INTERNATIONAL LABOR AFFAIRS ALERT
April 1998
NEW CONTRACT LABOR CONVENTION THREATENS
TO OVERTURN TRADITIONAL EMPLOYMENT RELATIONSHIP
PROCEDURAL NOTE
INTRODUCTION
The June 1997 Conference of International Labor Organization (ILO) saw the completion of the first year’s discussion of a Contract Labor Convention (and accompanying Recommendation), an international labor treaty that seeks to radically change the employment relationship as it has been understood for decades. The definition of contracting in the text of the Convention not only covers the employment relationship, however, but would also reach into the area of commercial law. The use of contracting of all kinds has greatly increased the competitive advantage of U.S. business by allowing corporations to concentrate on core activities while maintaining a high degree of flexibility to meet changing demand. The AFL-CIO and the international union movement have long opposed the use of contract labor, and now have an international instrument that will provide them ammunition to attack corporations that use it.
ILO procedures regarding Conventions call for a topic to be debated for two years before it is finalized. Member states are encouraged to ratify the Convention, which then takes on the status of international treaty law. Many members, particularly European, ratify Conventions in order to satisfy politically powerful trade union constituencies.
CLINTON ADMINISTRATION ENDORSES UNRATIFIABLE CONVENTION
The Clinton Administration, through the International Labor Affairs Bureau of the Department of Labor, has supported this Convention, either by agreeing to amendments that do further damage, or by remaining silent during the debate. As is the case with other recent ILO Conventions such as Homework and Part time work, the Department of Labor has voiced support for instruments knowing full well that it would be impossible for the Senate to ratify them. Indeed these Conventions would never even be brought before the tripartite review panel established for that purpose. Thus the Administration would allow restrictions to be imposed on international business operations that it would never conceive of imposing on domestic business. Moreover, as the largest users of contract labor, governments all over the world will be among the most adversely effected by this Convention. It is therefore critical that Congress and the Administration hear from corporate America regarding your opposition to this flawed instrument. Attached is a list of Administration and Congressional contacts whom you may target.
IMPLICATIONS OF CONTRACT LABOR CONVENTION
JOINT LIABILITY & VAGUE DEFINITIONS
Perhaps the most important consequence of the Convention would be to impose joint liability between the end user firm and the contract worker. Such liability would include everything from occupational safety and health to wages and hours.
PRESENT MAJOR PROBLEMS
Moreover, the definition of contract labor is altogether unclear, and varies widely from country to country and culture to culture. Because it means very different things in English than in French and Spanish, the term “Contract Labor,” and whatever international labor treaty that attempts to regulate it, will be practically impossible to monitor, and open to vastly different interpretations.
CONSEQUENCES TO COMPANIES’ BOTTOM LINE POTENTIALLY ENORMOUS
The apparent goal of the instrument is to discourage, if not to prevent, the use of contract labor by imposing on employers the same range of responsibilities and obligations as in a traditional employment relationship. One of the advantages of contracting has been to allow corporations to concentrate on core business activities, and thereby free up resources that would otherwise be spent on peripheral activities.
Further damage will be caused by other countries adopting the language of the Convention, regardless of whether they actually ratify. Many countries, particularly in Africa and Latin America, simply transfer ILO language into their national legislation, without fully exploring the implications. The consequence to a country that takes on the text of the Convention is a much more uncertain and unpredictable investment climate in the eyes of the potential investor.
TRADE UNION ATTACKS STRENGTHENED
The main goal of the trade union movement is to achieve an international instrument that will allow it to attack corporations for utilizing contracting and sourcing on a global scale. The International Confederation of Free Trade Unions’ Model Code of Conduct already includes a reference to this Convention, even though the instrument has not yet been completed. Many governments around the world, led by the European Union, and to a lesser extent, the United States, have gone along with this effort.
BUSINESS COMMUNITY ACTION
Corporations should become engaged by lobbying in Congress, at the State Department, and at the Department of Labor’s International Labor Affairs Bureau and asking that the U.S. Government cease to support, and indeed begin to oppose, the ILO’s Contract Labor Convention as written. Individuals to be contacted are listed below; attached is a sample letter which you are encouraged to use. Branches and subsidiaries in Europe, Asia, Latin America, and Africa should be encouraged to carry out a similar campaign.
Joseph Vella, Vice-President of Employee Relations at Federated Department Stores, has represented U.S. business at the Contract Labor discussion, and will do so again at this year’s Conference in June 1998. Those interested in supporting Joe in his efforts to lessen the potential damage done by this instrument may contact him at (513) 579-7802; fax: (513) 579-7719. Ed Potter, USCIB International Labor Counsel and head of the U.S. business delegation to the June Conference, may be contacted at (202) 789-8618; fax: (202) 789-8684. For further information on this issue and other activities of the USCIB’s Industrial Relations Committee, please contact John Ritchotte at (202) 354-4854.
NOTE: The sample letters to Congressional and Administration contacts can be found on our website at www.uscib.org under the Policy Positions section. The precise location is
www.imex.com/uscib/frame4c.htm Look for it under Industrial Relations.
