the construction and scope (gender, migration) of redistributive social welfare systems also vary. Finally, the international engagement and attention varies. What remains constant throughout a study of these cases, however, is that the relationship between trade liberalization and labour law must be assessed with attention to the context(s) in which they are embedded.

34 See ‘Employing workers’, available online at http://www.doingbusiness.org. The report comments favourably that 30 countries have introduced apprenticeship wages. 35 The chapters in Part II of this volume provide compelling illustrations of these practices in Latin America, southern Africa and South Asia. 107

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3.4 The terrain of labour law reform in developing countries

3.4.1 Mexico Mexico is a member of the North American Free Trade Agreement (NAFTA) and its side accord, the North American Agreement on Labor Cooperation (NAALC). Much has been, and continues to be, written about the NAALC, describing in legalistic detail its coverage and largely underutilized provisions.36 The most relevant dimension for the purpose of this case study is that it focuses not on establishing a new layer of labour principles, but rather on the enforcement of local labour laws. Under the NAALC, the failure to enforce a member state’s labour laws is itself a violation of the NAALC, and exposes member states to remedial action.37 As noted earlier, labour law specialists point in particular to the risk associated with the low-visibility avoidance strategy that is prevalent in export-oriented industry; it is understood, tacitly, that labour laws will not be enforced – notably, in export processing zones (EPZs) (see Kagan, 2005, p. 74; DeHart, 2006, p. 661). The EPZ sector in Mexico is characterized by a predominantly female labour force (Kagan, 2005, p. 163; Bensusán, Chapter 4), whose wage conditions and conditions of employment warrant nuanced analysis: [W]hile there is some evidence that women workers in maquiladora cities, particularly in the North, are better protected and better paid than those in nonmaquiladora cities in the interior, two provisos are in order. First, women employees in the maquiladora sectors (now not just confined to the Northern border states) only have entitlements to a limited and declining range of non-wage benefits, and have little or no access to gender-specific support such as childcare provision or maternity leave … . Second, the incorporation of women workers in the export sectors has spurred neither the design of women-friendly social policies, nor the extension of existing employment-related benefits to this new category of industrial workers. On the contrary they chronicle a steady decline in the mandatory protection of formal sector workers in Mexico as state enterprises were privatized, large scale retrenchments were implemented and domestic enterprises were squeezed by trade liberalization which exposed them to competition from cheaper imports. (Razavi and Pearson, 2004, pp. 16–17)

36 For a brief overview of the institutional mechanisms of the NAALC and a summary of the disputes brought before it, see Blackett (2002a). 37 NAALC, Arts 22 and 23. 108

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One critical example of the potential and the limits of the NAALC’s focus on enforcement is that of discrimination on the basis of pregnancy, and more specifically, pregnancy testing upon employment. A fundamental principle and right at work, freedom from discrimination is part of the decent work core. Yet testing during the 1990s of the female workforce in Mexico’s maquiladoras was commonplace, and was widely believed to have been adopted to circumvent Mexican labour law, which grants six weeks’ paid maternity leave prior to delivery and six weeks after delivery, with full reinstatement afterward (Kagan, 2005, p. 164).38 Employers such as Zenith Electronics Corporation and General Motors went beyond admitting that they engaged in pregnancy testing. They argued that Mexican law implicitly condoned pregnancy testing, because it excluded women who had not acquired sufficient tenure in the state social security system from obtaining maternity benefits (DeHart, 2006, p. 659). The practice of pregnancy testing remained unsanctioned by state regulatory actors. The NAALC’s mechanisms to redress under-enforcement were called upon to address this problem, but failed. The NAALC mechanism innovates to address the under-enforcement dilemma in two ways. First, it liberalizes the ability to investigate complaints of non-compliance with labour standards. It does not restrict the right to bring investigations to labour inspectors; rather, any individual or group may fi le a submission. Th is has resulted in the formation of transnational coalitions able to frame workers’ rights violations in ways that reflect the concerns of local actors, while drawing in a broad international coalition of support through the spotlight effect (Hertel, 2006).39 In the matter of pregnancy discrimination in the maquiladora industry in Mexico, New York-based Human Rights Watch (HRW) – one of the most powerful transnational human rights NGOs – which privileges civil and political rights, argued that pregnancy testing violated women’s rights to non-discrimination and privacy (ibid., p. 271). Hertel observes that when Mexican activists joined the HRW campaign, they “moved beyond this frame” to include broader state positive obligations to ensure that pregnant workers received “the ‘social guarantees’ of health care and economic benefits” (ibid.). Second, the NAALC does not require that a complaint be fi led; rather – and despite the fact that the language of “complaint” has been regularly used in NAALC – a submission is sufficient. In the pregnancy discrimination matter, this allowed HRW to submit an initial report in 1996, urging the government 38 Kagan (2005, p. 165) also discusses the justifications proffered by employers in favour of pregnancy testing. 39 Hertel emphasizes the ways in which less powerful actors in transnational coalitions can affect the framing of contestations. 109

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of Mexico to enforce its own domestic labour law more effectively. HRW subsequently filed a complaint on 16 May 1997, co-filed with the US-based International Labor Rights Education and Research Fund (ILRF, now the International Labor Rights Forum) and the National Democratic Lawyers Association (Asociación Nacional de Abogados Democráticos, or ANAD) of Mexico.40 There are many legitimately severe critiques of the NAALC. The procedures are seen to be excessively lengthy and cumbersome. Some would argue that they have been constructed so that they can never really be applied in full. Unions and civil society groups have largely abandoned using the NAALC mechanisms. In the pregnancy discrimination case, the intergovernmental review process was lengthy, complex and (arguably) of limited effectiveness. It took six months for the Mexican and US governments to organize a public hearing on pregnancy testing.41 Its Public Report of Review was issued on 12 January 1998, recommending ministry-level consultations to ascertain the extent of the protections against pregnancy-based gender discrimination under Mexico’s laws. A Ministerial Consultations Implementation Agreement was signed on 21 October 1998, through which the governments agreed to conduct outreach sessions to educate workers along the Mexico–US border region, and to coordinate a conference. A conference was held on 1–2 March 1999, in Yucatán, Mexico, in which protective laws in the three NAALC member countries were discussed. Not surprisingly, Mexico affirmed at that conference that federal labour law prohibits gender- and pregnancy-based employment discrimination. Outreach sessions took place to educate workers about their rights both in 1999 and in 2000.42 But as Kagan (2005, p. 172) reports: “[U]nder pressure from the Mexican government, the US NAO failed to enforce any sort of labor standard, citing ‘differing opinions within the Government of Mexico on the constitutionality and legality of the practice’.” Parallel to these processes, Mexican feminists instead persuaded the Mexico City Human Rights Commission (Comisión de Derechos Humanos of Mexico City, or CDHDF) to take up a campaign that explicitly denounced pregnancy testing and pushed for a range of gender-sensitive policy reforms at the national level. Over 100 cases of pre-hire pregnancy discrimination and five cases of firing for pregnancy were filed with the Tribunal on Reconciling Maternity and Work,

40 US National Administrative Office (NAO) Submission No. 9701 (gender discrimination). 41 The US NAO accepted the submission for review on 14 July 1997, and conducted a public hearing in Brownsville, Texas, on 19 November 1997. 42 US Department of Labor website update on US NAO Submission No. 9701, available online at http://www.dol.gov 110

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hosted on 22 October 1998 in Mexico City.43 This action was combined with a high-profile campaign and nationwide survey, in which between 6,000 and 7,000 Mexicans signed a proposal calling for an end to pregnancy testing (Hertel, 2006, pp. 274–275). Some groups of workers – notably, Mexico’s national teachers’ union – were able to negotiate prohibitions to pregnancy screening (ibid., p. 275). And crucially, in 2003, Mexico’s Congress passed a federal law to prevent and eliminate discrimination,44 including a new administrative agency charged with implementation, the National Council for the Prevention of Discrimination (Consejo Nacional para Prevenir la Discriminación, or CONAPRED).45 The scope of the law is federal employers; some argue that it is more limited still, to the government itself (DeHart, 2006, pp. 670–671). Enforcement in the exportoriented workforce at the origin of the NAALC submission seems remote from this new initiative. HRW ended its campaign in mid-1999, reportedly out of frustration. Hertel (2006, pp. 275–276) further reports a level of frustration amongst local activists that the international campaign was not more effectively linked to, and framed in terms of, the local activist campaign. Hertel notes that, according to government representatives, workers and activists, the pregnancy screening continues, but on a more covert level (ibid., p. 275). The NAALC mechanisms illustrate, therefore, that measures can be put in place at a transnational level that result in serious attention to the underenforcement of labour laws within an export-oriented sector. But transnational initiatives bring their own challenges, including the equitable representation of tripartite stakeholders in framing their own concerns, all the while marshalling international attention and support. The mechanisms also have to be designed in a manner that ensures that they themselves will be enforced. Despite the protective framework, the enforcement issue remains critical to the relationship between trade liberalization and labour law.

43 Arbitration and reconciliation tribunals have original jurisdiction over labour rights complaints, which may be brought by workers to a tripartite committee. Representativeness of workers is nonetheless contested. For a discussion, see FIDH (2006). 44 “Decreto por el que se expide la Ley Federal para Prevenir y Eliminar la Discriminación,” D.O., 11 de Junio de 2003 (Mexico). See also discussion in DeHart (2006, pp. 669–670, 681–684), noting that the constitutionality of the law is itself in question, because the UN Commission on Human Rights (UNCHR) is argued to have exclusive legislative authority over federal human rights questions, so the delegation to the Mexican National Council for the Prevention of Discrimination (CONAPRED) is also challenged. 45 See DeHart (2006, pp. 667–668), who emphasizes the fact that the CONAPRED is a decentralized, relatively autonomous organ with its own juridical nature, and, crucially, its own budget (albeit too limited, according to CONAPRED). 111

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3.4.2 The Caribbean Community (CARICOM) 46 Members of the Caribbean Community (CARICOM) are typically small island states with open economies. Many have relatively high standards of living and are not generally classified as least developed countries (LDCs).47 Yet their size prevents them from drawing on economies of scale that would facilitate competitive, externally focused trade policies, because only approximately 14 per cent of their trade is intra-CARICOM (Girvan, 2008, pp. 7–8). What CARICOM member states count upon is their ability to draw on proactive, sensible policies (CTAG, 2001) at different governance levels to mitigate the adverse impact of liberalization, and to reap the gains of deepened trade liberalization through effective regional cooperation. Perhaps in light of this, and despite the fact that CARICOM’s 2001 revised founding Treaty of Chaguaramas contains the enabling legal framework for an institutional superstructure, in the form of the CARICOM Single Market and Economy (CSME), implementation of this deeper level of integration has been uneven and significantly delayed (ibid., pp. 6–7).48 For CARICOM member states, the impact of the WTO’s European Communities–Bananas reports49 on Belize, Jamaica and several eastern Caribbean countries (the Windward Islands) is but one of the most palpable examples of economic 46 For a discussion of the institutional structure and social institutions relevant to trade in the CARICOM, see Blackett (2002b, pp. 932–941). 47 Most tend to obtain high rankings according to UN Human Development Rankings, which incorporate Amartya Sen’s capabilities analysis into determining human development indicators. Barbados tends to rank first among developing countries. For a discussion, see Levitt (2005, p. 370). 48 The “Single Development Vision” approved by CARICOM leaders in 2007 sets a 2015 target for complete CSME implementation. 49 GATT Panel, Report on EEC Member States Import Regimes for Bananas, DS32/R, 1993; GATT Panel, Report on EEC Import Regime for Bananas, DS38/R, 1994; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas (Complaint by the United States), Report of the Panel, WTO Doc. WT/DS27/R/USA, 1997; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas (Complaint by Guatemala), Report of the Panel, WTO Doc. WT/DS27/R/ GTM, 1997; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Appellate Body Report, WTO Doc. WT/DS/27/AB/R, 1997; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 by the European Communities, Report of the Panel, WTO Doc. WT/DS27/RW/EEC, 1999; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 by Ecuador, Report of the Panel, WTO Doc. WT/DW27/RW/ECU, 1999; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities Under Articles 22.6 of the DSU, Decision by the Arbitrators, WTO Doc. WT/DS27/ARB, 1999; WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities Under Articles 22.6 of the DSU, Decision by the Arbitrators, WTO Doc. WT/ DS27/ARB/ECU, 2000. The long-standing dispute is ongoing, with a new request for consultations by Ecuador on 16 Nov. 2006 and joined by Colombia on 30 Nov. 2006 on the new EU bananas regime: WTO Doc. WT/DS27/65/Rev.1, 2006. The result of the dispute is a second recourse to Art. 21.5, yielding an Appellate Body Report released on 26 Nov. 2008: WTO Doc. WT/DS27/AB/RW/USA. 112

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devastation by trade liberalization and submission to the trade machinery – that is, the WTO dispute resolution system. In a series of detailed decisions complicated by the elaborate tariff quota licensing reallocation requirements for the distribution of banana imports, the WTO’s Dispute Settlement Body (DSB) found, in essence, that the non-reciprocal trading arrangements that allowed preferential entry of bananas of former colonies of (primarily) the United Kingdom and France into the EU over the generally less costly “dollar bananas” produced primarily by US multinational corporations based in countries such as Colombia and Guatemala, and producing under more economically competitive conditions, were not GATT-compliant. The result of the decisions has been to cripple the economies of certain small nation states in the Caribbean that depended almost exclusively on the trade preferences to ensure exports of their higher priced bananas. Since 1993, when a new quota system was introduced to accommodate the entry into an enlarged EU that included a unified Germany, a progressive decline in exports from the CARICOM banana-exporting states has been noted, with a 50 per cent export decline in the largest producer, St Lucia. The forecast is that the industry will simply not survive, because wages are too high. The only exception is the Central American CARICOM member state, Belize, and the explanation offered by the Caribbean Trade and Adjustment Group (CTAG, 2001, p. 16) is telling: “With some restructuring and strengthening of alternative direct marketing arrangements, its nonunionized industry, largely dependent on Central American migrant labor, is considered internationally competitive, and capable of substantial expansion.” A link may therefore be established, from a CARICOM policy perspective, between labour costs, the movement of persons and trade competitiveness. Yet this link is not at the level of abstract theorization; rather, it is constructed on the basis of the exclusions of the managed trade system. Although the GATT, Art. III, must be interpreted in a manner that considers products’ end uses and consumer tastes and habits, which vary from country to country, as well as their properties, nature and quality, the WTO’s trade framework excludes from its mandate the conditions under which the bananas were produced, unless the DRB accepts that, as a result, bananas produced under “fair trade” conditions are not “like products” to “dollar bananas” (Blackett, 2003; Parker and Harrison, 2004). In this regard, it warrants noting that the “losers” are the countries that have strong democratic traditions and relatively robust labour standards. Yet the history of colonial plantation labour conditions and the significance of the development of trade unionism in this sector 50 50 For a brief discussion of the plantocracy under colonialism and the significance of the rise of trade unionism, see Goolsarran (2005). For a discussion of four models of the plantation economy, see generally Levitt (2005). 113

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to the construction of decent work become irrelevant under existing interpretations of the likeness standard. No regard is therefore to be given to the “free labour of a Caribbean peasantry born of struggle against the plantation system, and fortified by the will to assert the economic independence of family and community by small-scale food production and small business” (Levitt, 2005, p. 57). Arguably, the cost of the bananas in the affected Caribbean countries reflects a more legitimate valuation of the product – one that seeks to factor in the social costs (see International Banana Conference II, 2005). Some of the “winners”, on the other hand, face a litany of complaints about the conditions under which their “dollar bananas” are produced, and have had histories of undemocratic practices linked, in part, to US multinationals in the banana trade (LeGrand, 1998). No other mechanisms are embedded in multilateral liberal trade to ensure that the adjustment toward greater liberalization is compensated – a point that was lamented by Jagdish Bhagwati (2000), who considered it a failure of governance that the IMF and the World Bank did not step in and respond with adjustment measures for Caribbean states to ease the pain of this decision: I must also deplore the inability of the leadership at the World Trade Organization, International Monetary Fund and World Bank to come up with a compensation and adjustment programme that would, at a small fraction of their resources, adequately help the small banana exporters at risk from the WTO Panel, Appellate Court and Arbitration decisions dismantling the EU regime. Nothing in the doctrine of free trade requires that we ride rough-shod, at breakneck speed and with reckless regard, over the economies of the small and poor nations. (Bhagwati, 2000, p. 203)

It should nonetheless be noted that, in their forward-looking strategizing, Caribbean states wish also to promote greater capitalization of the Caribbean Development Bank (CDB) as a vehicle through which restructuring from trade liberalization can be accomplished (CTAG, 2001, p. 5).51 A particularly significant recent development for the region is the direction of regional trade. The EU–African, Caribbean and Pacific (ACP) Cotonou Partnership Agreement, signed in June 2000 and legitimized through a waiver, entailed the continuation of preferences through 2007. During that preparatory period, economic partnership agreements (EPAs) were to be signed – that is, bilateral trade agreements – notably, between the EU and particular ACP regions. 51 Kari Levitt (2005, p. 351) argues that the Caribbean Development Bank was initially proposed as an instrument to offset potential “polarisation effects” that could result from early regional free trade initiatives. 114

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After that preparatory period, quota and duty-free access to the commodities (including bananas) of LDCs was to be permitted. But in the EPA negotiations, the CSME framework was superseded by a separate negotiating structure, the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) (including the Dominican Republic and excluding Cuba). The EPA signed, despite considerable resistance in October 2008, arguably “forecloses the CSME strategy of consolidating a regional economic space as a platform for developing internationally competitive production to engage with the world economy” (Girvan, 2008, p. 30).52 An analysis of the EPA model is beyond the scope of this chapter, but it is important to recall that, unlike the Lomé agreements of the past that promoted preferential market access for former colonies, the EPA model reflects a move towards a form of bilateralism that promotes reciprocity in market access for the EU and enhances investor protections under a NAFTA-like model that is nonetheless significantly less encompassing than Chapter 11. It also integrates the temporary movement of natural persons for categories such as key personnel (business visitors, intra-corporate transferees), graduate trainees (broadly defined), business service sellers, contract service suppliers, independent professionals and shortterm visitors for business purposes, subject to a series of horizontal conditions (for example, prior employment of a juridical person for one year before seeking temporary entry for contract service suppliers). It therefore casts some doubt over the ability of CARIFORUM members to meet the conditions readily. Certainly, there are nods to a development dimension, including a financial component that includes funds and technical assistance to ease the burden of trade adjustment toward the services-oriented market access. The EPA process has also been dogged by concerns linked to the severe negotiating timelines and limited room for participatory engagement, and has garnered critique as cementing a new form of colonial relationship. Leading Caribbean economist Norman Girvan (2008, p. 30) has argued: “The EPA model is one of asymmetrical neo-liberal integration in which differences among countries in economic power and levels of development are largely ignored; and trade and investment liberalization by itself is assumed to be sufficient to deliver development.” In contrast, Pierre Sauvé, a former OECD official writing with World Trade Institute research fellow Natasha Ward, contends that “the EPA [is] a successful attempt to give operational meaning to the principles and objectives of GATS art. IV (Increasing Participation of Developing Countries) as the EU has made evident efforts to respond to demands to open sectors and modes of 52 Cf. Sauvé and Ward (2009). 115

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supply of relevance to CARIFORUM states” (Sauvé and Ward, 2009, p. 59). But whether critical or positive, early assessments suggest that the CARIFORUM EPA has established a difficult precedent for other ACP regions that have only entered into provisional agreements with the EU. Despite the concern that faces the CARIFORUM as it rushes to EPA implementation and to assess the full implications of its agreement, the CARICOM has in the past indicated its ability, through the use of transnational public policy, to shape the direction of its labour laws in response to liberalizing pressures. It might be imagined that these micro-states, faced with adverse trade decisions and NAFTA diverting manufacturing away from their regions in favour of Mexico, would be swiftly legislating away their labour legislation to ensure greater competitiveness in the liberalized market; rather, on the basis of a recent reported example, quite the opposite appears to have happened. According to a report submitted pursuant to the ILO’s 1977 Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, one major North American investor in the hotel and tourism sector intimated that it would relocate to a neighbouring island if the labour relations practice of voluntary trade union recognition were to be applied to its enterprise.53 The investor came from the tradition of the US Wagner Act of 1935, under which certification, mediated by quasi-judicial bodies, was required for a union to represent workers. Management hostility towards unionization and the virtual contest approach to a unionization drive, invariably accompanied by a proliferation of unfair labour practices and lengthy litigation, are all reasons that partially account for low unionization levels in the United States in particular, and to a more limited extent in Canada. In the English-speaking Caribbean, however, the British tradition of voluntary recognition was followed. The clash of industrial relations cultures came to the fore when a powerful foreign employer in the tourism industry essentially refused to follow local tradition and resisted unionization initiatives. Caribbean nation states recognized quickly that competing on the basis of labour regulatory systems would set into place pressures favouring a race to the bottom. In the particular example in question, the Ministers of Labour met within the CARICOM framework and came to an agreement that the prospective investor and employer would be unwelcome within the territory of any CARICOM member state, should it seek to transfer its operations. Under those conditions, the employer ultimately decided to stay within the initial island and accept the unionization initiative (ILO, 2001a). An ensuing labour law harmonization project provided a way for Caribbean countries to work through principles that 53 For a discussion of voluntarism as it applies in the Caribbean, see Goolsarran (2005). 116

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were central to their industrial relations systems, arrive at agreement on broad approaches, but leave room for individual member states to adopt the legislation as they see fit, to account for local conditions, and to render explicit local labour relations practices for an increasingly diversified set of investors.

3.4.3 Mauritius Mauritius has historically emphasized social development alongside economic development, by constructing a viable redistributive social welfare system (Bunwaree, 2004, p. 164). Economically, since the 1970s when the booming sugar industry had reached optimal levels, the Mauritian state developed and progressively expanded a policy to promote EPZ-led growth through a mix of facilitative labour law reforms focusing on dismissal and overtime provisions, as well as fiscal incentives, which fostered a boom in the clothing sector (ibid., p. 182). Yet Mauritian export production was not located in an enclave-type of EPZ, as is common in many other countries; rather, it is widely dispersed throughout the island and comprises 50 per cent of local capital from wealth accumulated through the then-profitable sugar sector (ibid., pp. 164–165).54 Structurally, Mauritius is an ethnically plural society, which has translated into a labour market that is heavily segmented along racial and gender lines. Bunwaree describes the labour force as follows: The Franco-Mauritians remain the country’s wealthiest group and have invested in the manufacturing sector and tourism; they are followed by the Chinese dominating this sector, though there are wealthy Muslim textile and grain traders as well. At the bottom of the socio-economic scale are the Hindu plantation workers, Muslims working in low-paid jobs within the informal sector and Black Creole factory workers, dockers and fishermen. Women continue to be over-represented in low-skilled, low-status and low-paid jobs. Some 38.7 per cent of women of working age are considered to be economically active whilst male participation rate is approximately 78.7 per cent. The highest proportion of women’s employment is in the EPZ. However the sex-based occupational segregation in Mauritius is striking. (Bunwaree, 2004, p. 175)55

54 Razavi and Pearson (2004, p. 178) consider this policy one of taking the work to the workers, rather than workers to the work, “which facilitated women’s employment in export processing”. 55 Razavi and Pearson (ibid.) also note that “the ethnic distribution of the EPZ labour force reflects the ethnic distribution in the country”. 117

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Partly as a way of managing the racial and ethnic volatility of Mauritian society and partly out of a belief that social progress must accompany economic progress, universal social protections were promoted and largely remain in place, including free health care, education, universal old-age pensions and some social aid. These were understood to be the basis upon which the strong economic growth was built and were funded heavily through taxation on sugar exports (ibid., pp. 166– 167). But the social policies have not been class- or gender-neutral: (i) a parallel private sector in health and education tends to offer better quality than that in the public sector, and is available only to the wealthy; and (ii) “family choices” may favour the education of boys over girls in difficult economic times; and (iii) legislation itself may contain biases – for example, the Occupational Health and Safety Act 2005, which contained biases against injuries prevalent amongst women, such as repetitive strain injury (ibid., pp. 168–170). Mauritius also faces pressure from the World Bank to cut public expenditure for social protection, by focusing only on poverty reduction (ibid., p. 172).56 And, of course, while women entered the paid labour force, the reproductive labour continues to fall into the hands of other women in the often nearby extended-family structure (Razavi and Pearson, 2004, p. 179). Partly because of its mix of social and economic policies, Mauritius has been one of the few African nation states to have experienced significant exportoriented growth. It benefited from the four Lomé Conventions and the current Cotonou Agreement,57 through which it could avoid the quota restrictions of the MFA and the ATC. Mauritius has also been eligible under the US African Growth and Opportunity Act (AGOA) of 2000 since 2 October 2000; it was granted eligibility for apparel benefits under AGOA on 18 January 2001.58 But with the expiry of the ATC on 31 December 2004, preferential access to the US

56 For a critique of poverty reduction strategies, see Rittich (2002, p. 277), who argues that “[t]he displacement of egalitarian social provisioning by programs to target poverty carries a number of risks, some of which arise because the character and degree of poverty is notoriously contestable. Even determining the poverty line poses numerous conceptual and normative problems, as it may be defined absolutely, relatively, or subjectively”. 57 EU–ACP Partnership Agreement, signed 23 June 2000, in force April 2003, revised 25 June 2005. Available online at http://ec.europa.eu 58 US Trade and Development Act of 2000, Title I. Although AGOA contains a requirement that is familiar to recent US bilateral arrangements, recognizing at §104(a)(1)(f) “the right to protection of internationally recognized worker rights, including the right of association, the right to organize and bargain collectively, a prohibition on the use of any form of forced or compulsory labor, a minimum age for the employment of children, and acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health”, there is no incentives-based compliance system that would be comparable to that in place in Cambodia. For a brief discussion of AGOA and other US bilateral arrangements, see Granger and Siroën (2006). 118

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market is significantly eroded, with African markets taking a particular hit.59 The WTO has expressed serious concern for “[t]he unbalanced distribution of the benefits of the liberalization in this sector”, arguing that “post-ATC adjustments are fundamental to addressing and reinvigorating production and competitiveness in the LDCs and other small and vulnerable economies” (WTO, 2004, paras 6 and 7). Currently, Mauritius is one of the examples of a state that is struggling to remain competitive (ILO, 2005a, p. 30). Chinese agreements with the EU and the United States to stabilize growth rate of Chinese exports to those regions and which included Chinese agreement to apply export taxes to many of its exports (Jones, 2006), may offer some predictability to other exporters such as Mauritius, but are far from resolving their state of crisis. With increased economic crisis, but starting since the mid-1980s, Mauritius has become another country in which women have been displaced from exportoriented production, “not because male workers are being recruited into skillintensive production processes, but rather because industrialists are hiring migrant female labour” (Razavi and Pearson, 2004, p. 17; see also Bunwaree, 2004, pp. 173–175) – women from China, Bangladesh, India, Sri Lanka and Madagascar, who live in dormitories near the factories, far away from their own families (ibid., p. 189) – “in order to sidestep the alleged shortcomings of the local labour force, such as its high levels of absenteeism and low productivity” (Razavi and Pearson, 2004, p. 18; see also Bunwaree, 2004, pp. 175 and 189). It should be noted, however, that when, in 1984, Mauritian male wages were “liberalized” through an abolition of the male minimum wage in EPZs (but not for Mauritian women), male employment grew more rapidly than female employment. One understands from this move that the female minimum wage had been significantly lower (63–76 per cent, depending on age and experience) than the male minimum wage (Razavi and Pearson, 2004, p. 180). Yet according to Bunwaree (2004, pp. 182–183), over time, men had better options in other sectors, so the real threat and actual job loss for Mauritian women came from the entry of female migrant workers through the late 1990s. So by promoting the use of migrant labour, Mauritius (temporarily) sidestepped the dislocation of its export sector to other lower cost locations, but created other conflicts (ibid., pp. 188–189). And with growing economic retrenchment has come the exclusion of former factory workers from both contributory and non-contributory pension schemes (ibid., p. 184). Not surprisingly, resentment runs high toward migrant workers “who are perceived to have taken jobs rightly belonging to Mauritian women” (ibid., p. 185). 59 See Kyvak Nordas’ projection (2004, p. 30, fn. 27), cautioning that projected declines may underestimate a number of factors beyond relative price that could have an impact on market share. 119

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Bunwaree (ibid., p. 186) reports contractual abuses that result in migrant women workers earning significantly less than expected and the significant disenchantment of these women with their conditions of work, leading to protests and spontaneous strike action after two Chinese women died in 2002: one of pneumonia, the other of a brain haemorrhage. The Mauritian government currently reports that it has taken steps to regulate the employment of migrant workers, claiming to vet all contracts of employment for compliance with labour legislation for approval by the Ministry of Labour and Industrial Relations through a recently established Special Migrant Workers Unit. That unit is also responsible for carrying out inspections at workplaces to ensure contractual compliance (Republic of Mauritius, Ministry of Labour, Industrial Relations and Employment, 2007). It has also set up a coordination committee on migrant workers within the Ministry of Labour and Industrial Relations to “monitor the conditions of employment, living conditions, social problems and other requirements of migrant workers” (ibid.). But the effectiveness of these enforcement efforts remains in question (Bunwaree, 2004, p. 187) and recent reports suggest a worsening situation for migrant workers (ITUC, 2008). The Mauritian experience is therefore a further example of the tension between trade liberalization, labour law and migration. Mauritius has indeed “managed remarkably well to fight off the erosion of its relatively generous welfare state, which continues to act as a bulwark against social dislocation and impoverishment, especially at a time when the export industry is shedding workers in large numbers” (Razavi and Pearson, 2004, p. 19). But the decent work aspiration is not extended to migrant women workers, around whom there is growing social tension, abuse and expulsion. Migrant women workers fall outside of the state’s social welfare web.60

3.4.4 Cambodia The export-oriented garment industry in Cambodia has been fast-growing since the end of the civil war in 1991 (Hall, 2000, p. 119). The promise of export-led growth is starkly significant in a country able to produce more than enough rice to feed itself, but with such an unequal distribution of wealth that the rural poor cannot afford to purchase it (ibid., p. 128). The Cambodian government has vigorously encouraged 60 Consider instead that the EPZ Labour Welfare Fund provides “welfare programmes” of “benefit” to migrant workers – notably, “free transport for outings, social grants in case of need, cultural and leisure programme on Migrants Day” (see Republic of Mauritius, Ministry of Labour, Industrial Relations and Employment, 2007, para. 12). 120

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investment, including through fiscal benefits to foreign investors (ibid., p. 127).61 The investors come chiefly from South-East Asian countries, including, notably, China62 – that is, countries that faced a garment export quota to the United States and the EU under the now-expired ATC (ibid., p. 128). In this regard, Cambodia became an indirect beneficiary of the export quotas under the MFA. The result was a rapid, significant shift away from agricultural and domestic activities, towards a relatively modern manufacturing economy, driven by primarily young, rural women moving to Phnom Penh to work in garment factories (ibid., p. 133).63 Yet worker discontentment with working conditions led to frequent demonstrations and strikes, as well as action by sympathetic US labour groups to seek a review of claims of abuses in Cambodian apparel factories in June 1998 (Polaski, 2006a). Labour law is also part of the export-oriented equation. In 1997, Cambodia adopted a free-market-oriented Labour Code, replacing a 1992 Labour Code that was responsive to international pressure during its transition (Hall, 2000, pp. 125–127).64 While the 1997 Code benefited from some labour law reform commentary from the ILO, it was not subjected to tripartite dialogue due to an insufficient formation of such collectivities in 1994, when consultations took place. In July 2001, when it became clear that enterprise-level organizing was taking place (rather than at the professional level, as foreseen in the legislation), another ILO consultation took place and two legislative decrees (prakas) were promulgated in November 2001 (Bronstein, 2004, pp. 242–243). Freedom of association for Khmer citizens is also constitutionally protected (Falkus and Frost, 2002), but there is hardly a tradition of collective bargaining in Cambodia and its free exercise remains significantly compromised.65 Once again, a critical concern remains the lack of enforcement of labour law (Hall, 2000). A “culture of impunity”, enabled by heavily critiqued blanket 61 See Falkus and Frost (2002, pp. 6–7). See also the 1996 US–Cambodia Agreement on Trade Relations and Intellectual Property Rights Protection, available online at http://tcc.export.gov 62 Hall (2000, p. 130) notes that the majority of foreign investors and factory owners are Chinese, or of Chinese heritage. He adds that “it is the ethnic Chinese, with their access to financing, comparatively high level of education, and willingness to provide mutual support, who are rapidly coming to dominate business and finance. While Khmer women are hired to be the bulk of the workforce in factories, office and management positions are almost exclusively staffed by foreign or local Chinese”. See also Falkus and Frost (2002, p. 8) for detailed data on country of origin. Falkus and Frost offer a helpful discussion of women’s participation rates in other sectors of the economy (2002, fn. 135). 63 The ILO reports that women currently represent 92.4 per cent of the factory workforce (see Kingdom of Cambodia, ILO, and Better Factories Cambodia, 2006). 64 Arturo Bronstein (2004) notes that this Code was largely based on the French-inspired 1972 Code. 65 Falkus and Frost (2002, pp. 135–144) chronicle restrictive provisions in the 1997 Labour Code on the exercise of freedom of association and collective bargaining rights, and severe, partial governmental actions to prevent unionization or to favour government supporters, including police violence. Hall (2000, pp. 152–166) further reports egregious violations of other basic conditions of employment. 121

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legislative protections for civil servants, “poses a serious obstacle to developing the rule of law in Cambodia” (ibid., pp. 123–124). The Bureau of Labour Inspection within the Ministry of Labour is considered to face high levels of corruption (ibid., p. 126). The Ministry lacks resources for systematic, thorough inspections, and chronically insufficient resources cultivate, and sometimes legitimate, pervasive, endemic corruption.66 According to the Report of the United Nations (UN) Secretary-General on human rights in Cambodia, although there were officially 100 labour inspectors in Cambodia in 1998, only 12 actually carried out inspections (UN, 1998). On 20 January 1999, the United States entered into a three-year bilateral trade agreement with Cambodia, which was extended for an additional three years through to the end of the MFA’s application, on 31 December 2004. To gain political acceptance of this accord, the United States made the preferential access of Cambodian exports to the US market subject to conditions related to the continuous improvement of working conditions in the garment sector. The United States committed to expanding Cambodia’s quota for textile and apparel exports to the US market by 14 per cent (subsequently increased to 18 per cent) if working conditions in the sector were found to be in substantial compliance with local Cambodian law and internationally recognized core standards (Elliott and Freeman, 2003, p. 117). There are reports that the spotlight effect has had some impact, despite persisting repression, enabling some union activities to continue, as in the case of U-Kong workers in January 1999 on the eve of a visit by a US trade delegation (Hall, 2000, p. 142). But Cambodia failed to achieve “substantial compliance”, according to a December 1999 report by US officials, although some progress was noted (ibid., p. 142). Consequently, a 5 per cent quota increase was offered if Cambodia allowed the ILO to monitor all of the export-oriented factories, through unannounced factory visits.67 Yet Elliott and Freeman (2003, p. 117) report that the ILO was itself an initially reluctant monitor: only when the United States offered financing for a parallel programme of technical assistance and training for the Cambodian Ministry of Labour did the ILO itself agree to participate.68 66 See Falkus and Frost (2002, p. 126), noting that the inspectorate lacked resources even to buy gasoline for its vehicles. Hall (2000, pp. 170–171) adds that civil servants, including judges, earn salaries as low as US$12 per month, which are below starvation levels, so it is unreasonable to expect that they would systematically resist bribes. He calls for them to receive a living wage. 67 Factories must register in order to be submitted to monitoring. But only registered companies are eligible to bid for export-oriented quotas (Falkus and Frost, 2002, pp. 62–63). The fact that the initiative includes all exporting garment factories is considered by the ILO to be a key reason for its success. The Better Factories Programme reports that “[i]t is transparent, credible to international buyers making sourcing decisions, and meets the needs and interests of workers and the industry” (see Better Factories, undated). 68 See also Polaski (2006a, pp. 5–6), noting the debate that was provoked in the ILO secretariat and Governing Body. 122

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The ILO currently produces two synthesis reports per annum.69 Over time, frequent violations consisted of incorrect wage payments and involuntary or excessive overtime, although monitors also noted violations of freedom of association principles (ILO CEACR, 2006c, pp. 6–14). Recent reports seek to refine the way in which aggregate compliance values are measured and reported. They reflect some fluctuations in compliance levels: for example, full compliance with maternity leave payments went from 68 per cent to 86 per cent, to 84 per cent, to 90 per cent, between the 18th and the 21st synthesis reports (Kingdom of Cambodia, ILO, and Better Factories Cambodia, 2007a, 2007b, 2008a, 2008b). The ILO inspectors make recommendations, and verify follow-up and compliance over time (Elliott and Freeman, 2003, p. 118, commenting on reports up until end 2002). The monitors have no formal enforcement powers. The ILO project director has also reported “monitoring fatigue” – particularly because some factories are submitted to multiple codes, as required by some buyers (ibid., p. 119). Some reports candidly but succinctly admit the limited ability of monitoring to detect underage workers due to the lack of a universal birth registration system, the incidence of sexual harassment despite significant numbers captured by a gender survey, and violations of freedom of association and anti-union discrimination due to allegations of corruption (see, for example, Kingdom of Cambodia, ILO, and Better Factories Cambodia, 2007b). Moreover, some recent newspaper reports suggest that legislated wage protection measures may become necessary beyond monitoring to cushion employees faced with growing unemployment from rising factory closures (see Sophal and Hab, 2008). Despite this, it is noteworthy that, when the World Bank Group’s Foreign Investment Advisory Service conducted a survey among apparel buyers in 2004, the conclusion was that buyers “rated Cambodia’s labor standards higher than those of regional competitors, and … would continue to purchase garments from Cambodia if credible monitoring by the ILO were to continue” (Polaski, 2006a, p. 14). For Sandra Polaski, the ILO monitoring and reporting system acts as a form of “reputation risk insurance to global apparel retailers” (ibid., p. 15),70 despite the real problems that continue to exist. The initial 5 per cent quota expansion was granted in May 2000 and a further 4 per cent was granted in September 2000, as further improvements in workers’ rights were noted. Although the total 9 per cent was extended into 2001, the remaining 5 per cent of the promised 14 per cent was withheld as incentive for continuous improvement (Elliott and Freeman, 2003, p. 117). Elliott and Freeman 69 This chapter is based on the first 21 reports, through 2008. 70 But Polaski (2006a, p. 33) could also envisage the monitoring and oversight role in the hands of private sector actors, including self-regulating bodies. 123

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hasten to add that the 14 per cent increase was worth approximately US$50 million per year, “far in excess of the costs to the Cambodians of improving standards”.71 The prospective nature of the increase was seen as a key aspect of the positive incentives for continuous improvement inherent to the programme (Polaski, 2006a, p. 29). Cambodia, which applied to become a WTO member in late 1994, became the 148th member of the WTO on 13 October 2004. Cambodia is the second LDC to join the WTO through the full working party negotiation process.72 US exports to Cambodia have reportedly increased significantly to nearly US$70 million in 2005, leading to the signing of a Trade and Investment Framework Agreement with the United States.73 The ILO reports that, despite the expiry of the MFA on 1 January 2005, the Cambodian export garment industry through to 30 April 2006 has faced an 11 per cent growth in employment, with constant wages.74 The Better Factories programme, staffed almost exclusively by Cambodian nationals,75 emphasizes capacity building and was initially expected to be “self-supporting” by 1 January 2009.76 While Elliott and Freeman (2003, pp. 117–119) report on industry opposition in the United States, as well as the opposition in some developing countries to the Cambodian conditioning of trade and labour standards, they ask whether the experience may enable Cambodia to garner a reputation as a niche market post-MFA to ensure export markets. Th is hints at the kind of consideration that is central to constructing comparative institutional advantage. For example, Kevin Kolben (2007) similarly commends the approach for moving beyond state-centrism to combine public and private regulatory strategies; he considers the Cambodian garment industry to be an early prototype of an integrative linkage between trade and labour regimes. Indeed, the ILO agreed, on 71 See also Better Factories (undated) reporting that the cost of the monitoring is modest, at less than US$3 a year per worker, or US$2,800 per factory, although factories that take part in training programmes contribute further to the cost. Financing is now broadened and includes the US Department of Labor, the United States Agency for International Development (USAID), the French Development Agency (Agence Française de Développement, or AFD), the Cambodian Government, the Garment Manufacturers Association of Cambodia and international buyers. 72 For a discussion of the history of Cambodia’s accession to the WTO, see WTO (undated). 73 Trade and Investment Framework Agreement between the Government of the United States of America and the Royal Government of Cambodia, Washington, DC, 14 July 2006. See also Office of the USTR (2006). 74 Wages were reported to be at US $72 per month, above the minimum wage of US $45 per month, which represents a 6 per cent decrease in real wages when adjusted for inflation: see Better Factories Cambodia and ILO (2006). 75 It has a team of 11 monitors (see ILO and Better Factories Cambodia, 2005). 76 See Better Factories (undated). See also Polaski (2006a, p. 25), commenting on the surprisingly cost-effective nature of the programme. Polaski (ibid., p. 27) also points out that the project, which previously enabled buyers and retailers to benefit from the reputational insurance without assuming the premium, has been reformulated so that the buyers contribute somewhat to sustaining it. 124

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21 August 2006, to collaborate with the International Financial Corporation (IFC) – the private arm of the World Bank – to build on the Better Factories Cambodia programme to create a global portal and global tools for labour standards monitoring and remediation systems in global supply chains. Attention under this “Better Work” initiative is placed on providing reliable data on labour standards compliance and a cycle of improvement by enterprises, while extending the monitoring information management system, including that for public labour inspection (ILO, 2006c).

