International labour law

The International Monetary Fund and the World Bank have indirectly driven changes in labour policy by demanding structural adjustment conditions for receiving loans or grants.

[1] While it was evident that support for workers’ rights was inconsistent across international boundaries, activists originally only employed the use of moral suasion to deal with differences in labour standards.

[1] As mandated by Part XIII of the Treaty of Versailles, the ILO was created as a branch of the League of Nations in order to address all conceivable aspects of labour rights.

Despite a lack of any formal means of coercion, the ILO then urged its 44 original member countries to adopt and ratify conventions limiting oppressive labour market practices.

With the deregulation of major markets and significant increases in the volume of international trade, attempts to make manufacturing sectors more attractive to retailers saw extreme downward pressure placed on the quality of working conditions in lower income regions of the world.

[12] This gave rise to growing concerns about a global race to the bottom, in which governments take part in the iterative loosening of labour protections in attempts to aid the international competitiveness of export-oriented industries.

The trade sanctions model in the United States, also working as an incentives approach of sorts, appears to have been successful in forcing U.S. officials to encourage countries that are the subject of complaints to address severe violations of labour standards, as defined in the legislation.

The model, embodied in the North American Agreement on Labor Cooperation (NAALC), is different from other compulsory methods in that it opposes any imposition of common standards schemes.

[13] Instead, the multilateral enforcement model requires that signatories to agreements like the NAALC make firm commitments to existing labor standard structures within their respective domestic spheres.

Rather than encouraging the inclusion of a baseline set of workers’ rights, the multilateral enforcement model merely requires that its members strive to create unbiased administrative bodies that judge whether or not appropriate measures are being taken to ensure the continued support of domestic labour standards.

[17] Additionally, U.S. apparel retailers, such as Nike, the Gap, and Liz Claiborne, have recently attempted to put in place a system of regulations to prevent their products from being produced under sweatshop conditions.

When they choose to respond to outside pressures, companies use means such as public announcements, local religious leaders, human rights activists, university professors, and labor representatives, among others, to implement compliance and a system of monitoring.

Finally, a variation of the voluntary standards models is one of certification, which began in October 1997 with the issuance of SA (Social Accountability) 8000 by the Council on Economic Priorities Accrediting Agency (CEPAA).

The resulting certification then serves the purpose of assuring customers that goods and services provided by certified firms have been produced by workers who are offered labour standards that meet at least a minimally acceptable level.

The UK ultimately refused to ratify the Convention, as did many current EU members states, although the Working Time Directive adopts its principles, subject to the individual opt-out.

The ILO provides a vehicle for investigating cases of noncompliance through representations, filed by employer or worker organisations, or complaints, lodged by another member that also ratified the convention.

Because the ILOs enforcement and sanction mechanisms are weak, there has been significant discussion about incorporating labour standards in the World Trade Organization's operation, since its formation in 1994.

Proponents of an integrated approach have called for a "social clause" to be inserted into the GATT agreements, for example by amending article XX, which gives an exception to the general trade barrier reduction rules allowing imposition of sanctions for breaches of human rights.

In order to meet the balance of power that comes from ability of businesses to dismiss workers or relocate, unions have sought to take collective action and strikes internationally.

This decision was implicitly reversed by the European Union legislature in the Rome I Regulation, which makes clear in recital 34 that the host state may allow more favourable standards.

The result is that the European Court of Justice's recent decisions create a significant imbalance between the international freedom of business, and that of labour, to bargain and take action to defend their interests.

[38] On 7 February, 1992, the signing of the Maastricht Treaty made it easier to pass legislation on less controversial issues, such as health and safety, nondiscrimination, and consultation with workers.

However, despite these difficulties and a complex decision-making structure designed to include consultation with the governments of all member states, the various EC policy-making institutions and the related parties have succeeded in creating cross-national legislation for labour standards under its social policy umbrella.

[4] Under articles 24 and 26 of the ILO Constitution, different groups of people may indicate to the governing body that a certain state is not complying with an international labor standard that they have previously ratified.

From the 1911 Triangle Shirtwaist Factory fire to the 2013 fertilizer explosion in West, Texas, industrial disasters negatively affect the lives of workers and their dependents with high associated economic costs.

[citation needed] A critique of international labour standards historically raised by right-of-centre economists is that they distort market forces, thus inhibiting employment and income.

[12] According to right-wing economists, global free trade allows countries to specialise in those activities in which they have a comparative advantage and to reap mutual gains through exchange.

[2] Empirical evidence provided by Berik and Rodgers (2006) suggests that any costs of raising labour standards can easily be offset by incentives encouraging foreign direct investment (FDI) and exports.

[2] Another prominent argument against international labour standards is the notion that any attempt to harmonise set benchmarks for acceptable working conditions disregards, to some extent, the current state of an individual country’s unique economic and social climates.

[65] The study concludes that in theoretical cases, market failures that allow a breakdown in working environment conditions are most adequately remedied by labour standards.