CONTACTS FOR CONTRACT LABOR LETTER
Andrew Samet, Acting Deputy Under Secretary
International Labor Affairs Bureau, Department of Labor
200 Constitution Ave, NW Washington, DC 20210
Tel: (202) 219-6043 Fax: (202) 219-5980
Daniel Sweeney, Wage and Hour Division
Room S 3516 Department of Labor
200 Constitution Ave, NW Washington, DC 20210
(U.S. Government Representative, Contract Labor)
Tel: (202) 219-4907 Fax: (202) 219-5122
Alexis M. Herman, Secretary, Department of Labor
200 Constitution Ave, NW Washington, DC 20210
Tel: (202) 219-8271 Fax: (202) 219-8822
LEGISLATIVE BRANCH
HOUSE EDUCATION AND THE WORKFORCE COMMITTEE
Rayburn House Office Bldg
Room 2181
Washington, DC 20515-6065
Republicans
Ctte phone and fax:
ph: (202) 225-4527
fax: (202) 225-9571
EMPLOYER-EMPLOYEE RELATIONS SUBCOMMITTEE
Republicans
(same address and phone as above)
1.William F. Goodling, PA, Chairman
2.Thomas E. Petri, WI, Vice Chairman
3.Marge Roukema, NJ
4.Harris W. Fawell, IL
5.Cass Ballenger, NC
6.Bill Barrett, NE
7.Peter Hoekstra, MI
8.Howard P. “Buck” McKeon, CA
9.Michael N. Castle, DE
10.Sam Johnson, TX
11.James M. Talent, MO
1.Harris W. Fawell, IL, Chairman
2.Joe Knollenberg, MI, Vice Chairman
3.James M. Talent, MO
4.Thomas E. Petri, WI
5.Marge Roukema, NJ
6.Cass Ballenger, NC
7.William F. Goodling, PA
12.James C. Greenwood, PA
13.Joe Knollenberg, MI
14.Frank Riggs, CA
15.Lindsey O. Graham, SC
16.Mark E. Souder, IN
17.David M. McIntosh, IN
18.Charlie Norwood, GA
19.Ron Paul, TX
20.Bob Schaffer, CO
21.John E. Peterson, PA
22.Fred Upton, MI
23.Nathan Deal, GA
24.Van Hilleary, TN
25.Joe Scarborough, FL
---------------------------
Room 2170
Washington, DC 20515-6128
Republicans
fax: (202) 225-2035
1. Benjamin A. Gilman, NY, Chairman
2. William F. Goodling, PA
3. James A. Leach, IA
4. Henry J. Hyde, IL
5. Doug Bereuter, NE
6. Christopher H. Smith, NJ
7. Dan Burton, IN
8. Elton Gallegly, CA
9. Ileana Ros-Lehtinen, FL
10. Cass Ballenger, NC
11. Dana Rohrabacher, CA
12. Donald A. Manzullo, IL
13. Edward R. Royce, CA
14. Peter T. King, NY
15.Jay Kim, CA
16.Steve Chabot, OH
17.Marshall “Mark” Sanford, SC
18.Matt Salmon, AZ
19.Amo Houghton, NY
20.Tom Campbell, CA
21.Jon D. Fox, PA
22.John M. McHugh, NY
23.Lindsey O. Graham, SC
24.Roy Blunt, MO
25.Kevin Brady, TX
SENATE COMMITTEE ON LABOR AND HUMAN RESOURCES
Senate Hart Office Building
Room 835
Washington, DC 20510-6300
Republicans
fax: (202) 228-5044
James M. Jeffords, Vermont, Chair
Dan Coats, Indiana
Judd Gregg, New Hampshire
William Frist, Tennessee
Mike DeWine, Ohio
Mike Enzi, Wyoming
Tim Hutchinson, Arkansas
Susan Collins, Maine
John Warner, Virginia
Mitch McConnell, Kentucky
SENATE COMMITTEE ON FOREIGN RELATIONS
Senate Dirksen Office Bldg
Room 450
Washington, DC 20510-6225
Republicans
fax: (202) 224-0836
Jesse Helms, North Carolina, Chairman
Richard G. Lugar, Indiana
Paul Coverdell, Georgia
Charles Hagel, Nebraska
Gordon Smith, Oregon
Craig Thomas, Wyoming
Rod Grams, Minnesota
John Ashcroft, Missouri
William Frist, Tennessee
Sam Brownback, Kansas
SAMPLE (for Congress)
(available on the USCIB website at www.imex.com/uscib/frame4c.htm
under Industrial Relations)
Dear Sir or Madam:
I wish to alert you to an upcoming international labor treaty that will seriously hinder the ability of the U.S. corporations to do business around the world. The International Labor Organization’s Contract Labor Convention will be finalized at its June 1998 Conference, and I urge you to contact the Department of Labor and express your opposition to this treaty. The International Labor Affairs Bureau of the Department of Labor has not opposed this instrument, even though it is clear that it would never be ratified by the U.S. Senate. Thus the Administration would allow restrictions to be imposed on international business operations that it would never conceive of imposing on domestic business. Moreover, as the largest users of contract labor, governments all over the world will be among the most adversely effected by this Convention.
The Convention seeks to radically change the employment relationship as it has been understood for decades. The definition of contracting in the text of the Convention not only covers the employment relationship, however, but would also reach into the area of commercial law. The use of contracting of all kinds has greatly increased the competitive advantage of U.S. business by allowing corporations to concentrate on core activities while maintaining a high degree of flexibility to meet changing demand. The AFL-CIO and the international union movement have long opposed the use of contract labor, and now have an international instrument that will provide them ammunition to attack corporations that use it.
Further damage will be caused by other countries adopting the language of the Convention, regardless of whether they actually ratify. Many countries, particularly in Africa and Latin America, simply transfer ILO language into their national legislation, without fully exploring the implications. The consequence to a country that takes on the text of the Convention is a much more uncertain and unpredictable investment climate in the eyes of the potential investor.
Please contact Andrew Samet, Acting Deputy Undersecretary and head of the Internatonal Labor Affairs Bureau, or Dan Sweeney, Wage and Hour Division at the Department of Labor and U.S. Government representative on the Contract Labor debate, to express your opposition to this Convention.
Thank you for your attention to this matter.
Sincerely,