3.4.5 The Republic of Korea Korea emerged from the Second World War, the departure of Japan and the arrival of the US military with a ravaged economic base. Despite the initial introduction of US employment law principles – notably, at-will employment – Korean labour legislation soon came to replicate Japanese labour laws; indeed, both countries rejected employment at-will in favour of lifetime employment (Park and Lee, 1995, p. 31; Kitt, 2003, pp. 537–540). Kitt describes the implicit labour “bargain” that fuelled the Republic of Korea’s export-led (but import-substitution-based) industrialization (Standing, 1991, p. 19) from the 1960s into the 1980s. By strategically utilizing Korea’s most abundant natural resources, plentiful and inexpensive human capital, new industries were able to produce and export goods at prices cheaper than those offered by foreign competitors. Under the banner “develop now, share later”, General Park pursued restrictive new labor laws that furthered the competitive edge of Korean businesses at the expense of workers’ rights. These new laws curtailed unions and their activities to discourage unwanted wage hikes and labor disputes, as well as to prevent political derailment of government policies and a feared radicalization of its workers by North Korean spies. In return for these sacrifices of long hours, low pay, and limited rights of collective action, Korean workers received what had already become an institutionalized part of the Japanese labor system – the implicit benefit of life-time employment security. (Kitt, 2003, pp. 542–542)77

Despite a policy of lifetime employment security, Hyoung Cho et al. (2004, p. 37) note that “contrary to the common belief that all Korean males had life-long jobs, 77 Through government credit, chaebol subsidized social security by maintaining this lifelong employment despite economic downturns (see Root, 2003, p. 588). For a close chronicling of the “development dictatorship” in the 1960s and 1970s, see Park and Lee (1995, pp. 31–32, 34). 125

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only about two-thirds of male workers had regular contracts”. Moreover, most employed women “faced considerable insecurity and instability regarding employment and income” (ibid.). Women predominated in temporary and daily work. In light industries, young rural women were recruited, but with increased educational opportunities, women gained employment over time in a wider but limited range of occupations, and grew continuously until the 1997 Asian Financial Crisis (ibid., pp. 35–38). The Korean model was fundamentally developmentalist, with strong state intervention in investment linking it to the banking sector and the chaebol, which were large, diversified businesses that secured domestic production and export strategy (ibid., pp. 31–32). While the developmentalist state heavily emphasized social policies – notably, education, housing, and health – Cho et al. note that “social protection afforded through state provided social welfare schemes and through social insurance initiatives … was greatly limited until the later 1980s … leaving corporate welfare, ‘market’ provision and household provision to plug the gap” (ibid., pp. 46–47). Unrest of the “Spring of Seoul”78 from both workers and student groups led to “even more depressed labor rights than in the 1970s”, and the underground union movement and activism by students, who linked these causes to democratization, grew throughout the 1980s (Park and Lee, 1995, p. 33). Facing the risk of embarrassment during the 1988 Seoul Summer Olympic Games, the government introduced significant democratic reforms, including free elections in June 1987. After a wave of strikes,79 it introduced amendments to the labour laws to allow the formation of unions, to limit government interference in labour mediation and arbitration, and to enforce a minimum wage (Kitt, 2003).80 Yet lifetime employment remained until the Korean Supreme Court began to dismantle it and, with the early signs of economic slowdown that preceded the Asian Financial Crisis, Korea moved to reform lifelong employment (ibid.). The Republic of Korea had also come under criticism for ongoing labour relations violations, which were brought to international attention during admission proceedings to the OECD. The Republic of Korea joined the ILO on 9 December 1991 and, in 1995, was brought before the ILO’s Committee on Freedom of Association (CFA)81 on allegations of repression and imprisonment of 78 There were over 400 labour disputes, ending in a military coup in May 1980, and the start of the Fifth Republic (see Park and Lee, 1995, pp. 32–33). 79 See Lee (2002), who adds that the number of strikes skyrocketed to 3,749 in 1987 alone. 80 The minimum wage legislation is argued to have reduced the gender wage differential to a limited degree (see Cho et al., 2004, pp. 38–39). 81 Case No. 1865 (Korea, Republic of): Complaints against the Government of the Republic of Korea presented by the Korean Confederation of Trade Unions (KCTU), the Korean Automobile Workers’ Federation 126

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trade unionists, notably in the public and construction sectors. International pressure prior to admission to the OECD led to significant scrutiny of the Republic of Korea’s labour law and labour relations practices. To be admitted, Korean authorities had to commit to “reform existing laws on industrial relations in line with internationally accepted standards, including those concerning basic rights such as freedom of association and collective bargaining”.82 This was lauded as a victory for those who wished to see membership in organizations of economic liberalization linked to an acceptance of a labour and human rights core. Yet the results, in concrete terms, have hardly been unidirectional. It is true that, in May 1996, the Republic of Korea established a Presidential Commission on Industrial Relations Reform (PCIR) (Lee, 2002, pp. 226–227). But the resulting law, which codified the Supreme Court’s 1989 blow to lifelong employment,83 was passed in secret “in the early morning hours of December 26, 1996” (Kitt, 2003, p. 546).84 Naturally, the amendments to the Labour Standards Act, No. 5309 of 1997, were deeply controversial, and culminated in a costly, nationwide strike lasting from December 1996 to March 1997 (Lee, 2002, p. 227). Further revisions resulted, but subsequent events overshadowed them. The Asian Financial Crisis at the end of 1997 resulted in the “humiliation” (Kitt, 2003) of Korea needing IMF assistance (OECD, 2000), and the IMF-led changes – carried through a Tripartite Commission on Fair Burden Sharing – entailed labour flexibility devices, focusing on dismissal provisions.85 Within the OECD framework, through pressure by the Trade Union Advisory Committee (TUAC) and a number of OECD member states, the OECD Council instructed its Committee for Employment, Labour and Social Affairs to “monitor closely the progress made on labour reforms in the light of [the Republic of Korea’s accession] commitment” (ibid., p. 4; see also ICFTU, 2006). The OECD conducted a labour market review of the Republic of Korea in 2000, calling for the Republic to act to consolidate “social sustainability” of its development process, including through “[f]urther action to consolidate the industrial relations system, reform labour law, and to improve the coverage and effectiveness of labour market and social safety-net policies” (OECD, 2000, p. 2). The OECD considered it to be necessary to create “a less confrontational and more consensual system of industrial relations if the Korean economy and society is to modernize (KAWF), the International Confederation of Free Trade Unions (ICFTU) and the Korean Metalworkers’ Federation (KMWF), 331st Report of the Committee of Freedom of Association. 82 See OECD (2000, p. 3) and ICFTU (2006). 83 Case 87 DA KA 2132 (23 May 1989). 84 Opposition party members were absent, and there was no parliamentary debate. 85 Kitt (2003) emphasizes the complications and limited effectiveness of the legislation – particularly in light of frequent wildcat strikes and other resistances. 127

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and prosper” (ibid., p. 3). It cited areas that are considered to be in conflict with internationally accepted standards, including “trade union pluralism, third-party intervention in collective bargaining, the right to organize of public servants and teachers, the right to strike in the public sector, trade union membership of dismissed or unemployed workers and the payment by companies of their full-time trade union officials” (ibid., p. 4), as well as that “arrest and imprisonment of trade union activists for activities that would be regarded as pursuit of legitimate trade union goals in other Member countries” (ibid., emphasis added). In 2004, the Korean government published a roadmap for industrial relations reform. Tripartite discussions continued into 2006, although significant repression of civil servants and construction industry workers continues to be reported (ICFTU, 2006). Consequently, the close monitoring continues and, ten years after the Republic of Korea’s accession to the OECD, the International Confederation of Free Trade Union (ICFTU), TUAC and Global Union Federations (GUFs) participated in a joint mission on 24–26 August 2006, on the invitation of two Korean affi liates, prior to the 14th ILO Asian Regional Meeting to be held in Busan, Republic of Korea (ibid.). But ILO CFA Case No. 1865 continues. It should be noted that the OECD itself recommends, as a policy priority, that the Republic of Korea “reverse the growing proportion of non-regular workers in the labour force, which creates equity and efficiency concerns, … the conditions on collective dismissals be relaxed and that the social safety net, particularly employment insurance, be further developed” (2006, p. 38). Meanwhile, the ICFTU, TUAC and GUFs have urged the international labour movement to renew international solidarity and focus on the Korean situation (ICFTU, 2006). While it can be suggested that the linkage with OECD mechanisms has created a forum through which concerns about labour violations can be raised and while some steps “in the desired direction” (OECD, 2000, p. 4) have been noted by the OECD in respect of labour law reform, the challenge to the respect of fundamental principles and rights at work remains alive in a country that has increased its level of development alongside a model that considers the democratization inherent in labour rights to be secondary.

3.5 Towards global distributive justice The chosen examples above are all reminders that the relationship between trade liberalization and labour law is embedded in both local and transnational regulatory contexts. It starts from the premise that multilateral and regional trade 128

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institutions are not natural or predetermined; rather, they should be understood to be political, economic and social constructs. The examples offer the opportunity to recast the trade liberalization and labour law discussion in terms that are not those of a vision of a naturally occurring market in which equilibrium prices are set without distortions: globalization should not be viewed deterministically;86 rather, it can be resisted and, indeed, reconstructed. The nature of the constructs also matters. The multilateral trade agreements have sealed distributive concerns out of the bargain. They assumed the distributive justice questions, including those relating to labour law, to be domestic concerns. As trade law specialist Don McRae (2005, p. 610) has commented on this analysis of distributive justice beyond borders, “if distributive justice is to be viewed on a global scale, the issue is not just balancing the increased price to consumers against the protection of a job market within each country. The protection of the job market of developed countries may have to be measured against the loss of job opportunities in developing countries.” Attention to the relationship between trade and labour law reminds us that the exclusion frames trade in a way that prevents trans-border mitigation of the adverse impacts on labour beyond borders. The examples of Mauritius and the Mexican border region offer further reminders that migration and the gendered nature of work have also been sealed out of the trade and labour law bargain. By focusing on “employment” rather than work,87 and by emphasizing production within states rather than the citizenship (literally and figuratively) of workers who undertake the production, analyses that correlate trade and employment overlook labour law’s exclusions. The fact that distributive concerns have been sealed out of most analyses88 leads to the kind of consequences modelled by Lee and experienced by CARICOM member states in the wake of adverse trade liberalization decisions. As Bhagwati (2000) argues, there is no reason why international mechanisms should not be marshalled to prevent adverse impacts to employment – and the ensuing tendency to favour production in non-unionized, lower wage, migrant labour zones – that face the current CARICOM in the production of bananas. 86 For a discussion, see Blackett (1998b). 87 See Standing (1991, p. 242). The relationship between women’s work and their structural position in the informal export-oriented economy facilitates this dichotomization and the neglected trade impacts. 88 The joint ILO–WTO study more optimistically argues that the relationship between global economic integration and redistributive policies is “increasingly recognized”, although “there is so far no agreement on how to design appropriate redistribution policies”, because incentive structures are potentially affected by redistributive transfer (Jansen and Lee, 2007, pp. 8, 73–76). See also Maur (2006), who observes that “studies of trade liberalization have tended to set aside issues related to adjustment by focusing on the question of whether trade liberalization would bring net costs or gains in the long term at country level”. 129

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The Cambodian case study provides a counter-example, in that it reflects how attention by a major industrialized trading partner to combining accrued market access with continuous improvement in the effectiveness of local labour law can enable a state to garner comparative institutional advantage. Both examples, which entail a mix of national, bilateral, and international responses, hint at the importance of recognizing a distributive dimension in trade relationships and addressing it through more careful attention to why adjustment assistance is needed, and how it can be accomplished.89 But McRae (2005) suggests that the Consultative Board on the future of the WTO – of which Bhagwati himself was a member – was reluctant to accept the logical consequences of the institution’s own fervent support for trade law’s nondiscrimination principles. McRae notes that: [W]hile it recommended that there be increased funding for trade policy related adjustment assistance for developing countries, it did not recommend that developed countries show more willingness to undertake adjustment themselves rather than so readily resort to safeguard measures or to other trade remedies in the face of developing country imports. (McRae, 2005, p. 610)

It is argued here that, in pragmatic discussions of how to enable governments to address the labour regulatory implications of trade liberalization policies, increased funding for trade policy-related adjustment assistance for developing countries would be a significant start – and an acknowledgement of the distributive justice considerations beyond borders, at different governance levels. In other words, it is not necessary to assume that individual states should be the (only, or main) source of their own adjustment:90 bilateral, regional and international action can be targeted in the ways illustrated in the case studies above. Targeted technical assistance by international institutions to provide adjustment assistance is one way in which this relationship may be considered, as in the Better Factories Cambodia example and its recent extension to other countries.91 Ruggie (2003) elucidates the potential role of a range of social processes 89 See Jansen and Lee (2007, pp. 2, 76 and 79). See also Maur (2006, p. 3ff ), who identifies efficiency, political economy, equity and international cooperation justifications for adjustment to be undertaken. 90 Maur’s caution (2006, p. 6) that “one should look at the government sector with care” is noted, although it is argued that the regulatory state in developing countries should be analysed with attention to its complexity and how other actors – including internationally – can buttress rather than undermine state capacity (see Blackett, 2004). 91 Given the scope of this review, the author has refrained from a critique of the limited effectiveness of monitoring to shift labour regulation away from a management self-governance ideology that analogizes 130

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and movements in the process of embedding global markets “within shared social values and institutional practices”, despite the absence of global governmental structures to foster the common good. Hepple (2005, p. 275) offers an institutional account, which stresses that “it is within [a] dynamic relationship between multivalent legal orders that the ability of labour law to contribute to social justice within the global market will be determined”. Both emphasize the significant difficulty associated with these strategies, but Ruggie (2003, p. 27) reminds readers that the original embedded liberalism compromise was itself the result of a long and hard battle. It is further contended that, from a broader distributive justice perspective, regional spaces may themselves provide a particularly fertile governance level from which to challenge a flattened, unidirectional vision of globalization. The regional reaffirms national choices, mediates international rules and makes the spaces of distributive justice seem tangible. A picture of the impact of trade on labour law is constructed from the bottom up, one country and one region at a time. It is also an approach that may resist a problematic tendency to obscure the distributive effects of the design of markets to focus exclusively on redistributive effects afterward (Rittich, 2002, p. 282). Rather, attention to regional construction offers an opportunity to fuse attention to the nexus between the economic, the political and the social. Both the globalization rhetoric that forecasts the disappearance of the nation state and the paradoxical state-centred focus of multilateral trade are decentred when regionalism is considered. Regionalism provides an opportunity to reconsider and reconstruct the spaces through which liberalization is mediated, and to argue for redistributions (such as considerations of the costs of adjustments to trade) beyond national borders. The willingness of the EU to put into place mechanisms to promote economic development in low-income members on accession (notably, Spain and Portugal) is a historical precedent. Regions provide the moral justification for treating one’s “neighbours” differently and provide a manageable, incremental scale for action.92 Certainly, the ongoing EU EPA experiences remind us that the nature of the regional agreement and the process at which it is arrived at are critical to any renegotiation of redistributional consequences. Yet there remains room for cautious optimism that regionalism can allow member states to move beyond the act of sameness reflected in signing and ratifying an international workers’ rights with other “accounting” features, towards a framework emphasizing citizenship at work (for details, see Blackett, 2001). But these framing considerations need to be addressed within the ILO’s engagement as an independent monitor in Cambodia. 92 One notes that regional and bilateral agreements do not necessarily rely on “proximity” as the basis for regional arrangements, but that a “neighbourly” relationship is created. Yet regionalism brings its own non-discrimination challenges (see, e.g., Hudec and Southwick, 1999). 131

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agreement, to consider how a member state may be enabled to meet the terms and objectives of the trade liberalization agreement, which in the case of multilateral trade includes “raising standards of living, ensuring full employment and a large and steadily growing volume of real income”, in addition to “the objective sustainable development”.93 Regionalism is a reminder that trade relationships and their contours are constructed – and that the constructs themselves may be marshalled to promote a mutually enhancing relationship between trade liberalization and labour law.

93 See 1994 Marrakesh Agreement Establishing the World Trade Organization, Preamble. 132

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PART II

Labour law and worker protection in the South Regional perspectives

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Labour law in Latin America The gap between norms and reality

4

GRACIELA BENSUSÁN 1

4.1 Introduction The aim of this chapter is to analyse the effectiveness of labour law2 in Latin American countries with high indicators of social inequality. Notably, this chapter examines the factors that impact on the capacity of labour law to exert its protective function. It also presents some of the responses developed in the region during the last few years to address these challenges. The cases presented here have been selected mainly because they reflect the diversity of situations in the region. This chapter, therefore, covers countries with a history of strong protectionist labour law (Argentina, Brazil and Mexico) and countries with lower levels of state intervention (Costa Rica and Chile). A second criterion for selection was that countries apply different policies to strengthen worker protection in the face of the challenges posed to the world of work by globalization. A third was to choose countries with various income levels, in order to ascertain whether income level had any impact on the effectiveness of labour law. As a result, ten countries have been chosen for this chapter. Of those, four are upper middle-income countries in the regional context (Argentina, Chile, Mexico and Costa Rica) and, with the exception of the last of these, all have acute levels of social inequality; six are lower middle-income countries (Brazil, the 1 The author is grateful to the anonymous reviewers and Tzehainesh Teklè for their comments on earlier versions of this chapter. 2 The expression “effectiveness of labour law” is understood to refer to the law’s capacity to achieve its objectives, in particular to protect the structurally weakest in the labour market (Weller, 1998). 135

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Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua), in the first of which inequality is greatest. The chapter also includes a number of references to other countries in the region.3 The leading argument of this analysis is that, regardless of income level differences and inequality among the countries studied, there is a wide gap in all of them between the original design of labour legislation aimed at protecting the weakest part of the employment relationship and its implementation in practice, as well as between the scope of labour law and the categories of worker in need of its protection. This distance tended to grow in the context of globalization. The main consequence is that large contingents of workers remain unprotected either de jure or de facto. Beyond this convergence, it is argued that diverse factors – such as the national institutional traditions, the power of unions, and the efficiency of authorities in charge of applying labour norms – had an influence on the modalities and the scope of institutional adaptation to the new context, both through legal reforms and/or facts on the ground. It has recently been noticed that the promotion of an extreme type of labour flexibility as a means of increasing the creation of formal employment, by liberalizing forms of contracting and dismissing workers, has lost its appeal. In some national and regional agendas it has been replaced by a search for more effective protection and inspection tools. The need to increase the effectiveness of labour legislation has appeared on the countries’ agendas, starting with a more adequate institutional design in terms of the current workers’ and labour market characteristics, including a growing participation of young people and women, increased labour mobility, the growth of informal, atypical and outsourced employment, and the weakness of union organizations. The chapter comprises three parts. The first sketches the evolution of labour law in the countries concerned and the underlying economic and political context. The second looks at the factors that challenge the capacity of labour law to deliver protection to workers in the region. Notably, it considers old and new problems relating to the scope of labour law and the impact of the reforms carried out during the last two decades. It also describes the weaknesses of the institutions with a responsibility in the enforcement of labour laws – namely, the labour inspectorate, the labour courts and trade unions – and the efforts made to overcome them. The third part is a case study on the effectiveness of 3 According to the World Bank (2006), all countries in Latin America and the Caribbean are developing countries. It classifies them all, with the exception of Haiti (low-income), as lower middle-income economies (Bolivia, Brazil, Colombia, the Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Jamaica, Nicaragua, Paraguay and Peru) or upper middle-income economies (Argentina, Costa Rica, Chile, Grenada, Mexico, Panama, Trinidad and Tobago, Uruguay and Venezuela). 136

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labour law in promoting gender equality in Mexico, with a focus on the exportoriented maquila apparel industry. This case study illustrates the limited capacity of labour law to protect women from discrimination, including in the jobs that are emerging in the new economy.

4.2 The evolution of labour law and the economic and political context Most Latin American countries adopted labour laws in the first half of the twentieth century with the aim of protecting wage earners, who were seen to be the weaker party in the employment relationship. The assumptions underpinning the original design were a strong state, stable jobs (especially in the large formal companies of the dynamic sectors of the import substitution model) for men with no family responsibilities (these were shouldered by their partners), strong unions, and wages that tended to even out and which had little impact on competitiveness because consumption was basically internal. But in the last two decades, labour laws have undergone various reforms. Starting in the 1980s, labour institutions in Latin America were confronted with a radical change of context and an adverse macroeconomic situation that modified the assumptions described above. To some extent, these have always been indicative only of the situation of the economy’s most modern sector, but the gap between the law and reality grew wider with the advent of globalization and market-oriented policies. In the 1980s, economic crises prompted the entire region to abandon the import substitution model, in which state intervention played a key role in the process of industrialization and in the internal market. The state would take active steps to raise industrial wages, while subsidizing and protecting national industry, thereby creating an environment that was conducive to the protection of wage earners. The shift to the export model reduced state intervention to buttress the social protection, industrial jobs and high wages that had sustained internal demand. During the period of economic liberalization that followed the recession of the early 1980s, structural adjustment policies were applied that were grounded in what was known as the Washington Consensus. The first of these reforms was trade and financial liberalization and privatization. The second generation of reform concerned tax and labour institutions, anti-corruption policies and new social policies. Deregulation and flexibilization characterized the labour law 137

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reforms, which generated changes above all in terms of individual rights. Various countries introduced drastic alterations to the protective nature of labour law, breaking with traditional principles (for example, that individual or collective agreements cannot establish conditions that are inferior to those that existed before, or to statutory norms) and deregulating labour markets (the extreme cases of Chilean reform in the late 1970s and early 1980s under the dictatorship, and much later the Peruvian reforms introduced by the Fujimori Government blazed a trail in this regard). Other countries introduced less thoroughgoing and profound changes, although they also moved towards flexibilization (Argentina, Brazil, Colombia, Ecuador, Guatemala, Nicaragua and Panama). There were a few cases of broad reform without flexibilization (Paraguay and El Salvador), and some countries made no changes at all (Bolivia, Honduras, Mexico and Uruguay). One review of events in 17 of the region’s countries in the late 1990s provided the following panorama in terms of flexibilization: two countries introduced radical change; three others also introduced radical change, but in fewer institutions; six countries introduced less far-reaching change; and six others reformed but did not flexibilize the employment relationship. Eleven of the 17 countries adopted flexibilizing reforms that affected about 70 per cent of the region’s wage earners. There is therefore no basis for concluding that the reform process had not gone far enough and needed to be taken further (Vega, 2001).4 On the fringes of the reform process there was also greater de facto flexibility. The employer discretion that often went hand in hand with corporate restructuring was also the consequence of low levels of pre-existing protection and/or the historical inadequacy of state enforcement (examples may be found in Central American countries such as El Salvador, Guatemala, Honduras and Nicaragua, but also in the Dominican Republic, Brazil and Mexico), or its significant deterioration where it had previously existed (Argentina, starting in the 1990s). Except in a few cases, the recommendations made by the international financial institutions in line with the Washington Consensus and corporate pressure to weaken the region’s trade unions, which the partisans of liberalization tended to see as upholders of privilege, opened the door to more flexible employment relationships, especially when public companies were privatized or large 4 On the other hand, Lora and Pagés (1996) warned that labour reform had been very limited in scope and was carried out in few cases, affecting only five countries seriously (Argentina, 1991; Colombia, 1990; Guatemala, 1990; Panama, 1995; and Peru, 1991). Their assessment has been used to argue that the absence of in-depth change is responsible for the problems observed in labour markets (Saavedra, 2003). But the Inter-American Development Bank (IDB, 2004) argues that flexibilizing labour reform is not the answer to all problems. A recent study on the need for further reform emphasizes the need to evaluate the effect of the reforms adopted to date and questions whether the strict application of rights affects competitiveness (Vega, 2006). 138

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private corporations were restructured – the very places in which workers benefited from the most protection. Although several countries, such as Mexico and Bolivia, followed only this path,5 most also introduced changes to the law. The package of reforms attracted capital flows and investment, and stimulated FDI, without creating new productive jobs; rather, traditionally vulnerable sectors were joined by those who entered new jobs without protection. The labour and economic reform of the 1980s and 1990s that introduced a new market-based economic and social paradigm spawned the extension of precarious employment – for some, the feminization of employment6 – and the exclusion of groups of workers from social protection. As financial markets opened up, governments were unable to stem the massive currency outflows that accentuated investment and growth instability. Trade liberalization had a negative impact on previously protected sectors, especially in companies and among workers whose products were intended for the internal market (Dussel, 2006). Although the region overcame the effects of the external debt crisis, the rise in gross domestic product (GDP) was slower than in previous decades, and was insufficient to reduce poverty levels and create the necessary number of formal jobs, with the result that levels of unemployment and informality went up (Tokman, 2004). In Argentina, the growth during the 1990s (until 1997) was not accompanied by the creation of formal jobs. In a country in which almost one-third of jobs were temporary before flexibilization, only 5 per cent of the formal jobs created between 1991 and 1996 took the new form of temporary contracts. This was fewer than anticipated, probably because the requirements established by reform made new temporary contracts more complicated to use than old temporary contracts and undeclared labour.7 Atypical contracts have not predominated in Brazil either. In 2003, they represented 4.3 per cent of the jobs created that year and were to be found basically in large companies, owing to the fact that the requirements to be met and their negotiation with the trade unions made such contracts difficult to implement. In addition, the perception is that temporary workers take legal action once the employment relationship has ended, demanding the rights inherent in open-ended contracts. This is consistent with the critical opinion that labour lawyers have of atypical contracts, which they deem unconstitutional because they 5 Although Mexico did not reform its labour legislation, it has introduced changes at the constitutional and statutory levels in the pensions system (1992–95 and 2006), basically following Chile’s individual capitalization model (Bensusán, 2006c). 6 Fudge and Owens (2006) use “feminization” to mean two things: more women working and the increasingly precarious nature of the work traditionally performed by women (that is, temporary, part-time, low pay, and with no trade union representation). 7 For an analysis of labour market performance in Buenos Aires and its effects on social exclusion, see Bayón and Saraví (2002). 139

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presuppose different treatment for workers doing the same or equivalent jobs (Cardoso and Lage, 2006). The number of undeclared workers in Argentina, on the other hand, increased by 56 per cent between 1990 and 2000, accounting for 43 per cent of wage earners (Bayón, 2003). It continued to grow until 2003, especially in companies with fewer than 100 employees, before gradually falling off with the application of new enforcement strategies and economic growth (Senén and Palomino, 2006). In 2005, Latin America was the second largest world region in terms of the average size of the informal economy after sub-Saharan Africa.8 The number of undeclared jobs grew in the 1990s as the costs of non-compliance with labour legislation fell.9 According to some academics, the rise in the number of undeclared workers may be more closely related to the loss of social support for the law among workers and employers than to its design (Senén and Palomino, 2006). Other research attributes it to the fact that labour law does not take account of the situation of numerous micro and small enterprises (MSEs) (Goldin, 2006b).10 Economic growth in the 1990s was accompanied by a rise in poverty and social exclusion levels, and by greater income gaps than in the period preceding the economic crisis of the 1980s, casting doubt on the supposed beneficial effect of economic and labour reform on employment (Stallings and Peres, 2000; ILO, 2002c; ECLAC, 2005, 2004). Poverty is more acute in rural areas, where worker protection and labour law enforcement are virtually non-existent.11 In 2002, 38.4 per cent of the urban population and 61.8 per cent of the rural population was living in poverty (ECLAC, 2005). In 2005, 39.8 per cent of the population (209 million people) were living below the poverty threshold (that is, on an income of less than twice the cost of the basic food basket) and 8 The term “informal economy” recognizes the existence of informal employment both in the informal and the formal sectors (ILO, 2002a). It is defined as income that is not reported to the taxing authorities, and which is generated by the production of legal goods and services, often through clandestine work. It includes all of the economic, monetary and barter activities carried out by unregistered or non-taxpaying agents. According to this definition, the size of Mexico’s informal economy is equivalent to that of Lesotho and Namibia (31 per cent); Bolivia has the highest average (67 per cent) and Chile, the lowest (20.3 per cent) (Schneider and Klinglmair, 2004, p. 5, cited in Zárate, 2008). On the problems of defining and measuring the informal economy in Latin America, see Gasparini and Tornarolli (2007). 9 On the role of labour inspection-related shortcomings, see section 4.3.3. 10 The number of undeclared jobs nevertheless fell in Argentina when the economy, legal protection and the enforcement of labour standards improved. This suggests that sustained economic growth is a key factor in restoring labour law to its previous prestige (Senén and Palomino, 2006). 11 The most serious problems of lack of protection and the highest rates of violations of fundamental rights (forced labour, child labour, discrimination and absence of freedom of association) occur in the farming and forestry sector, which also have high occupational accident and sickness rates and in which the indigenous population suffers the greatest discrimination and exclusion (ILO, 2005c). 140

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15.4 per cent (81 million people) were living under the indigence threshold (that is, less than the cost of the basic food basket). After three consecutive years of growth, the poverty rate is for the first time ever lower than it was before the crisis of the 1980s, although it remains high: the “region has taken 25 years to reduce poverty to 1980 levels”(ECLAC, 2006, p. 21). The introduction of temporary contracts, which limit workers’ rights and income, exclusion from social security systems, the transformation of public sector jobs, and recourse to atypical forms of hiring go a long way towards explaining the high levels of poverty among wage earners (Tokman, 2004; Vega, 2005; see also Portes and Hoffman, 2003). In this brittle context, expectations that the job deficit will be overcome through deregulation or labour flexibility are waning and the social protection agenda is gaining ground with the arrival (since 2000) of centre-left governments in countries such as Argentina, Brazil, Chile, Uruguay, Bolivia, Venezuela, Ecuador, Nicaragua, Peru and, more recently, Paraguay (in 2008). But many countries in the region continue to want more flexible rules – a process that heightens employer discretion in labour relations – as they associate enhanced worker protection with the difficulty of creating formal jobs.12 Nevertheless, even some of the partisans of the Washington Consensus and of labour flexibility have adopted a self-critical view, and are now seeking to promote better institutions and to strengthen active labour market policies that allow worker protection to dovetail more neatly with greater margins of employer discretion (Kuczynski and Williamson, 2003). Some authors (Piore and Schrank, 2006) observe that neoliberal policies failed most flagrantly in the field of labour regulation, but it remains to be seen whether the institutional arrangements that once existed will revive, or whether new institutions and policies will be constructed, and what thinking will guide them. Other labour law reforms undertaken in the past two decades had to do with the pressure associated with international trade agreements: the fact, in particular, that US trade unions wanted to avoid social dumping and that the Latin American countries wanted access to the US market pushed reform to enhance collective rights and enforcement mechanisms.13 Moreover, in some of the countries’ regions, processes of democratization that occurred in the late 1970s to early 1980s had an impact – albeit a contradictory one – on the protection of labour rights (see 12 The emphasis is on the need to make labour law even more flexible, so as to eliminate excessive wage-earner protection (Saavedra, 2003). The multilateral bodies have issued more nuanced recommendations in this regard, but the concern remains (IDB, 2004). The opposite position has also been developed, as an outcome of the crises experienced by the countries that opted for labour flexibilization in the 1990s (Stiglitz, 2000; Piore and Schrank, 2006). 13 On these reforms, see more in section 4.3.3. 141

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Goldin, 2007a, p. 7). In Brazil and Colombia, for example, political democratization led to constitutional change. But in an apparent paradox, while the constitutions gave greater recognition to collective rights and freedoms, the secondary legislation emphasized flexibility – especially regarding individual rights.

4.3 Worker protection under labour law: Old and new problems

4.3.1 The limited scope of labour law

The main patterns As stated above, the labour laws adopted in the first half of the twentieth century aimed to protect wage earners. From their inception, they left large groups of workers without coverage, creating a mismatch between the scope of labour law and the range of types of worker existing in the region.14 This was especially true of workers with less purchasing power, and those from micro or family businesses, who were not covered by the law in some countries, and of agricultural day labourers, whose treatment was subject to major differences between countries. In other cases, the law applies, but provides lower or inadequate levels of protection. This is the case of domestic workers, homeworkers15 and construction workers. For example, in the case of domestic work, certain rights – such as the limited working day – tend to be restricted. Moreover, domestic work is exempt from mandatory social security in countries such as Colombia and Mexico. Unpaid family workers do not benefit from labour protection and social security in most countries (Mesa-Lago, 1990, 2007). The original design problems were compounded by the fact that the law was ill adapted to the new globalization context, spawning large groups of workers without de jure or de facto protection. Its role has been undermined by the increasing informalization of employment.16 This covers various situations, including the growing trend for using contract labour, temporary employment 14 On the mismatch as a common problem in the South, see Teklè (Chapter 1) and Filali Meknassi (Chapter 2). 15 “Home work” is understood to refer to work that is customarily performed for an employer at the home of the worker or at a place freely chosen by that worker, without supervision or guidance by the employer. 16 “Informalization” refers to the process by which employment is increasingly unregulated and workers are not protected by labour law: it “covers both employees who are nominally covered by labour law but are not able to enforce their rights and those who are not employees because they have the legal status of independent contractors. In the case of externalized work, this includes situations where the nominal employer does not in fact control the employment relationship” (Benjamin, 2006a, pp. 188–189). 142

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services (TESs), and other “atypical” forms of hiring that make it difficult to ascertain who is working for whom and to determine legal liability (Bronstein, 1998; Bensusán, 2006c). Externalization 17 is becoming more and more commonplace, especially among beneficiary companies wishing to avoid the costs of a collective agreement (De Buen, 2001; De la Garza, 2005). Although these practices are not illegal (unless the contracting company is non-existent and is simply a front for the true employer), contradictions and loopholes in the law make it possible to simulate outsourcing and make it difficult for the workers involved to benefit from their rights. Workers often invoke the beneficiary company’s liability and demand working conditions that are equal to those of the workers hired directly by it only once the employment relationship is terminated.18 Problems such as ignorance about who is the true employer, or the fact that the employer apparently has no attachable property – especially in the case of contractors that are small companies – can discourage workers from exercising their labour rights. The legislation of some countries expressly authorizes the existence of triangular relations involving, for example, manpower companies, or temporary employment agencies.19 Chief liability vis-à-vis the workers falls to them, whereas the principal or user companies – in whose installations the workers labour – are obliged to maintain adequate conditions of safety and health. The ILO Private Employment Agencies Convention, 1997 (No. 181) endorses this approach. Other examples of triangular employment relationships are to be found in Peru, where the Employment Act, 1992, allows the formation of worker cooperatives for the purpose of promoting independent employment. These cooperatives can comprise up to 50 per cent of a firm’s workforce without there being an employment relationship, although the cooperative’s workers are entitled, as members, to receive income and employment conditions from the cooperative that are similar to those of the user company’s other workers (Bronstein, 1999). Another phenomenon is the use of commercial or civil contracts, which exclude or disguise the existence of an employment relationship, which is to say the legal precondition for the applicability of labour law (see Teklè, Chapter 1). 17 For an analysis of the different forms and legal implications of externalization, see Teklè (Chapter 1). 18 For the case of Argentina, where the law obliges the principal company to ascertain that the contractor meets its obligations towards the workers, including those relating to social security, see Goldin and Feldman (1999); for Mexico, see De Buen (2001). About 95 per cent of individual controversies in Argentina, Brazil, Chile and Mexico arise from unjustified dismissals, which is when workers claim their outstanding rights (Bensusán, 2006c). 19 Some countries prohibit the use of TESs in sectors such as construction, in which the workers are more vulnerable (Bronstein, 1999). 143

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This phenomenon is particularly important in Latin America. According to the data on non-agricultural employment, the number of informal workers (salaried and non-salaried) in the region rose from 42.8 per cent in 1990 to 48.5 per cent in 2005, and most of the increase is accounted for by self-employed workers (25.1 per cent of all those working), followed by micro-enterprise employees (17 per cent) and domestic workers (6.3 per cent) (ILO, 2006d). But these averages do not sufficiently account for regional heterogeneity. The data available in Chile on the extent of civil contracts (which may disguise a subordinate employment relationship) show that, in the late 1990s, they accounted for 6.6 per cent of jobs in micro-enterprises, 4.3 per cent in small businesses, 2.9 per cent in medium-sized businesses and 1.2 per cent in large companies (Feres et al., 1999). Exemplary situations of workers in the region who are self-employed, even though they are economically dependent on the client, include bricklayers, craftsmen, carpenters, plumbers and salesmen, and professionals and other kinds of service provider, whether qualified or not. Such workers do not benefit from protection under Latin American laws, although various countries have alternative social security schemes for them. One exception is the 1999 Constitution of the Bolivarian Republic of Venezuela, which extends labour protection to all workers. But the secondary legislation, which grants the right to form trade unions, negotiate collective agreements and benefit from social security,20 establishes labour protection only where it can be provided in respect of the actual working conditions. For example, it would not be possible to apply collective agreements if there were no one on whom the obligations could be binding, or to give effect to social security if workers and employers have paid no contributions. In fact, in Venezuela self-employed workers regulate their working relations via other contracts, which may be commercial or civil (Iranzo, 1999). The figure of the self-employed worker often hides an employment relationship in which the employer evades labour responsibility and tax liability. Travelling salesmen working on commission – who are protected by labour law, but whose employment relationship is masked by the fact that they are considered purchasers of articles to be resold – tend to fall into this category. Mexico’s propineros (workers whose main source of income is tips) are not considered employees of the companies in which they work, such as self-service shops or petrol stations. Lottery ticket and newspaper salesmen are in the same situation (De Buen, 2001). In Venezuela, disguised employment relationships exist in sectors such as air transport, and selling food and drink, and are even widespread in branches such as the airline industry. Some workers accept these conditions as normal; others 20 Ley orgánica de trabajo of 22 May 2001. 144

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agree to them because they have no other choice (Iranzo, 1999). These are old problems that grow in importance in contexts in which employers seek to reduce labour costs and in which the lack of formal jobs forces workers to accept unprotected employment. The transformation of public sector employment – the prototype of protection in the old labour model – has added to the host of people employed under new terms and conditions that allow the state to elude its responsibility as an employer, and witness the proliferation of professional service contracts and other kinds of contracts that turn public servants into self-employed workers. Under these new contractual relationships, many workers function as though they are subordinate employees: they work in state departments, receive orders relating to their work, and have working hours imposed by their hierarchical superiors. The labour law of each Latin American country uses essentially the same criteria to determine whether the worker is a wage earner or self-employed (on which distinction the law’s application depends) and gives precedence to the “principle of reality”, according to which the form of the relationship is unimportant and what counts is what is happening on the ground.21 This principle also applies to labour relations in the framework of subcontracting.22 Further, the countries use the same criteria to define the employer, the contractor, the intermediary and the beneficiary (or user) company. Despite these concordant criteria, they have been unable nonetheless to stem the deterioration in the quality of employment (Bronstein, 1999; Vega, 2005). Other forms of work that tend to escape labour law protection because they do not correspond to the “standard” (wage, full-time, permanent) model of employment are home work, flexible, fi xed-term and part-time work,23 which have become increasingly common in some countries. The case of Chile illustrates a situation in which temporary contracts are extremely widespread, encompassing 21 According to Bronstein (1999), this principle stems from the Uruguay doctrine and has been incorporated into various laws, such as those of Mexico – which, since 1970, has established the presumption that an employment relationship exists between the person providing the labour and the person receiving it – the Dominican Republic and Panama. 22 According to the draft Recommendation on Contract Labour discussed by ILO in 1997 and 1998, the criteria for deciding when contract labour constitutes an employment relationship are the following: (i) the form of the employment (general or individual); (ii) the duration of the employment and other employment conditions (i.e., to what extent they meet labour standards); (iii) the form of payment (at regular or irregular intervals); (iv) personal work, supervision, and disciplinary control (supervised or unsupervised); (v) investments and the provision of material or machines; and (vi) others, such as the distribution of profits and losses, and the regularity or exclusiveness of the employment (Bronstein, 1999). 23 Interest in avoiding non-salary costs is one of the reasons for the spread of these atypical forms. For example, in Argentina the difference in non-salary costs between a temporary and a permanent job varied from 42.6 to 32 per cent at the end of the 1990s. In 1998, in Brazil the figure was between 37 and 67 per cent (Vega, 2005). For Argentina, Brazil, Chile and Mexico, see Bensusán (2006c). 145

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over 30 per cent of wage earners – probably because the earlier dictatorship destroyed the system of employment stability and the trade unions are weak (Bensusán, 2006c; Figueroa, 2006; Senén and Palomino, 2006). Innovations in computer technology have also made it possible to engage in telework from home; this is a form of employment that, along with outsourcing, has spread in industry and services in the last two decades.

4.3.2 Recent responses to changing forms of work Alert to the consequences of growth in “atypical” and triangular employment relationships, and under strong pressure in recent years from various trade union organizations, several countries are currently introducing legal reforms (Chile, Uruguay, Argentina and Ecuador) and are adopting new criteria in case law to make worker protection more effective (Argentina and Brazil).24 They do not go so far as to prohibit intermediation and contract labour (except in Ecuador, where it was severely restricted in 2008); rather, they seek to fulfi l two types of objective. First, they impose new requirements on the use of TESs that tend to reduce their activities and encourage direct hiring. They penalize disguised employment relations and clearly define who is the employer and who has the capacity to give orders to the worker, while at the same time extending joint liability between the user companies and the contractors (without conditions). They thereby seek to enhance worker protection and to limit the incentives to have recourse to TESs as a strategy for reducing labour costs in the face of competitive pressure, while not preventing the TESs from functioning as sources of specialized labour or as means of reducing other kinds of cost. It is noteworthy that the new requirements will indirectly oblige the user companies to take much greater care in ensuring that the contracting companies meet their labour obligations – a task that they will share with the labour authorities, who are given new enforcement capacities. Second, steps have been taken to improve the opportunities for contract workers to organize and engage in collective bargaining, which is a decisive factor in the effectiveness of labour rights and which has also been accompanied by 24 The background document for the 16th Ordinary Congress of the Inter-American Regional Organization of Workers (ORIT) included the objective of organizing outsourced workers with a disguised employment relationship (subcontracting with only one company, cooperatives with fake members, and professionals with only one client). It also introduced, as a key component of its strategies, the concept of the “trade union network”, linking outsourced and subcontracted workers to the employees who constitute the core staff of the company for which they work (available online at http:// www.ituc-csi.org). 146

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change in trade union strategy. Although Mexico has not yet taken these steps, it is significant that the highest authorities have recognized that the law needs to be adapted accordingly.25 In 2006, countries such as Chile and Uruguay adopted similar changes,26 riding the new wave of reform aimed at the protection of wage earners. Some of those changes provide solutions to problems affecting all of the region’s countries and could serve as models for legal modifications elsewhere. It is important to note, however, that while Uruguay has a well-developed system of trade union representation that comprises good dialogue with the government and employers’ organizations, Chile has encountered serious problems in increasing the number of affiliations and augmenting trade union power. This, together with a more flexible labour model, partly explains why precarious employment is widespread and more protective rules are needed (Figueroa, 2006).

4.3.3 Problems relating to enforcement mechanisms A further important factor impinging on the capacity of labour law to protect workers is the weakness of the mechanisms and actors with a responsibility in the enforcement of labour law.27 Various studies have revealed major shortcomings in the performance of the region’s labour ministries (especially their inspection services) and labour dispute resolution systems, in addition to problems relating to the design of their structure and competencies. The result is that it costs employers little not to implement the law and, ultimately, reduces the level of worker protection (Jatobá, 2002; Bensusán, 2006c).28 Since the 1980s, interest in giving effect to intervention and enforcement capacities has plunged – where it existed in the first place – further segmenting labour markets. Lack of enforcement and the difficulty in obtaining access to justice helped to flexibilize industrial 25 Statements by the Mexican Labour and Social Welfare Secretary in Milenio, 4 June 2007. 26 The business sector’s main doubts about Uruguay’s new rules, expressed through the Chamber of Commerce, include that they hobble the global trend towards corporate specialization and transfer the obligation to control contractors – an exclusive state responsibility – to the entrepreneur (available online at http://www.ituc-csi.org). 27 A study of 15 Latin American countries, which explores the factors that influence compliance with social security obligations, arrives at the conclusion that enforcement mechanisms are a decisive factor, along with others, such as low corruption levels and high economic development levels (Marshall, 2007). 28 Ministries of finance and the economy obtained greater decision-making authority in the 1990s (Vega, 2003). Although the importance of labour ministries has recently increased with the adoption of active labour policies, the tendency has still not been reversed in at least four of the region’s countries with sizeable economies (Argentina, Brazil, Chile and Mexico), as is reflected in the fact that labour inspection continues to fall short in spite of innovations to its design and strategies (Bensusán, 2006c). On the new, prevention-oriented strategies of labour inspection, see Von Richthofen (2003). 147

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relations – probably more than certain legal reforms – and were justified by the fear of potential job losses if the legislation were to be strictly applied.29 The next sections examine the shortcomings in labour inspection and labour dispute resolution, as well in the role of trade unions.

Labour inspection The state’s capacity to detect, punish and remedy violations of labour rules largely depends on how the labour inspectorate is devised and operated. The institution was first established in Latin America in the early twentieth century, when labour offices and departments were created (the precursors of the ministries established between 1930 and 1990). In the 1980s, military regimes, economic crises and structural adjustment processes cramped their capacities and budgets. Since then, the pressure exerted by trade agreements and the process of democratization have sparked interest in modernizing labour inspection in most countries.30 The institution survived the paradigm shift in almost all cases and basically kept its original design. However, its condition and results vary widely, depending on its previous strengths and weaknesses in the country, and on the strategies subsequently adopted to strengthen it. Changes in labour inspection design and strategies were insufficient to adapt the institution’s capacities fully to greater labour mobility and precariousness, and to weaker trade unions. In some cases, the institution was extremely sensitive to the economic and political cycle and to the heightened competition fostered by trade liberalization: for example, fear of job losses led to “low visibility strategies” (see Blackett, Chapter 3), consisting in lax enforcement in times of economic crisis and shifting interest away from bolstering labour inspection credibility among workers towards improving the country’s image to attract investment. Countries were pulled between two conflicting poles: pressure from trade partners to step up enforcement and allow freedom of association, on the one hand; and the pressure to maintain low salaries and respond to the demands of transnational companies, on the other. This, combined with the state’s limited 29 According to a survey of ministries of labour in seven countries (Brazil, Colombia, Costa Rica, Chile, the Dominican Republic, El Salvador, and Guatemala), they agree on the need to expedite labour oversight and justice proceedings and to improve human resources, especially the need to increase the number of inspectors (ECLAC, 2003). 30 The Viña del Mar Declaration adopted by the 11th Inter-American Conference of Ministers of Labor (IACML) of the Organization of American States (OAS) in 1998 (20–21 Oct., Viña del Mar, Chile) listed among its priorities the strengthening of the region’s labour inspection bodies, which would require the development of instruments to oversee the implementation of labour and social security legislation (Jatobá, 2002). 148

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capacities, was a source of tension during this period, which explains why labour inspection has performed substantially better only in exceptional cases. The weakness of the labour inspection system seems to explain the size of undeclared work in the region. The percentage of salaried workers in informal jobs (without social security) ranges from 17.2 per cent to 49.06 per cent in the 15 Latin American countries for which data are available,31 with women, young people, workers in small businesses, workers with less seniority or working parttime, and rural labourers the most affected groups (Gasparini and Bertranou, 2005). In Chile, Uruguay, Venezuela, the Dominican Republic, Colombia and Brazil, the percentage of wage workers in informal jobs is less than 30 per cent; in Argentina and El Salvador, it is higher than that figure; while in Bolivia, Ecuador, Guatemala, Mexico, Nicaragua, Paraguay and Peru it is over 40 per cent. This situation is present not only in the smaller businesses, but also in the large ones, to the point that only in four countries – Brazil, Colombia, Mexico and Venezuela – is the percentage of informal salaried workers in small businesses higher than that of those in large businesses (Perry et al., 2007, p. 24). This phenomenon reflects the low inspection capacity of the relevant authorities to detect undeclared work, even in cases in which it could be most visible, such as in large companies. This could be due not only to technical limitations or corruption, but also to the interest that governments have in preserving employment, even at the expense of its quality, by turning the employers’ obligations into voluntary norms and giving up on the application of sanctions (Zárate, 2008).

Functions and strategies: Consequences on the law’s effectiveness The dominant Latin American inspection model, which is based on the Spanish model, itself taken from the French, is strongly influenced by the ILO and is allencompassing in nature. It consists of a unified system for the enforcement of all labour law (Von Richthofen, 2003). A comparison of labour inspection systems in the countries brings to light various strengths and weaknesses, and reveals major differences in the following elements: structure (decentralized or centralized); competences (including labour law and social security); attributes (prevention, counselling, information, investigation, dissemination and campaigns); approach (punishment or education); priorities (undeclared work and social security evasion, working hours, forced labour, child labour, work by other vulnerable groups, and special campaigns); quality of the human resources involved and budget 31 In 2002, the ILO introduced the concept of “informal employment”, with the intention of incorporating salaried workers who are not registered for social security, and who render services to businesses in the formal and informal sectors (ILO, 2002a). On measuring this concept, see ILO (2003c). 149

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(professionalism, job stability, pay and infrastructure); and procedures (spontaneous, based on denunciation, social participation) (Jatobá, 2002). Table 4.1 shows the number of inspectors per 100,000 workers in 2005, and hence the relative importance that each country attaches to the task of enforcing the law. There is a huge gap between those with the most (Chile and Guatemala) and those with the least enforcement (Ecuador and Colombia). The table also demonstrates the effort being made by most Central American countries to strengthen labour inspection. The inspection systems are characterized by the inspectors’ broad and varying margin of institutionally recognized discretion,32 which allows them to adapt the law to company conditions in order not to affect sources of employment. This flexibility is not, however, a positive attribute of the region’s inspection system; rather, it was brought about by the system’s poor structures and abilities, the low quality and number of resources set aside for inspection, and the lack of will to improve the situation in the face of the widely held belief that greater enforcement destroys jobs (IDB, 2004). It would seem that, because it is so difficult to reform labour law in depth, governments prefer to ease up on enforcement. Little progress has been made in detecting undeclared work. In Brazil, an effort was made to extend coverage and detect undeclared work, but the upshot of granting incentives to inspectors – their pay was linked to performance, as measured by the number of workers covered – was unsatisfactory, in that inspections were carried out where the problem was least serious, in large companies (Campos and Galín, 2005; Cardoso and Lage, 2006). Widespread shortcomings include the absence of enforcement in the informal sector and failure to detect disguised employment relations. Better results have been obtained in Argentina (Senén and Palomino, 2006). Another controversial issue when it comes to increasing the effectiveness of inspection is the strategy used to strengthen compliance with labour rules. Until the 1990s, the predominant strategies were those that imposed sanctions on the basis of the rule’s importance and of the variable interest in increasing detection capacity. Since then, countries have adopted different approaches to repression, but they all attach greater importance to the promotion of voluntary compliance and prevention as they endeavour to strike a balance between punitive strategies, on the one hand, and preventive and didactic goals, on the other.33 There is nevertheless an underlying risk that an imbalance will emerge between the two functions (Jatobá, 2002). 32 Inspectors have greater discretion in deciding which companies to control in Brazil and Chile than in Mexico (Jatobá, 2002). 33 Mexico’s approach is biased towards education, while Brazil is trying to strike a better balance between punishment and education (Jatobá, 2002). 150

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Table 4.1 Latin America: Inspectors per worker, 2005 Countries

Inspectors per 100,000 workers

Argentina

3.05

Brazil

2.45

Colombia

1.24

Costa Rica

4.66

Chile

19.25

Dominican Republic

5.54

Ecuador

0.57

El Salvador

2.28

Guatemala

7.53

Honduras

3.97

Mexico

1.72

Nicaragua

1.58

Peru

1.34

Uruguay

5.79

Source: Piore and Schrank (2007).

Some countries, invoking their determination to fight corruption, weakened or dismantled the enforcement apparatus and opened the door to the privatization of inspection systems. This is what happened in Mexico for some activities (Bensusán, 2006d). Eroding the system’s detection and punitive functions dilutes the power of conviction that is needed to promote acceptance of the advice and recommendations provided as part of the system’s didactic or advisory functions. This is why the specialists maintain that these are complementary, not mutually exclusive functions, and that “striking a balance between both functions is the key to the success of the inspection services” (Jatobá, 2002, p. 14).34 The shift towards prevention strategies and the promotion of voluntary compliance were in 34 The goal is to have the means of enforcing compliance with labour law – that is, “repressive action is just a tool to achieve general preventive actions, preceded by observation, discussion and promotion of protective legal provisions” (Jatobá, 2002, p. 15). 151

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line with the notion that stricter enforcement and harsher sanctions, especially in small companies, would result in job losses (IDB, 2004). Scant attention has been paid to the necessary internal coherence between the design of labour institutions and the mechanisms intended to make them work. If, in the face of regulations that carry a high cost of compliance, the strategy adopted does not set out the conditions needed to augment legitimacy, detect violations and apply sanctions, the most rational conduct will be to fail to comply, either openly or covertly, using various forms of evasion or simulation. The mismatch between design (for example, high-cost compliance for small companies) and lax application mechanisms that are based on persuasion alone goes some way to explaining why the law tends to be ineffective in small companies, and – perhaps – explains the number of informal jobs, even within the formal sector of the economy. The few evaluations carried out conclude that the preventive strategy has not had the anticipated results, because inspectors are poorly trained or lack appropriate instruments and methods. However, they mention the cases of Brazil and the Dominican Republic as the most innovative, and as those that showed the most improvement.35 Of special note is the absence of strategies aimed at controlling small companies or the informal sector, even in the most advanced experiences evaluated recently (Jatobá, 2002; Schrank, 2004; Bensusán, 2006c).36 And the challenge of detecting undeclared or clandestine work remains to be met. With few exceptions (such as construction in Brazil), the trade unions have shown practically no interest in strengthening inspection systems or participating in inspection activities. The fact that limited resources are available to labour inspection apparently reflects a lack of determination to enforce compliance with the rules. As Arévalo and Arriola (1996, cited in Anner, 2006, p. 17) point out, uncertain human and financial resources are the best means of guaranteeing that recognized rights will not be respected on the factory floor. 35 The most prominent features of labour inspection in Brazil, some of which are the outcome of change since 1988, are the political importance attached to who is responsible for the system, its centralized structure, scope (it covers all workers, including domestic workers), high degree of computerization, the quality of its human resources and their high pay, and incentives relating to enforcement, such as the link between inspectors’ pay and the number of beneficiary workers (Cardoso and Lage, 2006). In the case of the Dominican Republic, labour inspection was given renewed impetus in the Labour Code adopted in 1992, which raised the requirements for inspectors, their number and pay, gave them great discretion to prevent the employment relationship from breaking down, drew up regular annual plans for visits per sector, introduced a planning system based on objectives and rules for the rotation of inspectors, and changed the Labour Ministry’s environment and infrastructure to enhance its transparency and image. Inspection was oriented towards prevention and conflict mediation and extended to assembly-line companies working for the export market (Schrank, 2004). 36 In Brazil, Chile and Mexico, small companies (fewer than nine workers in Brazil or 15 in Chile and Mexico) receive preferential treatment and are in fact exempt from control and sanction (Bensusán, 2006d; Cardoso and Lage, 2006, Figueroa, 2006). 152

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The role of the labour courts In the past ten years, various countries have transformed the design and strategy of their labour court systems, which had become discredited by the snail’s pace of their proceedings, their inability to enforce rulings and their damaging effects on small businesses. A first problem is the change in the assumptions on which the systems were originally designed. Conceived to function at times of economic growth and employment stability, labour dispute resolution mechanisms proved to be ineffective when labour market conditions changed and industrial disputes heated up, especially those concerning individuals. In most countries, the main reason for an individual dispute or complaint was dismissal.37 Fear of losing one’s job weighed, and continues to weigh, heavily – especially in the current context – on a worker’s decision to denounce their employer and file a complaint, and on the worker’s willingness to accept contracts that shield the employer from responsibility and stipulate working conditions below the level provided by the law. The situation is only questioned, in the best of cases, when the employment relationship ends and the worker claims compensation for unfair dismissal.38 In Mexico, the labour dispute resolution system is free for both plaintiffs and defendants, but in Argentina, Brazil and Chile, the costs are partially borne by the losing party, or are shared by both parties when the ruling is in both of their favours. Poorly educated, underskilled workers, with few resources, who find it difficult to hire professional counsel for a prolonged and complex court case (the proceedings average two years) – particularly in places where labour defence offices are non-existent or inefficient (Bensusán, 2006c) – are thus prevented from having access to the courts. A study conducted under ILO auspices in 2002, in connection with the 12th Inter-American Conference of Ministers of Labor (IACML) (17–19 October 2002, Ottowa, ON), found that further research was needed to assess how labour justice should be changed (Sappia, 2002). In principle, the study found that a serious region-wide effort had to be made to modernize the mechanisms for resolving conflicts and to ensure that cases were heard by judges trained in labour law. One of the first problems that it identified was recognition that conflict is inherent in industrial relations and should not be considered unusual. This called 37 A recent study in Argentina, Brazil, Chile and Mexico found that complaints relating to other matters, such as the payment of overtime or vacation pay, only arose when the worker was dismissed. There is no evidence that complaints have been fi led concerning discrimination in hiring or job stability, or the level of pay and other benefits (Bensusán, 2006c). 38 The old systems of compensation on dismissal may not suffice to meet the needs of workers who alternate frequently between employment and unemployment, and between formal and informal jobs, yet only six countries have unemployment insurance – and even those are not extensive and afford little protection. Forms of prior capitalization of compensation, such as those existing in Brazil, could be an alternative to the traditional system, but such mechanisms have not managed to lower the high number of individual conflicts in that country and the consequent court delays. 153

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for a positive approach in which conflict was not suppressed. Change should be oriented towards accelerating and simplifying procedures, and offering guarantees to the parties. Matters to evaluate were the possibilities for pre-trial stages and conciliation, and the elimination of appeals, which excessively prolong court proceedings. The study emphasized that the labour dispute resolution system needed more resources to enhance personnel training and working conditions, and to augment the number of courts. Better methods of preventing and resolving collective conflicts had to be developed, based on the consensus required to maintain social peace. According to the study’s diagnosis, action had to be taken to improve the quality and reputation of mediation and arbitration services, so that the participating parties felt that their rights would be guaranteed. The study recommended that voluntary arbitration be used for economic conflicts and that mandatory arbitration be maintained only for exceptional cases. In the case of the Central American countries, a recent evaluation carried out by a working group of the region’s deputy labour ministers and endorsed by the IDB found that labour dispute resolution constraints – chiefly, limited resources, including the number of specialized judges, support personnel, and equipment – led to protracted trials. An additional requirement is proper training for judges, lawyers and other parties involved in the conflicts. Costa Rica has a highly professional labour court system and is therefore an exception. But the system’s credibility has resulted in a high number of cases, leading to huge delays. These delays have been dealt with by creating specialized courts and appointing more judges. The Dominican Republic doubled the number of judges and labour courts, including outside the capital and major towns, thus eliminating delays. One of the positive factors is that a fi xed percentage of GDP (2.66 per cent) is allocated to the judiciary’s budget, resulting in an acceptable level of institutional capacity (ILO, 2005b). Argentina, Brazil and Chile have introduced structural organizational changes to the labour courts in the past two decades. Brazil has shown innovative flair: certain corporatist traits were eliminated, including the classist representation of the tribunals (in the late 1960s). It is now possible to create extrajudicial, joint initial conciliation commissions, and a fast-track procedure was established for cases involving small amounts of compensation. In addition, requirements were introduced to reduce the number of appeals, which involved too many bodies and overly prolonged trials. Further, mechanisms were devised to facilitate the execution of rulings, which poses problems in other countries as well.39 The 39 One of the mechanisms allows the court, in certain circumstances, to impound bank accounts and therefore expedite execution of a labour judgment (Cardoso and Lage, 2006). 154

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result is that Brazil now has a relatively effective and efficient labour court system that provides a coherent response to the growing trend towards labour law litigation (that is, an increase in the number of individual cases), as the number of collective conflicts falls. The biggest innovation in Brazil is the promulgation of a constitutional amendment in December 200440 that extends the system’s jurisdiction from the subordinate employment relationship to the work relationship in the broad sense, including the provision of independent services, subordinate relations, and, according to some interpretations, all relationships that comprise the appropriation of an added value, with the exception of consumer relations. The system now attracts a large number of cases previously heard in the civil courts and judges are obliged to apply not only labour law, but also other legislation, such as civil law. This has, however, led to doubt about whether the system will be able to handle the increase and to apply legislation other than labour law (Cardoso and Lage, 2006).41

Case law: Does it broaden or restrict labour rights? Little is known about the real role of the judiciary as it relates to the effectiveness of giving effect to labour law, although court action tends to be seen as a factor of greater rigidity in employment relations and greater worker protection. In order to confirm or rule out this assertion, a recent study reviewed court decisions in the most controversial areas in the past three decades in Argentina, Brazil, Chile and Mexico (Bensusán, 2006c, 2006d). Mexico’s jurisprudence has been very consistent on the scope of individual and collective rights, neither broadening nor restricting them in 80 per cent of over 700 cases between 1970 and 2003. With few exceptions, it is not sensitive to the economic cycle, but it does react to political change: since the Supreme Court acquired greater independence in 1995, at the same time as the country moved towards political openness, its rulings have clearly been in favour of trade union plurality. In terms of collective rights, it ruled that mandatory trade union unity in the public sector,42 and – in a non-binding ruling – the exclusion clause obliging workers to join and remain with the trade union to keep their jobs,43 40 Emenda Constitucional 45, 30 December 2004. 41 Cardoso and Lage (2006) wonder how judges will deal with the contradiction between labour law, the premise of which is worker protection, and civil norms, which are based on the assumption that the contract is an agreement freely reached by two parties in conditions of equality. They view the constitutional amendment in the context of workers being squeezed by globalization to work under civil contracts and thereby accepting precarious conditions that reduce their rights to job stability and exclude them from social security, with the burgeoning cost of public assistance policies being a further consequence. 42 Judgment No. 43/1999, Suprema Corte de Justicia, 27 May 1999. 43 Amparo Directo en Revisión 1124/2000, Suprema Corte de Justicia, Segunda Sala, 1 May 2001. 155

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were both unconstitutional. The case law reproduces, in general terms, the protective connotations of the statutes, but has developed certain criteria in a way that facilitates flexible working conditions. The collective agreements renegotiated since the 1980s therefore provide for fewer rights and benefits. Both statutory and case law attach greater importance to the situation on the ground than to what the parties to the contract are called; labour law is applied even if the contract is a rental, commercial, or professional service agreement, so long as the relationship is subordinate (Bensusán, 2006c, 2006d). In Chile, the flexibilizing interpretations that fostered the use of atypical contracts and undercut the working conditions set out in collective agreements were stronger than in other countries. The 2005 labour reform nevertheless doubled the number of labour courts in the country, created courts to recover outstanding social insurance payments from employers, and endeavoured to shorten trials and make them less costly and more efficient. The low rate of individual conflicts relating to dismissals – fewer than 1 per cent compared to 6 per cent in Mexico, 15 per cent in Brazil, and 30 per cent in Argentina (Bensusán, 2006c) – may be due to more flexible terms of hiring (many contracts are temporary), and to little faith in the judicial system’s protective purpose and effectiveness (Figueroa, 2006). The case law of Argentina showed a marked tendency towards flexibilization in the 1990s, facilitating contract labour and limited compensation for occupational risks, for example, but turned a sharp corner in 2003 in terms of labour policy. This, combined with a change in the composition of the Supreme Court, resulted in a return to social protection (Senén and Palomino, 2006). In Brazil, the courts have been extremely busy interpreting the law. Under the “annualized hours” system introduced in the late 1990s, workers are hired for a specific number of hours per year and are called on by the employer as needed; overtime is therefore frequently a point of contention when workers are dismissed. Between 1970 and 1999, 65.3 per cent of court rulings broadened individual rights (they were more generous in scope and reach than the statutes), 2.6 per cent were neutral (they defined the right without modifying its scope), and 32.1 per cent were restrictive (they limited the right’s scope). Furthermore, until 1986 the judiciary was restrictive about contract labour and outsourcing between companies, limiting them to temporary contracts or surveillance services, but in 1993 it broadened the scope for such arrangements and extended the user company’s liability in respect of the workers concerned.44 In response to the growing number of cases relating to outsourcing, it subsequently introduced a distinction between 44 Enunciado 331, Tribunal Superior del Trabajo de Brasil. 156

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non-core activities (such as cleaning or transport services), the externalization of which was permitted, and core activities, which had to be performed directly by the company. It also established that, in cases of outsourcing, the user company bore subsidiary liability for worker benefits if it had also been cited as a defendant. The Brazilian labour courts have undeniably safeguarded worker rights and had a predominantly protective focus, although they have also been sensitive to the economic cycle and only a percentage of the claims initially approved ultimately worked out in the employees’ favour, wholly or partially because of various problems encountered in enforcing court decisions (Cardoso and Lage, 2006).45 In the countries of Central America, the judges’ interpretation would seem to have been favourable to the workers in some areas. In Costa Rica, the Constitutional Court introduced the doctrine of trade union immunity in 1993,46 protecting the leaders, members and other workers involved in trade union activities from discriminatory practices. In 1998, it established as unconstitutional the prohibition of public-sector strikes, ruling that only strikes in essential service sectors could be banned.47 It also declared unconstitutional the requirement that 90 per cent of workers be citizens. Rulings that were favourable to workers and trade unions were also set in El Salvador (ILO, 2005b).

The role of trade unions One critical aspect of employment relationships in the region is the weakness of the trade union system, or the persistence of some traits of the corporatist model. Until 2001, 14 countries (Argentina, Brazil, Colombia, Costa Rica, Chile, the Dominican Republic, Ecuador, El Salvador, Guatemala, Nicaragua, Panama, Paraguay, Peru and Venezuela) had adopted measures to expand and/or strengthen the exercise of collective rights or to give effect to the ILO Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98),48 which were 45 In Rio de Janeiro, an estimated 50 per cent (Cardoso and Lage, 2006). 46 Case No. 5000, Corte Suprema de Justicia, 8 October 1993. 47 Decision No. 1317/98, 27 February 1998, Sala Constitucional de la Corte Suprema de Justicia de Costa Rica. 48 Reforms promoting freedom of association include measures to suppress restrictions on association (El Salvador); to facilitate its exercise by reducing the minimum number of members (El Salvador and Panama); to simplify the procedure for registration and obtaining legal personality (Colombia, El Salvador, Panama and Paraguay); to extend the right to other categories of worker (in agriculture, in the case of El Salvador, and public servants, in Chile, Nicaragua and Panama); or to facilitate the formation of trade unions at various levels and for different categories of worker (Colombia, Chile, El Salvador, Panama and Peru). 157

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ratified by a growing number of the region’s states as democratization and regional integration processes kicked in.49 In the countries of Central America and in the Dominican Republic, progress has been made chiefly because of the pressure associated with access to the US market. Both political and economic factors played a role in El Salvador, which has apparently undertaken more in-depth reform, but has not eliminated the characteristics of the previous collective rights system (Anner, 2006). Collective rights were most recently reformed in Uruguay, the law of which had few provisions on the matter. In 2006, the government of Tabaré Vázquez followed the recommendations of the ILO Committee on Freedom of Association (CFA) and adopted legislation on trade union immunity that guarantees freedom of association.50 Similar action had already been taken in Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Panama, Paraguay and Venezuela, which introduced or enhanced trade union immunity. Venezuela’s 1999 Constitution and other provisions subsequently allowed state interference in trade union life. Mexico has maintained a corporatist trade union system that developed during 70 years of rule by a single party to which most trade union organizations were tied, even after that party was relegated to the opposition. Although the law retains a number of restrictions that are in violation of Convention No. 87, such as mandatory trade union unity for public servants and exclusion clauses that penalize workers who leave or are expelled from trade unions with loss of employment, Supreme Court rulings – which constitute binding jurisprudence – have buttressed protection of freedom of association in the first case (public servants). But those rulings only benefit those who challenge the legal provisions; they have no erga omnes impact. It is therefore crucial to adopt reform measures eliminating the restrictions and adapting the law to the international Conventions signed by Mexico. It also should not be forgotten that Mexico has not ratified ILO Convention No. 98 (Bensusán, 2000, 2003, 2006d). Despite the progress that has been made, countries nevertheless continue to run into problems in bringing national legislation in line with the Conventions, and a mounting number of complaints have been filed with the CFA.51 49 El Salvador ratified the Conventions in 2006, but it had already taken steps to align national legislation with them. Brazil and the Dominican Republic have not ratified Convention No. 87. Other countries ratified both Conventions decades ago, but subsequently adopted measures to extend the principles of freedom of association and collective bargaining (Anner, 2006). 50 Libertad sindical: Normas para su protección, Law 17.940 of 2 January 2006, which declares the absolute nullity of any anti-trade union act and gives unions a series of prerogatives, such as union leave and direct deduction of union dues from pay (Ermida, 2006). 51 Mexican independent trade unions and NGOs have fi led 32 complaints with the ILO in the past half-century, two-thirds of them in the past ten years, during the political transition to democracy, 158

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The outcome of reforms relating to collective rights in the countries of the Southern Cone has not removed the obstacles that workers encounter in the full and independent exercise of those rights, and reform has not always been in the trade unions’ favour. In Argentina, for example, a restriction arose in the regulation of public sector strikes (Senén and Palomino, 2006). Steps to decentralize collective bargaining in the workplace led the number of sector agreements to fall from 65 per cent in the mid-1990s to 22 per cent five years later. The trend rebounded in 2004, when sector collective bargaining regained the upper hand. Moreover, trade unions have been described as having a weak institutional presence, lacking independence from the state, and having a top-down, top-heavy style of conduct induced by the trade union system.52 Other problems arising from collective bargaining in the country were reflected in the inevitable ineffectiveness of most of the rules set out in the old agreements, with informal agreements or simple “employer unilaterality” holding sway on the sidelines (Goldin, 2006b, p. 9). But these tendencies are apparently being reversed as a result of the high level of economic growth since the 2001 crisis, the fall in the unemployment rate and the decrease in undeclared employment (Senén and Palomino, 2006). Serious problems also persisted for collective action in Colombia, even though the 1991 Constitution incorporated the ILO international Conventions into domestic legislation.53 The labour law reform of 1990 heralded a period of decline for collective bargaining in the private sector, to the point that in 2002 a mere 2.3 per cent of the labour force engaged in collective bargaining and 7 per cent were organized. Fewer issues were made the subjects of collective bargaining, as companies and government rejected the trade unions as negotiating partners. Another setback was the recognition that arbitration tribunals were competent to review the content of collective agreements, which made it easier for employers to demand that previously acquired labour rights be reduced or eliminated (Vásquez, 2005). Although the Dominican Republic also introduced reform, workers who tried to form trade unions continued to be dismissed in the absence of strong pro.

citing violations of the rules on recognition of trade unions, election procedures, and anti-trade union practices. 52 As in Mexico, Argentine trade unionism is “statist”, with political action being the preferred means of obtaining advantages and lower level action being of less importance (Goldin, 2006b). 53 ILO Labour Relations (Public Service) Convention, 1978 (No. 151), which was ratified by Colombia in 1997 and which extends the right to collective bargaining to public service workers, has not fully entered into force because the Constitutional Court considers it to be contrary to internal legislation (Vásquez, 2005). 159

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tection mechanisms. Many trade unions only existed on paper and few managed to engage in collective bargaining.54 A study prepared in 2005 by Central America’s deputy labour ministers under ILO auspices conceded that one of the subregion’s main problems was enjoyment of the right to organize and freedom of association (ILO, 2005b). The situation in Guatemala was similar to that in the Dominican Republic, with unions having problems organizing. In El Salvador, which undertook one of the most profound reforms of the trade union system, the rate of organization in the manufacturing sector fell from 29.9 per cent to 7.9 per cent in the 1990s, and the percentage of workers covered by collective bargaining from 37 per cent to 2.7 per cent (Anner, 2006). Moreover, employers were frequently denounced for using illegal means of pressure to keep trade unions from forming. In Honduras, certain employers took advantage of loopholes in the law to organize their own unions with the complicity of the authorities (ibid.). Mexico’s maquila industry experienced a similar situation. It would seem, therefore, that trade union weakness is not associated with the country’s income level, but rather with the way in which the country participates in the global economy and the institutional possibilities for employers and governments to hold the process of organization in check (ibid.). Another problem is that while most of the measures adopted to reform collective rights starting in the 1990s were favourable towards Latin American workers, they did not resolve the need for greater opportunities to exercise those rights in the adverse context of labour market instability, fewer formal jobs in sectors with a tradition of trade union organization, and downward competitive pressure on wages.55 The adverse effects of market-oriented reform could not be counteracted by pro-trade union legislation. The economic transformation affected the very core of the corporatist arrangements – state companies, large private companies and public sector jobs – in which the trade unions had traditionally predominated. The processes of subcontracting and of intermediation or triangulation, and high unemployment levels, combined with growth in the informal sector, proved harmful to the unions. They were also limited in the strategies that they could 54 Although there were 100 unions in the maquila sector, only eight had collective agreements with the employers. The Dominican Federation of Free Trade Zone Workers (Federación Nacional de Trabajadores de Zonas de Libre Comercio, or FEDOTRAZONAS) followed up nine cases of anti-trade union conduct in the garment industry, in which trade union leaders and activists were dismissed, in some cases, intimidated, and in one case, even imprisoned (GAO, 1998). 55 More than two-thirds of the measures to reform collective rights introduced between 1985 and 1998 in the labour systems of 18 countries were intended to augment the workers’ capacity to organize and engage in collective bargaining (Murillo and Schrank, 2006). But major problems of design and implementation of the rights remain (Anner, 2006, p. 6; Bensusán, 2006d). 160

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deploy to counter government and business policies, and had no tangible incentives with which to attract members, such as the management of social welfare and other services for workers (Marshall, 2006). The problem was different in the countries of Central America, where the trade unions’ weakness or absence pre-dated globalization. In the new scenario, the trade partners demanded improved labour standards relating to freedom of association, but, at the same time, wages had to be kept low to attract investment in labour-intensive sectors; the conditions were therefore not favourable for trade union activity. In addition, there were well-known shortcomings in the strategies for applying the law (Anner, 2006). In short, problems relating to the quality of jobs and the exercise of collective rights are not the prerogative of the smallest countries, those with the lowest income levels, or those with the lowest trade union membership rates.

4.4 Gender equality: The case of Mexico This section discusses the effectiveness of labour law in promoting gender equality in Mexico – a country with a strikingly inequitable labour market and huge problems in effectively implementing labour standards. Mexico represents an interesting case study for several reasons, as follows. ● It is the first Latin American country that incorporated into its Constitution (in 1917) a complete catalogue of individual and collective labour rights, which had an enormous impact on other countries and still comprises one of the highest levels of formal protection in the region. ● In this country, the proportion of women among the economically active population has grown substantively since the 1970s, when legislation reforms aimed at achieving gender equality were introduced, albeit without public policies that could ensure the achievement of this goal. The participation of women is over 40 per cent of the economically active population, although various forms of discrimination still persist, along with a significant wage gap between women and men. ● Mexico is also one of the few countries in the region in which the manufacturing industry grew during the 1990s, due, in particular, to the expansion of the export-oriented maquila industry in the framework of the North American Free Trade Agreement (NAFTA). The female labour force dominates this industry. 161

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The selection of this case is useful, therefore, as an illustration of the role of labour law in securing equality between men and women, including in the socalled new economy, and the relative ineffectiveness of the current system.

4.4.1 The legal framework and the situation of women workers in the labour market The region’s countries have taken various legal steps in the past 15 years to guarantee gender equality in the labour market – in many cases, ratifying international instruments – but guaranteeing equality nevertheless remains a problem. This can be attributed to the lack of adequate procedures for applying the rights set out in international treaties at national level, on the one hand, and to the difficulty in mainstreaming gender in the laws and their interpretation, on the other (Fernández, 2002). In most countries, the law covers only women in “standard” employment relationships, leaving those outside those relationships with fewer possibilities than men to develop to their full potential. This is compounded by gaps in schooling and income, and by the additional burden of work in the home and child-rearing activities.56 Mexico has not been spared these problems. It took some steps to protect women’s rights in 1974, but since then has taken no further action. The constitutional and legal reforms introduced that year, which were intended to establish women’s full legal equality with men, gave rise to a labour system establishing social protection for maternity, “preserving the health of the woman and her infant child during pregnancy and lactation”.57 This did away with any distinction between the rights of men and those of women that did not derive from the latter’s reproductive functions, and eliminated the legal stumbling blocks that discriminated against women and kept them from entering the labour market. But neither then, nor later, were any rules adopted to modify the cultural paradigm under which responsibility for running the household falls to the woman (Bensusán, 1993). Under art. 123.A of the Constitution, the rights of women wage earners are limited to the following: ● they may not be required at any time during pregnancy to do jobs that demand a considerable effort and pose a risk to their reproductive health; 56 The case of domestic workers, the majority of whom are low-income women, is typical of this situation (Pautassi, Faur and Gherardi, 2004). 57 “Ley Federal de Trabajo” (Federal Labour Law), D.O., 20 April 1970, art. 166 (all citations translated from the Spanish). 162

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● they are entitled to two special half-hour breaks per day while breastfeeding (no set period is established); ● they are entitled to six weeks’ antenatal and six weeks’ post-natal maternity leave; ● the employer is obliged to take the requisite measures to guarantee the lives and health not only of pregnant woman workers, but also of their unborn offspring; ● they are entitled to daycare services funded by social security; and ● they have the right to equal pay for equal work, irrespective of sex and nationality.58 The rules set out in the Mexican Federal Labour Law (Ley Federal de Trabajo, or LFT), arts 164–172, relating to these constitutional provisions, essentially reaffirm these rights. Although there are no specific provisions protecting women workers from unjustified dismissal during pregnancy, both sexes benefit from general legal protection against unjustified dismissal that includes the right to be re-employed or to receive compensation, except in cases in which the employer can opt to pay a higher award. One such case is that of domestic workers, almost all of whom are women (LFT, arts 47–50). Women workers are also protected by the Mexican Social Security Law (Ley del Seguro Social, or LSS), 59 which applies to workers covered by art. 123.A of the Constitution, and by the Mexican Law of the Institute of Security and Social Services for State Workers (Ley del Instituto de Seguridad y Servicios Sociales para los Trabajadores del Estado, or ISSSTE), 60 which applies to workers covered by art. 123.B of the Constitution. Coverage is mandatory for occupational risks, illness and maternity, disability, old age and severance pay for the elderly and on death, and daycare centres are provided for children of the insured. In general, the insured person’s gender makes no difference. The daycare services are only for children of insured women and cover the risk that the woman worker will not be able to provide material care to her infant children (for a minimum period of 43 days to a maximum of four years) during working hours by granting specific benefits during those hours. Employers are obliged to pay the entire premium for this benefit, whether or not they employ women workers, in order to avoid discrimination (LSS, art. 190). Maternity insurance (including obstetric care, and cash benefits for breastfeeding and care of the newborn) are granted to the insured 58 The constitutional maternity rights of women public servants are similar to those mentioned above (art. 123.B of the Constitution). 59 D.O., 21 December 1995. 60 D.O., 31 March 2007. 163

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(worker or pensioner), or to the wife of the insured worker or pensioner, or to his partner if he is not married, under certain conditions (LSS, art. 92). These legal provisions constitute a minimum threshold of rights that can be raised in collective agreements, although little has been achieved in that way even in sectors in which the trade unions are strong and there are large numbers of women workers. It can be said, therefore, that this minimum legal threshold sets a benchmark for all women wage earners, even those who are trade union members. There are no rules protecting non-wage women workers. But Mexican labour law encompasses special rules concerning two activities that employ almost exclusively women: there are special rules restricting the rights of domestic workers relative to all other workers;61 and there are detailed and strict rules protecting homeworkers, which are aimed at ensuring that employers do not elude their responsibilities.62 In practice, the latter are not complied with. In addition, legal protection is not extended to workers in family businesses except in relation to the rules on occupational safety and health. Mexico has ratified three ILO Conventions relevant to working women: the Underground Work (Women) Convention, 1935 (No.  45); the Equal Remuneration Convention, 1951 (No. 100); and the Discrimination (Employment and Occupation) Convention, 1958 (No. 111). In relation to Convention No. 45, the prohibition of employing women in this kind of work first appeared in 1934 in the Mexican Regulations on Unhealthy and Dangerous Work for Women and Minors.63 The LFT does not include such a prohibition, since women’s work is only limited during pregnancy. The law guarantees equal pay for men and women. But the relevant provision (LFT, art. 169) is more limited in scope than the content of Convention No. 100, which refers to work of equal value. In relation to equal opportunities and treatment at work, the law contains no restrictions that discriminate against women. Some such restrictions nevertheless persist in practice, such as the requirement for a woman to prove that she is not pregnant in order to obtain or keep a job: the export 61 The main restrictions include an undefined working day (employers are merely required to allow breaks for meals and to rest at night), wages that can comprise up to 50 per cent room and board, a contract or work relationship that can be freely cancelled during the first 30 days, and no obligation to register the worker with social security, although there is an obligation to provide some assistance in the event of illness (LFT, arts 331–343). 62 In order to ensure that the employment relationship is not disguised, it is established that: “The agreement by which the employer sells raw material or objects to a worker for transformation by the latter or storage at his home for subsequent sale to the same employer, or any other agreement or similar operation, shall constitute home work” (LFT, art. 312). It is further established that homeworkers provide services with “help from the family”, meaning the family members are not considered to be workers. Employers are obliged to enter their names in a labour inspection register, to keep a record of the working conditions, and to provide the workers with a booklet on working conditions (LFT, arts 311–330). 63 Reglamento Federal de Seguridad, Higiene y Medio Ambiente de Trabajo, 29 November 1934. 164

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maquila industry revealed that this requirement was not expressly prohibited by the law (Verge, 2002). Government policies are slow to acknowledge the value of women’s work (Rendón, 2004). Mexico has not ratified the ILO Workers with Family Responsibilities Convention, 1981 (No. 156) or the Maternity Protection Convention, 2000 (No. 183). There are no legal provisions aimed at making work more compatible with family responsibilities, except in relation to the daycare services mentioned above. With regard to collective bargaining, Mexico has ratified ILO Convention No. 87, but not Convention No. 98. Mexican legislation contains no provisions restricting the collective rights of women workers. But in cultural terms, women workers continue, in practice, to work double days because domestic responsibilities are unfairly distributed between husband and wife. This makes it harder for them to take part in trade union activities and, above all, to occupy leadership positions, even in trade unions in which most members are women. The scarce presence of women in union boards or leadership, which hold the power to negotiate with employers, explains the lack of rules ensuring gender equality through collective negotiation. The widespread Mexican phenomenon of simulation in this respect also plays a role: employers generally choose their union counterpart and sign collective contracts with alleged union representatives who are endorsed by labour authorities and protect the employers against authentic unions. In this case, collective contracts are limited to reproducing legal norms and are not concerned with improving the situation of women. It would seem that the institutional framework described above has been unable to undo traditional patterns of gender inequity. In the past three decades, while the number of economically active women has increased significantly, reaching 41.4 per cent in 2005 (73.1 per cent for men), pay differentials and occupational segregation remain (Rendón, 2004; ILO, 2006d). In terms of the structure of female urban employment, in 2005, 45.1 per cent of women were working in the informal sector and 22.9 per cent were self-employed (of these, 6.4 per cent were unpaid). Domestic employment occupied 10.9 per cent, slightly less than micro enterprises (11.9 per cent, of which only 1.8 per cent were women employers) (ILO, 2006d). The vulnerability vis-à-vis the possible loss of jobs associated with pregnancy and the lack of mechanisms to enable a shared responsibility in the area of family duties often forces women to take part-time jobs in the informal economy, mainly in the area of commerce or services, without any kind of protection. One of the factors limiting women’s access to formal employment is the corporate world’s widespread, negative perception that women workers supposedly cost more – for example, because of maternity leave (hence the frequent requirement that women prove that they are not pregnant when they are hired and even, occasionally, later). The perception persists even though the wages of women 165

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on maternity leave are paid by social security, drawing on existing employer contributions that are independent of the actual pregnancy. The same holds true for contributions for daycare services. In fact, a study has determined that the labour costs associated with maternity in Mexico account for a low percentage of the wage bill and that the costs borne by employers of women with children are insignificant, refuting the argument that women should not be hired or that they should be paid less because employer liabilities raise labour costs (Rendón, 2002). Another set of constraints to the effectiveness of labour law to pursue gender equality pertains to the limitations of the enforcement system. There are no special mechanisms that could guarantee respect for women workers’ rights and prevent discriminatory practices prohibited by legislation. In this context, female workers face the same problems as men, particularly when working under atypical contracts or in triangular employment relationships (through the use of subcontractors or TESs). As it is argued in the section below, the enforcement of women’s rights faces particular hurdles in the export-oriented garment sector. Specific changes are required in the legal design, in order to improve opportunities for women workers to access decent jobs and to implement gender equality effectively. Among other pending reforms, the following can be highlighted: longer periods of maternity leave (pre- and post-partum, from six to eight weeks each); the prohibition to require a pregnancy test as a condition to access employment, and other forms of discrimination related to accessing and retaining work, including effective sanctions and repair mechanisms; special norms and procedures in case a pregnant woman is fired; the possibility of both men and women having the right to enjoy days off to tend to family responsibilities; and equal pay for work of “equal value”, and not only for the “same” work.64

4.4.2 The situation in the export-oriented maquila garment industry The limited role of labour law and labour institutions in the pursuit of gender equality is very well illustrated by the case of the export-oriented maquila garment industry. The maquila sector is an extensive example of international outsourcing (De la Garza, 2005). It is a major sector that has been affected by trade agreements, such as the NAFTA between Canada, the United States and Mexico, and by profound change in production and in the patterns of international distribution, much of it brought about by the industry’s restructuring in the United States. It is characterized 64 On this subject, see the Labour Legislation Reform Initiative with a gender perspective submitted by the Democratic Reform Party (Partido de la Revolucion Democratica, or PRD) parliamentary group at the Mexican Congress Chamber of Deputies’ Permanent Commission, on 14 July 2004. 166

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by high job turnover, intensive use of low-skilled labour, low wages, and little or no organization. As the Commission for Labor Cooperation (CLC), organized under the North American Agreement on Labor Cooperation (NAALC), pointed out in one of its pioneering studies, effective application of labour law to this sector would no doubt improve working conditions (CLC, 2000). The sector employs mostly women (six out of every ten employees), although this is changing as more men are forced to accept less well-paid jobs (Juárez, 2002; Rueda Peiro and Simón Domínguez, 2006).65 The industry’s workers are a vulnerable group for which the gap separating the rules from reality results in precariousness and social exclusion, in particular for those employed in the weakest links of the production chain: the small, usually undeclared workshops and homeworkers. It is a highly unstable industry geographically. The relocation strategies of large transnational companies affect developing countries more than others, and tend to be wielded as “psychological weapons” to counteract worker demands and to deny them full enjoyment of their rights (ILO, 2000). The export-led maquila garment industry was the fastest growing sector and generated the most jobs in Mexico at the end of the 1990s and early in the new millennium, whereas traditional manufacturing died out or became marginal (Juárez, 2002). In the first seven years after NAFTA came into force, up to 2002, Mexico was the leading international supplier of garments and textiles to the United States – a position that it later lost to China. There were high expectations in the sector that the requirement of strict compliance with labour law linked with the North American process of regional integration would induce companies to adopt technological and organizational innovations resulting in substantial increases in productivity, but this did not happen. In fact, recent studies show that the relative success of the industry,66 which is currently in decline, continues to depend essentially on low wages (Rueda Peiro and Simón Domínguez, 2006). Various factors have led to a worsening employment situation in the sector. After several positive years, US demand started falling off in 2001, activities were 65 In 2001, there were slightly fewer than 700,000 jobs spread over 14,000 establishments; more than 75 per cent of those jobs were in export-led maquila plants or were incorporated into the chain as submaquilas. In the late 1990s, around 500,000 workers were employed in medium-sized or large companies, a little under 70 per cent were women, 60 per cent had a primary school education, and only 15 per cent were trade union members, according to the Encuesta Nacional de Empleo, Salarios, Tecnología y Capacitación (National Survey of Employment, Wages, Technology and Training) conducted in the mid-1990s (CLC, 2000; Juárez, 2002). 66 In 2001, the textile and garment industry was the fourth largest manufacturing activity in Mexico and accounted for 7.1 per cent of manufacturing GDP, 17.5 per cent of all jobs and 2.4 per cent of investment in the sector (Ministry of the Economy, Programa para la Competitividad de la Cadena Fibras-TextilConfección [Programme for Competitiveness in the Fibre–Textile–Apparel Value Chain], cited in Martínez de Ita, 2005). 167

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relocated to the United States, Central America and Asia, US export quotas were gradually eliminated, and new competitors such as China arrived on the scene. All of this dealt a severe blow to the Mexican garment industry, which demonstrated great labour flexibility in adapting to the new circumstances, informalizing many jobs by turning them into home work and work in clandestine workshops, and giving short shrift to the institutional restrictions regulating company closures and dismissals in Mexico, such as the rules governing unjustified dismissal and compensation (Juárez, 2002, p. 20). The maquila sector is under constant pressure to lower prices and tighten delivery schedules, and this, prevailing over the requirements imposed by US garment companies on their suppliers in terms of respect for local labour law, fosters undesirable working conditions (Martínez de Ita, 2005). Other factors that explain the non-compliance with workers’ rights, including women’s rights, are the absence of, and problems of representation within, trade unions, the state’s low capacity to enforce the rules, and the fact that collective bargaining, where it existed, did not serve to improve on the working conditions stipulated in the law.67 There have been denunciations, for example, of ill treatment and humiliation by supervisors; arbitrary reductions in pay; failure to pay overtime and wages; failure of small, medium, and clandestine maquiladoras to declare workers to the Mexican Social Security Institute (Instituto Mexicano del Seguro Social, or IMSS); the absence of freedom of association, and the predominance of contracts that protect employers and steer clear of organization and collective bargaining; 28-day temporary contracts drawn up in contravention of the law; child labour; high accident rates; exposure to toxic substances and occupational illnesses in laundries; and night work following on from day shifts. In addition, there have been discriminatory practices specifically affecting women, such as discrimination in the form of pregnancy tests, sexual harassment and abuse. These violations occur irrespective of whether the garments produced are intended for the internal or the export market 67 Lack of representation, and the predominance of trade unions and collective agreements protecting employers, are common in Mexico, in both the manufacturing and the service sectors, and have been extensively discussed in many studies (see, for example, the various studies collected in Bouzas, 2007). Another recent study describes the situation in the garment industry in the states of Aguascalientes (Mexico), where a substantial proportion of workers do not know that they are members of a trade union, and Yucatán, where trade unions simply do not exist (see Rueda Peiro and Simón Domínguez, 2006). According to the testimony of the Coordinator of the Maquila Solidarity Network, Canada’s Lynda Yanz, to the National Administrative Office (NAO) of the North American Agreement on Labour Cooperation (NAALC) between Canada, the United States and Mexico, “[p]rotection contracts negotiated by ‘official’ unions affi liated with the CROC [Confederación Revolucionaria de Obreros y Campesinos] or CTM [Confederación de Trabajadores de México] without worker knowledge or participation are the norm rather than the exception in Puebla’s garment industry. Workers do not have access to these contracts, and in many cases workers are unaware they are represented by a union. The role of the official unions in local and state Conciliation and Arbitration Boards is an institutionalized barrier to fair, equitable and transparent labour boards and processes” (Yanz, 2004). Barrios and Hernández (2003) make the same point. 168

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(export maquila), although, in the latter, the presence of retailers’ codes of conduct can lead to better working conditions (Barrios and Hernández, 2003). The degree of ineffectiveness of labour law rules vary widely depending on “social situations” on the ground (see Filali Meknassi, Chapter 2). The size of the company makes a difference and, more importantly, whether it is formal or informal. Formal companies are more visible and may be subject to closer scrutiny by social organizations, although, in general, labour inspection is absent. On the other hand, small clandestine workshops and home work, in which women are the great majority, avoid all labour, tax, and safety and health regulations, given that they are undeclared and that those who work in them are afraid to denounce, or even to comment on, their working conditions to outsiders. Homeworkers tend to be treated as “self-employed”, even though the LFT has an entire section on the registration and control of home work. Although this is a case in which the legislation aims to prevent any type of abuse on the part of employers, in fact there is no policy to put these rules in practice, which is the responsibility of labour inspection. In family workshops, which employ only the spouses, their older and younger relatives, and their dependants, the only provisions of labour law that apply are the rules on safety and health (LFT, arts 351–353), and even these are not enforced, because labour inspection rarely controls and penalizes smaller businesses (Bensusán, 2006c). Women are also, in this case, the most affected. In this context, efforts to curb worker exploitation as the main competitive advantage and to promote greater gender equity have made little progress. It has proven difficult to convert measures tied with corporate social responsibility into fair labour practices by enforcing compliance with codes of conduct and monitoring the working conditions offered by suppliers for major brands and retailers.68 Moreover, gender equality has not figured prominently in codes of conduct. The search for solutions is complicated by the factors seen earlier, such as the state’s waning ability to enforce respect for the fundamental rights of workers in the industry, and the absence, poor performance or relative weakness of trade unions. The emergence of new social protagonists, such as non-government organizations (NGOs) and associations of labour and human rights activists, has not provided a sufficient counterweight to the weakness of trade unions.69 The design of global mandatory labour and control standards in the industry’s factories – perhaps the only way to do away with private and public resistance to 68 Corporate social responsibility was more topical in Mexico at the end of the 1990s, when the number of corporate foundations and of members interested in obtaining certification from the Mexican Philanthropic Centre (CEMEFI) grew. Some evaluations argue that there is much more talk than action in this field (Red Puentes, 2004). 69 On the role of regional instruments – notably, the NAALC – in addressing violations of women workers’ rights in Mexico, see Blackett (Chapter 3). 169

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compliance – faces a number of hurdles, such as pressure from multinationals to find “decent” suppliers that are also cheaper. Another issue is the range of approaches to the type of standard to adopt, the obligation to be assumed (such as making the list of suppliers public), and the forms of monitoring. For example, groups inspecting factories have been observed to adapt their procedures to the level of standards that they apply and the form of the inspection (depending on whether the participating companies chose the factories to be inspected or not). Another matter of debate is whether the base requirement should be payment of the country’s minimum wage or a salary that allows the worker a dignified life; this depends essentially on internal bodies such as the National Minimum Wage Commission (Comisión Nacional de Salarios Mínimos), on which the workers are formally represented. This confirms that the global approach does not mean that the need for, and viability of, the institution of better national norms can be ignored (Bernstein, 2005).70 Neither can it be ignored that the search for better regulatory policy and institutional solutions should include specific attention to the elimination of discriminatory practices and integrate gender equality among the social goals pursued.

4.5 Conclusions Worker protection is inadequate in the new circumstances brought about by globalization and compounded by Latin America’s history of ineffective law, the result of lax application of laws that were basically associated with wage employment. Although the problem is widespread, the situation varies from country to country, depending on their past and their capacity to innovate and reshape institutions in response to competitive pressure. Integration into the global economy is also a factor,71 increasing the risks to which workers are exposed as the effects of the recent economic crisis have illustrated. 70 Red Puentes – a network of NGOs from Argentina, Brazil, Chile, Mexico, the Netherlands and Uruguay – has established a diagnosis according to which, even if companies engage in corporate social responsibility, initiatives to promote civil society participation in labour protection, and to bridge the gap between what management says and does, are insufficient. The few instruments that exist do not tend to incorporate citizen evaluations or worker participation, and yet these are sine qua non conditions for obtaining better results. The diagnosis concludes that the state should recover and augment its role as an enforcement agent for the benefit of society (Red Puentes, 2004). The network comprises 31 members, and is dedicated to promoting the development of socially responsible corporate culture and practices that take account of the civil society perspective in Latin American countries. 71 See also Filali Meknassi (Chapter 2), who argues that the ineffectiveness of labour law can be interpreted as a symptom of the decent work deficit, which can be partly explained against the background of global economic competition. 170

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It is imperative that the region improves and gives effect to the protection of workers formally covered by labour law, with institutional arrangements suited to the new context, and strengthens the enforcement apparatus to encompass typical and atypical forms of employment. New protection mechanisms are needed for workers excluded de jure, which is to say the majority in most Latin American countries. The case of self-employed workers deserves special consideration, in that they represent a significant and variable percentage of job holders, yet are, at present, excluded from the labour law and social security systems of most countries. But the proportion of waged workers without social security coverage (excluded de facto) is also significant and growing, and policies aimed at extending that coverage should therefore figure high on the agendas of governments and trade unions. The methods and bodies used to apply labour law also require further reform, and this means having accurate diagnoses. It also means overcoming the fatigue generated by successive, and sometimes contradictory, waves of reform in countries where reform was more in-depth and intense. The review conducted in this chapter shows that, in some cases, institutions such as labour inspection have taken positive steps, breaking with the dominant approach of flexibilization promoted by the Washington Consensus. Very different countries – Argentina, Brazil, Chile, Ecuador, the Dominican Republic and Uruguay – seem to be making great strides forward, although there are still no clear indicators of their impact on the scope of protection and social inequality. The barriers to innovation must be overcome in countries in which reform was not possible. Many expectations and perceptions – for example, that hiring women raises labour costs considerably, that reduced labour costs of necessity result in more workers being registered with social security, or that flexibility and deregulation will generate formal jobs – are more myth than reality. Ascertaining the true impact of institutions on social protection, while taking account of the diversity of forms of employment, is the best method for redesigning them so that they fulfil their role in a new context; it also avoids pointless reform. The denunciation of violations of labour standards has been the driving force behind labour inspection and labour courts’ decisions in almost all of the countries in which those institutions have been relatively effective. In a heterogeneous context, however, in which the recent improvement in some labour market indicators has been accompanied by the creation of too few jobs, labour segmentation, heightened informality, weak trade unions, and lack of resources for labour inspection and the judicial system, workers find claiming their rights to be a fraught process. To consolidate full labour citizenship in the region, the state must strengthen its capacity, and the legitimacy of protecting workers must 171

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be restored to government and social discourse. There is sufficient evidence that alternative means of giving effect to basic rights in the emerging jobs of the new economy (such as codes of conduct and private monitoring) are a valuable complement to, but do not replace, state enforcement activities – as evidenced in the labour situation in the export-led maquila garment sector in Mexico, in which NGOs have been noticeably present and active in the past decade. Any strategy aimed at making labour law more effective should, first and foremost, expand state action and guarantee that it is independent of those on whom the law is binding. Greater efforts should also be made to harmonize institutions regionally72 and globally, so that the quality of employment is not lowered as a means of attracting investment. The region also has a clear need for trade unions with real power that can counteract corporate policies and help to meet the challenges of competition, although the need does not exist, nor is it equally intense, in every country. The weaker the trade unions – which may be a consequence of the fact that other sources of identity, such as ethnicity, gender, or age, are more decisive factors of social mobilization – the greater the importance of quality labour regulations and enforcement bodies. The export maquila industries of Central America, Mexico and the Dominican Republic are among the most developed in the region, and experience the same difficulties in ensuring that workers can exercise their basic collective rights, recognizing trade unions as valid partners, and making room for social dialogue, in spite of the differences between economies and between political and labour systems. It would seem that the form of integration into the global economy has a greater influence than other factors, such as the country’s income level or institutional arrangements, on opportunities for collective action. It is also clear that in those countries the presence of new protagonists such as NGOs has not in any way made up for trade union weakness. In countries such as Argentina and Brazil, the existence of trade unions that are very independent of government and business, and which therefore have real negotiating power and their own political base, seems partly to have attenuated the effects of production restructuring and globalization on trade union members, although it did not stop the spread of social exclusion. At present, the existence of this type of trade union and of governments formed by political parties traditionally favourable to the development of unions, along with the havoc wreaked by earlier market policies and the weakening of the state, are conferring a renewed legitimacy on worker protection that has not been incompatible with economic growth. 72 See Blackett (Chapter 3), arguing that “from a broader distributive justice perspective, regional spaces may provide a particularly fertile governance level to challenge a flattened, unidirectional vision of globalization”. 172

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In the heterogeneous picture described above, all of the region’s countries have similar problems. In many ways, the future of democracy in Latin America seems to hinge on its capacity to repair the social and institutional fabric in the short and medium term, and to include rapidly more and more of those left behind by the export-oriented model, which uses the labour force in ways that make it easier for companies to evade their responsibilities. Transforming labour law and the social security system into instruments of inclusion that help to reduce uncertainty and social inequality is a long-standing goal that has reappeared on the agenda of most of the region’s governments. It will have to materialize today against a varied backdrop in which economic efficiency is increasingly important, and, as indicated in this chapter, in which progress towards enhanced worker protection has combined with ineffective labour law – especially in the face of the new types of employment that have emerged during this period. As a result, the instruments of protection must be renovated and their scope, effectiveness and beneficiaries extended.

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5

COLIN FENWICK, EVANCE KALULA and INGRID L ANDAU 1

5.1 Introduction This chapter explores the challenges that hamper the capacity of labour laws to protect workers in the southern African region. It also examines the legal and policy responses of southern African nations to these challenges. We focus on those countries that are members of the Southern African Development Community (SADC): Angola, Botswana, the Democratic Republic of Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, the United Republic of Tanzania, Zambia and Zimbabwe. While the SADC member states have very different levels of development and rates of economic growth, they share similar historical legacies of colonial rule and they all have labour law systems that have been “borrowed” from the North. They all also face a number of common legal, socio-economic and political challenges. The first part of this chapter provides a brief overview of the historical evolution of labour law in the region. Northern labour law structures and principles were originally imposed upon southern African states by the colonial powers. While these systems largely endured in the post-colonial era, there has been some “borrowing and bending” of northern labour law structures and norms.2 Immediately following decolonization, the overriding concern of most SADC states with political unity 1 The authors are grateful to Pamhidzai Bamu, Mothepa Ndumo and Zakeyo Mtimtema for their assistance in the drafting and research of this chapter. 2 The term “borrowing and bending” is used in the southern African context by Evance Kalula (1993, p. 345) to denote the process of adapting northern labour law norms and systems. It was partly inspired by Thompson (1993, p. 109). 175

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and economic development manifested itself in highly interventionist approaches to industrial relations and, in particular, in tight controls over trade unions. In the 1980s, however, economic liberalization led to a reduced role for the state in regulating the labour market. The trend towards democratization in the region since the early 1990s has been accompanied by extensive labour law reform. The second part of the chapter identifies and explores a number of factors that challenge the capacity of labour law to protect workers in southern Africa. It also examines regional and national regulatory responses to these challenges. Relevant socio-economic factors include poverty, income inequality, unemployment and underemployment, the impact of HIV/AIDS, and large-scale labour migration. Another challenge is the tendency of southern African states to subordinate labour law to political and economic priorities. The capacity of labour laws to protect and empower workers is also inhibited by reliance, within labour legislation, on the conventional employment relationship as a mechanism through which rights and duties are conferred. Finally, a lack of institutional capacity among key industrial relations actors – namely, trade unions, courts, and labour inspectorates – also hampers the capacity of labour law to perform its protective function. The final part of the chapter comprises a case study on the quest for gender equality in employment in Lesotho. While Lesotho has demonstrated a concern with the achievement of gender equality, it has generally pursued this objective through policy reform and non-employment-related legislative reforms. The result is that labour law continues, in key respects, to fail to protect women from discrimination. Before proceeding, it is important to note that the content of this chapter is limited by the fact that scholarship on the development of labour law and its interaction with labour markets in southern Africa is scarce for most countries other than South Africa. While increasing attention is being paid to comparative labour law, to date, the literature has been confined principally to northern industrialized democracies, East Asia, or Latin America. Similarly, reliable labour market data on the SADC region are limited and often contradictory. Given this paucity of reliable and uniform data about the different countries, greater reference is made to those SADC countries for which there are data and studies. Nonetheless, the limited information and analysis available suggests that, in southern Africa, both the character of labour laws and their impact are problematic.3 Throughout this chapter, labour law is understood in a broad sense – that is, as any state-recognized labour rights and standards that reflect the general goal of improving the quality of working life, and the relative bargaining power of people who are dependent on their labour for a living (Arup et al., 2000, p. 99). 3 This simple, but useful, framework is used in Cooney et al. (2002a). 176

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The form and content of most labour laws in SADC member states conform, in large measure, with the requirements of the core labour standards of the ILO. Nevertheless, in many cases, key provisions of the laws that determine to whom they apply significantly limit the extent to which workers enjoy their protection. In addition, the labour law systems, largely “borrowed” from the North, are predicated upon the existence of certain levels of socio-economic development, industrialization and institutional capacity that simply do not exist in most of the SADC member states. In other words, in many respects, the character of labour law in the region is derived from other social and economic environments. This, in turn, contributes significantly to the greatest challenge for labour law in southern Africa – that is, in its limited impact on labour markets. There is a vast disjuncture between the legal framework governing employment and everyday practice in southern African workplaces. As argued by Filali Meknassi (Chapter 2), the limited effectiveness of labour law may be seen as a manifestation of the process of adapting legal rules to a socio-economic situation that differs from that of the industrialized countries from which the model of regulating work has been transferred. Labour law has also been unable to keep pace with changes in work and employment relationships and production arrangements, which have increased the incidence of flexibilization, casualization and informalization of work (Benjamin, 2006a). As a result, there has been an increase in the number of workers who, de jure or de facto, do not enjoy the protection of labour laws. (These phenomena are defined and discussed in more detail in the second part of this chapter.)

5.2 The evolution of labour law in southern Africa

5.2.1 Colonization Labour law in southern Africa is shaped by the region’s colonial past. Colonized in the eighteenth and nineteenth centuries, the region was regarded by the European powers mainly as a source of primary commodities for export. African workers provided cheap labour for the mines and agricultural estates, and for the small industry of secondary products and services used by the settlers (Mhone, 2001). The majority of the African population, which continued to live by subsistence farming, was treated as a “labour reserve” from which the colonial settlers could draw cheap labour for the mines and plantations when necessary. The colonial rulers used labour law to organize and control the indigenous labour force. Many colonial territories had labour laws that applied specifically to the (black) African populations. These racially discriminatory laws were principally 177

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concerned with regulating temporary labour migration and imposed a range of criminal penalties for non-compliance, in a similar fashion to “masters and servants” legislation throughout the British common law world (Fenwick and Kalula, 2005).4 In other countries, such as Botswana, Malawi and Zambia, racial discrimination was not directly institutionalized through labour laws, but other policies were implemented to compel the African population to seek wage employment.5 Strict control over the indigenous wage labour force limited the development of trade unions (Klerck, Murray and Sycholt, 1997). While resistance to colonial policies among the indigenous population was widespread, it was not commonly expressed through organized forms of resistance. Where trade unions did exist, they were inescapably political, “as much a reaction to imperial rule as a reaction to working conditions” (Damachi et al., 1976, p. 3). Emerging pressures for decolonization in the region after the Second World War compelled the colonial rulers to implement changes to the discriminatory labour laws. Among the reforms was the introduction of new provisions for the establishment of trade unions, as a means of channelling worker dissent (Fenwick and Kalula, 2005). But the colonial authorities monitored these trade unions carefully, to ensure that they were confined to “economic” objectives (Freund, 1988; Damachi et al., 1976). The success of such policies was, however, limited, because in countries such as Namibia, Tanzania and Zambia, the labour movement played a key role during the struggle for national independence.

5.2.2 Post-independence All of the southern African countries, with the exception of Namibia and Zimbabwe, achieved independence in the 1960s or 1970s.6 While most of the newly independent states initially established multiparty democratic systems of government, many moved rapidly towards one-party rule. Countries that were ruled by single parties or monarchies during the 1960s, 1970s, and 1980s include Angola, Lesotho, Madagascar, Malawi, Mozambique, Seychelles, Swaziland, the United Republic of Tanzania, Zaire and Zambia. In these states, the legislature and judiciary were subordinated to the executive and all social organizations were brought under the control of the ruling regime (Dzimbiri, 2005). During this 4 On masters and servants legislation, see Hay and Craven (2004). 5 An example of such a mechanism is the “hut tax” imposed by the British in Zambia (and other former colonies), by which the local African population were charged with such high taxes on their homes that they were forced to work in the copper mines. 6 Zimbabwe achieved independence in 1980 and Namibia in 1990. 178

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period, many southern African states were distinguished by their pervasive violations of human rights, in general, and of international labour standards, in particular. There were, of course, significant differences in the relationships between labour and the ruling parties. For example, in countries where trade unions had been closely involved in the liberation movement (such as the United Republic of Tanzania, Namibia and Zambia), the post-colonial governments tended to adopt more “trade union-friendly” policies (Klerck, Murray and Sycholt, 1997). Upon achieving independence, the southern African states were faced with underdeveloped economies that were characterized by small formal sectors, limited domestic markets, high levels of poverty and stark income inequality. With the absence of a significant entrepreneurial class, the state adopted the primary role in driving economic development, adopting what has been described as an “ideology of economic development” (ibid., p. 6). This dominant role for the state, and its overriding concern with economic development, manifested itself in a highly interventionist approach to industrial relations (see Freund, 1988; Takirambudde, 1995; Christie and Madhuku, 1996; Dzimbiri, 2005).7 The post-colonial states in southern Africa retained the labour law systems imposed during the colonial period. Like their predecessors, many of the postcolonial states imposed tight restrictions on trade unions and industrial action that amounted to efforts to redefine the role of trade unions. Now, however, these measures were implemented in the name of the “national interest” (ibid.). In a few of the states, such as Malawi, Swaziland and Zimbabwe, this was partly a response to rising rates of industrial conflict immediately following independence.8 In the United Republic of Tanzania, Zambia and Zimbabwe, trade unions were used as administrative arms of the state in varying degrees (see Shadur, 1994; Fenwick and Kalula, 2005).9 More militant unions were violently suppressed, and their members arrested, harassed and intimidated (Shadur, 1994; Dzimbiri, 2005). The one-party states used a range of political, legal and economic mechanisms to integrate the labour movement into the state (see Mihyo, 1995; Dzimbiri, 2005). In countries with a multiparty political system, such as Botswana, control over trade unions was also very firm, but exercised through compulsory registration requirements, detailed bureaucratic supervision and surveillance of union affairs, and tight legal restrictions on industrial action (Takirambudde and Molokomme, 1995). 7 For a discussion of the interventionist approach to labour relations in Zimbabwe post-independence, see Knight (1997). 8 See Sachikonye (1987, pp. 252–259), cited in Southall (1997, p. 347). 9 In the United Republic of Tanzania, the high degree of government control over the single trade union federation is demonstrated by the fact that the labour laws empowered the President to appoint and dismiss the union leadership (see Rutinwa, 1995). 179

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During this era, labour rights – including the rights to freedom of association, collective bargaining and industrial action – were curtailed (Christie and Madhuku, 1996; Dzimbiri, 2005). In Malawi, under the Banda regime, the Trade Unions Act No. 32 of 1958 granted the state the power to control the formation, registration, management and dissolution of trade unions (Dzimbiri, 2005). Labour disputes were generally resolved through government or administrative action, or by adjudication in the criminal or civil courts (Christie and Madhuku, 1996). Many employment issues, such as wages, were set unilaterally, and were limited by statute and administrative decisions of the state (Takirambudde, 1995). For example, Zimbabwe’s Labour Relations Act No. 16 of 1985, while extending some rights to workers and unions, and providing for fair labour standards, provided the Minister of Labour with a wide discretion to determine wage levels, to define an unfair labour practice, to register or deregister a trade union, to approve or disapprove of any dismissal, and to disallow industrial action (Richer, 1992). Similarly, Swaziland has been cited many times by ILO supervisory bodies as interfering with, and limiting the right of trade unions to, freedom of association.10 Social and political unrest in several of the SADC member states during this era inhibited the development of labour law. In Angola, Mozambique and the DRC, civil wars have resulted in resources being channelled to state defence rather than to development (Fashoyin, 1998). Apartheid policies influenced the development of labour law not only in South Africa, but also in other countries that felt the impact of such policies, including Lesotho, Namibia, Swaziland and Zimbabwe.

5.2.3 Economic liberalization Since the 1980s, labour laws in the region have been influenced by the adoption of economic liberalization programmes (Takirambudde, 1995).11 Increasingly marginalized from the world economy in the 1970s and 1980s, many southern African states borrowed heavily from the international financial institutions (IFIs). Structural adjustment programmes (SAPs) were imposed as preconditions for receiving financial assistance from the IFIs and from Europe, under both the Lomé and Cotonou processes (see Tørres, 1998).12 In some cases, such as Botswana, economic liberalization programmes were voluntarily adopted (Siphambe, 2004). These processes have come under considerable criticism by social partners in the 10 See, e.g., ILO CEACR (2007). 11 For a discussion of the adoption of economic liberalization policies in Zimbabwe and its impact on the labour market, see Knight (1997). 12 On the Lomé process, see, e.g., Mailafia (1997). 180

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countries. In particular, both trade unions and employer groups have criticized the economic liberalization process for being “donor-driven” and the governments for failing to consult adequately with the social partners.13 During this period, many southern African governments abandoned their interventionist approach to industrial relations in favour of more market-oriented policies. According to Takirambudde (1995, p. 25), southern African labour laws introduced in the 1990s embodied a paradigm shift towards “limiting the role of the state, the acknowledgement of economic conflict between capital and labour, recognition of the managerial rights of the owner/manager and respect for trade union autonomy”. IFIs required the governments to implement labour market reforms aimed at facilitating enterprise efficiency, both in terms of labour market flexibility and labour productivity. While each country had adopted slightly different reforms, the reform programme included the following standard elements: a reduction in public sector employment; decentralized wage determination; cost containment by marginalization of the activities of trade unions; increases in labour “flexibility” by making it easier for employers to terminate employees’ contracts of employment (reducing job security); and the establishment of export processing zones (EPZs). Changes to labour legislation in Zimbabwe in the early 1990s epitomize the type of labour law reforms that have been implemented by countries in pursuit of labour market “deregulation”. The Zimbabwean government sought to decentralize the regulation of terms and conditions of employment (Kayenze, 1999; Gwisai, 2006). It granted employment councils a greater role in determining wages and conditions and in dispute resolution, abolished statutory minimum and maximum wages (except for agricultural and domestic workers), reduced its own role in resolving labour disputes, and simplified labour regulations. Workplace councils14 were assigned the responsibility of establishing “codes of conduct” governing workplace issues such as retrenchments, dismissals and labour disputes (Knight, 1997).

5.2.4 Democratization By the mid-1990s, multiparty political systems were established in Angola, Malawi, Mozambique, Namibia, South Africa, the United Republic of Tanzania and Zambia. The creation of new constitutions in Angola, Malawi, Mozambique, Namibia and South Africa led to the constitutional entrenchment of some 13 See, e.g., Seshamani and Kaunga’s (1999) discussion of the views of the Zambian trade unions and employer federations. 14 A workplace council is a shopfloor decision-making body, comprising equal representation of workers and management. 181

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individual and collective labour rights. Democratization was soon followed by significant labour law reforms. Rounds of labour law reform have been undertaken in South Africa (1995 to the present), Lesotho (1992 and 2002), Namibia (1992, 2004, and 2007), Swaziland (1998 and 2000), Zambia (1993 and 2008), Malawi (1996 and in progress), Botswana (1992 and 2007), United Republic of Tanzania (2004) and Zimbabwe (1996 and 2003). Labour law reform in the democratic era has extended rights to workers unprotected under earlier labour law regimes, and has strengthened the legal and social safety nets for full-time permanent employees. But the SADC member states have retained the basic tenets and structures of labour law as it developed in the northern industrialized countries. Today, the following key features are present in most labour law systems in the region. Firstly, the labour laws generally establish a floor of legislated minimum rights, covering wages, hours of work, leave, and workplace safety and health. Laws protect the rights of workers to freedom of association, and facilitate collective organization and action by both workers and employers. More recent reforms have sought to address issues of child labour and discrimination. Many countries have also entrenched basic workers’ rights within their constitutions.15 Secondly, labour laws provide for a system of labour dispute resolution, usually by conciliation or mediation, and then commonly by arbitration. Often, a labour court is created, typically with the jurisdiction to hear appeals against arbitral awards on points of law. In a number of the jurisdictions (such as Lesotho, Malawi, South Africa and Swaziland), there is a concept of “unfair labour practice” and a forum to which resort may be had to remedy such a practice. Finally, many of the labour law systems in the SADC region are organized around the principle of tripartism, as promoted by the ILO (Fenwick and Kalula, 2005). A number of countries – notably, Botswana, Lesotho, South Africa and Swaziland – now have labour dispute resolution systems that give a significant role to the social partners. Equally significant is the fact that the social partners have played a role in devising such systems. Further, most southern African countries have some form of high-level tripartite forum to facilitate consultation between the social partners.16 15 Standard rights in the constitutions relating to labour include freedom of association, protection from forced labour, and protection from discrimination. See, e.g., the 1966 Constitution of Botswana, Ch. II (“Protection of fundamental rights and freedoms of the individual”); the 1968 Constitution of Mauritius, Ch. II (“Protection of fundamental rights and freedoms of the individual”); the 1990 Constitution of the People’s Republic of Mozambique, Pt II (“Fundamental rights, duties and freedoms”); the 1990 Constitution of the Republic of Namibia (as amended), Ch. 3 (“Fundamental human rights and freedoms”); the 1992 Constitutional Law of the Republic of Angola; the 1993 Constitution of Lesotho, Ch. II (“Protection of fundamental human rights and freedoms”); and the 1994 Constitution of the Republic of Malawi, Ch. IV (“Human rights”). 16 These include, e.g., the National Economic Development and Labour Council (NEDLAC) in South Africa; the National Tripartite Committee in Zimbabwe; the Labour Consultative Council in 182

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In addition to legislation, a number of jurisdictions have recently introduced codes of practice governing a number of employment-related issues. This approach started with South Africa, in its Labour Relations Act No. 66 of 1995, and has been adopted in other jurisdictions such as Botswana and Lesotho. The approach is currently under consideration in Malawi and Zambia. At the subregional level, it is apparent in the use of similar codes, declarations and charters by the SADC as part of its regional integration agenda. Namibia’s Labour Act No. 11 of 2007, for example, empowers the minister to issue codes of good practice and guidelines for the administration of the Act.17 These codes are to be taken into account by any person interpreting or applying the relevant provisions.18 By as early as July 2000, a number of draft codes and guidelines had been prepared, with the assistance of the ILO. They covered sexual harassment in the workplace, termination of employment, organizational rights (rights of entry, workplace union representation and deduction of union fees), collective bargaining (particularly recognition, bargaining in good faith and disclosure of information), strikes and lockouts, picketing, and employment discrimination (Fenwick, 2006). The introduction of codes of practice and guidelines has been identified as a potentially significant development in the regulatory scheme and approach. Fenwick (ibid.) has observed that the use of such “soft” instruments may offer greater flexibility to both the regulator and to the regulated community. Codes and guidelines can be produced, amended and replaced much more quickly than regulations or legislation, and can be amended in the light of events and developments in parties’ practice. He notes that the use of codes in Namibia in relation to industrial action may prove particularly useful, given the frequency with which unions have resorted to illegal industrial action. Codes may also facilitate collective bargaining, especially in the absence of a lack of detailed legal provisions.

5.2.5 The role of the ILO The ILO has had a strong influence on the labour law systems in southern Africa.19 There are two ways in which the impact of the ILO has been particularly significant. Zambia and Malawi; a tripartite forum in Mozambique; a Labour Advisory Committee in Botswana; and the Labour Advisory Council (LAC) in Namibia (see Tørres, 1998, p. 94). It should be noted that these bodies are largely only consultative. 17 Section 137. 18 Labour Act, No. 11 of 2007, s. 137(3). 19 While this section focuses on the ILO, it is important to note that other UN organizations and Conventions (such as those relating to discrimination) have also influenced labour laws in the region. 183

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The first is that, by ratifying ILO Conventions, countries come within the ILO standards supervision system.20 Since its inception in 1992, the SADC has encouraged member states to ratify and implement the core ILO standards. All SADC member states except Namibia have ratified all of the ILO core Conventions.21 The second way in which the ILO has influenced labour laws in the region is through the provision of technical assistance. In particular, the ILO has assisted most countries in southern Africa – for example, Botswana, Lesotho, Malawi, Namibia, South Africa and Swaziland – to develop labour legislation that is consistent with international standards. In addition, the ILO has helped to improve the capacity of key institutions and actors in the region through technical cooperation, as, for example, in the ILO–Swiss Ministries of Foreign and Economic Affairs’ projects for regional conflict management and enterprise-based development, and for strengthening labour administration in southern Africa (SLASA). Many of the objectives of the latter project were subsequently continued in the project for improving labour systems in southern Africa (ILSSA), covering Botswana, Lesotho, Malawi, Namibia, Swaziland and Zambia.22

5.2.6 Regional integration SADC countries have long been informally integrated through undocumented cross-border trade and the movement of peoples. Since the 1980s, however, there have been moves towards formal integration in the region. In 1980, nine southern African countries formed the Southern African Development Coordination Conference (SADCC),23 which was succeeded in 1992 by SADC.24 Its objectives 20 Fenwick and Kalula (2005) note that, even before a country ratifies an ILO standard, it is likely to be subject to a range of regulatory activities by the ILO. This includes negotiation and discussion between ILO officials and representatives of countries, including ministers responsible for labour matters and senior officials of relevant government departments. This might occur, e.g., within the framework of the campaign to promote ratification of the ILO’s core labour standards. This “informal” aspect of ILO regulatory activity, while well known within certain circles, has not, as far as we know, been the subject of major academic study. For brief consideration, see Panford (1994, pp. 130–141). 21 These are the Forced Labour Convention, 1930 (No. 29); the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87); the Right to Organise and Collective Bargaining Convention, 1949 (No. 98); the Equal Remuneration Convention, 1951 (No. 100); the Abolition of Forced Labour Convention, 1957 (No. 105); the Discrimination (Employment and Occupation) Convention, 1958 (No. 111); the Minimum Age Convention, 1973 (No. 138); and the Worst Forms of Child Labour Convention, 1999 (No. 182). Namibia has not ratified Convention No. 100. See http://www.ilo.org 22 For more detail, see ‘What is ILO/SAMAT?’, available online at http://www.ilo.org 23 These countries were Angola, Botswana, Lesotho, Malawi, Mozambique, Swaziland, the United Republic of Tanzania, Zambia and Zimbabwe. 24 See the 1992 Treaty of the Southern African Development Community (SADC). Available online at http://www.sadc.int 184

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include regional integration and harmonization, the promotion of sustainable and equitable socio-economic development, the promotion of democratic values, and the combating of HIV/AIDS.25 The SADC has adopted a number of Treaties and Protocols that are relevant to the content of national labour laws. A key development has been its Charter of Fundamental Social Rights.26 Adopted in 2003, the Charter provides for the social protection of workers and the unemployed. In the realm of labour rights, the Charter provides for minimum requirements and for the harmonization of requirements for paid maternal leave, and occupational safety and health protection;27 protects rights relating to freedom of association and collective bargaining;28 requires the improvement and harmonization of work and living conditions;29 calls for information for, consultation with, and the participation of workers;30 and provides for the education and training of workers.31 The Charter also requires member states to ratify and implement the ILO core Conventions.32 All member states are required to submit regular progress reports on their compliance with the Charter to the annual SADC tripartite sectoral meeting. The most representative organizations of employers and workers must be consulted during the preparation of the report.33 Another regional instrument with the potential to affect labour laws is the SADC’s 1998 Draft Protocol on the Facilitation of Movement of Persons.34 The harmonization of labour laws has been identified as part of the broader movement towards integration. In 1995, the SADC Council of Ministers established the SADC Employment and Labour Sector (ELS), mandated with the task of securing cooperation and integration among member states concerning labour and employment matters. Today, the ELS is integrated into the Directorate of Social and Human Development and Special Programmes (SHDSP). The ELS oversees all issues concerning human resource management, including the promotion of employment and labour issues, so as to “improve labour productivity and social development” (Olivier et al., 2003, p. 658). To 25 For the full list of objectives, see ibid., Art. 5. 26 Available online at http://www.sadc.int 27 SADC Charter of Fundamental Social Rights, Art. 11(a). 28 Ibid., Art. 4. 29 Ibid., Art. 11. 30 Ibid., Art. 13. 31 Ibid., Art. 15. 32 Ibid., Art. 5. 33 Ibid., Art. 16(1). 34 The SADC has also adopted non-binding instruments on HIV/AIDS (1997 and 2003) and on social security (2005). These instruments are all available online at http://www.sadc.int 185

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date, however, there seems to have been little progress made towards the harmonization of labour laws.35

5.2.7 Concluding remarks This part of the chapter has outlined the development of labour law in the region, from the repressive and interventionist labour regulation of the colonial and post-independence governments, through the non-interventionist stance taken in pursuit of labour market “deregulation”, to the more recent shift towards the protection and promotion of individual and collective labour rights. While significant strides have been made towards bringing the content of labour laws into line with international labour standards, it is arguable that they have not had the desired impact, because many workers do not enjoy their protection. The next part of the chapter will examine the factors giving rise to the disjuncture between the ideal and the reality. It will also outline and evaluate the policy and legal responses to these challenges.

5.3 The challenges facing labour law in southern Africa

5.3.1 The socio-economic environment

Poverty, income inequality and unemployment Poverty continues to be one of the greatest challenges faced by the southern African region. Economic growth has not been sufficiently strong to contribute to large-scale poverty alleviation (University of Cape Town DPRU, 2005, pp. 5–6). In 2003, the region’s average gross domestic product (GDP) growth rate was 2.7 per cent, after increasing gradually from the early 1990s. Regional averages, however, obscure the differences in economic performances between the SADC member states: Botswana, Lesotho and Mauritius have continued to enjoy strong economic growth, while Zambia has had a much lower growth rate; war and political unrest in Angola, the DRC and Zimbabwe have adversely affected economic performance; and in 2003, Malawi, Mozambique and the United Republic of

35 In February 2006, the labour ministers of the SADC member states met in Zimbabwe to review and revive the sector. 186

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Tanzania recorded the highest GDP growth rates (of 5.9 per cent, 7 per cent and 5.5 per cent, respectively). The proportion of the southern African population living in poverty has increased over the last few decades.36 In 2003, the ILO estimated that 76.4 per cent of the population in sub-Saharan Africa lived below the poverty line of US$2 a day.37 Sub-Saharan Africa has the highest incidence of working poverty of all developing regions: around 55 per cent of those employed do not earn enough to lift themselves and their families above the level of US$1 a day.38 Sub-Saharan Africa is the only region in the world that saw decreases in labour productivity levels between 1993 and 2003.39 The average United Nations (UN) Human Development Index (HDI) value for the SADC region in 1998 was 0.538, which places it in the medium human development category. The HDI comprises three components of human development: longevity, education level, and living standards. But, as figure 5.1 demonstrates, there are large differences between the SADC member states. Linked to the high levels of poverty in the region are the high levels of income inequality. Indeed, sub-Saharan Africa exhibits the highest levels of income inequality in the world (University of Cape Town DPRU, 2005). Figure 5.2 demonstrates the range of income inequality between the different SADC member states: the higher the Gini coefficient, the more inequitable the distribution of income in the relevant country. Income inequality continues to be structured overwhelmingly along racial lines. Unemployment remains high throughout southern Africa. While statistics on employment in the SADC are scarce, it is estimated that around 30 to 40 per cent of the labour force are unemployed (University of Cape Town DPRU, 2001). The formal sector is incapable of absorbing the economically active population, leading to increased activity in the informal economy (Mhone, 2004).40 This triad of socio-economic woes has implications for the capacity of labour laws to protect workers in the region. Most significantly, high levels of poverty, income inequality and unemployment have predisposed many workers to accept employment on any terms, even where it may be unstable or precarious (Klerck, 2002). Workers are in an increasingly vulnerable situation, because employers are in a position to vary the terms and conditions of employment at will. With no better alternative, many workers accept work under very poor conditions without seeking 36 The proportion of the population living on less than US$1 a day in sub-Saharan African increased from 42.6 per cent in 1980, to an estimated 45.7 per cent in 2003 (see ILO, 2005d, p. 23, table 1.1). 37 Ibid. 38 Ibid., p. 60. 39 Ibid., pp. 61–62. 40 For an analysis of this phenomenon on a global scale, see ILO (2006e). 187

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Figure 5.1 Human Development Index for SADC states, 1998 1.0 0.8 0.6 0.4 0.2

Malawi

Mozambique

Mozambique

Tanzania

Angola

Tanzania

Zambia

Congo, Dem. Rep.

Zimbabwe

Lesotho

Botswana

Namibia

Swaziland

South Africa

Mauritius

Seychelles

0

Source: Rousseau, Meintjes and Barnard (2002, p. 12)

Figure 5.2 Gini coefficients, 1980–98 0.8 0.6 0.4 0.2

Seychelles

Zambia

Swaziland

Mauritius

Angola

Botswana

Lesotho

South Africa

Malawi

Zimbabwe

Namibia

0

Source: Rousseau, Meintjes and Barnard (2002, p. 11)

the protection offered by labour law. Their exclusion from the protection offered by labour laws in turn fuels a vicious cycle of poverty and income inequality.

188

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The impact of HIV/AIDS Southern Africa has the highest number of people living with HIV/AIDS in the world.41 The epidemic is concentrated in the working age population (among those aged 15–49), thus impacting most severely on those with critical social and economic roles (Cohen, 2002). Eight SADC countries had infection rates higher than 15 per cent in 2007 – the only countries in the world with such high rates of infection. Of these, Swaziland’s infection rate was estimated at 26 per cent, Botswana’s at 24 per cent, and Lesotho’s at 23 per cent (UNAIDS, 2008). The HIV epidemic affects southern African labour markets in a number of ways. The epidemic reduces the size of the labour supply and changes the composition of the labour force. It also reduces the levels of skills, professionalism and experience of the workforce in a region where levels of skilled labour are already low.42 The HIV epidemic directly affects enterprise productivity by increasing absenteeism, sick leave, disability pensions, medical care and funeral expenses. The epidemic increases labour turnover and thus employers have less incentive to invest in the training of their employees. More broadly, the HIV epidemic undermines the capacity of states to develop by reducing rates of economic growth and forcing governments to divert resources from investment activities towards coping with the HIV epidemic. This poses a number of challenges for labour law, the most significant among which are workplace discrimination against HIV-positive employees and the fact that high HIV prevalence rates lead to the increased use of child labour (Rau, 2002). The high rate of deaths due to HIV has raised the number of childheaded households, as well as the need for children to work to support themselves and their siblings. Because children may lack skills and may wish to circumvent minimum age legislation, they are likely to seek work in “invisible” workplaces. Children in these circumstances are more vulnerable to abuse and exploitation, and may work for low wages and under poor conditions, sometimes doing hazardous work, and may even engage in illicit activities, such as drug trafficking and prostitution (ILO, 2002a). The SADC has sought to respond to the challenges posed by HIV to employment by developing a code on HIV/AIDS and employment, which was introduced in 1997.43 The code emphasizes human rights principles in respect of 41 Of the estimated 33 million people worldwide living with HIV/AIDS in 2007, an estimated 22.1 million were in sub-Saharan Africa (see UNAIDS, 2008). 42 For a detailed economic analysis of the effect of HIV/AIDS on southern African labour markets, see, e.g., Arndt and Lewis (2001, p. 427); Cohen (2002); Hacker (2002, pp. 19–23). For a comparison of national policies on HIV/AIDS in the SADC, see POLICY Project (2002). 43 Reproduced in UNDP (2008). 189

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non-discrimination and confidentiality. National laws and policies have also been reformed to reflect these core principles.44 The code is based on three key principles: respect for human rights, including the World Health Organization (WHO), UN and ILO standards and guidelines; patient rights; and business efficiency. The code proceeds to make a series of specific recommendations about how to manage HIV/AIDS at work, encompassing education, awareness and prevention programmes; job access and job status; workplace testing and confidentiality; managing illness and job security; occupational benefits; risk management; first aid and compensation; protection against victimization and grievance handling; and information, monitoring and review.45 The code is not a legally binding document, but it recommends that member states develop tripartite national codes that should be reflected in law. Member states have reformed national laws and policies to reflect the core principles in the code; a number of them have recently taken steps to develop codes modelled on the ILO’s 2001 code of practice on HIV/AIDS and the world of work. In 1998, Namibia46 and Zimbabwe each adopted a code on HIV/AIDS and employment. While the Namibian code is not a binding legal instrument, the tripartite Labour Advisory Council and the Ministry of Labour are responsible for monitoring, reviewing and implementing it.47 In Zimbabwe, the code takes the form of statutory regulations under the Labour Relations Act No. 16 of 1985.48 Although the regulations do not make specific provision for monitoring, review and implementation, contravention of the regulations amounts to an offence punishable with a fine or six months’ imprisonment.49 A number of SADC member states have, in consultation with their social partners, designed and implemented policies and programmes relating to HIV/ AIDS in the workplace.50 For example, Botswana’s 2003 national policy on HIV and AIDS in the workplace provides guidelines on a number of issues, such as equal opportunities and non-discrimination; HIV testing, confidentiality and disclosure in employment; the provision of fair and equitable employment 44 See, e.g., Government of Lesotho (2000), Government of the United Republic of Tanzania (2001), and Government of Botswana, Ministry of Home and Labour Affairs (2003). 45 See SADC Code on HIV/AIDS and Employment, paras 1–12. 46 See Namibia Ministry of Labour, Guidelines for implementation of National Code on HIV/AIDS in Employment, No. 78, 1998, appended to UNAIDS (2000). 47 Ibid., art. 6.12. 48 Zimbabwean Labour Relations (HIV and AIDS) Regulations, 1998 (SI 202 of 1998), appended to UNAIDS (2000). 49 Ibid., reg. 1. 50 See, e.g., Government of Botswana, Ministry of Home and Labour Affairs (2003), and the relevant policy documents for Swaziland, available online at ILO/AIDS, ‘Country profi le: Swaziland’, http://www.ilo.org. See also the discussion in UNAIDS (2000, pp. 30–32). 190

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benefits; information, communication and awareness; and the planning and implementation of HIV and AIDS interventions in organizations.51 The policy forms the foundation for the envisaged enactment and/or amendment of relevant employment legislation to reinforce constitutional rights and obligations.52 An audit of HIV/AIDS policies in six SADC countries conducted in 2004 indicates that South Africa has the most extensive legislative provisions specifically protecting the rights of people living with HIV/AIDS, both within and outside the employment context (Zungu-Dirway et al., 2004). Section 187(1)(f) of its Labour Relations Act No. 66 of 1995 provides that a dismissal is automatically unfair if the reason for the dismissal is “an arbitrary ground”, including (but not limited to) the grounds listed in art. 9 of the 1996 Constitution of the Republic of South Africa. Arguably, dismissal on the basis of HIV status would be automatically unfair, because the latter is an analogous ground of discrimination.53 In 2000, the National Economic Development and Labour Council (NEDLAC) published a Code of Good Practice on Key Aspects on HIV/AIDS and Employment. Th is code provides guidelines for employers, employees and trade unions that are designed to prevent unfair discrimination against HIVpositive employees, to manage HIV/AIDS within the workplace, and to foster cooperation at various levels. The code does not have any binding force, however, and employers and employees and their respective organizations are merely encouraged, not compelled, to consider it. The Employment Equity Act No. 55 of 1998, inter alia, prohibits unfair discrimination in an “employment policy or practice”, which covers any action taken by an employer within the scope of the employment relationship.54 Section 9 of the Act provides that applicants for employment are also covered by the Act, as far as it is applicable to them.55 Section 6(1) of the Act specifically lists HIV status as a prohibited ground of discrimination, and discrimination on this ground is actionable. The Act prohibits an employer from testing employees and job applicants for 51 Government of Botswana, Ministry of Home and Labour Affairs (2003), art. 5.2. 52 Ibid., art. 5.3. 53 In South Africa, § 9 of the Constitution prohibits discrimination on a number of listed grounds, such as race, ethnic origin, marital status, gender, religion, etc. The grounds listed in § 9 are not a closed list and the Constitutional Court has held that HIV status is one of the grounds of discrimination that is analogous to the listed grounds: see Hoff mann v. South African Airways (CCT17/00) [2000] ZACC 17; (2001) (1) SA 1; 2000 (11) BCLR 1235 (CC) (28 September 2000). 54 This includes, but is not limited to recruitment procedures, including advertising and selection criteria; appointments and the appointment process; job classification and grading; remuneration; employment benefits, and terms and conditions of employment; job assignments; the working environment and facilities; training and development; performance evaluation systems; promotion; transfer; demotion; disciplinary measures other than dismissal; and dismissal. 55 While employment policies are relevant to job applicants, employment practices, such as promotion and training, are not. 191

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HIV, unless the Labour Court finds that such testing is justifiable and authorizes it. The Labour Court may impose conditions relating to counselling, confidentiality, and limitations on the categories of employee who may be tested. The 2004 audit also indicated that South Africa was the only country in which HIV/AIDS issues had been litigated to that time. The most significant case relating to HIV/AIDS and employment in South Africa is that of Hoff mann v. South African Airways,56 in which an applicant for a position as a flight attendant was denied an appointment because he was HIV-positive. South African Airways (SAA) attempted to justify its decision on various grounds, including the argument that HIV-negative status was an inherent requirement of the job and the argument that all its other competitors did not hire HIV-positive people. With reference to the right to equality in art. 9 of the Constitution,57 the Constitutional Court examined the position of people living with HIV, and found that they are stigmatized, marginalized and one of the most vulnerable groups in society. It found that SAA’s decision amounted to unfair discrimination, which was not justified by the purpose of the discrimination, nor the medical evidence available. The Court ordered SAA to appoint the applicant. Th is decision demonstrates the extent to which the South African courts are willing to vindicate the rights of people living with HIV. But the case is also an indication of the rampant discrimination and stigma that HIV and AIDS engender. In many other SADC jurisdictions, courts have not intervened in any apparent way, let alone vindicated the rights of people living with HIV and AIDS. The measures taken by SADC member states to tackle the challenges posed by HIV/AIDS in the workplace range from non-binding codes, and policies and programmes, to enforceable legislation. There is a dearth of information, however, regarding the impact of the measures – particularly in relation to the non-binding codes and policies. Two significant obstacles to protecting employees living with HIV/AIDS are the persistent social stigma attached to HIV/AIDS, and employees’ ignorance of the existence and content of measures designed to protect them. The success of these measures also depends on the success of broader measures to tackle HIV/AIDS in society and broader measures to address the indirect effects of HIV/ AIDS, such as the increase in child labour. In addition, the scope of protection offered by these measures is limited, given the fact that many employers operate outside the confines of the law and many workers are not employees in the legal sense, and are therefore de jure denied the protection of labour law. 56 See n. 53 supra. 57 This was because the facts giving rise to the matter had arisen before the Labour Relations Act No. 66 of 1995 and the Employment Equity Act No. 55 of 1998 had come into force. 192

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The impact of HIV and AIDS, and the consequent denial of labour law’s protection, is far more extensive than may at first appear. Reviewing South African Reserve Bank reports from 2003, Benjamin (2007) has suggested that the pandemic has a severe impact on both the macro- and micro-economic situation in that country. There is, for example, a link between HIV/AIDS and casualization of employment. The increased costs related to the burden of HIV/ AIDS on workers is said to be another factor that pushes business to reduce the number of formal employees, preferring instead to hire casual workers. That way, the employer avoids the responsibility for providing health care and other social benefits to the affected workers (ibid.).

Labour migration Another factor that poses a challenge to the protective capacity of labour law in the region is large-scale labour migration. From the late nineteenth century, a number of economic sectors (particularly mining and commercial agriculture) in South Africa received large numbers of migrant workers from Botswana, Lesotho, Malawi, Swaziland, Mozambique, Zambia and Zimbabwe. To a lesser extent, other countries, such as Namibia, the United Republic of Tanzania, Zambia and Zimbabwe, have also historically attracted labour migrants from neighbouring countries. South Africa, however, remains the region’s most dominant, sophisticated and diversified economy, and continues to attract the highest numbers of both formal and informal labour migrants. Since 1990, the number of labour migrants moving to South Africa from neighbouring countries has increased dramatically. This has been attributed to a number of factors, including increasing unemployment in the sending countries and reduced government investment in social services (ILO, 1998). Today, key reasons for migration include large differentials between SADC member states in terms of wages, standards of living and unemployment rates, and political upheavals (Crush et al., 2005). The impact of migration in the region is felt in a number of ways, of which one is that many households and communities in the region are dependent on the earnings of family members who have migrated to seek work. Another is that governments have designed legal and institutional frameworks to ensure that migrants do not settle in receiving countries (ILO, 1998). Documented migrants are those that enter the country legally and have the host country’s official permission to work in the country. Permission to work is granted on the basis of a job offer from an employer, which must be motivated by the need to employ a migrant on the strength of the latter’s knowledge, skills and expertise in a particular field. Because host countries scrutinize closely applications for permission to work, they are only made by employers that are formally 193

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registered and comply (at least on the face of it) with the legislation regulating employment relations. Thus, it is likely that the majority of documented migrant workers work under favourable conditions, which are comparable to those of their local counterparts. They have greater bargaining power and may enforce the protections afforded by labour law. But, with the exception of those with permanent resident status, migrant workers do not have access to state social security protection, such as disability benefits and unemployment insurance benefits (Olivier et al., 2003). Migration in the region challenges the capacity of national labour law frameworks to protect undocumented migrant workers, who form the majority of the migrant workforce. These are workers who enter and work in the country illegally, or enter legally (on a basis other than a work permit) and stay in the host country, proceeding to work without permission to do so. They usually do not have the education or skills that would justify the issue of a work permit. They prefer to work in jobs in which they do not attract the attention of the public authorities and so they have fewer choices open to them (ILO, 2002a). They are therefore vulnerable to exploitation and abuse, and are willing to accept work in areas in which conditions are poor, the wages are low, and there is little or no job security (ILO, 1998). Because of their precarious position, they do not have recourse to the protection afforded by labour laws. The SADC has recognized the need to work towards the facilitation of movement of citizens between member states and the gradual harmonization of migration policies.58 To date, however, there has been relatively little progress in regional efforts to regulate labour migration. The SADC region still lacks a coherent migration policy, and many migrant workers lack any form of social protection while working in host countries (Olivier et al., 2003).

5.3.2 The relationship of labour law to economic objectives As noted in the first part of this chapter, there is a long history in the region of the subordination of labour law to political and economic objectives. The concern with maintaining political stability and increasing productivity has often manifested itself in close controls over collective bargaining and industrial action. More recently, subordination of labour law has taken place in the context of globalization. This phenomenon consists of a number of processes, namely “trade and 58 See the SADC’s 1998 Draft Protocol on the Facilitation of Movement of Persons. Available online at http://www.sadc.int 194

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the expansion in the volume and variety of cross-border transactions in goods and services; foreign direct investment (FDI) and a dramatic increase in international capital flows; the rapid and widespread diffusion of technology; and international labour migration.” (ILO, 2002a, p. 33). One important feature of globalization is the integration of domestic markets into regional and global markets. There has been increasing progress towards formal integration in the region. Regional economic integration is pursued through several mechanisms, including the Southern African Customs Union (SACU), the SADC, the Common Market for Eastern and Southern Africa (COMESA), and the African Union. The SACU, composed of Botswana, Lesotho, Namibia, Swaziland and South Africa, provides for the free movement of goods and services between member states and the imposition of a common external tariff when trading with other countries. In the late 1990s, the SADC agreed to implement gradually a free trade area, with 100 per cent liberalization by 2012.59 Nine SADC members also belong to COMESA.60 Finally, it should be recalled that the terms of the 1991 Treaty that established the African Economic Community provided a timetable for achieving a common market for all of Africa by 2025, under the auspices of the African Union. Beyond the region, southern African countries participate in a range of international trading regimes. All SADC member states are World Trade Organization (WTO) members. The SADC is also a partner in the New Partnership for Africa’s Development (NEPAD). One of the key objectives of NEPAD is the need “to stop the marginalisation of Africa in the globalisation process and enhance its full and beneficial integration into the global economy”.61 Finally, under the US African Growth and Opportunity Act of 2000 (AGOA), most products from those countries in sub-Saharan Africa designated by the US President as meeting certain eligibility criteria are provided with duty-free access to the United States. Among these criteria is that countries have “established, or [will be] making continual progress towards establishing … protection of internationally recognized worker rights”.62 All SADC member states, with the exception of Zimbabwe, are AGOA beneficiaries.63 59 See the SADC 1996 Protocol on Trade. Available online at http://www.sadc.int 60 Angola, Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Namibia, Swaziland, Zambia and Zimbabwe. 61 See “NEPAD in brief: What are the NEPAD primary objectives?”. Available online at http:// www.nepad.org 62 These are defined to include the rights protected by ILO’s core Conventions, as well as “acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health” (AGOA, § 104(a)(1)(F)). 63 See http://www.agoa.info 195

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As highlighted by Adelle Blackett (Chapter 3), the nature of trade-related constructs determines “employment levels, wage inequality and other employment patterns, and labour law”. In the case of the SADC member states, regional and global economic integration impacts upon labour markets and labour laws in a number of ways. For example, economic integration is important to the construction and functioning of member states’ labour markets through its impact upon national industrialization policies (Fenwick and Kalula, 2005). Many southern African states, while eager to attract FDI, are able to offer little more than lowcost labour. Regional integration (for example, through the SACU) and global integration (for example, through the WTO) also affect industrialization policies through inhibiting the capacity of member states to protect infant industries. Participation in such groups may compel countries to adopt an export-oriented approach to industrialization (ibid.). According to Kuruvilla’s work on industrialization strategy and industrial relations, export-oriented industrialization tends to be associated with repressive labour laws, designed to maintain flexibility and low labour costs (Kuruvilla, 1995, 1996).64 The latter are also achieved through under-enforcement of labour laws, which is one of the main challenges posed by trade liberalization (Blackett, Chapter 3).65 The extent to which labour laws should be reformed to facilitate labour market “flexibility” continues to be a subject of contention in the region. More broadly, these arguments are concerned with the perennial question of how to balance economic development with concerns for social justice. Advocates of labour market “deregulation”, including the IFIs, have persistently argued that labour law reform is needed to create jobs and facilitate economic growth. They also argue that high labour standards can limit access for those outside the labour market, while protecting the relatively few privileged workers within the formal system.66 A common example is minimum wage legislation, which is widely thought to reduce the demand for labour and thus to contribute to unemployment.67 Those opposed to further “deregulation” of labour laws emphasize the social and developmental costs associated with such policy prescriptions, and the need for high labour standards that will address the persistent inequality and discrimination in southern African labour markets.

64 For an analysis of the tension between trade liberalization and export-led industrialization and labour law, see also Blackett (Chapter 3). 65 For the gender dimension of this phenomenon, see later in this chapter. 66 See, e.g., ILO (2006e, pp. 2–4). 67 Ibid., p. 2. 196

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In South Africa, for example, debate continues around the extent to which labour laws should be reformed to reduce unnecessary “rigidities” in the labour market. In light of the increasing integration of the South African economy into global trading networks, employers often view “flexibility” as the means by which to modernize and secure economic viability (Tørres, 1998). The South African Government and employer groups have been particularly concerned with the impact of the regulatory framework on small and medium-sized enterprises (SMEs). In 2002, South Africa implemented a range of amendments that were intended to reduce the regulatory burden on the sector.68 Many of the government’s proposed reforms were successfully blocked by organized labour (Benjamin, 2006b). In 2005, however, the government reiterated its commitment to exempting MSEs from key regulations, including those relating to central bargaining and “other labour arrangements” (ibid., p. 33). This is problematic, because it means that millions of workers are excluded from the protection of labour law.69 In Namibia, debate over reforms to the Labour Act No. 6 of 1992 extended over a period of almost ten years. The ultimate outcome of the process was the Labour Act No. 11 of 2007, which implements a range of changes, particularly to basic standards of employment and to the dispute-resolution process.70 While welcomed by employee groups, an earlier version was resisted by the Namibian Employers’ Federation (NEF) and by the Namibian Economic Policy Research Unit (NEPRU), on the basis that it would raise labour costs and have a negative impact on the Namibian economy (see Lejonhud and Hambodi, 2005; Tutalife, 2006). Opponents of the proposed changes argued that the reforms, by increasing statutory leave entitlements available to workers, would reduce the competitiveness of Namibian enterprises and impede the capacity of Namibia to attract FDI (Lejonhud and Hambodi, 2005; NEPRU, 2005). Job security entitlements were criticized for raising the costs associated with hiring and firing, and thus having a potentially negative effect on employment. In contrast, the government and trade unions argued that the law would be conducive to economic growth, stability and productivity, and that economic studies emphasizing the costs of the new laws to employers and the economy had been “grossly exaggerated”. Controversy over the legislation continued for some time,71 not least because the final version included 68 Examples include higher maximum hours of overtime and lower payments for overtime: Basic Conditions of Employment Amendment Act No. 122 of 2002, § 50(1). 69 On the multiplicity of statuses determining the legal condition of workers as a common feature of the labour law systems of the developing world, see Filali Meknassi (Chapter 2). 70 For analysis of the changes that would have been implemented by a 2004 version of the Act, see Fenwick (2006). In most respects, the 2007 Act introduces the same changes. 71 See, e.g., Katswara (2006). 197

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a prohibition on labour hire arrangements. The prohibition was however overturned on the grounds that, as enacted, it was invalid in terms of the Constitution of Namibia, which protects the freedom to carry on a trade or business.72 One specific area in which the tension between labour rights and economic development is clearly demonstrated is the establishment of EPZs. A number of southern African countries, including Malawi, Mauritius, Namibia and Zimbabwe, have established EPZs in an attempt to attract foreign investment and promote exports. One of the many incentives offered to employers by host governments has been lower labour costs. These lower costs have often been assured by granting EPZ companies exemptions from the labour laws. In particular, workers in these zones have been denied basic labour rights and protections. In Zimbabwe, for example, employees in EPZs were governed by separate legislation that specifically removed them from the jurisdiction of the Labour Act No. 16 of 1985. In Namibia, EPZs were classified as essential services, thus denying workers the right to strike (Bauer, 1996, p. 13). More recently, however, Namibia and Zimbabwe have both amended their labour laws to bring EPZ workers back within their scope. But even where labour laws do formally apply to workers in EPZs, they are often ignored in practice (FES, 1999; LaRRI, 2000; Kalula, 2003).

5.3.3 The scope of the employment relationship and changing patterns of work It is now widely accepted in labour law scholarship around the world that the capacity of labour laws to protect and empower workers is significantly inhibited by reliance on the conventional employment relationship as a mechanism through which rights and duties are conferred.73 The ILO has also addressed the issue in recent years, culminating in the discussions at the ILO Conference that led to the adoption of the Employment Relationship Recommendation, 2006 (No. 198) (see ILO, 2006a). In southern Africa, as in many developing regions, the challenges to orthodox labour law concepts are perhaps even greater than those facing labour law in the industrialized world. They include the significant degree to which participants in the labour market are “own-account” workers – that is, working in the informal economy. Widespread unemployment and underemployment will always 72 African Personnel Services Pty Ltd v Government of the Republic of Namibia, Case No. 51/2008, 14 Dec. 2009. 73 See, e.g., the essays in Davidov and Langille (2006) and, before them (among others), Supiot (2001). For a review of this and other relevant literature, see Teklè (Chapter 1). 198

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pose major challenges to the effectiveness of labour law.74 Here, it is difficult to see how even broadly expanded notions of the nature of an employment relationship would be effective in extending the protective scope of labour law. Not surprisingly, then, these issues pose particular challenges to the capacity of labour law in southern Africa to fulfil a protective function. Many of the difficulties facing labour law lie in its traditional reliance upon the “standard” employment relationship as the pivot around which most of its protective wheel turns. There are two problems here: one is the legal concept of “employment”; the other is the assumption about whether this, or any form of employment, is the standard in a labour market. The legal concept of employment, regulated predominantly throughout the common law world (in particular) by the legal mechanism of contract, plays a key role in regulating work relations. It sets the bounds of work relationships in which the employee is typically subordinate to their employer – that is, subject to the employer’s direction in their work. Contract allocates to the employer significant scope not only to determine the content of a work relationship, but also to determine contractual terms and conditions, particularly through the vehicle of implied terms. In modern economies, in particular, it therefore serves as an effective legal vehicle by which to facilitate greater flexibility in work relations.75 At least in the English context, it is now clear that one of the reasons why the contract of employment developed in this way is because of its relationship to patterns of engagement in the labour market and to the development of the welfare state. Contract came to allocate significant control to employers because of (reasonable) assumptions about the usual length of employment relationships, and because the state played a significant role in delivering social protection in ways not provided by the employment relationship itself. The two, however, developed in tandem with each other.76 Thus, one of the main concerns of labour law now is to develop new ideas about how to ensure social protection in the face of the challenges posed by changes to patterns of engagement and to the nature of welfare states. A critical focus of this work is increasingly the idea that labour law may be an important means of developing human capabilities.77 These ideas may prove particularly useful in the developing economy context, and especially in the southern African context, but it is beyond our present 74 In the South African context, see, e.g., Benjamin (2006a); compare the similar observation made by Lindsey and Masduki (2002) about the effectiveness of labour law in Indonesia. 75 See, e.g., Collins (2001). 76 See, generally, Deakin and Wilkinson (2005); compare Howe and Mitchell’s (1999) analysis of the evolution of the contract of employment in Australia. 77 See, particularly, Deakin and Wilkinson (2005, pp. 290–303); Brian Langille has also drawn on the capabilities approach of Amartya Sen (1999). 199

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scope to explore them.78 We turn instead to what is known about patterns of engagement in labour markets throughout southern Africa. As we emphasized at the outset, it is difficult to obtain reliable data for most countries in the region. Nevertheless, it is reasonably clear that each of them faces challenges from three separate, but related, phenomena in the labour market: informalization, casualization and externalization.

The informalization of work and employment Informalization, a process by which workers are compelled to move from mainstream formal employment to the informal economy, in fact results in deregulation: workers move beyond the protective scope of labour law. Informalization refers to the situation of employees who are de jure covered by labour law, but who are de facto not able to enforce their rights, as well as to those workers that are de jure not covered by labour law because they are independent contractors. While informalization may be attributed to a number of causes, a key influence has been the need for enterprises to achieve flexibility in order to remain competitive in the global era (Theron, 2005). “Flexibility” in this sense refers to an enterprise’s capacity to adapt to changed circumstances and in particular market changes (Theron and Godfrey, 2006). Firms may adopt one or a combination of flexible work practices, including changing the internal organization of the workplace, changing the work process, and changing the employment status or composition of the workforce. Firms have moved towards arrangements that reduce the costs and risks associated with the standard employment relationship, through “using cheaper labour, directly reducing wage and benefit costs and making it easier to hire and fire” (Von Holdt and Webster, 2005, p. 18). Figure 5.3 demonstrates the percentage of the labour force in formal employment in 2000 in SADC countries. With the exception of Mauritius, Malawi and Seychelles, the percentage of workers who were working informally in the region ranged from 30 to 68 per cent in 2000. While more recent statistics are unavailable, it is likely that these percentages have increased since then. Along with informalization, there has been a rise in self-employment in many southern African countries. This has been apparent particularly in South Africa over the last ten years. Self-employment has grown in both the formal and the informal sectors, and all indications are that self-employed workers form a particularly vulnerable group (Benjamin, 2007). Domestic workers form another 78 For an analysis of the way in which the capabilities approach may be useful in developing economies, see Fenwick et al. (2006). 200

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Figure 5.3 Percentage of labour force in formal employment, 2000 % 100 90 Labour without formal employment

80

Formal employment

70 60 50 40 30 20 10

Swaziland

Angola

Congo, Dem. Rep.

Mozambique

Zambia

Botswana

Lesotho

South Africa

Namibia

Tanzania

Zimbabwe

Seychelles

Malawi

Mauritius

0

Source: Rousseau, Meintjes and Barnard (2002, p. 14)

group that is relatively more vulnerable than the norm. As far back as 1998, Tørres had observed this trend, citing Zimbabwe as an example (Tørres, 1998). As in the case of informalization and self-employment, domestic service workers are overwhelmingly women, giving these phenomena a particular, gendered character. Although attempts have been made in some southern African labour markets to enhance protection for domestic workers – such as in Zimbabwe, in the late 1990s, and in South Africa, in recent years – these workers continue to be among the most vulnerable.79

Casualization Informalization has been achieved largely through increased casualization of the workforce. The ultimate outcome of casualization is the reduction in the number 79 The ILO is working towards the adoption of an international standard on domestic work, with the topic scheduled for discussion at the ILO Conference in 2010 and 2011 (ILO, 2009a). 201

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of permanent, full-time employees. Enterprises may achieve this by increasing the number of non-permanent (that is, temporary or fi xed-term) employees or by making more flexible use of permanent employees by requiring them to work part time (Theron and Godfrey, 2006). Casualization is not a new phenomenon: it has traditionally been used for employees whose skills are readily and easily available, such as secretarial staff. Retail outlets employ workers on a casual basis because it enables them to operate on public holidays and weekends in order to achieve temporal flexibility, while temporary workers enable them to achieve the numerical flexibility required to meet seasonal peaks. Other sectors make use of temporary and part-time workers to meet their changing operational needs. In Namibia, casualization is predominant in the construction industry, followed by the fishing, retail and manufacturing sectors (Klerck, 2002). Because casuals do not lose their status as employees of the organization, the number of employees remains more or less the same. But casualization changes the status of these employees in the organization. Casualization fragments the workforce into two segments: permanent full-time workers and casual (parttime or temporary) workers (Benjamin, 2006a). Casualized employment is more precarious than standard employment, and temporary and part-time workers have “fewer promotion and training prospects, less convenient working hours, less functional adaptability and job security and more repetitive tasks” (Klerck, 2002, p. 102). Casualization may render regulation of the employment relationship difficult, because part-time and temporary employees are more vulnerable than standard employees, and are at the mercy of their employers.80 As a study on casual workers in Namibia revealed: It is like slavery over there. They [employers] treat us like children, like dogs I could say … The casuals can lose their jobs for anything … They say that if you go someone else will come in, and that is true. People only do this work because there is so much unemployment … Sometimes we don’t have time to go on lunch, then you must eat while you are standing and working. You cannot sit down and eat … They tell you ‘you are a casual worker and you must be satisfied with whatever money you get.’ You don’t negotiate with them … if you go to the manager and complain about your pay, they tell you to take your things and go. That’s all. It is better just to be quiet and to be satisfied with whatever you get (casual worker, retail). (Klerck, 2002, p. 106)

80 For a different view on the question of whether casual employees are precarious in a legal sense, see Tham (2006). 202

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The vulnerable position of casual employees is exacerbated by the fact that, for a number of reasons, their “[n]eeds are not collectivized or dealt with collectively” (see Filali Meknassi, Chapter 2). These workers are usually not represented by trade unions. One reason is that unions are traditionally reluctant to represent these employees because unions believe that their main focus, and source of income and strength, lies in full-time and permanent employees, that casualized employment threatens the job security and conditions of standard employment, and that the interests of casualized workers conflict with those of “standard” employees. In addition, the circumstances of casualized employees render it difficult for unions to protect their rights and interests through traditional dispute resolution procedures, forms of employee representation, and mechanisms for employee participation (Klerck, 2002, p. 108). Moreover, when unions in South Africa and Namibia have tried to recruit and organize casualized workers, they have found it difficult to do so. While it is difficult to obtain data on the incidence of casualization throughout the region, the increased attention that it has received from commentators and trade unions in recent years suggests that it is on the rise. Th is assumption is strengthened by the advantages that it offers to employers – namely, increased flexibility, the ability to cover unsocial hours, a reduced commitment to permanent staff, a decrease in the need for managing labour, and concentration on areas of competitive advantage. The challenge remains for labour law and the trade union movement to find innovative ways of protecting, and representing, the unique interests and needs of the casualized workforce.

Externalization Externalization is another factor that contributes to rising levels of “nonstandard” employment in the region. The phenomenon of externalization, while not as significant elsewhere in the region, is particularly acute in South Africa. Externalization is more radical and complex than casualization. It is “a process of economic restructuring in terms of which employment is regulated by a commercial contract rather than by a contract of employment” (Benjamin, 2006a, p. 188). Its distinguishing characteristic is that it reduces the number of people employed by the enterprise, thereby narrowing the scope of the application of labour law (Theron and Godfrey, 2006). Externalization is explained on a number of bases. The most benign is that enterprises should concentrate on their core functions – that is, the operations and activities in which they have expertise, or areas of business in which they have established a competitive advantage. This idea has driven a process of “vertical disintegration” of enterprises around the world for quite some time (Collins, 203

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1990, p. 353). Often, however, the true motivation seems to be an intention to contract out of the obligations, risks and “hassle factor” created by the standard employment relationship. The enterprise reduces its labour costs, because it is no longer under an obligation to pay a living wage or to provide social benefits such as medical aid and pensions. In addition, it usually employs a task-based payment, rather than a wage system of payment, thereby rendering the labour costs variable (Theron and Godfrey, 2006). Externalization may be achieved in a number of ways, including outsourcing, transferring assets to satellite enterprises, and the use of labour brokers. While it is difficult to distinguish clearly between the different methods, due to variations in practice and differing definitions by different authors, most means of externalization involve triangulation (Theron, 2005).81 An enterprise (the “client”, “core business”, or “true employer”) enters into a commercial contract with a contractor, intermediary, satellite enterprise or labour broker (“the nominal employer”) whereby the former pays the latter an agreed amount for work done. The nominal employer then engages the employees to perform the work for the core business and pays them. One variation of externalization that does not necessarily involve triangulation is the use of “independent” contractors who are, in fact, dependent on the core business (ibid.). Outsourcing may occur when a core business retrenches employees performing non-core functions and hires an external contractor to do the job. The core business may or may not transfer the employees to the external contractor (Theron and Godfrey, 2006). In South Africa, large enterprises (such as hotels) and institutions (such as universities) have outsourced their security, catering and cleaning functions to external contractors. Another instance of outsourcing is in the South African clothing industry, in which a large portion of local products is made in homework operations. Home work is defined as work that is home-based, and which involves an employment relationship (between the owner of the home-work operation and the worker) and a relationship of economic dependence on a supplier or intermediary that is akin to an employment relationship (Godfrey et al., 2005).82 Another form of externalization is the transfer of assets to employees, or former employees, establishing their own enterprises. The latter are known as “satellite enterprises”. The most common example in South Africa is the sale of 81 Theron warns against assuming that triangular employment relationships are necessarily formal and that they involve only three parties, because there may be a chain of intermediaries between the worker and the “true” employer who commissioned the work. 82 The South African clothing industry has undergone massive restructuring following trade liberalization in 1996, which resulted in the local market being flooded with foreign products. This caused pressure on local manufacturers to be more competitive, leading many to close operations and the rest to search for cost-cutting measures. 204

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trucks to truck drivers, who employ their own crew to assist them with deliveries (Theron and Godfrey, 2006). Another example is that of a food manufacturer selling its poultry farm to companies that its employees had formed (ibid.). The satellite enterprise is usually required to provide goods or services exclusively to the core business. One of the effects of this form of externalization is that it transforms the “social relations in the workplace”, because “certain ex-employees are elevated to the status of employers of the other employees” (ibid., pp. 20–21). Externalization may also take place through the use of “self-employed persons”, or “independent contractors”, without the involvement of an intermediary employer or entity. Hawkers, street vendors and itinerant traders have become a means by which large formal retailing establishments, distributors and manufacturers expand their markets to include low-income groups and those in rural areas in Angola and South Africa (ILO, 2002a). For example, Unilever sells its soaps through these traders and Coca-Cola rents out kiosks to vendors, the majority of whom are women (ibid.). In South Africa, many taxi drivers effectively rent taxis from the owners and are entitled to keep the difference between the rental and the fares (Theron and Godfrey, 2006). What these arrangements have in common is the asymmetrical relationship between the parties (Theron, 2005). The assumption underlying a commercial contract is that the parties are on an equal footing, and that the terms are reached by negotiation and compromise. In most cases, the nominal employer or the “independent contractor” is dependent on the goodwill of the core enterprise, which determines the nature and amount of work to be done, and, effectively, the terms on which the work is done. Where a contract of employment exists between the nominal employer and the workers, this is usually a sham, because the core enterprise is, in fact, the real employer.

Labour law’s responses to changing patterns of work Over the last decade, several jurisdictions in southern Africa have sought to expand the definition of an “employee” in their labour law, so as to offer protection to those not formally within a contract of employment. In Namibia, for example, § 1 of the Labour Act No. 11 of 2007 defines an employee as: an individual (other than an independent contractor) who (a) works for another person and who receives, or is entitled to receive, remuneration for that work; or (b) in any manner and for remuneration assists in carrying on or conducting the business of an employer. 205

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In Botswana, the legislature has broadened the employment relationship through expanding the concept of an “employer”. The Employment Act No. 29 of 1982 defines an employer as a person who has entered into a contract of employment to hire the labour of any person, including the government or a public authority, or the person who owns, or is carrying on for the time being, or is responsible for the management of, the undertaking, business, or enterprise of whatever kind in which the employee is engaged.83 In recognition of the increased incidence of disguised employment relationships and the need to protect de facto employees, in 2002 South Africa inserted § 200A into the Labour Relations Act No. 66 of 1995, and § 83A into the Basic Conditions of Employment Act No. 75 of 1997 to supplement the statutory definition of “employee”.84 These sections (which are identical) introduce a rebuttable presumption that a worker is an employee if any one (or more) of a listed number of factors is present.85 The person alleging the existence of an employment relationship (usually the worker) bears the onus of proving that one (or more) of the factors is present; if the worker succeeds in doing so, they are presumed to be an employee, “regardless of the form of the contract” (Du Toit et al., 2003). The onus then shifts to the other party to rebut the presumption. The approach adopted by South Africa has influenced other countries, including the United Republic of Tanzania, where the Employment and Labour Relations Act No. 6 of 2004 contains a similar presumption (Benjamin, 2006a).86 The presumptions have, to date, not been tested by the courts, so their effectiveness in practice is still not well understood.87 From a normative point of view, Benjamin’s view is that one positive aspect of the presumption is its intended application irrespective of the form of the agreement between the parties: it will 83 See Botswanan Employment Act No. 29 of 1982, § 2. 84 The South African Labour Relations Act No. 66 of 1995 defines an employee in § 213 as: “(a) any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration, and (b) any other person who in any manner assists in carrying on or conducting the business of an employer.” 85 The factors are the following: that the work performed is subject to the control or direction of another person; that the person’s hours of work are subject to the direction and control of another person; if the person works for an organization, that the person forms part of that organization; that the person has worked for the other person for an average of at least 40 hours per month for the past three months; that the person is economically dependent on the person for whom they work; that the person is provided with tools of trade by the other person; and that the person works for, or renders services to, only one person. 86 For other approaches, including in other African and developing country environments, see ILO (2006a). 87 The Labour Appeal Court in South Africa has, however, drawn on the provisions in cases in which it was not, strictly speaking, applying them. It did so to hold that a person who has not yet started work under a concluded contract of employment is an “employee”, and that the factors related to the presumption might be used in assessing whether a person not covered by them is or is not an employee: Wyeth SA (Pty) Ltd v Manqelea (2005) 26 ILJ (SA) 749 (LAC); Denel (Pty) Ltd v Gerber (2005) 26 ILJ (SA) 1256 (LAC). 206

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require a court to look beyond the wording of the contract to examine the realities of an employment relationship. Moreover, the hurdle for the application of the presumption is relatively low, because only one of the factors need be established (Benjamin, 2006a). Theron (2005), however, is sceptical about the scope of the new presumption, given the possibility that the employer may successfully rebut it. He argues that even the most optimistic interpretation will not extend effective protection to workers that need it (for example, those in triangular relationships). Benjamin also questions the efficacy of the presumption, given the fact that the problem with disguised employment is largely one of enforcement (Benjamin, 2006a). In our view, the legislative presumptions that operate in several southern African jurisdictions have significant potential to expand the protective scope of labour law. As noted, however, they remain largely untested. Herein lies one of the difficulties of using legislative measures to achieve social justice outcomes. Law, of course, can – and, arguably, should – be used for these purposes. But if the law on the books cannot be transformed into law in action, then it may achieve little in practice. As we observe below, there are significant weaknesses in the institutions of labour law throughout the region – particularly the courts. This may, therefore, have the effect of constraining the positive benefit that might otherwise flow from the introduction of such legislative presumptions. As we have noted, the increase in the use of labour brokers or temporary employment services (TESs) also poses challenges to labour law in southern Africa. Labour law in South Africa deals specifically with this type of arrangement. Section 198 of the Labour Relations Act No. 66 of 1995 regulates triangular relationships involving a TES. It provides that the person who works for the client is an employee of the TES and that the TES is that person’s employer. The worker may therefore invoke the protection of labour laws against the TES. Section 198(4) of the Act provides, however, that the TES and its client are jointly and severally liable if the TES contravenes terms and conditions of employment provided for in a collective agreement, a binding award, the provisions of the Basic Conditions of Employment Act No. 75 of 1997, and a wage determination in terms of the Wage Act. Special provisions also apply to unfair discrimination matters. Section 57(1) of South Africa’s Employment Equity Act No. 55 of 1998 provides that where a TES provides a person’s services to a client either indefinitely or for more than three months, that person is deemed to be the client’s employee and the client may therefore be held liable for unfair discrimination in terms of the Act. A TES and a client will be held jointly and severally liable if a TES “commits an act of unfair discrimination on the express or implied instructions of a client” (Du Toit et al., 2003, pp. 75, 593). 207

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The provisions are commendable because they place some liability on the client to comply with some labour law provisions. The provisions acknowledge the reality that the client is in control of the workplace, and usually, directly or indirectly, determines the workers’ terms and conditions of employment. In theory, they make it less difficult for a client of a TES to turn a blind eye to the wages that the TES pays the employer. But given the precariousness of temporary work and the minimal trade union activity amongst workers in this category, it is less likely that they have recourse to these labour law protections. In addition, the provisions do not hold the client liable for unfair dismissals. This is a serious shortcoming, given the fact that it is usually the client’s decision whether or not to dismiss.

5.3.4 The limited capacity of labour law institutions The final factor impinging upon the effectiveness of labour law in southern Africa is the lack of institutional capacity among key industrial relations actors. Institutions are often not capable of performing the functions that the industrial relations system assigns to them. Among other things, in many southern African countries, the institutions that have been established to create, monitor and enforce labour laws suffer from a lack of qualified personnel and significant resource constraints. These deficiencies are well illustrated through a brief examination of trade unions, the courts and labour inspectorates.

Trade unions Tripartism is a central feature of many of the southern African labour law systems. The systems depend upon the existence of relatively effective and well-functioning trade union movements. Yet the labour movements in many southern African countries suffer from a legacy of repression and control.88 As explained in the first part of this chapter, it is only fairly recently that many trade unions have been able to operate even relatively freely. Today, despite widespread formal recognition of the principle of freedom of association, trade unions in some SADC member states continue to be subject to considerable government interference. A number of the SADC member states have labour laws that do not comply with the ILO Freedom of Association and Protection of the Right to Organise Convention, 88 Takirambudde and Molokomme (1995), for example, attribute the “underdeveloped” nature of the collective bargaining system in the United Republic of Tanzania to the legacy of a regime designed to minimize the independence of the social partners. 208

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1948 (No. 87) and its Right to Organise and Collective Bargaining Convention, 1949 (No. 98), although all members have ratified these instruments.89 Malawi, for example, has been criticized in recent years for its violent repression of workers’ protest marches, as well as for its continuing tolerance of employers’ anti-union behaviour.90 The situation in Malawi clearly illustrates the difficulties encountered by trade unions as a result of persistent state interference. Dzimbiri (2005) has argued that the shift to democracy in Malawi in the 1990s, while leading to a growth in trade unions and reform of the legal framework,91 has not, in practice, led to freedom of association. Whereas during the decades of dictatorship, the government controlled and marginalized trade unions through administrative, political and legal means, in the democratic era it has adopted more “diplomatic” forms of hostility to trade unions. Dzimbiri argues that the current government’s hostility towards the labour movement manifests itself in “divide-and-rule” tactics through which the state sponsors “splinter unions”, manipulates union leaders using bribes and promotes or transfers other union leaders to other parts of the country, and “hide-and-seek” tactics by which the state prevaricates between recognizing trade union rights and interfering in the labour movement and using the state apparatus to suppress labour rights.92 For Dzimbiri, the continuing violations of trade union rights in Malawi raises the question of how far externally induced changes have become institutionalized and sustainable in practice. In light of this situation, it is unsurprising that the trade unions struggle with limited organizational, financial and administrative capability, and with a lack of leadership and research skills (Murray and Wood, 1997; Bauer, 1998). A lack of capacity among trade unions limits the extent to which they can effectively protect and serve members’ interests at the workplace level. There is evidence from Namibia that, despite a labour law framework that depends to a large extent on collective bargaining, parties are often not sufficiently familiar with the requirements of the labour laws to comply with its requirements (Fenwick, 2007). Similarly, the frequency of illegal strikes in Namibia in the 1990s suggests that trade unions may be ignorant of the legal requirements for the taking of industrial 89 See the numerous individual observations of the CEACR. Available online at http://www.ilo.org 90 See, e.g., ILO CEACR (2006b, 2006c). 91 In Malawi, individual and collective labour rights are formally recognized in the 1994 Constitution, the Labour Relations Act No. 16 of 1996 and the Employment Act No. 6 of 2000. 92 This observation is supported by the conclusion of a human rights and employment study commissioned by the Ministry of Labour in 2000 to assess the effectiveness of freedom of association and collective bargaining. The study observed that the state constrained freedom of association because it “took with one hand what the other gave” (cited in Dzimbiri, 2005, p. 77). 209

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action (ibid.). The limited capacity of trade unions also affects the extent to which they can perform their role within the formal peak-level tripartite structures, particularly relating to the formulation of labour laws and economic policy (Olivier, 2002). Finally, a weak trade union movement also affects the enforcement of labour laws: only trade unions with sufficient capacity are able to play an effective role in monitoring compliance with labour-related laws. The capacity of trade unions to perform these various roles depends in many respects on whether they are able to achieve a sufficient level of union density to serve as a base from which they might have some influence. But unions frequently experience difficulty in achieving significant levels of union density in southern African labour markets. A key challenge for unions in this respect is posed by the spread of informalization, casualization and externalization: all lead to “nonstandard” work relationships in which it can be difficult to organize workers. The declining level of formal employment in most labour markets in southern Africa poses further challenges, as do retrenchments and other structural factors that cause loss of employment. Where unions do not adopt flexible strategies to respond to these labour market realities, their capacity to attract members and to represent them is significantly diminished. Another institutional factor affecting the capacity of trade unions in a number of southern African states is their close affi liation with ruling political parties. Such relationships are largely the legacy of cooperation between the organizations during the struggle for independence. For example, in Namibia, the National Union of Namibian Workers (NUNW) continues to be affi liated with the ruling party South-West Africa People’s Organization (SWAPO); in South Africa, the Congress of South African Trade Unions (COSATU) is allied to the African National Congress (ANC) and the Communist Party; and in Mozambique, the Organization of Mozambican Workers (Organização dos Trabalhadores de Moçambique, or OTM) is still closely associated with Frelimo. Being closely affi liated with the government is not necessarily a problem for the trade union movement or for workers. Indeed, such alliances may facilitate union input in government and thus influence the policy-making process in favour of organized labour (Bauer, 1998). But it may mean that workers’ interests are easily subordinated to other priorities of the ruling party (Bauer, 1998; Fenwick, 2007). In Namibia, NUNW-affiliated unions and union members have expressed concern over the fact that the close association with SWAPO has led the union movement to rely on this relationship to influence the government, rather than focusing on shop-floor strength and trying to translate this into policy-making strength (Bauer, 1998). 210

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The role of the courts In most southern African countries, the courts appear to have played a rather limited role in establishing and maintaining principles of labour law (Kalula, 2003). Th is is despite the fact that all but four SADC member countries (the DRC, Angola, Madagascar and Mozambique) are common law jurisdictions, whether Roman-Dutch or English. Although labour courts in countries such as Botswana, Swaziland and Zambia have attempted to develop key principles, they have had only limited success. By contrast, a notable exception to the general trend in the region is South Africa. From the late 1970s in particular, the Industrial Court developed its ill-defined unfair labour practice jurisdiction by drawing upon international sources, particularly the United States (Thompson, 1993). Much of its jurisprudence was later codified in the Labour Relations Act No. 66 of 1995 (Kalula, 2004). In the other southern African countries, however, the courts have limited themselves – or have been limited by legislation – to dispute-resolution functions and to matters relating to the contract of employment (ibid.). Some courts have also proven reluctant to apply international human rights law, even where it is open for them to do so.93 A failure to report court decisions regularly also impedes the development of a body of coherent jurisprudence. Exploring the role of the courts in the development of labour law in the region is a task that has yet to be undertaken. Even if we accept that the evidence suggests that the courts are playing a rather minimal role, it is unclear why this is so. One partial explanation may be that the court systems suffer from a lack of capacity. Judges and advocates may lack the skills and education to apply the labour laws adequately, and the courts are certainly often poorly resourced. In Zambia, for example, it was reported in recent years that there were only two industrial courts for the whole country and that the judges in the two courts worked only part time (Seshamani and Kaunga, 1999). Court processes in most southern African countries are complicated and slow (Christie and Madhuku, 1996). Another reason may be that the courts generally enjoy considerably less independence from the executive government than their counterparts in liberal democracies in the North (Jayasuriya, 1999). Corruption may also affect the application of labour laws in the courts and the extent to which workers are willing to seek legal redress when their rights are violated.94

93 See, e.g., Trier Hansen (2002). 94 See, e.g., Zvekic (2002). 211

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Labour inspectorates Even where labour laws formally cover workers and there are institutional arrangements for inspection and enforcement, a lack of qualified personnel, resources and organizational capacity often limits the capacity of the state to ensure that the laws are respected (Kalula, 2003; ARLAC, 2006). Particular problems encountered include a lack of adequate equipment for inspectors to carry out their duties, a lack of transport facilities (meaning that inspectors are unable to inspect workplaces at any distance from their offices with any frequency), and poor working standards and career prospects for inspectors, leading to low morale. In Angola and Mozambique, for example, the lack of resources available to the labour inspectorates has contributed to significant declines in the number of establishments inspected: in Mozambique in 2000, 4,978 establishments were inspected, but this had dropped to 2,935 in 2004 (ILO CEACR, 2006a); in Angola, the figures dropped from 2,496 in 2002 to 1,417 in 2003 (ILO CEACR, 2005a). A lack of enforcement is a particular problem for certain types of worker, such as domestic workers and agricultural workers, whose workplaces are dispersed (Fenwick and Kalula, 2005). Examples include the persistent failure of agricultural estate owners in Malawi and Namibia to comply with labour laws – particularly minimum wage rates.95 The ILO’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) has raised concerns with a number of the SADC member states regarding their failure to fulfi l their obligations assumed under the ILO’s Labour Inspection Convention, 1947 (No. 81).96 Lack of compliance with labour laws is exacerbated by the low levels of legal literacy among most workers in the region.97 It has been observed in relation to Namibia, for example, that workers have “little understanding of what a trade union is and how it differs from other organizations” (Bauer, 1998, p. 116). In addition, the high levels of unemployment and the lack of adequate social security only increase the pressure on workers not to report instances of non-compliance by their employers (Klerck, 2002). Policy-makers and the general population alike recognize corruption as a serious problem in the SADC.98 Of particular relevance to the functioning of 95 For Malawi, see Mkandawire (1999, p. 7). Concerning Namibia, see Gallo and Cohrssen (2004, pp. 15–17). 96 See, e.g., ILO CEACR (2005a). 97 For a discussion of the low level of awareness of rights among workers in Namibia, see LaRRI (2004). 98 See, e.g., Zvekic (2002). 212

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labour law systems are the perceived high levels of corruption among civil servants. While it is possible that corruption could affect the enforcement of labour standards by labour inspectors, there do not appear to have been any studies on how corruption affects the operation of labour laws in southern Africa, if at all.

5.4 Gender equality in Lesotho: A case study This final part of the chapter focuses on the effectiveness of labour law in pursuing one specific social goal: gender equality. Taking Lesotho as a case study, it examines the role and capacity of labour law to protect women from discrimination. To this end, fi rst, it briefly outlines the legal and policy framework in Lesotho for the pursuit of gender equality. Second, it examines the role of labour law in reinforcing existing gender inequalities in Lesotho. Thirdly, it identifies a number of proposed labour law amendments that may affect the labour rights and standards enjoyed by women in the Lesotho labour market. Fourthly, it looks briefly at how a lack of capacity in the enforcement of labour laws affects the realization of women’s rights and entitlements. Finally, the case study identifies a number of legislative developments in Lesotho that are not directly related to women’s employment rights, but which may lead indirectly to positive developments in the area. We note, at the outset, that the subject matter of the case study is one upon which there is a paucity of published material. The ILO carried out a study on gender equality in the world of work in Lesotho in the early to mid-1990s (ILO, 1994a), and did some follow-up work a few years later (ILO, 1997–98). Tajgman and Kalula (1997) published an analysis of the relevant legal framework at around the same time, but since then there has been little if any work carried out. Nevertheless, these sources are sufficiently reliable for our present purpose. Indeed, the situation for women in employment in Lesotho appears not to have changed substantially in the meantime: so much is clear from current attempts to address the situation that are mentioned in this case study. That caveat aside, this case study suggests that, while the state has not adopted a laissez-faire approach to gender equality in Lesotho, neither has it focused its efforts on securing equality of opportunity in employment; rather, the state has pursued its objectives on gender equality through broad-based policy reform and through non-employment-related legislation. In the labour law realm, considerable challenges remain. The labour laws still do not address critical areas of employment equality, such as maternity protection, and the reconciliation of 213

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family and work responsibilities. This lack of a supportive legal framework mostly affects women employed in the lower levels of the formal sector, particularly those in the textile sector and in domestic employment.

5.4.1 The legal and policy framework

The legal framework The position of women within the legal system in Lesotho should be viewed within the context of the dual legal system, which entrenches both customary law and the common law (the common law is derived from Roman-Dutch law, as a result of colonial administration). Both systems underpin the legal minority status of women in Lesotho. Most importantly, women do not currently have the capacity to enter into employment contracts without their guardian or husband’s assistance. Some women, as a result of their minority status, are unable to take advantage of opportunities for training because their husbands have objected; other women have been forced to resign by their husbands, who do not wish them to continue in employment, or on account of transfers to different parts of Lesotho. The legal framework governing women and their employment in Lesotho is comprised of two key instruments: the 1993 Constitution of Lesotho and the Labour Code Order No. 24 of 1992. The latter is a consolidation of all of Lesotho’s labour laws since independence in 1966 and generally reflects core ILO norms. Together, they provide a basic floor of rights that can be improved upon by collective bargaining in a well-functioning industrial relations system. The 1993 Constitution of Lesotho Lesotho’s Constitution contains a general prohibition on discrimination, including discrimination based on sex or gender.99 There are, however, extensive qualifications to this prohibition based on customary law,100 which adversely affect women’s participation in the labour market (ILO, 1994a, p. 45). The Constitution also provides for principles of state policy, which are expected to permeate every policy instrument and piece of legislation, and to guide official acts in the implementation of such policies in Lesotho.101 Although not justiciable, these principles 99 Constitution of Lesotho 1993, art. 18. 100 Ibid. This affects marriage, divorce, property rights, inheritance, etc. 101 The principles provide for equality and justice in employment (art. 26); opportunity to work (art. 29); just and favourable conditions of work (art. 30); and protection of workers’ rights and interests (art. 31). 214

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cannot be dismissed on that basis; their importance should rather be seen in light of their purpose, which is to inform policy at every level of state action, in every organ of the state and in every activity of the state.

The Labour Code Order No. 24 of 1992 The Labour Code Order No. 24 of 1992 (“the Labour Code”), the most comprehensive piece of labour legislation to be promulgated in Lesotho, has been subject to several rounds of amendments since its enactment. Within the code, it is possible to differentiate between general provisions proscribing discrimination based on various grounds and protective provisions targeted mainly at protecting women in their employment. In a manner very similar to the Constitution, the code prohibits discrimination based on, inter alia, marital status or gender.102 Sexual harassment is prohibited under the same provision.103 The relatively recent Labour Code codes of practice104 contain extensive provisions on sexual harassment.105 The non-discrimination provision in the Labour Code establishes the principle of equal remuneration for work of equal value between men and women in mandatory terms.106 But exclusions or preferences based on narrowly defined operational requirements are not to be construed as discrimination (the Labour Code, as amended, does not provide any further guidance on this point).107 The codes of practice do, however, elaborate on instances in which difference in treatment would be justified on the basis of “inherent requirements of the job”.108 The provisions on non-discrimination apply to both employment and occupation in the sense of access to training and other occupational opportunities by women. The policy framework There are several key policy documents in Lesotho relating to the pursuit of gender equality. The 2003 Gender and Development Policy (GADP) is a broad policy document concerned with promoting gender equality in all state policies and 102 Lesotho Labour Code Order No. 24 of 1992, § 5(1). 103 Ibid., § 5(2). 104 Labour Code (Codes of Practice), Government Notice No. 4 of 2003. The Codes cover various topics: termination of employment; collective bargaining; strikes and lockouts; picketing; employment discrimination; and sexual harassment. 105 Ibid., §§ 55–70. 106 Lesotho Labour Code Order No. 24 of 1992, § 5(3). 107 Ibid., § 5(4). 108 Labour Code (Codes of Practice), Government Notice No. 4 of 2003, § 51(4)(b)(i). 215

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activities. The GADP was influenced by a number of national, regional and international documents, including the Constitution, the 1997 SADC Declaration on Gender and Development, the 1979 UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) and NEPAD. It is underpinned by three principles: equal participation in development; non-discrimination; and the empowerment of, inter alia, marginalized women through mainstreaming gender concerns.109 The GADP is broad in scope and application, encompassing areas such as access to land, finance, information and technology, and the promotion of equal opportunities and participation in politics and decision-making.110 While the promotion of gender equality in employment is not specifically stated as a policy objective of the GADP, the policy does recognize the importance of reducing gender inequalities by improving access to employment and calls for the adoption of strategies to consider existing gender relations, “paying particular attention to women’s time as well as poverty caused by the double burden of paid work and their unpaid care activities”.111 Moreover, one of the ten “priority programme areas” of the GADP is the adoption of measures to eliminate discriminatory practices by employers on the basis of women’s reproductive roles and functions, including the refusal of employment and dismissal of women due to pregnancy and breastfeeding responsibilities.112 Interestingly, the GADP identifies the provision of mandatory paid maternity leave as a priority area, despite the absence of this entitlement from labour legislation. Several new institutional structures have been established to implement the GADP, including gender focal points, a gender management forum, a gender equality commission, and gender caucus groups. The GADP is also implemented through various government departments, ministries and parastatals. The national Poverty Reduction Strategy also clearly expresses the government’s intention to eliminate all forms of discrimination against women. The strategy anticipates the review of all gender discriminatory legislation, with a view to establishing a legislative regime based on equality between the sexes.113

109 110 111 112 113

See the Foreword to the 2003 Lesotho Gender and Development Policy (GADP). GADP, para. 3.2. Ibid., para. 9. Ibid., [h] at para. 12. Poverty Reduction Strategy, para. 12.3(2).

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5.4.2 The role of labour law in reinforcing existing gender inequalities Under the Labour Code, women employees are entitled to 12 weeks’ maternity leave, six weeks of which shall be post-birth.114 There is no statutory obligation on the employer to pay wages during this period, although the employer may do so voluntarily and it may be required by the contract of employment.115 After the employee has returned to work following statutory maternity leave, she is permitted, for up to six months, to take an hour off each day during working hours to nurse her infant, without any loss of remuneration.116 The logistics of implementing the nursing provision are left to the employer and the concerned employee.117 Contravention of the maternity leave provisions (through requiring an employee to work during leave or permitting them to work during leave) attracts a penalty of 300 miloti (LSL), or three months’ imprisonment, or both.118 The termination of employment of an employee on maternity leave is automatically an unfair dismissal;119 contravention of this provision attracts a fine of LSL400. Where maternity leave has been extended due to illness (an extra two weeks as a statutory minimum),120 an employer cannot serve the employee with a notice for dismissal. Contravention of the nursing provisions attracts a fine of LSL400. While individual employers may provide for paid maternity leave through either collective agreements or individual contracts of employment, only a minority of women would enjoy this benefit. The widespread absence of paid maternity leave provisions affects mostly women employed in the textile industry and other manufacturing sectors, and in domestic employment. The Ministry of Labour and Employment has acknowledged that the lack of paid maternity leave, together with the inadequacy of the penalties provided in the Labour Code, means that the provisions do little to facilitate the participation of women in the labour market.121 The Labour Code is silent on the issue of paternity leave and family responsibilities, in the sense that there is no prohibition of discrimination on the basis 114 Lesotho Labour Code Order No. 24 of 1992, § 133. 115 Ibid., § 134. 116 Ibid., § 136(1). 117 Ibid., § 136(2). 118 Ibid., § 135. 119 Ibid., § 136(1). 120 Ibid., § 133(4). 121 Labour inspectors do admit that pregnant women employees are victimized, that some are not given maternity leave (which is a minimum statutory requirement), and that some women actually hide the fact that they are pregnant from their employers for fear of dismissal. 217

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of an employee’s family responsibilities. The Labour Court should, however, be applauded in this regard for introducing the notion of family responsibilities into Lesotho’s labour jurisprudence.

5.4.3 Proposed labour law amendments

The Labour Code Amendment Bill, 2006 Certain provisions of the Labour Code are currently being revisited and revised – particularly the scope of coverage of the code in relation to domestic employees. Lesotho’s dispute resolution agencies, including the Directorate for Dispute Prevention and Resolution (DDPR), are currently grappling with the definition of “employee” in the Labour Code and how this definition applies to domestic employees. Furthermore, there are concerns with the applicability of the provisions of the Labour Code to domestic employment, such as the leave provisions and the enforcement of the code in this context. There are calls, therefore, for the adoption of a separate piece of labour legislation, to apply to domestic employment and, by implication, to SMEs (mainly because these sectors experience compliance and enforcement problems). The foreseeable danger of this is the creation of a two-tiered labour market, which might marginalize mainly women employees even further by removing them from the scope of protective provisions in the main legislation.122 The draft Bill on HIV/AIDS and Employment, 2004 The garment and textile sector is the largest private employer in Lesotho, and women constitute 78 per cent of the sector’s workforce. Many migrant workers from Lesotho’s districts are particularly vulnerable to HIV infection: they are susceptible to risky behaviours, because they are separated from their primary partners; they are often forced to trade sex for transport and for food, because they are in low-paid jobs; and they often have to commute long distances between work and home, and many supplement their meagre incomes through sex work (Mashape, 2006). As an attempt to counter the adverse impact of HIV infection on workers and particularly vulnerable workers, Lesotho had a draft Bill on HIV/ AIDS and Employment in 2004, which would prohibit discrimination on the basis of an employee’s HIV status and reiterate the principles contained in the codes of practice. 122 See n. 69 supra. 218

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The codes of practice state that no employee may be dismissed merely on the basis of their HIV-positive status; furthermore, employees are expected to continue with their normal duties as long as they are medically fit to do so.123 Where, as a result of HIV-related illness, the employee is unable to undertake normal duties, the employer is expected to find alternative employment that the employee may be able to perform, without loss of remuneration.124

5.4.4 The enforcement of labour laws An important obstacle to the achievement of equal participation in the labour market for women is the lack of enforcement of labour law entitlements. The enforcement of women’s rights and entitlements in employment is particularly problematic in the textiles sector.125 The sector is driven by foreign investors who often do not comply with domestic labour legislation. The state is generally perceived as lacking the muscle to enforce labour laws, or to require investors to comply with domestic legislation, because the priority in the ever-competitive textile sector seems to be to keep investors in Lesotho at all costs. Even the enforcement of existing maternity leave entitlements is problematic. Evidence suggests that some employers dismiss newly pregnant employees or refuse to take back the new mother after her absence on maternity leave, discriminate in favour of women who are beyond childbearing age, or merely presume that “women with children tend to leave their jobs” (ILO, 1994a, p. 51). The labour inspectorate is understaffed and is not guided by any specific policy on equality of opportunity. The GADP acknowledges the shortcomings of the labour administration system in Lesotho, in particular the manner in which the weaknesses of the system reinforce existing gender inequalities, especially in the private sector.126 For example, one of the priority areas to be pursued by the policy is to take measures to implement the maternity leave provisions of the Labour Code in the industries. This provision has been notoriously difficult to monitor and enforce due to institutional weaknesses. To ensure the proper and effective implementation of the Labour Code, there are provisions on labour administration that establish processes such as labour inspection carried out by labour officers,127 and institutions 123 Labour Code (Codes of Practice), Government Notice No. 4 of 2003, § 16(13). 124 Ibid. 125 Minister of Gender and Youth, Sport and Recreation, in the Foreword to the White Paper on the Married Persons Equality Bill (April 2006). 126 GADP, para. 5.1(h-l), p. 12. 127 Lesotho Labour Code Order No. 24 of 1992, § 14. 219

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such as the Labour Commissioner, the Labour Court,128 and the DDPR.129 For the purpose of enforcing and administering the provisions of the code, labour officers are empowered to institute proceedings before the Labour Court, in respect of any contraventions thereof, in their own name or on behalf of employees.130 These provisions have several implications for women and their employment. Women can report any contravention of the provisions of the code, including contraventions relevant to § 5, to the labour officers for redress. To avoid victimization of the employee by the employer, the labour officer may institute such proceedings in their own name.131 Despite this avenue, however, it has been noted that: … there do not appear to be widespread initiatives to address gender discrimination through legal recourse, even where it has been recognized. For example, formal complaints of discrimination to the Department of Labour based on legal rights are not numerous; as neither sex-segregated nor ‘nature of complaint’ statistics are kept, only anecdotal evidence can be relied upon to suggest that no more than two per cent of formal complaints are gender related. Similarly there has not been one case of employment related sex discrimination or sexual harassment taken to court – despite many accounts of such occurrences. (ILO, 1994a, p. 49)

With regard to the Labour Code’s provision on equal remuneration for work of equal value, one method of ascertaining compliance is the power of the Labour Commissioner to collect statistics from employers, including, among other things, rates of remuneration.132 It is impossible to establish, however, whether this provision is being used. The Labour Code also establishes the National Employment Service (NES), which has, inter alia, the functions of providing vocational guidance (in collaboration with the Department of Technical and Vocational Training) and the provision of employment-related training (in collaboration with other appropriate bodies).133 The NES is also charged with collecting information and statistics regarding the labour market, to be forwarded to the Labour Commissioner. The problem that has been noted with regard to the statistics collected by the NES is that they are not classified according to gender, making it difficult to reach certain conclusions (ibid.). (This “gender 128 Ibid., §§ 12 and 22, respectively. 129 Ibid., § 46B. The DDPR is a more recent addition to the dispute resolution system of Lesotho, offering conciliation and arbitration services. 130 Ibid., § 16. 131 Ibid., § 16(a). 132 Ibid., § 17(1). 133 Ibid., § 21(1)(c). 220

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neutrality” also applies to complaints forwarded to the Department of Labour by employees.) While Lesotho’s labour market lacks broad-based sensitivity to gender issues, the appointment of women to the bench may help to ensure a gender-sensitive jurisprudence and judiciary. Some progress has been made in terms of ensuring a gender-representative bench as far as the Labour Court is concerned: the Deputy President of the Labour Court is a woman. It is, however, difficult to assess the effectiveness and limits of the protection offered by the Labour Code unless and until women institute gender discrimination cases before the Labour Court. The lack of such cases does not mean there is no discrimination; on the contrary, it could be ascribed to a lack of legal literacy amongst women and a lack of sensitization on the part of the authorities.

5.4.5 Complementarities between labour laws and other laws

The Married Persons Equality Bill, 2006 The 2006 Married Persons Equality Bill seeks to remove the legal minority status of married Basotho women conferred upon them by the common law by virtue of what is known as the “husband’s marital power”.134 Currently, women need their husband’s consent to take up employment and to take up appointment as a managing director of a company. Sections 3(1) and 4 of the Bill would confer on married women the legal capacity to assume such positions. In practice, however, the common law provisions are rarely observed and it is widely acknowledged that the effect of the Bill will be to “legitimise already existing practices”.135 But non-observance does not imply the absence of negative perceptions that might have contributed to preventing the appointment of women to positions of responsibility at work.136 To deal with such perceptions, the Bill also emphasizes the importance of the sensitization to, and dissemination of, its provisions among the general populace. But another effect of the husband’s marital power is that married women cannot institute legal proceedings unassisted, which means that an employed woman cannot resolve a labour dispute without the assistance of her husband, because she has no locus standi to initiate or defend such proceedings (at least in theory).137

134 A concept and practice derived from Lesotho’s colonial legacy and customary law. 135 White Paper on Married Persons Equality Bill (April 2006), p. 5. 136 The White Paper actually acknowledges the absence of women in boardrooms and decisionmaking positions. 137 Married Persons Equality Bill, 2006, § 11(1)(b). 221

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The Local Government Elections (Amendment) Act, 2005 In Lesotho, women are rarely found at the policy-making and decision-making levels of government. The situation is, however, improving: for example, there are now four women in the Cabinet, five women judges in the High Court, many women magistrates, and increasing representation of women in the National Assembly. The Lesotho Government recognizes that “[w]omen’s equal participation in decision-making is vital for the elaboration of policies and decisions which are both gender-sensitive and responsive to the needs and concerns of both sexes in society”.138 As noted above, one of the objectives of the GADP is the promotion of equal opportunity and participation in politics and decision-making. The promulgation of the Local Government Elections (Amendment) Act, 2005, can be viewed partly as the crystallization of this policy objective.139 Clearly, one of the anticipated results of increasing participation of women in decisionmaking and politics is that they would be able to influence the law reform process to promote gender equality in employment and equal access to employment opportunities. It remains to be seen whether these laws, through increasing the rate of participation of women in decision-making, will have an impact in areas such as labour legislation. 5.4.6 Concluding remarks In Lesotho, state-generated norms are increasingly playing a critical role in the promotion of gender equality and there is little doubt that the pursuit of gender equality is now firmly on the national agenda. To date, however, the state has not sought to use labour legislation as a principal means through which to pursue its policy objectives in this area. As a result, labour law continues to play a positive but limited role in the pursuit of gender equality in Lesotho’s labour market. It remains to be seen whether, and to what extent, the government’s policy and legislative reforms in other areas will influence the position and rights of women workers in Lesotho.

138 White Paper on Married Persons Equality Bill (April 2006), p. 2. 139 It seems that the government was not bold enough to pass similar legislation for the national elections in 2007. 222

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5.5 Conclusions A range of factors limits the capacity of labour law to protect and empower workers in southern Africa. The form and content of labour law in the region has been strongly influenced by the region’s colonial past. The SADC member states continue to have labour law systems that, in many ways, resemble those of northern industrialized countries. Since independence, however, there has been significant domestication of labour law by governments, legislatures and courts in the region. Following independence, many SADC member states adopted highly interventionist approaches to industrial relations, and imposed tight constraints on the existence and activities of trade unions. The 1980s witnessed a shift towards economic liberalization, which manifested itself in a reduced role of the state in regulating the labour market. Democratic reforms in many countries in the region since the early 1990s have led again to significant changes to labour law. Many SADC member states have now adopted labour laws that extend rights to workers that were previously unprotected under earlier labour law regimes, and have strengthened the legal and social safety nets for full-time permanent employees. In doing so, they have been influenced significantly by international labour standards. The effectiveness of labour law in the region is, however, significantly weakened by socio-economic factors: high levels of poverty, income inequality, unemployment and underemployment. The HIV/AIDS epidemic only exacerbates the difficulties faced by the region. The SADC has implemented a Code on HIV/ AIDS and Employment, and member states have reformed national laws and policies to reflect the principles embodied in this code. In addition, a number of SADC member states have, in consultation with their social partners, designed and implemented policies and programmes relating to HIV/AIDS in the workplace. Large-scale labour migration is yet another factor that poses a significant challenge to the protective capacity of national labour law frameworks, partly because of the way in which migration is regulated, and because of the high degree of informal, undocumented labour migration. While there have been some developments at the regional level to address this challenge, little real progress has been made on this front. The subordination of labour law to political and economic objectives, which has long been a feature of the region, continues. Today, the concern of many governments with attracting foreign investment and remaining internationally competitive has given rise to debates over the extent to which labour markets should be “deregulated” through labour law reforms and, in some cases, to the tendency to overlook instances of non-compliance with labour law, particularly by foreign investors. Increasing regional and global competition has also manifested itself in 223

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increasing levels of informal employment. Casualization, externalization and the increasing use of TESs and labour brokers within the SADC member states pose considerable challenges to labour laws that are predicated upon the existence of a conventional employment relationship as the mechanism through which rights and duties are conferred. Some SADC member states have sought to amend their labour laws so as to extend protection to workers not formally within a contract of employment. Labour law institutions in southern Africa have a limited capacity to perform the functions assigned to them through the industrial relations system. Despite formal recognition of freedom of association in SADC member states, trade unions in some countries continue to be subject to considerable government interference, either through law or through more informal means. The courts in most SADC member states play only a limited role in establishing and maintaining principles of labour law. Finally, even where workers are formally covered by labour laws and there are institutional arrangements for inspection and enforcement, a lack of qualified personnel, resources and organizational capacity, as well as corruption, limit the extent to which workers enjoy this protection in practice. The case study in the third part of this chapter sought to examine the effectiveness of labour law in the pursuit of gender equality in employment. Rather than reforming labour law, the Government of Lesotho has pursued its objective through policy reform and non-employment-related legislative reforms. As we have shown, the result of such an approach, however, is that labour law continues, in key respects, to fail to protect women workers from discrimination. This chapter has provided an overview of the challenges faced by labour law in the southern African region. It has also outlined how governments and regional organizations have responded to these challenges. A strong theme emerging from this chapter is the need for further research into labour law and labour market developments in individual SADC member states, and on a regional basis. More work is needed to understand the interaction between socio-economic, cultural and political factors and labour law, and to understand how labour law and labour law institutions in the region can be improved, so as to afford greater protection to workers in employment relationships and beyond.

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6

KAMALA SANKARAN 1

6.1 Introduction This chapter examines the scope and function of labour law in the South Asian region, with special reference to India. The distinction followed in some countries between “employment law” and “labour law” is not maintained here: labour law refers to statutory provisions, rules, judicial interpretation and practices that have emerged in the countries concerned dealing with employment relations, dispute resolution, conditions of work, wages and social security. The common law tradition of most countries in this region has meant that the courts have played a major role in determining the scope and interpretation of the law, often going beyond what the legislature may have intended. The rich corpus of case law also needs to be analysed to understand the scope and effect of the law. The chapter is arranged as follows: the first part examines the historical evolution of labour law, while the second identifies certain key features of labour law in the region and analyses its capacity to deliver protection to workers. The second part also examines current proposals to reform the labour law in order to improve its reach and enforcement, and considers the ensuing debates in the region, with particular focus on India. The third and final part examines labour law specifically in the Indian context with reference to its instrumental capacity to achieve gender equality.

1 I am grateful to Tzehainesh Teklè and the anonymous reviewers for helpful comments and suggestions. Errors remain my own. 225

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6.2 Historical evolution Countries in South Asia have a common colonial heritage. Although legal systems vary today, the origins of much of the existing law in the subcontinent lies in the British system of common law, which was “transferred”2 into the region, beginning with the Charter Act of 1726, and modified by the notions of “equity, justice and good conscience”.3 By the middle of the nineteenth century, British colonialism had established its dominance over much of present-day Bangladesh, India, Pakistan and Sri Lanka.4 The Law Commission set up in 1856, led by Lord Macaulay, drafted a series of laws for this region, some of which are still in force today.5 The British law of master and servant laid the foundation for much of the present labour law (see Anderson, 2004). Actions for breach of contract were not civil remedies; rather, criminal sanctions were imposed.6 Th is curious mix of criminal and civil remedies in labour law continues to find expression in the region, as, for example, in India, where denial of the minimum wage can result in an application to the designated authority for back wages and a possible prosecution of the employer by the inspector, with the prior sanction of the government. An additional feature in this region has been the specific performance of a contract of employment when it was breached (instead of the usual claim for damages). This was enforced quite vigorously in the colonies to fulfil the urgent need for labour in South Asia 7 and other parts of the world. At the same time, the idea of a contract of employment, with its implied notions of consensus ad idem and freely given consent to the terms of employment, meant that criminal remedies for 2 For a discussion of the notion of legal transfers, see Teklè (Chapter 1). On the implications of legal transplanting in the field of workers’ protection, see Teklè (Chapter 1) and Filali Meknassi (Chapter 2). 3 The dominance of the British was established, pushing out the vestiges of other colonial legal systems, such as the Roman-Dutch (Sri Lanka) and French (Karaikal, Mahe in India). Pondicherry and Goa in India continued to be governed by civil laws as applied by the French and Portuguese, respectively, until much later. 4 Nepal was never annexed by the British. Nepal and Britain signed a treaty in 1923, which formally recognized Nepal’s independence. 5 Take, e.g., the Indian Penal Code, 1860, which applied not only to British India, but also to the 562 princely states (under British suzerainty) that comprised much of the South Asia region. After India and Pakistan became two political entities in 1947, the law was called the Pakistan Penal Code in Pakistan, while the original law continues in India. Since the independence of Bangladesh (erstwhile East Pakistan) in 1971, the same law is known as the Bangladesh Penal Code, 1860. These laws are identical except for some amendments made in each country. Sri Lanka has the Penal Code of 1883, which is largely similar to the Indian Penal Code. The Code of Criminal Procedure, 1898, formed the basis of the criminal procedural laws in this region. Hay and Craven (2004) point out that, in the nineteenth century, with the export of indentured labour from India, Indian laws came to be borrowed in the South-East Asian countries. A case of receipt and borrowing of law come full circle, perhaps? 6 See, e.g., the Employers’ and Workmen’s (Disputes) Act, 1860. 7 The demand was greatest in plantations in Sri Lanka, Assam (India) (euphemistically called “tea gardens” – conjuring up visions of elegant tea parties of the sahebs), and in roads and railways. 226

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breach of a contract of employment or the specific performance of the contract by compelling the deserters to work, could not be equated with slavery or its equally barbaric South Asian cousin, bonded labour. The second influence on the formation of labour law was the creation of the ILO and the impetus that it gave to lawmaking in the region. Laws such as the Workmen’s Compensation Act, 1923 (the Workmens’ Compensation Ordinance, No. 19 of 1934 for Sri Lanka), the Trade Unions Act, 1926 (the Trade Union Ordinance, No. 14 of 1935, for Sri Lanka), the Trade Disputes Act, 1929 (replaced in Bangladesh, India and Pakistan by the Industrial Disputes Act, 1947, and Industrial Disputes Act, No. 43 of 1950, for Sri Lanka) were adopted in the entire region.8 A third phase in the formation of South Asian labour law was the period following independence (India, Pakistan, Sri Lanka) and the start of the democratization process (Nepal) in the middle of the twentieth century. This coincided with a thrust towards industrialization and towards developing what in India has been referred to as the “commanding heights” of the economy. Based on the new constitutions drafted in the course of movements for independence and social justice, there was a strong emphasis on basic rights of equality and freedom, and a focus on the need to eradicate poverty and discrimination. Countries such as India and Sri Lanka had a clear orientation towards a socialistic model of society, and their governments emerged as the biggest employers. The state and public sector dominated much of the secondary and tertiary sectors. Strong trade unions had already emerged in the colonial period, and these were strengthened and seen as partners in the planned development of the newly independent countries. Much of the legislation passed in this period relates to the organized, industrial and formal part of the economy.9 Much of the attention on labour matters in this period, by scholars based in the South Asian region and abroad, also focused on industrial relations, with theoretical and empirical work undertaken in this area (see Myers and Kannappan, 1970). Studies also point out that the industrial relations systems that emerged in this period were a compact between trade unions and management, with an important role played by the state, in order to fulfil the goals of planning and rapid industrialization (Kennedy, 8 Industrialization in Nepal took place later than in other countries in the region. Thus trade unions were formed only after industrialization began in the mid-1930s and disputes emerged shortly thereafter. The Factories Act was passed in 1959. 9 See, e.g., in India, social security laws such as the Employees’ State Insurance Act, 1948 and the Employees’ Provident Fund and Miscellaneous Provision Act, 1952; in Pakistan (also applicable to Bangladesh), the Working Journalists (Conditions of Service) Ordinance, 1960, the Minimum Wage Ordinance, 1961, the Road Transport Workers Ordinance, 1961, the Employees’ Social Insurance Ordinance, 1962, the Tea Plantation Labour Ordinance, 1962, and the Employment of Labour (Standing Orders) Act, 1965. Also see, in Pakistan, the Workers Welfare Fund Ordinance, 1971, and the Employees Old Age Benefits Act, 1976. 227

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1966; Johri, 1967). Some studies also point to the role of the trade unions in favouring a policy of import substitution and protectionist policies (see de Silva, 1998). It must be noted that labour policies were strongly “industrial relationscentric”, in the sense of concentrating on labour relations in the formal sector that most closely mimicked the “West” (Kahn-Freund, 1974); labour relations in the unorganized sector were largely ignored. In the past two decades, several changes have been taking place in the labour laws of the South Asia region. The process of liberalizing and opening up the economy in India has brought about demands for urgent changes in the labour law.10 Changes to the labour law and the subsequent labour-related policies in Pakistan were made against the background of the proclamation of emergency (the Industrial Relations Ordinance, 2002). Pakistan is also in the process of finalizing several policy documents relating to employment and labour.11 The procedure for dispute resolution was streamlined in Sri Lanka (by the Industrial Disputes (Amendment) Act, No. 32 of 1990) and the revamped Labour Act, 1992, of Nepal followed the restoration of democracy there. Bangladesh revised its labour law in 2006, and India has been debating various versions of draft comprehensive legislation for the informal sector, together with changes in the other labour laws. A narrower version of the proposed legislation aimed at providing social security for unorganized workers was voted on in Parliament in 2008. These changes reflect the repositioning of labour law in this region: instead of acting as a protective measure to secure workers’ rights, labour law is expected to ensure faster growth and flexibility. It is also seen as a vehicle through which the region is made an attractive destination for investment.

6.3 Labour law in South Asia: Features and proposals for reform

6.3.1 Features of labour law in the South Asia region At the risk of overgeneralization and oversimplification, this chapter indicates some of the features of labour law in the region that merit detailed study and identifies the factors that challenge the capacity of labour law to protect workers. 10 See, e.g., Government of India, Ministry of Labour (2002a), which recommends changes in labour law in the light of globalization, and also changes to address the needs of those in the informal economy. 11 See, e.g., the draft Employment Policy, the Labour Inspection Policy, 2006, and the Labour Protection Policy, 2006, available online at Government of Pakistan, Ministry of Labour, Manpower, and Overseas Pakistanis, Labour & Manpower Division, ‘Policies’, http://www.pakistan.gov.pk 228

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The limited scope of labour law South Asia constitutes a compelling illustration of that phenomenon of “multiplicity of statuses determining the legal situation of workers” which Filali Meknassi (Chapter 2) describes as underlying much of the exclusions from legal protection suffered by workers in the developing world. Labour laws in the countries of the region are not applicable to all workers and exclude several groups of workers or groups of establishments from their scope. It is generally the formal or organized sector (typically, the larger scale manufacturing and service sector) that is covered by labour law. Labour laws often apply only to certain sectors of the economy or, in some cases, to what is interpreted judicially to be an “industry”. Every employer–employee relationship is not covered under the labour law: government employees, agricultural employees, and domestic workers are kept out of the scope of an “industry”, thereby limiting the coverage of the law.12 There are also several sectoral laws that deal with issues of safety and health of workers limited to factories, mines, plantations or certain specific sectors.13 Exclusion is also achieved in other ways. The labour laws variously determine minimum levels of employment as conditions for their applicability and so exclude vast numbers of smaller establishments.14 Most establishments in India employ fewer than ten workers and are thus below the threshold limit. This aspect, coupled with definitions of “workmen” based on functional or remunerative criteria, excludes certain categories of workers (such as those in domestic work, those in managerial or supervisory levels, teachers and doctors, whose work does not fall within the description of “workmen”) or those earning above a certain ceiling, and results in limiting the coverage of labour laws.15 12 In India, the important Supreme Court judgment in Bangalore Water Supply v. A Rajappa 1978 2 SCC 213, AIR 1978 SC 548, 1978 3 SCR 207, despite its “triple test” and liberal approach to include all those in employer–employee relationships, producing goods and services for the public at large, excluded these vital sectors as falling outside the scope of industry. 13 Thus the Pakistan Factories Act, 1934, the Indian Factories Act, 1948, the Sri Lankan Factories Ordinance, No. 45 of 1942, the Bangladesh Factories Act, 1965 (and now the Bangladesh Labour Act, 2006), and the Nepalese Labour Act, 1992, apply to factories and other specified establishments, but not to all establishments in which workers are engaged or employed. 14 In India, most of the labour laws have a threshold limit of ten or 20 employees under which laws relating to social security or conditions of work will not apply; the limit is even higher, fi xed at 50 or 100, in the case of laws that deal with terms of employment and procedures to be followed for disciplinary action, and those that lay down retrenchment, lay-off and closure compensation. See the Indian Industrial Employment (Standing Orders) Act, 1946, and the Indian Industrial Disputes Act, 1947, as examples of the latter category. In Pakistan, several labour laws apply to workplaces with more than 50 workers (Afzal, 2006, p. 116). 15 For example, in Bangladesh, managerial and administrative employees were excluded from the right to association (s. 3(a) of the Industrial Relations Ordinance, 1969), while in India, under the Trade Unions Act, 1926, managerial and administrative staff have the right to form unions, but are excluded from the scope of the Industrial Disputes Act, 1947. 229

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Recent years have seen a great increase in the numbers of casual workers and those who are employed via intermediaries or contractors in lieu of fulltime employees to perform certain jobs, such as cleaning, catering, and watch and ward. Casual workers are often excluded from the defi nition of “worker” or “workman” in these laws, on the grounds that they have not put in the requisite minimum eligibility period (in the case of social security benefits).16 Workers engaged via intermediaries or contractors are considered not to be in the employment of the establishment that uses their services, because they are not “employed” (in the sense of being under the direct control and supervision of the establishment that requires their services) and are thus not deemed to be within the scope of a “contract of service” vis-à-vis the principal employer.17 As a result of all of these factors, most labour laws apply only to a small proportion of the workforce. Thus, although an enterprise may be covered by the law due to its size or sector (and thus may be part of the formal economy), a number of workers employed within such enterprises may still fall outside the scope of the law due to the nature of the work that they perform or other exclusionary criteria. It is thus possible to talk of informal employment within a formal enterprise.18 The most recent example of consolidation and law reform in the region – Bangladesh, which revamped its labour law in 2006 – has broadened the applicability of the law to cover many activities, yet with certain crucial exclusions.19 16 A casual worker is covered under the definition of “workman” in the (Indian) Industrial Disputes Act, 1947, if they perform the kind of work that is covered (functional criteria), but may yet be excluded from benefits if they have not worked for 240 days a year. Part-time workers are also covered under the definition of “workman”: see the Supreme Court decision, Divisional Manager, New India Assurance Co. Ltd. v. A. Sankaralingam 2008 (10) SCC 698. 17 See, e.g., the provisions of the (Indian) Contract Labour (Regulation and Abolition) Act, 1970. The Supreme Court decision in Steel Authority of India Ltd. v. National Union of Waterfront Workers 2001 (7) SCC 1 has held that, upon abolition of the system of engaging contract labour, such workers would not get automatically absorbed as direct employees of the principal employer, resulting in their exclusion from protection. 18 The Government of India, for example, defines “informal employment” as informal jobs both in informal and formal enterprises, and in households. Employees are considered to have informal jobs if their employment relationships are, de jure or de facto, not subjected to standard labour legislation, taxation, social protection or entitlement to certain employment benefits (for further details, see http://www.mospi. nic.in). In any event, not being protected by the law is not the only feature of informality. As the ILO (2002a, p. 3) notes: “The different groups have been termed ‘informal’ because they share one important characteristic: they are not recognized or protected under the legal and regulatory frameworks. This is not, however, the only defining feature of informality. Informal workers and entrepreneurs are characterized by a high degree of vulnerability. They are not recognized under the law and receive little or no legal or social protection and are unable to enforce contracts or have security of property rights.” 19 The Bangladesh Labour Act, 2006 deals, among other things, with “establishments”, defined as any shop, commercial establishment, industrial establishment or premises in which workers are employed for the purposes of carrying on an industry (s. 2(xxxi)). Yet the law does not apply to government, welfare organizations, shops, educational institutions, agricultural farms with fewer than ten persons employed, 230

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Changes due to economic policies have also had their effect on the number of people covered by the labour laws. Thus, in India, the loss of around 1.1 million jobs in organized sector manufacturing between 1995 and 2001 (part of the period of liberalization) has meant a reduction in the number of persons covered by labour laws.20 Simultaneously, there has been an increase in the number of contract workers in the same sector. Contract labour is defined as those engaged by a contractor or intermediary to work in the establishment of the principal employer.21 Given the limitations of the definition such workers would be outside the scope of the protective labour laws in most instances. As noted earlier, some of the labour laws apply only to workers directly employed; in other cases, contract labour is explicitly included in the scope of the law, but this is by no means universal. Laws such as the Contract Labour (Regulation and Abolition) Act, 1970 (in India), empower the government to abolish contract labour if the jobs are perennial; this law is seen as reducing the flexibility of the labour market and is at the centre of debates about labour law reform – a question that is discussed later. It is estimated that between 66 per cent and well over 90 per cent of all workers in this region are in the informal (or “unorganized”)22 sector (including agriculture), and this proportion is growing. In 2005, the total employment in India was 457 million. Of these, 394.9 million were in the unorganized sector and 62.6 million in the organized sector; within this latter group, workers with legal coverage constituted 53.3 per cent, while the remaining 46.6 per cent could be described as the informal workers within the organized sector. The total unorganized workers are estimated to be 423 million – that is, 92.4 per cent of total workforce.23 In Pakistan, the labour force is estimated to be over 45 million in 2005, with only 2.4 per cent organized into trade unions. The proportion employed in the informal sector is estimated to be around 70 per cent (Ahn, domestic workers, or owner-run establishments with family labour (s. 1). Before this 2006 Act there were 26 Acts, 14 Ordinances, and 35 Rules and Regulations (see Bangladesh Labour Act, 2006; Dhar, 2007). 20 Based on Indian Ministry of Labour, Directorate General of Employment and Training, estimates, organized sector employment in non-agricultural activities declined by a little under 1.6 million between 1 Mar. 2000 and 1 Mar. 2005 (see Sundaram, 2008, p. 92). 21 The proportion of contract workers rose from 40 per cent to 62 per cent between 1990 and 2002 in manufacturing sector employment in Andhra Pradesh (Sharma, 2006, p. 2081). Between 1984 and 1998, the use of contract labour grew from approximately 7 per cent of total work days to 21 per cent. The growth was more marked in the case of the public sector enterprises, although, in absolute terms, private firms engaged in twice as much contracting out (Anant and Sankaran, 2003). For further details of the impact of globalization in India, see Government of India, Ministry of Labour (2002a). 22 I use the expressions “unorganized” and “informal” interchangeably; only “unorganized” is used in Indian laws and policies. 23 See Government of India, Ministry of Small-Scale Enterprises (2007, p. 4). 231

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2008, p. 1017).24 Bangladesh, with a labour force of 44.3 million in 2002–03, had 79.1 per cent in the informal economy; Nepal, with a labour force of 10.60 million in 2001, had 93.4 per cent in the informal economy; while Sri Lanka, with a labour force of 6.66 million, had 66.3 per cent in the informal economy (ibid.). Workers excluded from labour law would fall within the informal sector.25 The informal sector normally covers workers in agriculture and in small-scale establishments, the self-employed, and casual, temporary workers in the formal sector who are not covered because they do not have the minimum required period of employment in a given year to be eligible for benefits.26 The majority of the self-employed constitute what has been referred to as the poor and vulnerable. Self-employed persons are normally assisted by family members, and are referred to in the literature as “own-account” enterprises, which use the unpaid labour of a contributing family member. If the self-employed person has hired anyone else to help them, they are understood to be running an establishment in India.27 Own-account enterprises constitute the bulk of all enterprises in India, constituting 87.4 per cent of all enterprises in 1999–2000, while those establishments employing two to five workers comprise 10.9 per cent and those employing six to nine workers comprise 1.7 per cent.28 In terms of numbers, 73 per cent of all workers were engaged in the work of own-account enterprises, signalling the sheer scale of the self-employed sector, which is a factor to keep in mind while formulating policies for this sector. One of the challenges confronting the law in general and labour law in particular is whether such poor and vulnerable self-employed persons could be brought within its scope. Some models of legislation from this region are worth considering, particularly since the traditional limits of labour law, which is seen to provide protection only to those in employment relationships, are overcome by bringing such self-employed persons within its scope. Some states in India have 24 See also PILDAT (2005, pp. 9–10). If one were to include agriculture, the proportion of such workers would exceed 90 per cent of the labour force (ibid., p. 12). 25 Certain laws, such as the minimum wage law, apply to the informal economy. 26 For details of the labour law concerning the informal economy, see Sankaran (2006). In India, in the case of workers engaged in agriculture, forestry, fisheries and plantations, the proportion is over 99 per cent; 75 per cent in the manufacturing sector; 78 per cent in the building and construction sector; 98 per cent in the trade and commerce sector; and 61.5 per cent in the transport, storage and communication sector. 27 A conceptual distinction is made between own-account workers (who do not engage any outside workers, but may work alongside unpaid family help defined as “own-account enterprises” in India) and those who may engage one or more (but fewer than ten) workers to work alongside them (defined as “establishments”). 28 See Government of India, Ministry of Small-Scale Enterprises (2007, p. 51). 232

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set up tripartite boards for unorganized workers, which have been instrumental in providing a vehicle for the delivery of welfare and social security benefits for such marginal self-employed persons as tailors, auto-rickshaw drivers, coir workers, and several other trades in which such self-employed persons are to be found. These are contributory welfare funds to which the beneficiaries and the government make payments. Such boards are also in place for those in employment relationships in certain sectors. Centrally administered boards for mineworkers, cine-workers and beedi (hand-rolled cigarette) workers, apart from industry-specific or general unorganized sector boards in a few states in India, have such arrangements (with minor modifications) in place. This model typically has a tripartite board consisting of representatives of government, employers and workers, with a government officer deputed to function as the chief executive, while other government employees staff the various offices of the board. Contributions are made from employers (where applicable), workers, and the government, with considerable variation across industries. Given its pivotal role in the administration of these boards, the government has a major say in the manner of functioning of these boards. The new central legislation in India allows for a variety of options for funding social security schemes.29 As seen earlier, macro- and micro-level studies point to the shift of employment from the organized to the unorganized sector. This tendency has increased with globalization30 and the fall in organized sector manufacturing. Further, even within the organized sector, there has been a decline in full-time employment and an increase in casual and contractual employment. This has meant that, even in non-agricultural sectors, employment is characterized by the absence of a clear employer–employee relationship, a high incidence of home-based work, underemployment and lack of regular employment. This is particularly true for women workers, with most women working in the unorganized sector in this region (Unni, 2001). Yet the legal framework for regulating employment relationships is largely focused on “typical” full-time regular employment in the organized sector. Many people in the unorganized sector are the “working poor” who do not earn a minimum wage, and whose conditions of work are precarious and unsafe. Family labour is engaged in some home-based occupations. Child labour is also present here. Debt bondage may also be present. Piece-rate work, casualization 29 This proposed scheme also envisages coverage for self-employed persons who are treated as “workers” for the purposes of the draft law. 30 Some commentators maintain that the “inflexibility” of the formal economy bound by rigid labour was one of the reasons for the decline in employment growth in this sector. Changes in the production processes have also contributed to these shifts (Sharma, 2006). 233

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and the contractualization of work are prevalent and are increasing. Employment is often seasonal and intermittent. It is essential to provide decent work to increase the productivity and viability of this sector. The past couple of decades have seen new categories of exemption from labour law coverage, as is the case of export processing zones (EPZs) in the region. The choice of an export-led industrialization strategy resulted in the creation of EPZs in Sri Lanka. National labour law clearly privileges the maintenance of export sector manufacturing in Sri Lanka over the normal trade union rights of the workers.31 According to recent reports, while EPZs were created over 25 years ago, unionization rates have grown slowly and in 2006 union membership had spread over 54 out of 268 such free trade zone enterprises, with a total membership of 10,646 out of a total EPZ workforce of 116,000 (9 per cent).32 India enacted a Special Economic Zone Act in 2005, but in the face of opposition had to restrict the law to procedures for setting up such zones, rather than the regulation of labour relations within such zones. Bangladesh passed the Bangladesh Export Processing Zones Authority Act, 1980, providing for the establishment of EPZs that could attract foreign direct investment (FDI) and increase export earnings. Instructions have been issued to retain a minimum of labour standards in these zones. Despite the enactment of the more recent EPZ Worker Association and Industrial Relations Act, 2004, in Bangladesh, serious allegations of violation of trade union rights in these zones continue.33 The Act requires that not less than 30 per cent of the eligible workers in an industrial unit must apply for formation of a workers’ association, which then has to be reaffirmed by support of 50 per cent of eligible workers in a referendum.34 The Bangladesh Labour Act, 2006, prohibits strikes in any industry for the first three years, and this ban is total if the establishment is owned by a foreigner or is established in collaboration with foreigners.35 31 For example, the Sri Lankan Emergency (Maintenance of Exports) Regulation No. 1 of 1992 prohibits the intimidation of persons employed or engaged in enterprises that manufacture articles for export, with the intention of disrupting the activities of such enterprises. Persons guilty of such an offence shall be liable to imprisonment for a term between ten and 20 years. The ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR) (2004) states that the Board of Investment (BOI), the overseeing authority of the export processing zones (EPZs), indicated in a communication dated 21 May 2004 that it has made arrangements to insert an additional clause to s. 9A of the Labour Standards and Employment Relations Manual under which a duly nominated representative of a trade union, who is not employed in a BOI enterprise, but whose trade union has members employed therein, whether within or outside the EPZ, shall be granted access to the enterprise or EPZ under certain conditions. 32 See ILO CEACR (2006d). 33 See, e.g., ibid., on the manner of interference by the Bangladesh Export Processing Zones Authority (BEPZA) and discrimination against leaders of active worker representation and welfare committees (WRWCs). 34 The EPZ Workers Association and Industrial Relations Act, 2004, ss. 14 and 15. 35 Bangladesh Labour Act, 2006, s. 211(8). 234

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Pakistan, too, follows a system of exempting EPZs from the scope of labour laws.36 Indian labour laws are applicable to such zones, but their enforcement is deliberately kept weak: prior permission from the Development Commissioner in charge of these zones is required before inspection can take place, resulting in the enforcement agencies often turning a blind eye to lack of compliance (Oberai et al., 2001).37 Maintaining very high levels of membership in order to qualify as a bargaining agent for collective bargaining is a related aspect of limiting trade union rights.38 The conventional explanation for dualism in the labour laws and the exclusion of vast numbers of workers from protection has been that the spearhead of growth would be the modern industrial sector and that, gradually, the dual economy would be consolidated with the formal sector (Sethuraman, 1997). Another explanation for such exclusion from the law could also be based on the lack of “demand” for such a law from a poorly organized segment of the economy. Sectors such as agriculture, construction, home-based and other activities in the unorganized or informal sector are outside the purview of the important labour laws in the countries in the region, with the result that there are no institutional mechanisms for dispute resolution and no regulations governing the terms and conditions of work. This, in turn, has contributed to the low levels of unionization among these workers.39

Multiplicity and lack of uniformity in the law A common feature is the existence of multiple laws enacted to deal with conditions of employment in various sectors of the economy, such as in India 40 and in 36 See, e.g. the exclusion of the right to form trade unions in these zones in the Industrial Relations Ordinance, 2002, and the comments by the ILO CEACR. 37 See Blackett (Chapter 3) on under-enforcement as a problematic aspect of the relationship between trade liberalization and labour law. 38 See the Industrial Relations Ordinance, 1969, ss. 7(2) and 22, and comments on this in the ILO CEACR (2004). Under the Bangladesh Labour Act, 2006, this position continues, with minor modifications. Also see ILO Committee on Freedom of Association (CFA), (Bangladesh): Complaint against the Government of Bangladesh presented by the International Textile, Garment and Leather Workers’ Federation (ITGLWF), Rep. No. 337, Case No. 2327. 39 In the case of India, early commentators on industrial relations and labour law noted that the government’s labour policy with regard to the unorganized sectors is “in direct proportion to the amount of trouble and worry that labour can give to the government. That accounts for the fact that agricultural labour, which is phenomenally dumb and helpless, derives the least measure of support and assistance from the government” (Subramanian, 1967, p. 314). 40 In India, at the central level, there are the Dock Workers (Regulation and Employment) Act, 1948; the Factories Act, 1948; the Plantations Labour Act, 1951; the Mines Act, 1952; the Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955; the Motor Transport Workers Act, 1961; the Beedi and Cigar Workers Act, 1966; the Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981; the Child Labour (Prohibition and Regulation) Act, 1986; and Shops and Establishments Acts of different states. 235

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Bangladesh.41 Consolidation has taken place, to some degree, in Sri Lanka, with perhaps the greatest consolidation in Nepal and, more recently, Bangladesh. Other efforts are also afoot to consolidate or simplify the labour law, with Pakistan’s 2002 Labour Policy calling for a consolidation of labour laws into six areas.42 Multiple laws, with differing definitions of “worker”, “employer”, “establishment”, “industry” and “wages”, have meant a lack of uniform coverage. People may be covered under a law dealing with conditions of work, but may be excluded from the scope of a social security law because their income is above the maximum income coverage limit. Uncertainty in the capacity of the law to protect all of those working in a sector that it supposedly covers erodes its authority as much as the non-applicability of the law to many sectors of the economy. Multiplicity of laws has another dimension affecting its capacity to serve its purpose. Each law creates its own authority for compliance and adjudication of disputes. Currently, in India, disputes relating to the non-payment of wages or to compensation for injuries are dealt with at the state level by authorities notified by the various state governments under the different laws. In addition, in the case of a federal country such as India or Pakistan, each state government notifies the number and location of authorities under different labour laws in the manner that it considers most expedient. If all quasi-judicial powers were to be handed over to a unified labour judiciary with broad jurisdiction, some degree of uniformity in labour adjudication would develop. There have been proposals at various times for a unified labour judiciary that would have the power to deal with all disputes and offences under the labour laws. (At present, there are different sets of authorities or courts dealing with civil and criminal remedies under the labour laws.) Another aspect relating to the lack of uniformity is the constitutional structure of the country. Unlike other countries (Sri Lanka now having limited devolution of powers), India and Pakistan have federal constitutions under which both the central and provincial legislatures can legislate on labour matters. As a result, there is considerable variation across states or provinces in the laws. Where the central legislature has enacted a law, uniformity prevails due to a supremacy clause. Thus the important areas of trade union formation and dispute resolution are 41 Bangladesh had the Working Journalists (Conditions of Service) Ordinance, 1960; the Road Transport Workers Ordinance, 1961; the Apprentices Ordinance, 1962; the Tea Plantations Labour Ordinance, 1962; the Factories Act, 1965; the Shops and Establishment Act, 1965; the Newspaper Employees (Condition of Service) Act, 1974; the Dock Workers (Regulation of Employment) Act, 1980; and the Inland Water Transport Workers (Regulation of Employment) Act, 1992. 42 In the case of Pakistan, there is a move to reduce the number of labour laws from 27 to six (Reinecke and White, 2004). In India, the Second National Commission on Labour (see Government of India, Ministry of Labour, 2002) has suggested similar rationalization and consolidation for the unorganized sector, while attempts have been made to codify the labour laws into a single law. See the draft Indian Labour Code, 1994, prepared by the National Labour Law Association. 236

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centrally determined in both countries. Even where a central law has “occupied the field of legislation”, flexibility and deference to federal concerns have been achieved in a number of ways: a state law might take the form of entirely new legislation, or it might be an amendment to the central law with reference to the state. The other characteristic of labour laws in a federal state is that many of the centrally enacted laws have given the power of enforcement to the “appropriate government”, thereby ensuring provincial variation in the manner in which laws are applied. It also means that some provinces or states could decide, for political or economic considerations, to be more lax than others in relation to labour law compliance.43

The dominant role of the state and the juridification of disputes One of the early impacts of colonial rule in this region was the establishment of a centralized legislative authority and the creation of a “modern” legal system that claimed greater normative authority (backed by the full force of coercive machinery) than the existing systems in all matters. This early view of law as a “modern” force and the legal system as the superior normative order with which to settle disputes is also reflected in the ease with which compulsory adjudication came to have primacy as the method of settling industrial disputes in many countries in the region. The diminishing of what some commentators have called the non-state legal systems in this region (Rudolph and Rudolph, 1967; Baxi, 1982; Jain, 1990) has underscored the growth of the power and influence of the state in those areas in which it chose to intervene.44 The intervention of the formal legal system in labour matters has been a deliberate choice made by the parties in power, as is demonstrated by a clear decision not to intervene as much in areas of “personal” matters, leaving it to the religious normative system to decide disputes.45 But this has not prevented the formation of what Filali Meknassi (Chapter 2) calls socio-legal pluralisms, which “express the accumulation of layers of law over time, containing relics of lifestyles, values and regulations dating from before contemporary law”. Even 43 Some states, such as Gujarat and Rajasthan, in India have recently demanded that labour matters be removed from the concurrent list in India and handed over for legislation exclusively to the states. 44 For example, see its intervention in introducing compulsory adjudication, as contrasted to collective bargaining, in industrial matters imposed in present-day Bangladesh, India and Pakistan by the Defence of India Rules in 1941. 45 This is so in almost all countries in the region. Thus Bangladesh, after 1971, has chosen not to intervene in matters relating to Hindus who continue to be bound by the ancient uncodified Hindu law, while very little legislative intervention has taken place in personal law matters governing Muslims in India. Pakistan, however, has chosen to modify to a much more radical degree the Shari’a applicable to its Muslim population. 237

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with respect to labour matters, it was implicit (although never formally acknowledged) that, because the applicability of the labour law was limited,46 disputes that arose in the agricultural sector or informal economy (to which the laws relating to labour relations or dispute resolution did not extend) would be settled by other non-legal means. Thus, in most countries in the region, disputes arising between agricultural labourers and employers over terms and conditions of employment continue to be “settled” outside the fold of state law. This is because the reach of the labour law is limited and does not cover all employment relations. In areas in which the labour law does not apply, social and political processes resolve disputes by means of episodic social unrest and violent conflict, out-migration by labour in search of better work, and (rarely) collective trade union pressure. Also of significance is the fact that there is no comprehensive anti-discrimination law in India prohibiting discrimination in hiring and dismissal on caste or religious grounds: the 1949 Constitution prohibits it only in state employment, and generally prohibits the practice of “untouchability” (egregious forms of discrimination against “lower” castes) among private persons. Caste and religious networks therefore reproduce themselves in the gradually growing informal economy as the formal economy (often the state economy, since the government is the largest formal sector employer in India) shrinks in the liberalized era (Breman, 1996; Harriss-White, 2003). The central role played by the government and courts in labour disputes, which are often more frequent than settlement through collective bargaining, has led to the greater “juridification” of all disputes and grievances. For example, the power of the government to refer a dispute for adjudication “at any time” in India has meant that bipartite or alternative modes of dispute resolution have played a limited role.47 Similarly, in Sri Lanka, under the Industrial Disputes Act, No. 43 of 1950, the government can refer a dispute to adjudication or arbitration, yet the award of an industrial court has greater weight than an award of an arbitrator and cannot be repudiated, unlike the latter which can be repudiated after 12 months. But in Nepal, under the Labour Act, 1992, the government can only refer a dispute not settled in direct negotiation or conciliation to an arbitrator or a tripartite committee with the mutual consent of parties. Under the Pakistan Industrial Relations Ordinance, 2002, the government had the power to prohibit a strike in a public utility and to refer the dispute to compulsory arbitration. In Pakistan, in recent years, it was proposed that the pivotal role of the state in dispute resolution 46 For example, in India, most of the labour laws apply to establishments that employ a varying minimum number of workers; in Pakistan, labour laws apply only to workplaces with more than 50 workers. 47 Micro-level studies of the industrial adjudication processes point out that, on average, adjudication of an industrial dispute takes three years to conclude. Around 40 per cent of the disputes are abandoned, because the worker is unable to pursue the court case further, and even when pursued until the end, in a majority of the cases, the workers get no relief (Saini, 1995). 238

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should be changed, with the 2002 Labour Policy placing emphasis on bilateralism and a reduction in the state’s role in dispute resolution.48 While the need to give importance to bipartite negotiations is periodically raised by governments, trade unions and employers, no concerted effort has ever been taken on this front. One reason for this is the reluctance of the government to lose control of the industrial relations machinery, which is seen as pivotal in insuring industrial peace and growth; the other is the concern among trade unions that in sectors where they are weak, reliance on collective bargaining may make them vulnerable. ILO bodies such as the Committee of Experts on the Application of Conventions and Recommendations (CEACR) or the Committee on Freedom of Association (CFA) have, in the context of South Asia, called on governments to amend the laws to give primacy to bilateral settlement of disputes and commented adversely on the power of the state to refer disputes to compulsory arbitration unilaterally. The ILO, by not adopting any labour standard with regard to the judiciary or principles of labour adjudication, has also indicated its preference for collective bargaining as the method for dispute resolution. This inability to address what the governments in the region have felt to be a necessary power to maintain industrial peace for the purposes of economic development did somewhat reduce the role that ILO could play among the then newly independent member States. The recent period of liberalization and globalization has seen a decline in union power in the region. Privatization of the erstwhile public sector has created a major dent in the traditional bases of the trade unions. Downsizing and the increased use of casual and contract labour have also contributed to this. In selected countries in Asia, a decline of trade union density and trade union influence has been noted (Kuruvilla et al., 2002). On average, the union density in India is around 50 per cent; in other words, half of the workers in unionized establishments stay outside unions (Ramaswamy, 1992). While talking of union membership in this region, it may be better to speak of union influence rather than a fee-paying membership, since it appears that a large number of workers are reluctant to pay dues, but are in complete solidarity with a union during a struggle (Bhowmik, 1992). But in certain industries such as banking, insurance, and ports and docks, unionization is quite high; it is also higher in larger establishments than it is in small or medium-sized ones. Unionization rates in Sri Lanka are markedly higher than in other countries in the region. The multiplicity of trade unions and the growing number of splits is another problem. Due to the political nature of trade unions in this region, there is a multiplicity of unions affiliated to the different political parties. The trade union laws 48 Available online at http://www.pakistan.gov.pk 239

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for all of the countries in the region have contributed to this. Further, the law has always recognized and permitted the political links of trade unions, including through provisions permitting outsiders to be on the executive of the unions, the creation of a political fund to which workers can opt to donate, and permitting political support as legitimate trade union objects. The minimum number required to form a union has been kept quite low in most countries until recently.49 Recent changes to the law in India and Pakistan have addressed the question of multiplicity.50 As noted above, the revamped Bangladesh Labour Act, 2006 has restricted the number of trade unions that could be formed in an establishment.51 Emergency measures that have frequently been imposed in all of the countries of the region have taken their toll on the trade unions. For example, as part of emergency measures, several trade union rights have been curbed in Sri Lanka.52 Restrictions on trade union rights were introduced in Nepal following the coup d’ état in 2005; several curbs were introduced on the freedom of association of civil servants under the Civil Service Act, 1993, as amended in 2005. In addition, s. 30 of Nepal’s Trade Union Act, 1992, gives powers to the government to curb trade union rights if they seem to create an extraordinary situation, thereby disturbing the peace and order, or if they go against the economic development of the country.53 In Pakistan, the Anti-Terrorism Act, 1997, penalizes the creation of civil commotion, including illegal strikes or go-slows, with up to seven years’ imprisonment.54 Another aspect that strengthens the primacy of the state in all labour disputes is the exclusive power of the government, in most cases, to refer a dispute to adjudication in India, Nepal and Sri Lanka. (The power to refer a dispute to adjudication is a distinct but related aspect of the tripartite nature of labour relations, with a pre-eminent role of the state in such matters.) The power of reference is a 49 In India, Pakistan, and Bangladesh, it was seven. 50 Through an amendment to the (Indian) Trade Unions Act, 1926, by the Trade Unions (Amendment) Act, 2001, at least one tenth of the membership or 100 workers, whichever is less, is required for registration of a trade union. In Pakistan, the Industrial Relations Ordinance, 2002, fi xed this at one fourth. Pakistan’s law also requires all members of the trade union to be employed in the trade or industry, thereby curtailing political leadership of trade unions. 51 A tripartite Labour Law Reform Committee (LLRC) was reconstituted by notification of 24 Aug. 1998 to review the draft Labour Code of 1994 (see ILO CEARC, 1999). The Bangladesh Labour Act, 2006, is the result of this reform process. 52 The Sri Lankan Emergency (Miscellaneous Provisions and Powers) Regulation, No. 1 of 2000. Gazette, Pt I, 2000-05-03, No. 1130/8, pp. 1A–37A contains provisions on the control of meetings, processions and publications. 53 See ILO CFA, Complaints against the Government of Nepal presented by the International Confederation of Free Trade Unions (ICFTU) and the Nepal Government Employees’ Organization (NEGEO), Rep. No. 340, Case No. 2412, and reports of the ILO CEACR. 54 See reports of the ILO CEACR. 240

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discretionary power of the government, to be exercised according to the need for a binding judicial resolution of the dispute (and subject to limited judicial review).55 The lack of direct access to remedies for the workers becomes even more important in rights, as contrasted to interests, disputes. Often, with the exception of Nepal, there is no separate machinery for rights and interests disputes. Trade unions have often asked for direct access to remedies to be broadened, bypassing the need for a governmental reference to move the courts. It is necessary to address the question whether workers should have the right to launch proceedings upon failure of statutory conditions relating to safety and health, for example, or whether this should be at the discretion of government as at present. The question of access to remedies (discussed later) is, in many ways, linked to how the state enforces labour law. The structure of industrial relations – which was developed over 50 years ago, placing the state at the very centre of enforcement – was meant to safeguard the interests of society and to resolve disputes that could not be settled through bipartite methods, by referring them to compulsory adjudication. Today, when the juridification of disputes appears to be here to stay, there is a need for independent access to the courts and tribunals by the parties. The importance given to the state in dispute settlement has meant that adequate attention has not been paid to the development of the bipartite settlement of disputes in some countries, notably India. Many countries in the region have laws dealing with the recognition of trade unions for the purposes of collective bargaining. In Pakistan, the Trade Union (Amendment) Ordinance, 1960, provided for compulsory recognition of trade unions. Disagreements over the method of determining the bargaining agent – the check-off or the system of secret ballot – have been an obstacle. India still has no provision in the central law to determine the bargaining agent in an establishment or industry, and no provision for compulsory recognition of trade unions. Timely legislative provisions regarding recognition of a bargaining agent might have gone a long way in reducing multiplicity and helped to consolidate the trade unions.

6.3.2 Current debates around labour law

Labour law and economic development One of the questions that globalization has thrown into sharp relief is the function of labour law and its effect on economic development, particularly in the 55 Where disputes are not referred for resolution using the state’s industrial relations machinery, parties are free to use collective bargaining to settle matters. Given the often skewed nature of industrial power, it is the workers who, more often than not, seek governmental intervention in such disputes. 241

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context of trade liberalization. Many of those calling for reform and flexibility in the labour law have based their arguments on the adverse effects that rigid labour laws have on economic development. While this section focuses mainly on India, all countries in the region have adopted policies and amendments to the labour laws, keeping in mind the changing economic context of the past few years. Thus, Pakistan has adopted a series of policy measures in recent times, and has given great importance to compliance with the ILO core Conventions;56 in its 2006 Labour Protection Policy, Pakistan directs attention to the informal economy.57 Bangladesh, too, has kept the importance of its export sector in mind while revamping its labour laws.58 The understanding that labour laws pose “rigidities” that hamper the “flexibility” of business interests is fairly well debated in India. The degree of state control and the related “inflexibility” of labour law has been at the centre of current debates to delete Ch. V-B of the Industrial Disputes Act, 1947, in India – a provision that requires prior permission from the government before retrenchment, lay-off or closure of units by large employers.59 The lines have been fairly rigidly drawn in this debate, with trade unions wanting governmental intervention to safeguard employment levels and existing rights of job security, while industry demands what is termed an “exit policy” (Debroy and Kaushik, 2006). But even where the labour laws are considered to be “rigid”, the poor enforcement of laws, and the contractualization and casualization of the labour force, often provide enough “flexibility”. Other areas for labour law reform have focused on the deletion of s. 9A of the 1947 Act requiring prior notice to be given to the workers concerning conditions of service, the need to remove government power to order abolition of contract labour in jobs that are permanent or perennial and instead to allow the use of contract labour in non-core, peripheral jobs, and the need to simplify and harmonize labour laws and, if possible, to consolidate them (this last point, of course, having widespread consensus). The questions raised here relate to a broader question: whether labour law is inimical to economic growth, and whether adherence to such laws hampers economic development. The lack of empirical studies on the effect of labour law 56 See, e.g., the Pakistani Labour Policy, 2002, the draft Labour Protection Policy, 2006, the Labour Inspection Policy, 2006, the 2001 National Policies and Plans of Action for the Abolition of Bonded Labour and to Combat Child Labour, adopted in recent years. 57 Available online at http://www.pakistan.gov.pk 58 See, e.g., the provisions relating to bans on strikes in enterprises with foreign collaboration in the Bangladesh Labour Act, 2006, and the overall scheme of the EPZ Workers Association and Industrial Relations Act, 2004. 59 The Second National Commission on Labour (Government of India, Ministry of Labour, 2002b) recommends doing away with prior government permission in cases of lay-off and retrenchment, retaining it only in the case of closure of an undertaking. 242

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regulation on the economy is noticeable in much of the debate.60 There is a need to review and analyse the literature available, to see if various assumptions about the effects of labour law are well founded or not. There is also perhaps a need for more studies to be carried out. Without attempting to be in any way comprehensive, this chapter draws attention to some studies on the effect of labour law in India in certain sectors or areas, in order to draw some tentative conclusions (Sundar, 2005; Anant et al., 2006; Sharma, 2006). In an early study, Kaushik Basu et al. (undated) developed a model for assessing the effect of provisions for retrenchment compensation under the Industrial Disputes Act, 1947, on employment. Another study on the effect of pro-worker amendments to the 1947 Act covering 1958–92 shows that these are associated with lowered investment, employment, productivity and output in registered manufacturing (Besley and Burgess, 2002); the methodology of the study has, however, been criticized (Bhattacharjea, 2006). Fallon and Lucas (1991) have also argued that job security provisions have hampered employment demand. The calls by many employers’ groups, economists and academics for “flexibility” in the labour law and for an exit policy have also cited the example of China, with flexibility being the mantra behind its success.61 On the other hand, studies have pointed out that labour law-related problems might not be as serious for industry as, perhaps, infrastructure or institutional constraints. A large sample survey of informal sector establishments revealed that labour problems were a fairly low priority for informal sector employers.62 In a recent study, Bazillier (2004) considers the effect of core labour standards (as identified by the ILO’s 1998 Declaration on Fundamental Principles and Rights at Work). He fi nds that labour standards have positive effects on per capita income, which is greater for countries with medium or strong labour standards. These fundamental principles and rights can be considered relatively cost-free, since they do not pertain to wage levels, social security or redundancy costs. An OECD study (1996) stated that there was nothing to suggest that non-compliance with core labour standards produced gains in competitiveness; a more recent survey (Brown, 2000) updates these findings on various facets of trade, foreign investment and growth in gross domestic product (GDP). 60 For example, the Second National Commission on Labour (ibid.) has not carried out any studies on the impact of labour laws on the economy. 61 See Government of India, Ministry of Labour (2002a, para. 4.127ff ), which mentions the submissions of various employers’ associations calling for a regime like that of China. Note, however, that the National Commission on Labour visited China and found no evidence of the much-touted “lawless paradise”. See also various papers calling for flexibility in the labour laws (primarily dealing with manufacturing and services in the organized sector) in Debroy and Kaushik (2006). 62 See NSSO (2001, esp. table 21). 243

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There is a need to assess the kinds of study that have been done and to draw appropriate conclusions.63 But it must be emphasized that regulation through labour law is necessary in order to maintain any notion of social justice and human rights. Regulation is also necessary in order to prevent a “race to the bottom”. But another idea often put forward is that standards are costly, and that by not imposing standards countries can keep labour and other operating costs low; thus, countries can gain an advantage in a liberalized trading world. From a human rights perspective, such a view is untenable. In this regard, Blackett (Chapter 3) reiterates that institutional analysis of trade law suggests that “it is important to ensure the existence of a normative baseline below which regulatory competition is considered inadmissible”.64

Legislating for the informal sector One of the issues that has been debated in India in the recent past is the basis on which the labour laws should be extended to the unorganized or informal sector. Should this sector be defined in terms of an employment limit or in terms of capital invested? Or should the laws apply to certain designated employments, whatever the employment level or amount of capital invested? The Second National Commission on Labour in India recommends the creation of umbrella legislation to cover this sector. It also recommends that the law should not only have universal coverage, but that it should also cover self-employed persons within certain income or wealth limits. In continuation of this, the National Commission on Enterprises in the Unorganized Sector had recommended a national minimum level of social security to all unorganized or informal workers, who constitute over 90 per cent of the workforce. The National Commission had proposed the Agricultural Workers’ Conditions of Work and Social Security Bill, 2007, and the Unorganized Non-Agricultural Workers’ Conditions of Work and Social Security Bill, 2007, for this purpose.65 Another question is whether there should be a comprehensive law dealing with conditions of work, wages, regulation of employment and social security for this sector, or if social security should initially 63 See Blackett (Chapter 3) for a reflection on the studies conducted on trade and labour law, and for a call for studies that contextualize the analysis and duly consider country-specific characteristics. 64 Blackett (ibid.) also argues for “the importance of considering adjustment costs to offset the temporary impacts of the trade dislocations that may nevertheless occur”. 65 The Bill provides basic social security cover, including: hospitalization up to 10,000 rupees (INR) per illness; maternity benefit up to INR1,000; sickness benefit of INR750 per earning head of the family (during hospitalization for 15 days, INR50 per day); life insurance for natural death of INR30,000; disability cover of INR37,500–75,000; and an old-age pension of INR200 a month for unorganized agricultural and non-agricultural workers. 244

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be extended to this sector, with other areas subsequently legislated upon.66 The Unorganised Workers Social Security Act, 2008, has, however, confined itself to providing social security to unorganized workers. The manner in which this new law will be implemented for the vast informal labour force remains to be seen.67 This section has attempted to situate the debate in the current economic climate. Labour law reforms have traditionally worked in India when approved through the tripartite route. There is fairly widespread agreement among social partners that the requirement for government permission to retrench workers or to close down businesses can be withdrawn or diluted only if unemployment benefits are greatly increased. The recently introduced unemployment benefit in the Employees’ State Insurance Act, 1948, in India is indicative of attempts to build a consensus. The move to restrict contract labour to core aspects of the establishments has been more controversial. The diversity of political views and the race among different state governments to attract investment have led to some states making changes in their regulatory framework sooner than others.

Compliance with the ILO Declaration of Fundamental Principles and Rights at Work The adoption of the ILO Declaration on Fundamental Principles and Rights at Work and its follow-up in 1998 has exerted pressure on countries in the region to reform their labour laws in line with the core Conventions.68 Pakistan and Sri Lanka have ratified the eight Conventions dealing with the four areas of the Fundamental Principles.69 All of the countries in the region have ratified the Forced Labour Convention, 1930 (No. 29), the Equal Remuneration Convention, 1951 (No.  100), and the Discrimination (Employment and Occupation) Convention, 1958 (No. 111). The Freedom of Association and Protection of the 66 See, e.g., the various points of view of the debate in the Economic and Political Weekly, Vol. XLI, No. 32, 12–18 Aug. 2006. 67 Countries in the region are also proposing legislation for small and medium-sized enterprises (SMEs) and micro and small enterprises (MSEs). Thus India enacted the Micro, Small and Medium Enterprises Development Act, 2006 (this law does not include labour-related provisions); the impact that this will have on labour law coverage and enforcement will have to be studied. 68 Ratification record of countries in the region: Bangladesh has ratified all except the Minimum Age Convention, 1973 (No. 138); India has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), Convention No. 138, and the Worst Forms of Child Labour Convention, 1999 (No. 182); Nepal has not ratified Convention No. 87; Pakistan and Sri Lanka have ratified all of the core Conventions. As noted above, Pakistan has made compliance with these core Conventions a central part of its draft Labour Protection Policy, 2006. 69 The Forced Labour Convention, 1930 (No.  29), Convention Nos 87 and 98; the Equal Remuneration Convention, 1951 (No. 100); the Abolition of Forced Labour Convention, 1957 (No. 105); the Discrimination (Employment and Occupation) Convention, 1958 (No. 111); and Convention Nos 138 and 182. 245

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Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98) raise the greatest difficulties for ratification in this region. Some of the sectors that pose a problem for ratification – or for compliance, if ratified – are examined briefly below.

Essential services One of the sectors in which labour laws dealing with trade union and collective bargaining rights have restricted application is in essential services and public services. Countries in the region have given themselves sweeping powers to ban strikes and agitation in essential services. In Sri Lanka, for example, as part of the emergency imposed in the country, the amendment to the law provides that the President may require, or may delegate to anyone the power to require, any person to do any work or render any personal service in aid, or in connection with, national security or the maintenance of essential services.70 Pakistan has gone so far as to prevent workers from leaving their essential service employment without prior permission.71 India has often had recourse to Essential Services Maintenance Acts that not only prohibit strikes, go-slows, and refusal to work overtime in an elastic and administratively determined list of essential services, but also permit strikers and trade union leaders who are not employed in the industry to be arrested without warrant. One reason why almost all countries in this region have had complaints heard in the CFA regarding the curtailing of rights in essential services is the excessive number of services that such laws cover. The CFA states that what is meant by “essential services”, in the strict sense of the term, depends largely on the particular circumstances prevailing in a country (ILO, 2006f, para. 582).72 The CEACR is of the view that the authorities could establish a system of minimum service in public utilities, rather than impose an outright ban on strikes (ILO, 1994, para. 160). This has been suggested in some cases in South Asia.73

70 Sri Lankan Emergency (Miscellaneous Provisions and Powers) Regulation, No. 1 of 2000. Gazette, Part I, 2000-05-03, No. 1130/8, pp. 1A–37A. 71 The Pakistan Essential Services (Maintenance) Act (ESA), 1952, and corresponding provincial Acts, prohibit employees from leaving their employment, even by giving notice, without the consent of the employer, as well as from striking. See the comments of the ILO CEACR (2006d) concerning this aspect of the law, with reference to the Forced Labour Convention, 1930 (No. 29). Nepal’s Essential Services Act, 1957, has also come in for comments from the CEACR. 72 The ILO (1983, paras 213–214; 1994, para. 159) has defined essential services as “services whose interruption would endanger the life, personal safety or health of the whole or part of the population”. 73 Such a measure was suggested by the ILO CFA in Rep. No. 211, Case No. 1024, para. 538, where the Government of India had banned a railway strike on the grounds that it was an “essential service”. For details, see Sankaran (2009), pp. 191–98. 246

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Every country in the region has resorted to curbing trade union rights on the grounds of the greater common good, without providing adequate alternative mechanisms for raising and resolving disputes. While emergency conditions74 could be treated as a case of force majeure, overriding normal democratic avenues, denial of rights on a more regular basis has grave implications for the credibility and legitimacy of the labour law as an instrument with which to maintain industrial peace, together with social justice. This becomes all the more critical in that essential services are usually government-dominated, and are the most unionized and most vocal sectors.

The position of government employees and the “sovereign state” South Asian countries, barring India, have ratified either, or both, Conventions Nos 87 and 98. The reluctance (in India) and the delay (in other South Asian countries) in ratifying these Conventions – particularly Convention No. 98 – has stemmed primarily from the granting of trade union rights to government employees. The Indian Government has faced the greatest problem in ratifying the related Conventions in relation to its own employees, since they are denied the right to raise disputes collectively with the state under their respective conduct rules. Machinery, such as the administrative tribunals, allows government employees to raise individual disputes, and the joint consultative machinery in place for central government employees permits negotiation only on limited matters. Right from the framing of Convention Nos 87 and 98, now included in the ILO 1998 Declaration on Fundamental Principles and Rights at Work and its follow-up, there has been a debate internationally about the extension of trade union rights to categories of employees such as civil servants, the police and the armed forces. The delay or reluctance of countries in this region to ratify many of the core Conventions comes from their adherence to the Anglo-Saxon jurisprudence of treating government employees as holding tenure during the pleasure of the sovereign, and by the nature of their duties as distinct from those of other employees.75 The enhanced conditions of work enjoyed by government servants – such as constitutional remedies in the event of dismissal, pension and health benefits – are considered the quid pro quo for stripping them of their normal civil and political rights, including the right to strike. It appears that the position has not changed much during the last 50 years. Governments in this region continue to place restrictions on their employees, and 74 Imposed, on occasion, in all of the countries in the region. 75 There is a category of “service law”, as contrasted with “labour law” practice among lawyers in the courts in this region, which corresponds to the cases arising from the service conditions of state employees who are governed by status rather than by a contract of employment. 247

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this continues to be a source for discussions and complaints in the ILO’s CEACR and the CFA.76 From colonial times, the “steel frame” was the linchpin that served to implement colonial rule. The common law doctrine of state immunity for wrongs committed by its servants was brought into the region to prevent the colonial state being dragged to court. Unquestioning loyalty from its servants, in return for better conditions of work than those available to others, was the compact on which the rule was maintained. Independence and democracy have still not stripped authority of its special privileges and immunities in this region.

Other core Conventions The existence of child labour, even bonded child labour, has been a recurring problem in this region. One of the reasons for non-ratification of the Minimum Age Convention, 1973 (No. 138) (Bangladesh and India), and the Worst Forms of Child Labour Convention, 1999 (No. 182) (India), is the piecemeal prohibition of child labour in certain kinds of work. The 2006 Ministry of Labour notification (in India) prohibiting child labour in domestic service, hotel and restaurants would be a step towards bringing labour law into line with ILO standards. Nepal, which has ratified these two Conventions, enacted the Child Labour (Prohibition and Regulation) Act, 2000, which came into force in November 2004.77 In the case of Pakistan (which has also ratified both of these Conventions), the Employment of Children Act, 1991, provides that children under 14 years of age shall not be employed in the occupations listed in Pts I and II of the Schedule to the Act. Sri Lanka, meanwhile, has prohibited child labour under the Women, Young Persons and Children Act No. 47 of 1956. All countries in the region have ratified Convention Nos 100 and 111. Yet, as various CEACR reports reveal, discrimination between men and women on the basis of unequal pay for work of equal value continues to be a contested issue. Non-equal treatment of groups based on caste, religion and gender also continue to be reported to the CEACR from countries in this region.78 Bonded labour is a persistent problem. Nepal recently enacted the Kamaiya Labour Prohibition 76 There have been cases from Bangladesh against restrictions on government servants’ trade union rights during the imposition of martial law and the curtailment of rights under the Pakistan Industrial Relations Ordinance, 2002. As recently as 2003, a state government in India enforced the provisions in its conduct rules denying the right to strike to government employees ranging from teachers to secretariat staff, and dismissed over 200,000 employees. They were later reinstated, but with the clarification by the Supreme Court that government employees do not have a “moral or legal right” to strike. 77 There are some doubts about how far this law will prevent child labour in the informal sector (see ILO CEACR, 2005b). 78 For example, the widespread violence against women and their sexual harassment at the workplace, despite the enactment of the Bangladesh Suppression of Violence against Women and Children Act, 2000, continue to be examined. 248

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Act, 2002, which prohibits debt bondage and provides for rehabilitation of freed kamaiyas (bonded labourers); Pakistan enacted the Bonded Labour System (Abolition) Act, 1992, and India the Bonded Labour System (Abolition) Act, 1976, with similar goals.

Improving the enforcement of labour laws The consolidation of laws (referred to earlier) has often been suggested as a means of labour reform and as a way in which to improve the effectiveness of the laws. Simplification has also been mooted because of the large number of overlapping registers that employers have to maintain and the number of returns that they have to submit. In the case of the informal sector, this aspect is seen to increase the cost of compliance and the reluctance of many to come within the scope of the law. Most countries in the region have a system of inspection to ensure compliance, with prosecution and other legal actions taken to enforce the law in cases of non-compliance.79 A reduction in the number of laws and corresponding authorities should result in fewer inspections. “Inspector Raj” is a term often used in India to highlight the bureaucratic harassment faced by employers in complying with cumbersome reporting requirements of the labour laws. A proposed amendment (a Bill pending in Parliament since 2005) of the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Central Establishments) Act, 1988, promises a reduction in the number of returns to be submitted to government. This has been opposed by unions as being further evidence of the government’s policies to relax labour laws in these times.80 In recent years, the enforcement of labour laws in EPZs through regular inspections has almost ground to a halt, in the name of preventing harassment of employers and providing an investor-friendly environment. Prior permission has to be granted by the Development Commissioners or ministry officials before inspections can be carried out. Of course, because labour laws apply, workers are free to pursue their rights – but, in the near absence of unions and the low levels of unionization among women workers who constitute a high proportion of the workforce in such 79 See, e.g., Pakistan’s recent Labour Inspection Policy, 2006, which focuses on this aspect of enforcement. 80 The Indian Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Central Establishments) Act, 1988, provides exemption to employers in small and very small establishments from furnishing returns and maintaining registers under certain labour laws. “Small establishments” have been defined as establishments in which not fewer than ten and not more than 19 persons are employed, or were employed on any day in the preceding 12 months. “Very small establishment” is defined as an establishment in which not more than nine persons are employed, or were employed on any day in the preceding 12 months. The exemption is granted with respect to nine laws, mainly relating to wages and weekly holidays. There is no exemption for the laws of social security at present. 249

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zones, labour laws are quite easily flouted. In the agricultural sector (to which mainly the minimum wage law applies, with some states having legislation protecting the conditions of work of agricultural workers), the close ties between the inspectorates and the landowners have been highlighted as a reason for the poor enforcement of labour laws (Breman, 1985; Hirway and Abraham, 1990). The power granted to the state, as noted above, to grant prior permission to prosecute in cases of violation again reduces the certainty of enforcement. In the current debate about simplifying labour law and making it investor-friendly, self-certification is a proposal that is often put forward, but workers have viewed this with suspicion.81 Other proposals include the appointment of independent auditors to monitor compliance with the codes of conduct: compliance is not with the labour laws of the outsourced country of production, but rather with a common labour standard evolved by the manufacturer. Codes of conduct can be noted in sectors in which there is a link with international trade, such as the footwear, textile and clothing sectors. But unions have expressed concerns that codes of conduct may result in the “privatization” of labour administration. Further, there is some evidence to suggest that multinational corporations (MNCs) have been somewhat selective in their choice of issues to include in their codes. While state-based inspection systems are sanctions-based, such voluntary systems would be an incentive for the social partners – particularly the employers – to improve their brand image. Voluntary codes would, of course, in no way supplant existing inspection procedures, but would merely supplement them. Given the high degree of subcontracting taking place domestically in the countries of this region, there is scope for introducing such voluntary codes in sectors in which there is subcontracting to ancillary units, in order to ensure compliance with labour standards. Employers, subcontractors and trade unions could agree upon the need to recognize certain minimum labour rights in the subcontracting chain, and might also arrive at mutually agreeable means of monitoring these codes. The consolidation of laws should also help to create a unified labour judiciary, empowered to deal with all manner of disputes – employment relations, trade union recognition, wages, social security – cutting across both large-scale and unorganized sectors. At present, the presiding officers of industrial tribunals or the authorities competent to hear claims under the different labour laws, either belong to a general judicial service cadre or are administrators who are liable to be frequently transferred. The result is that they are unable to develop an adequate degree of specialization and orientation for labour adjudication. It has been repeatedly pointed out that the task of the labour judge is different from that of the generalist judiciary. 81 Unions have also put forward a call for worker certification of establishments. 250

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A single-window court or an Industrial Relations Commission (as in Pakistan) is often suggested as a way in which to deal with claims, petitions or disputes arising from all labour laws, in addition to magisterial powers to prosecute for an offence that is presently pursued separately in the criminal courts.82 By amalgamating civil and criminal powers in the Industrial Relations Commission, litigants will have a “single window” through which to seek their rights. In India, the Gujarat Labour Laws Review Committee has recommended reviving the idea of the National Commission on Labour of setting up a Labour Judicial Service (Government of Gujarat, 1974, p. 17).83 The Second National Commission on Labour in India has since considered this again. This specialist judiciary would receive special training or orientation in order to deal effectively with labour adjudication. The central role played by the government and courts in labour disputes has led to the greater juridification of all disputes and grievances, as noted above. One innovation to deal with the backlog of cases that plague the labour judiciary has been to set up Lok Adalats as a form of alternate dispute resolution mechanism, which can dispose of pending cases. These are more informal proceedings before a judge that have been used in many jurisdictions or branches of law in India.84 Certain states in India have experimented with Lok Adalats in labour matters and more work needs to be done to assess how viable an alternative these are for the speedy and just disposal of cases. The right to legal aid, as provided in some labour laws, is also suggested as a means of helping workers to gain access to their remedies. In such cases, the need to shift the burden of proof onto the employer is often recognized. (Traditional common law requires that the burden of proof be upon the person asking for relief.) In several countries in the region, basic rights overlap to some extent with rights under labour law, such as the right not to be exploited and the right to organize. Constitutional remedies, such as writ remedies, are used to enforce these basic or fundamental rights. These remedies are in addition to those available under labour law, and are often swifter and easier to enforce, given that they then become high-profile cases. Thus in most of these countries the existence of bonded labour, the non-payment of minimum wages, the trafficking of women, and child 82 By the National Labour Law Association, in the draft Indian Labour Code, 1994. The draft Labour Code was introduced as a private members’ Bill in the Lok Sabha (House of the People, the lower House of Parliament) in 1997. 83 This was been repeated once again in the Indian draft Labour Code prepared in 1994. 84 Lok Adalats are presided over by judges from the formal judiciary. While Lok Adalats have frequently been set up in accident claims cases, matrimonial disputes and sometimes even compoundable criminal matters, their use in labour matters has been relatively infrequent. The relatively new Legal Services Authority Act, 1987, and the National Legal Literacy Mission in India have provided a boost to the setting up of such Lok Adalats. 251

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labour would constitute not only a violation of the labour law but also of their constitutions. Some element of “constitutionalization” of labour matters is therefore inevitable, and is often resorted to by unions and activists, given their relative speed and media attention. Recourse to the Supreme Court in labour matters is possible only when there is an explicit overlap between fundamental rights and labour rights in the areas of arbitrary termination of employment by the state (a violation of the constitutional right to livelihood), the non-payment of minimum wages (a violation of the constitutional prohibition against forced labour), and the use of child labour (again, constitutionally prohibited). The use of this recourse to constitutional remedies to protect fundamental rights may well increase in the coming years, given the fact that the Supreme Court in India (which hears both constitutional matters and is the highest appellate court in respect of labour matters) has been perceived as reversing an earlier liberal era of the broadening of labour rights provided by labour law in its appellate jurisdiction.

6.4 Law and gender equality: The case of India Women in India are employed mainly in large establishments in which 1,000 or more workers are employed, or in the informal sector. The areas in the formal sector in which women are employed are the textile industry, the EPZs, the fish-processing industry, and the call centres in which much business-processing outsourcing work is done. Studies note the low levels of unionization of women in these sectors. They are usually quite educated, young and unmarried, and employers are known to prefer such women because of their relative docility and the high chances of their leaving employment after a few years. More and more women are employed in the informal home-based sectors, with deteriorating work conditions and in conditions of unpaid work, as already noted (Mitra, 2006). Over 140 million women worked in the unorganized sector covering both agriculture and non-agriculture in 2004–05, corresponding to 91 per cent of women in the workforce.85

6.4.1 The gendered notion of “work” Initial economic accounting practices in India counted only work that was economically productive. Women’s unpaid family work within the household or 85 See NCEUS (2007), Tables A1.2 and A1.3. 252

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work that resulted in products that were consumed within the household were not treated as economically productive. In short, work that did not involve a market transaction and thus did not fetch a “price” was not treated as having economic value and therefore did not count in the calculation of national income. The notion that “real” work is only wage work has led to labour market inequality, and women have had to bear privately the burden of their reproductive role within the family (Rittich, 2006). The women’s movement in India has helped to raise awareness of these invisible contributions of women to the well-being of their families. As a result, there have been some changes in the manner in which national accounts perceive a major part of women’s work. Today, production for self-consumption is treated as economic activity. Yet various household activities that women perform – such as cooking, cleaning and other domestic work, the upbringing of children, and the care of the aged and the infirm – have yet to be counted as economic activity (Sankaran, 2008). Treating these activities as economically productive would mean putting a monetary value on the work that is performed by women within the home, but imputing a value does not mean that women expect to be paid for the work that they do. Quite often, the care provided by members of the household is given freely, rather than in the expectation of a return. Yet there is a need for this work to be acknowledged publicly as contributing to society and the family. Ascribing a value to it would not only bring it within the policy-makers’ vision, but it would also be likely to enhance the position of women who do such unpaid work in the eyes of their families and of society. For example, we note that one of the poorest paid groups of workers in urban areas is women who are domestic workers. One reason for their low level of wages is the fact that, in the eyes of the employers, the nature of the work performed – cooking and cleaning – is unpaid and unrecognized labour done by the women of households. As a result, the employers see no reason to pay a market wage for the work, even though the identical job performed outside the home, by a cook in a hotel, for example, would command higher wages. A further problem is posed by the voluntary work in which women engage. While such work may be economically useful, the fact that it is voluntary may exclude such persons from the scope of wage employment. The case of anganwadi workers (village-level workers who run the tens of thousands of Integrated Child Development Services health-care programmes in India) who are not paid even minimum wages on the grounds that they are volunteers working for a social cause, has been a point of much protest.86

86 The courts have also rejected the claim for regularization and consequential benefits under service law: State of Karnataka v. Ameerbi 2007 I LLJ 996 (SC). 253

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6.4.2 The gendered nature of labour law The law often does not accord the work done by women due status or protection, and thus, at the very threshold, women workers suffer exclusion or at least discrimination. By and large, labour law does not extend to the informal sector, in which over 90 per cent of women workers are employed. The number of persons who are self-employed, and thus outside the purview of labour law, is growing in India, accounting for 56 per cent of the work force in 2004–05.87 Selfemployment among women is often a survival strategy when they are unable to find wage employment. Even if they do find wage employment, this is often home work, which is difficult to bring under labour law (which is based on the idea of work being performed at employers’ premises). It is often also piece-rated – that is, paid by output, rather than by time – with the result that the need for continuous supervision by the employer is not a requirement. This also adds to the “atypical” nature of the work done by women. Their invisibility is (among other reasons) also due to the low priority accorded to women by the law and the view that home-based work or domestic work does not fall within the formal definition of “work”, as traditionally understood. The definitions of “worker” do not always cover people engaged through a contractor; because informal sector homeworkers are invariably engaged through a complex chain of contractors and subcontractors, the workers would be likely to find it difficult to get legal protection even if the law were to extend to this sphere. The enforcement officers of the labour inspectorate accord a low priority to carrying out inspections in the informal sector, where only limited laws, such as those relating to minimum wages, apply. The scattered nature of the establishments, and the lack of official vehicles and support staff, make it easier for the inspectors to cover several establishments located in a compact industrial zone and to complete their monthly quota of inspections in an efficient manner.88 A gender audit of the labour enforcement mechanisms, as performed in other areas of policy-making, does not appear to have been carried out in many of the countries. As already noted, the bulk of labour laws in India are premised on the existence of an employer–employee relationship in order for a person engaged in an activity to be classified as a “worker” (or a “workman”, “employee” or “employed

87 Report of the NCEUS (2007), Table A1.1. 88 Many of these aspects of labour inspection, with recommendations to strengthen the labour enforcement machinery, are contained in the Report of the Second National Commission on Labour (Government of India, Ministry of Labour, 2002a). 254

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person”, as the case may be) and hence, by implication, engaged in “work”. Wage employment is often a necessary condition for legal protection.89 In the case of unpaid family helpers, such as in agriculture, the fact that their work is unremunerated has not prevented it from being considered economic activity. The gendered understanding of what constitutes work makes women particularly vulnerable to falling outside the scope of labour law. The law may choose to treat their activity as not “work” and therefore as not entitled to protection. Protecting the private domain of the family seems to be the operative principle here and the work, for example, performed by children on family farms typically stands outside the attempts of the law to regulate or prohibit it.90

6.4.3 The gendered impact of “neutral” laws: Examples

Social security Where the law provides social security, the method of delivering benefits sometimes has a gendered impact. Thus, where maternity benefit is provided through a social insurance system, the cost of providing the benefit is distributed among all workers and employers. In contrast to this, employers’ liability systems cast the burden exclusively upon the employer, creating a disincentive to employment. In India, maternity benefit is provided under the Maternity Benefit Act, 1961 (providing employers’ liability), and the Employees State Insurance Act, 1948 (providing insurance). Failure to convert all employer liability schemes into an insurance model could then have a differential impact upon women’s employment. The undervaluation of women’s work Occupational segregation by gender and the resultant differential wage levels are other causes for concern. The Indian Parliament passed the Equal Remuneration Act in 1976. This law provides for equal remuneration of men and women workers, and for the prevention of discrimination against women on the grounds of sex in matters relating to employment. Thus, under the law an employer is obliged to pay 89 It must be pointed out that the mere existence of this employer–employee nexus is not sufficient to bring such cases within the ambit of the law. Certain kinds of activity are, by their very nature, excluded from legal protection, such as domestic service or spiritual activities, chosen as examples of activities that were excluded from the purview of the Industrial Disputes Act, 1947, by the judgment in Bangalore Water Supply v. A Rajappa AIR 1978 SC 548, 1978 3 SCR 207, 1978 2 SCC 213. 90 Note, e.g., the exclusion provided by the Indian Child Labour (Prohibition and Regulation) Act, 1986, s. 3, of work performed by family members (Sankaran, 2008). 255

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any worker remuneration that is not less than that paid to a worker of the opposite sex employed to perform the same or similar work. The employer cannot discriminate between men and women at the time of recruitment, or in conditions subsequent to employment, such as promotion, training or transfer. However, the 1976 Act does not lay down guidelines about what constitutes “same or similar work”. Normally, it has been noted that women’s work is treated as unskilled or requiring less effort, and these aspects have been used to justify payment of wages lower than those paid to male workers. Thus, for example, in agriculture, traditional practices that forbade women to use tools resulted in men handling the plough, while women did such work as rice transplanting, which is often more arduous and back-breaking. This persistent undervaluation of women’s work, which often involves long hours of drudgery, results in lower wages for women despite the existence of a law requiring equal remuneration. As a result, many commentators have pointed out that there is a need to replace the expression “same and similar” with the phrase “work of equal value”. This would permit disparate jobs to be assessed and evaluated for the value that they add to the production process, even if they are different from jobs performed by another person. The question of equal pay for work of equal value has received greater attention in India in recent years. The ILO CEACR has determined that the equal pay for “work of the same or similar nature” laid down in the 1976 Act is not sufficient compliance with Convention No. 100. It is necessary to carry out detailed studies in order to assess the comparable worth of different jobs. Occupational segregation resulting in women’s jobs being accorded a lower value also needs to be tackled. Establishing equality of wages between dissimilar jobs that have equal value could help to reverse the undervaluation of those jobs in which women are concentrated, and which are therefore treated as “women’s jobs” and thus low paid. Studies show that women’s wages in agriculture are, on average, 71 per cent of the male wage (Harriss-White, 2003). Fixing minimum wages permits different rates to be fixed for skilled, semi-skilled and unskilled work. The problem is that work done by women is often classed as unskilled (weeding or transplanting in agriculture), while work traditionally done by men (ploughing) is treated as semi-skilled or skilled.

Occupational segregation and the piece-rate wage system Another aspect of wage discrimination faced by women is the lack of regular income. Casual jobs are typically outsourced for women to perform in their homes. Beedi work, finishing garments in ancillary units doing labour-intensive parts of production, and the rolling of papad (lentil flatbreads) are some of the 256

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myriad jobs that homeworkers, usually women, perform in rural and urban areas. This work is usually paid on piece-rate basis. Even if a woman were to work for over ten hours a day with help from her children, she would hardly earn the minimum wage for an eight-hour day. Piece rates therefore contribute to the lower wages earned by women compared to men. Women are also paid less because of lower skill levels. The poorer education given to girls is a reflection of family and social biases against them. Their inability to upgrade their skills, and hence their earning capacity, could also be a result of their considerably lower income and wealth levels in India. Discrimination in inheritance laws is also to blame for this; another factor is women’s inability to take up other jobs because they are burdened with domestic and childcare responsibilities. The result is persistent inequality in wage rates. In addition, homeworkers are not compensated for the use of their premises and lighting, which are “costs” saved by the employer or contractor. The law proposed by the NCEUS (2007) allows for such costs to be factored in as a component of the wage paid to such unorganized sector homeworkers.

6.4.4 The nature of labour law for women: Equality or protection? Another question that arises is whether the labour laws should provide for equality or if they should go further and make affirmative provisions for women. Should the laws be gender-neutral, in the sense of treating women as equal with men? Or, given the socio-economic conditions facing women, should they treat women differently – that is, make special provisions for them? The Indian Constitution envisages both kinds of treatment as feasible. Thus, while art. 15(1) states that no person should suffer discrimination on the basis, inter alia, of sex, art. 15(3) permits the state to make special provision for women. On the basis of art. 15(3), quota-based reservations for women in government jobs, the reservation of seats for women in elected bodies such as panchayats (local governments at the village or town level), and municipalities, and setting up exclusive women’s colleges have all been part of the constitutional scheme and have been upheld as affirmative action that benefits women. Denying women the right to hold jobs in combat wings of the armed forces, or to work in certain prison jobs or in unsafe conditions (usually night work or in underground mines), have also been upheld as provisions that protect women. There is, of course, serious reconsideration currently going on among women activists, trade unions, and policy-makers about how the lines of protection should be redrawn. It has to be determined when protection becomes paternalism. 257

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When, and under what circumstances, protective measures should be taken is a matter for serious debate and the issue of night work for women captures this dilemma, as discussed below.

6.4.5 Night work by women In India, women who work in factories and offices are prohibited from working at night.91 Some other sectors, such as nurses in hospitals, call centres, those offices not covered by the various laws banning night work, or those in which exemptions have been granted, allow women to work at night. The Factories Act, 1948, states that no woman should be required or allowed to work in any factory except between the hours of 6 a.m. and 7 p.m., with the proviso that the hours may be varied, provided that no woman may work between 10 p.m. and 5 a.m. But the law itself provides ways in which this ban on night work can be circumvented: the state government may exempt women from the ban on night work in fish-curing or fish-canning factories, where the employment of women during night hours is necessary to prevent damage to, or deterioration of, any raw material. This exemption can be subject to such conditions as the government deems necessary.92 There is pressure for liberalization of the present laws that prohibit night work for women in those sectors that are fast opening up. These would include electronics, information technology, food processing, agro industry and textiles. These sectors either require continuous processing to prevent deterioration of raw materials (as in the case of food processing), or they may include business-process outsourcing (BPO) establishments that take advantage of information and communications technology to provide greater employment to both men and women. Demands for night work for women on the grounds of preventing discrimination have been raised in these areas. The National Commission on Labour, appointed by the Government of India to look into several labour questions, has recommended that the ban on night work by women could be lifted if the number of women workers per shift in an establishment were not fewer than five, and if the

91 See the Indian Factories Act, 1948, and the Shops and Establishment Acts of different states. Women working in hospitals and in agriculture are exempt from such laws. The Madras High Court has struck this down as unconstitutional: Vasantha R. v. Union of India 2001 II LLJ 843 (Mad.). 92 See the Indian Factories Act, 1948, s. 66(2). For example, the rules made under this Act in the state of Tamil Nadu (where the present case arose) provide that no woman shall be employed before 6 a.m. or after 7 p.m. for more than three days in a week, and that no woman shall be employed after 11 p.m. and before 5 a.m. The number of days on which a woman may be so employed cannot exceed 50 days in a year. 258

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management were able to make satisfactory arrangements for their transport, safety and rest after or before shift hours.93 There is an ongoing debate on this issue, with several trade unions holding that there is an urgent need to take into account the high degrees of violence that women face on the streets while travelling to work, poor public transport facilities, and the levels of sexual harassment at the workplace94 that can be expected to increase if night work is permitted.

6.5 Conclusions South Asia has one of the largest workforces in the world today, yet the region is also characterized by extremely poor conditions of work and wages for most of its workers. Except for pockets of well-developed trade unionism, large proportions of the working population are non-unionized and lack an organizational voice with which to deal with these conditions. The challenge confronting labour law is to provide an effective means to redress the lack of “decent work” in the countries in the region. The capacity of law to create a level playing field in the world of work and to create decent work is limited by the non-universal scope of the law itself. The law is premised on a traditional understanding of what constitutes “work”, limited by the kind of establishment, the place of work, the type of work performed and the status or earning capacity of the person doing the work, all of which have contributed in excluding work done in the informal economy, care work done by women within the homes, and unpaid family labour performed by women and children in activities considered to be “economically productive”. Recognizing the dichotomy between work and employment – and therefore the need to include self-employed, contract and “atypical” workers in the law – and making informal work visible in the eyes of the law still constitute major challenges in this region. 93 See Government of India, Ministry of Labour (2002a). Unlike countries in Europe, which have denounced certain ILO Conventions – the Night Work (Women) Convention (Revised), 1934 (No. 41) and the Night Work (Women) Convention (Revised), 1948 (No. 89) – on the basis that women do not require protection except in cases of pregnancy and maternity, trade unions in India argue that there is a need to continue to prohibit night work of women. Since factories employing women are in the export sector, it is argued that the demand for permitting night work is driven by the need to have a third shift, rather than an assessment of women workers’ real position in the workplace (see also Sankaran, 2003). 94 A well-known judgment delivered by the Supreme Court has not only defined sexual harassment, but also mandated all workplaces to set up complaints committees to deal with sexual harassment faced by women: Vishaka v. State of Rajasthan 1997 6 SCC 241, AIR 1997 SC 3011, 1998 BHRC 261, 1997 3 LRC 361, 1997 2 CHRLD 202. 259

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Globalization has had an impact in the world of work in the region, with some new sectors of employment opening up (such as EPZs, call centres and BPO) with corresponding changes in the structure of employment, poor unionization rates and precarious employment. The shared history of the region under colonialism notwithstanding, political and economic changes in the countries in the region have resulted in divergent responses. A debate on whether the effectiveness of labour law should be used to measure the levels and extent of protection to workers, or whether it ought to be used to assess to what extent an investor-friendly, flexible environment can be created, is an ongoing one. Yet, given the imbalance in the world of work and the mandate by the ILO to create conditions for decent work, it is inevitable that the effectiveness of labour law be measured against its ability to produce results in the direction of decent work. One of the important ways of doing this is by making the law more inclusive, in the sense of making it more broad-based in its coverage, encompassing all of those who work, whether in “standard” employment or otherwise. The effectiveness of labour law to promote decent work also lies in a greater strength of workers’ organizations. While a predominant role of the state in labour-related matters appears inevitable for some time to come, given the lack of unionization and bargaining power, there is a need for law reform that is participatory and that gives a voice to workers’ organizations. This indicates the need to organize workers in the informal sector. The close connections of work-related matters to the social, cultural, economic and political milieu in each country in the region has often led to a greater reliance on political or social movements than on trade unions to ensure protection of workers. The decline in trade union power and the relative importance of the labour portfolio within the governments of the region have also posed challenges to the ability of labour law to play its role effectively. In addition, the current economic liberalization and growth in many countries in the region have no doubt triggered several calls for a new look at labour law and the “costs” for the labour market. Yet, given the complex, unequal and diverse societies that exist in the region, the need for a labour law that provides for humane and decent work can hardly be overemphasized.

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—. 2005. La reforma laboral en América Latina: 15 años después – Un análisis comparado (Lima, ILO). —. 2004. Libertad de asociación, libertad sindical y el reconocimiento efectivo del derecho de negociación colectiva en América Latina: El desarrollo práctico de un principio fundamental, InFocus Programme on Promoting the Declaration on Fundamental Principles and Rights at Work Working Paper No. 28 (Geneva, ILO). —. 2001. La reforma laboral en América Latina (Lima, ILO). Velázquez, M. 2003. Seguros de desempleo, objetivos, características y situación en América Latina (Santiago, ECLAC). Verge, P. 2006. “Perspectives Canadiennes sur l’effectivité du droit du travail”, in P. Auvergnon (ed.): L’effectivité du droit du travail: A quelles conditions?, Proceedings of the International Seminar on Comparative Labour Law, Industrial Relations and Social Security (Bordeaux, COMPTRASEC), pp. 291–320. —. 2004. “Vers une graduelle ‘continentalisation’ du droit du travail? Aperçu de l’impact des accords plurinationaux Américains en matière du travail”, in Revue Etudes Internationales, Vol. 35, No. 2, pp. 287–306. —. 2002. “Presentación analítica del Acuerdo de Cooperación Laboral de América del Norte (ACLAN)”, in J. Somavía et al. (eds): Dimensión social de la globalización y de los procesos de integración, Working Paper No. 146 (Lima, ILO), pp. 91–144. Available online at http://www.oit.org.pe Von Holdt, K.; Webster, E. 2005. “Work restructuring and the crisis of social reproduction”, in E. Webster; K. Von Holdt (eds): Beyond the apartheid workplace: Studies in transition (Scottsville, University of KwaZulu-Natal Press), pp. 1–40. Von Richthofen, W. 2003. La inspección del trabajo (Madrid, ILO/Ministry of Labour and Social Welfare). Vosko, L. 2006. “Gender, precarious work, and the international labour code: The ghost in the ILO closet”, in J. Fudge; R. Owens (eds), pp. 53–75. Watson, A. 1993. Legal transplants: An approach to comparative law, 2nd edn (Athens, University of Georgia Press). —. 1983. “Legal change, sources of law and legal culture”, in University of Pennsylvania Law Review, Vol. 131, pp. 1121–1157. —. 1978. “Comparative law and legal change”, in Cambridge Law Journal, Vol. 37, pp. 313–336. Weller, J. 2000. Reformas económicas, crecimiento y empleo: Los mercados de trabajo en América Latina y el Caribe (Santiago, FCE/ECLAC). —. 1998. “Los retos de la institucionalidad laboral en el marco de la transformación de la modalidad de desarrollo en América Latina”, Economic Reforms Series No. 10 (Santiago, ECLAC). —; Van Gelderen, M. 2006. “Flexibilidad de los mercados de trabajo: Las variables laborales frente al crecimiento económico”, in G. Bensusán (ed.), pp. 45–94. Williams, L.A. 2002. “Beyond labour law’s parochialism: A re-envisioning of the discourse of redistribution”, in J. Conaghan; R.M. Fischl; K. Klare (eds), pp. 93–114. 288

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Adjustment costs trade liberalization, and 106 Africa see also Southern Africa colonialism, and 17–18 Agricultural protectionism 99–100 Argentina case law 156 Arthurs, H. “project of boundary definition” 7 Banana quota system 113 Bonded labour 248–9 Brazil case law 156 Cambodia 120–5 “Better Work” initiative 125 bilateral trade agreement with US 122 distribution of wealth 120 foreign investment 120–1 ILO, and 122–5 integrative linkage between trade and labour regimes 124–5 Labour Code 1997 121 labour laws compliance with 123 enforcement 121–2 WTO, and 124 CARICOM 112–17 banana quota system, and 113 CARIFORUM 115 CSME 112

direction of regional trade, and 114–15 “dollar bananas”, and 113 economic partnership agreements (EPAs) 114–16 labour law harmonization project 31, 116 shaping of labour laws 116 unionization, and 116–17 WTO European Communities–Bananas report 112–13 Casual workers South Asia 230 Casualization effect 4 southern Africa 201–3 Child labour 80–4 displacement of workers 83 Europe, in 80 Geneva Declaration of the Rights of the Child 1924 81 historical development 80 human rights instruments 80–2 ICESCR 81 ILO Minimum Age Convention 1973 81 International Labour Code 82 legal pluralism, and 83–4 normative ineffectiveness, and 83–4 South Asia 248 UN International Convention on the Rights of the Child 82 UN Universal Declaration of Human Rights 1948 81 UNDP, and 83 291

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UNESCO, and 83 UNFPA, and 83 UNICEF, and 83 Worst Forms of Child Labour Convention 1973 81 Chile case law 156 gender equality 38 subcontracting 24 Collective bargaining Latin America 146–7, 159 Mexico, in 165 Colombia trade unions 159 Colonialism GATT, and 94 influence of 17–20 multilateral trade, and 94–7 South Asia, and 17, 226 southern Africa 177–8 World Trade Organization, and 95 Commission payments 62–63 Community workers 15–16, 61 gender dimensions 16 travail coutumier 16 Concession contracts 63 Contracts of employment South Asia, in 226–7 southern Africa, in 199 Contributing family workers 13–15 customary law, and 13–14 deregulatory processes, and 14–15 francophone sub-Saharan Africa 14 India 14 scope 13 social norms, and 13–14 Corporate social responsibility 86 Costa Rica case law 157 Courts role of 210–11 southern Africa, in 210–11 Decent work paradigm 44 Declaration on Fundamental Principles and Rights at Work 1998 76–7 Democracy Latin America, in 173 southern Africa, in 181–3

Discrimination HIV/AIDS, and 189 maquila garment industry, in 168 non-discrimination principles 130 Dispute resolution South Asia, in 240–1 Domestic workers 15 enforcement, and 32–3 vulnerability 15 Dominican Republic trade unions 159 Dual economy South Asia, in 234–5 Dualism effectiveness of labour law, and 55 Economic partnership agreements (EPAs) CARICOM, and 114–16 colonialism, and 115 Effectiveness of labour law 11–12, 51–92 adapting rules to social situations 66–7 child labour see Child labour colonial legislation, and 54–5 colonial regimes, and 57 competition, pressure of 67 decent work deficit, and 69–92 Declaration on Fundamental Principles and Rights at Work 1998 76–7 domestic work 90–1 dualism, and 55 duality between normalized work and informal activities 64–7 effectiveness, meaning 51–2 export processing zones 59 extending social protection 89–91 foreign direct investment, and 65–6 fragmented labour market 64–5 framework for analysis 51–92 fundamental rights 76–7 recognition of and application, gap between 75–84 gender equality see Gender equality globalization see Globalization human rights 76–7 immediate market profit, and 67–9 inadequate integration into dominant trade networks 63–9 informal economy 64–7 international context 58

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legal and practical considerations 63–4 legal pluralism, and 54 links between national and international law 54 minimum wage requirement, and 66–7 multiplicity of statutes 58–9 needs dealt with collectively 68 non-industrial societies 65 pluralism 58–9 post-colonial extension of scope 57–8 reference or dominant system of laws 56–8 relativity 66 rule of law see Rule of law self-employed workers 90 “social clause”, demand for 53 social protection called into question 68–9 social security, and 90 socio-legal pluralism, and 55–69 statutory derogations 59 unemployment, pressure of 67 unified labour market 64–5 unprotected employment relationships 59–63, see also Unprotected employment relationships El Salvador case law 157 Enforcement 32–6 awareness of rights, and 33 diversity of approaches 34 domestic workers, and 32–3 flexibilization, and 35 globalization, and 35–6 inadequate strategies 34 Latin America 34 poverty, and 33 rural workers, and 32–3 socio-economic conditions, and 33–4 South Asia 249–52 structural political and institutional weaknesses 34–5 EPZs effectiveness of labour laws, and 59 EPZ-led growth 117 Mexico, in 108 South Asia 234 southern Africa 197–8 Equal pay 248 Equality gender see Gender equality

Externalization 20–4 Chile 24 effect 4 expert-oriented sectors 23 flexible production methods, and 22 globalization, and 21–2 India 23 Latin America 23 network of units 20 productive decentralization 20–2 South Africa 21 southern Africa 203–5 tâcheronnat 22–3 “underclass” of workers, creation of 24 Uruguay 24 “Fallacy of composition” effect 102 Family helpers 60–1 Family law gender equality, and 39 Foreign direct investment effect 4 effectiveness of labour laws, and 65–6 Franchise contracts 63 Freedland, M. scope of labour law, on 5–6 Freedom of association Latin America, in 160 southern Africa, in 223 GATT colonialism, and 94 Multi Fibre Agreement 99 role of law, and 96 Gender equality 36–42, 77–80 Chile see Chile customary norms and practices, effects 39–40 displacement of female workers 119 divide between productive and nonproductive work 36–7 family law, and 39 gendered construction of law 36–7 globalization, and 40–2 “atypical” work arrangements 41 feminization of export employment 41 mobility of capital and production 41 rights, language of 40–1 household work, and 36–7 ILO standards 78 293

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impact of provisions 38 India see India inheritance law, and 39 Lesotho see Lesotho Mexico see Mexico normative protection 79 promotion of 37–9 social norms, and 38–9 social values, and 79–80 South Asia see South Asia southern countries, developments in 79 statistics 37 status of women 78–9 tradition, and 38–9 traditional legal culture, and 39–40 UN International Bill of Human Rights 77–8 UNIFEM study 37 Geneva Convention of the Rights of the Child 1924 81 Globalization 21–2, 84–9 “à la carte” normalization 87–8 corporate social responsibility 86 effect 4 effectiveness of labour law, and 84–9 enforcement, and 35–6 extending social protection 89–1 fair 46–7, 84–9 gender equality, and 40–2 see also Gender equality ILO 1998 Declaration, and 86–7 ILO report on fair 84 liberalization, and 85 need to rethink current model 46 “promotional” law 85–7 regulatory impacts 104 report of ILO Director-General 89 selective protection and international trade 85–8 South Asia 239, 260 southern Africa 194–5 stronger social dimension 91–2 transfer of standards 87 WCSDG report 2004 88–9 work arrangements outside labour law 42 Havana Charter 1948 95–6 Hepple, Bob aim of labour law, on 8

HIV/AIDS draft Bill on HIV/AIDS and Employment 2004 (Lesotho) 218 southern Africa see Southern Africa Human development index 188 Human rights 76–7 child labour, and 80–2 effectiveness of labour laws, and 76–7 South Asia 243–4 UN International Bill of Human Rights 77–8 UN Universal Declaration of Human Rights 1948 81 ICESCR 81 Independent contractors southern Africa 204–5 India contract workers 23 exclusion of workers from labour law 18 gender equality 252–9 employer–employee relationship 254–5 gendered impact of “neutral” laws 255–7 gendered nature of labour law 254–5 gendered notion of “work” 252–3 household activities 253 inspections 254 nature of labour law for women 257–8 night work 258–9 occupational segregation 255–6 piece-rate wage system 256–7 quota-based reservations 257 “same or similar work” 256 self-employment 254 social security 255 undervaluation of women’s work 255–6 voluntary work 253 self-employment 28 Industrialized countries academic research, and 8 Informal economy legislating for 244–5 trade law, and 30 Informalization southern Africa 200–1 Inheritance law gender equality, and 39 International Bank for Reconstruction and Development 95

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International labour code 82 International Labour Organization (ILO) Declaration of Fundamental Principles and Rights at Work South Asia, and 245–6 Declaration of Philadelphia 1944 44 gender equality standards 78 Minimum Age Convention 1973 81 ratification of Conventions 164 southern Africa, and 183–4 International Monetary Fund 95 International trade law 29–32 asymmetrical liberalization 31 contradictions 30–1 negative impact 31–2 relationship with informal economy 30 subsidization of northern markets 30–1 trade liberalization 29–32 International Trade Organization 94–5 Judiciary Lesotho, in 220 Korea, Republic of 125–8 chaebol 126 labour “bargain” 125 labour relations violations 126–7 lifetime employment security 125–6 OECD, and 127–8 PCIR 127 roadmap for industrial relations reform 2004 128 “spring of Seoul” 126 US employment law principles 125 Labour courts Latin America see Latin America Labour inspection Latin America see Latin America Labour inspectorates southern Africa 211–12 Labour law assigned purposes 28–9 capacity of see Capacity of labour law debates on role of 3 scope of 5 South Asia, in 241–52 economic objectives, relationship with 194–8

effectiveness see Effectiveness of labour law enforcement 218–20 evolution of 177–86 Mexican reform of 108–11 Namibian reform of 197 nature of for women 257–8 non-universal scope of 259 perceived crisis of 3 proposals to extend scope 6 reforms 28–9 repositioning of 228 scope 53–4 trade liberalization and migration and 120 traditional concerns 3–4 Labour market regulation meaning 7 Labour migration southern Africa 193–4 Latin America 135–73 barriers to innovation 171 collective bargaining 146–7 colonialism, and 18–20 contracts disguising existence of employment relationship 143–4 de facto flexibility 138 democracy, future of 173 denunciations of violations of labour standards 171–2 diversity of situations 135 economic crises of 1980s 137 economic growth in 1990s 140 economic and political context 137–42 enforcement 34 enforcement mechanisms 147–61 externalization 143 FDI 139 flexibilization 137–8 gap between norms and reality 135–73 increasing informalization 142–3 international trade agreements, and 141–2 labour courts 153–7 case law, effect 155–7 ILO study 2002 153–4 judiciary, role of 155–7 organizational changes 154–5 protracted trials 154 labour flexibility 136 labour inspection 148–52 changes in design and strategies 148 295

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consequences on law’s effectiveness 149–52 design 152 evaluations 152 functions 149–52 ILO influence 149–52 inspectors per 100,000 workers 2005 151 institutionally recognised discretion 150 mechanisms 152 origin 148 privatization 151 size of undeclared work, and 149 strategies 149–52 strategies for compliance 150 strengths and weaknesses 149–50 undeclared work 150 weakness of system 149 labour law evolution of 137–142 exclusion of workers from 19 gap between design and implementation of 136 limited scope of 142–6 labour ministries 147 lax application of laws 170 legal reforms 146 new protection mechanisms, need for 171 outsourcing 23 poverty statistics 140–1 “principle of reality” 145 propineros 144 recent responses to changing forms of work 146–7 self-employment 25, 26, 144 subcontracting 23 temporary contracts 145–6 TESs, new requirements for 146 trade liberalization, and 139 trade unions 146–7, 157–161 collective bargaining 159 freedom of association, and 160 market-oriented reform, and 160 need for 172 weakness 157–8 transformation of public sector employment 145 undeclared workers 140 “Washington Consensus” 137–8

worker protection 142–161 Legal irritants 10 Legal transplants outcome of 10 Lesotho gender equality 212–22 complementarities between labour and other laws 220–2 Constitution of 1993 214 draft Bill on HIV/AIDS and Employment 2004 218 enforcement of maternity leave 219 equal remuneration 220 GADP 215–216 implementation of Labour Code 219 judiciary 220 Labour Code Amendment Bill 2006 217–18 Labour Code Order No. 24 of 1992 214–15 labour laws, enforcement 218–20 legal framework 213–14 Local Government Elections (Amendment) Act 2005 221–2 Married Persons Equality Bill 2006 220–1 maternity leave 216–17 paucity of published material 213 policy framework 215–16 policy reform 213 Poverty Reduction Strategy 216 proposed labour law amendments 217–18 role of labour law in reinforcing existing inequalities 216–17 state-generated norms 222 Lok Adalats 251 Malawi trade unions 208–9 Maquila garment industry see Mexico Maternity leave Lesotho, in 216–17, enforcement of 219 Mauritius 117–20 composition of labour force 117 displacement of female workers 119 EPZ-led growth 117 erosion of welfare state 120 export-oriented growth 118–19

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female minimum wage 119 male minimum wage 119 migrant female labour 119–20 social welfare system 117 tension between trade liberalization, labour law and migration 120 universal social protections 118 Mexico 108–11 case law 155–6 Constitution of 1917 19 EPZ sector 108 gender equality 161–70 art. 123.A of Constitution 162–3 collective bargaining 165 equal pay 164–5 legal framework 162–6 limitations of enforcement system 166 Mexican Federal Labour Law 163 Mexican Social Security Law 163 minimum threshold of rights 163–4 non-wage-women workers 164 pending reforms 166 ratification of ILO Conventions 164 reforms of 1974 162 traditional patterns of inequality 165 women workers, situation of 162–6 labour law reform 108–11 maquila garment industry 166–70 characteristics 167 denunciations 168 discriminatory practices 168 ineffectiveness of labour law rules 169 low wages 167 multinationals, pressure from 169–70 vulnerability of workers 167 worsening employment situation 167–8 NAALC, and 108–11 pregnancy testing 109–11 trade unions 158 Migration female labour 119–20 labour migration 193–4 temporary 98 Minimum wage Mauritius, in 119 Multi Fibre Agreement 99 Multilateral trade 94–7 agricultural protectionism, and 99–100 colonialism, and 94–7

embedded liberalism, and 94–7 foundations 94–7 NAALC 108–11 Namibia reforms of labour law 197 NEPAD 195 Night work gender equality, and 258–59 Non-governmental organizations (NGOs) rule of law, and 75 Non-standard wage employment 16–17 “transit” of workers from formal to informal employment 16–17 Non-state legal systems 237–8 Normative pluralism 72 Occupational segregation 255–6 OECD Republic of Korea, and 127–8 Outsourcing southern Africa 204 Piece-rate wage system 256–7 Pluralism effectiveness of labour laws, and 58–9 Poverty enforcement, and 33 Latin America, in 140–1 Pregnancy testing Mexico 109–11 “Principle of reality” 145 Propineros 144 Quota-based reservations 257 Representation contracts 63 Rule of law 71–5 composite societies 72–3 ILO Constitution 74 ILO Declaration of Philadelphia 74 ineffectiveness of workers’ rights 70–84 legal pluralisms, and 72 nature of 71 NGOs, and 75 normative pluralism, and 72 political will, and 71–2 predominance of SMEs and family businesses, and 72–3 297

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Rural workers enforcement, and 32–3 Satellite enterprises southern Africa 204 Self-employment 25–8 challenging prevailing stereotype 27 effectiveness of labour laws, and 90 growth of 25–8 India 28 itinerant trade 26 Latin America 25, 26, 144 legal nature of 25 legal protection 25–6 South Africa 26, 27 South Asia 231–3, 254 southern Africa 200 Social goals promotion of 12 Social security South Asia 255 national minimum level of 244 Socio-legal categories mismatch with reality 12–32 South Africa externalization 21 self-employment 26, 27 skills development legislation 27 South Asia 225–60 bipartite negotiations 238–9 bonded labour 248–9 British law of master and servant 226 casual workers 230 child labour 248 colonial heritage 226 colonialism, and 17 consolidation of laws 249–50 constitutional remedies 251–2 constitutional structure, and 236–7 contracts of employment 226–7 Convention Nos 87 and 98 247 current debates around labour law 241–52 dispute resolution 240–1 government powers 240–1 juridification of disputes 237–41 dominant role of state 237–41 dual economy, and 234–5 economic policies, and 231 emergency measures 240

enforcement of labour laws 249–52 EPZs 234 equal pay 248 essential services 246–7 excluded workers 231–2 features of labour law 228–41 globalization 239, 260 government employees 247–8 historical evolution 226–8 human rights perspective 243–4 ILO Declaration of Fundamental Principles and Rights at Work 245–6 “industry” 229 “inflexibility” of labour law 242 informal sector 231–2 “Inspector Raj” 249 labour law and economic development 241–4 labour law, meaning 225 lack of uniformity of law 235–7 legal aid 251 legislating for informal sector 244–5 liberalization, and 239 limited scope of labour law 229–35 Lok Adalats 251 multiplicity of laws 235–7 national minimum level of social security 244 non-state legal systems 237–8 non-universal scope of labour law 259 period following independence 227–8 poor conditions and wages 259 privatization of labour administration 250 quasi-judicial powers 236 repositioning of labour law 228 self-certification 250 self-employment 231–3 trade unions 227, 241 tripartite boards 232–233 unemployment benefit 245 voluntary codes 250 women workers 233 workers’ organizations 260 “working poor” 233–4 Southern Africa 175–224 casualization 201–3 increase in 203 status of employees 202

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vulnerability 202 challenges facing labour law 186–212 changing patterns of work 198–208 codes of practice 183 colonization 177–8 contract of employment 199 courts, role of 210–11 democratization 181–3 disguised employment relationships 206 economic liberalization 180–1 employee, meaning 205 Employment Relationship Recommendation 2006 198 EPZs 197–8 evolution of labour law 177–186 externalization 203–5 bases 203 independent contractors 204–5 nature of 203 ways of achieving 203–4 “flexibility” 200 freedom of association 223 globalization 194–5 HIV/AIDS, impact of 188–93 Code on HIV/AIDS and Employment 189–90 composition of labour force 189 employees’ ignorance of protective measures 192 policies 190 programmes 190 severity of 192–93 social stigma 192 South Africa 191–92 workplace discrimination 189 ILO, and 183–4 income inequality 187 informalization 200–1 international labour standards, and 222 key features of labour law systems 182 labour inspectorates 211–12 labour law, meaning 176–7 labour market “flexibility” 196 labour migration 193–4 documented migrants 193 undocumented migrants 194 legal concept of employment 199 limited capacity of labour law institutions 208–12

market-oriented policies 181 “national interest” 179 one-party rule 178–9 outsourcing 204 percentage of labour force in formal employment 2000 201 post-independence 178–80 poverty 186–7 rebuttable presumption of employment 206–7 regional integration 196 relationship of labour law to economic objectives 194–8 responses to changing patterns of work 205–8 satellite enterprises 204 scarcity of research 176 scope of employment relationship 198–208 self-employment 200 social and economic environments 177 social and political unrest 180 socio-economic environment 186–94 socio-economic factors 222 “standard” employment relationship 198–9 structural adjustment programmes (SAPs) 180–1 subordination of labour law to political and economic objectives 223 temporary employment services (TESs) 207–8 trade unions 179–80, 208–10 affiliation with ruling political parties 210 lack of capacity 209 levels of density 209–10 “splinter unions” 209 tripartism 208 tripartism 182 unemployment 187 Southern African Development Community (SADC) 175 Charter of Fundamental Social Rights 185 Gini coefficients 1980–98 188 harmonization of labour laws 185 human development index 188 NEPAD 195 objectives 184–5 regional integration 184–6 299

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WTO, and 195 Standardization of work model 44 Structural adjustment programmes (SAPs) 180–1 Structural features of work and labour law 12–20 Subcontracting Latin America, in 23 Subjective weakness of labour protection 43–4 Supiot Report 6 new occupational status, proposal for 6 Tâcheronnat 22–3 Targeted technical assistance 130–1 Teleworking 63 Temporary contracts Latin America, in 145–6 Temporary employment services (TESs) Latin America 146 southern Africa 207–8 Teubner, G. regulatory capacity of law, on 9–10 Trade liberalization 29–32, 93–132 adjustment costs 106 comparative institutional advantage of states 103–4 distributive concerns 129–30 “fallacy of composition” effect 102 global embedded liberalism 128–32 global welfare, and 102 labour law, and 93–132 labour market regulation, and 103 labour market segmentation, and 101 labour regulatory choices, and 103, 106 low-visibility practices 107 movement of persons, and 97–8 nature of constructs 129 non-discrimination principles 130 regionalism, and 131–2 regulatory diversity and competition 104–5 regulatory impacts of globalization 104 social welfare systems, and 100 source of comparative advantage 105 state labour deregulation as form of subsidy 100 targeted technical assistance 130–1 temporary migration, and 98

women’s employment, and 101–2 Trade unions Latin America 146–7, see also Latin America Malawi 208–9 Mexico 158 South Asia 227, 241 southern Africa 179–80 see also Southern Africa Transnational corporations regulation of 4 Tripartism 182 southern African trade unions, and 208 United Nations (UN) International Convention on the Rights of the Child 82 UNDP 83 UNESCO 83 UNFPA 83 UNICEF 83 Universal Declaration of Human Rights 1948 81 United States of America bilateral trade agreement with Cambodia 122 employment law principles 125 Unprotected employment relationships 59–63 commission payments 62–3 community work 61 concession contracts 63 family helpers 60–1 franchise contracts 63 modern economy, and 60 recent forms 62–3 representation contracts 63 teleworking 63 traditional economy, and 60 traditional form of unprotected work 60–2 Uruguay subcontracting 24 Voluntary work South Asia 253 “Washington Consensus” 137–8 Welfare state Mauritius, in 120

300

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Women gender equality in Mexico see Mexico Work constructs used to think of 45 Worker protection challenges for 43 Latin America, in 142–61 see also Latin America “Working poor” 233–34 World Bank Doing Business 29 World Trade Organization Cambodia, and 124 colonialism, and 95 European Communities–Bananas report 112–13 SADC, and 195 Worst Forms of Child Labour Convention 1973 81 Zimbabwe labour market deregulation 181

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TEKLÈ

AND

IN DEVELOPING COUNTRIES

This important new study shifts the focus of scholarly and policy debates on the role of labour law in an era of globalization away from the countries and labour law systems of the North to those of the global South. Placing its analysis within the context of the current scholarly debates on the challenges and future of labour law, the book critically reviews the relevant literature and reflects upon the way in which workers’ protection tends to be conceptualized, as well as on the adequacy of the legal categories and tools used to further it, with special attention given to the effectiveness of labour legislation in promoting gender equality. The book argues that, in addition to problems in the application of labour law, there is a mismatch between the realities of the developing world and the social, economic and political underpinnings of labour law. This dates back to its development in post-colonial African and South Asian countries and, to a lesser extent, in Latin American ones. The divergence persists, while new manifestations have appeared due to globalization, leaving a significant number of workers outside the scope of labour law and in need of protection. Against this background, the book explores regulatory and policy responses at different governance levels to enhance the scope and application of labour regulation in Latin America, South Asia and southern Africa.

LABOUR LAW AND WORKER PROTECTION IN DEVELOPING COUNTRIES

LABOUR LAW WORKER PROTECTION

ILO

TZEHAINESH TEKLÈ

LABOUR LAW WORKER PROTECTION

AND

IN DEVELOPING COUNTRIES