United Kingdom Labour Law - International Labour Law

International Labour Law

Since the industrial revolution the labour movement has been concerned how economic globalisation would weaken the bargaining power of workers, as their employers could move to hire workers abroad without the protection of the labour standards at home. Following World War One, the Treaty of Versailles contained the first constitution of a new International Labour Organisation founded on the principle that "labour is not a commodity", and for the reason that "peace can be established only if it is based upon social justice". The primary role of the ILO has been to coordinate principles of international labour law by issuing Conventions, which codify labour laws on all matters. Members of the ILO can voluntarily adopt and ratify the conventions by enacting the rules in their domestic law. For instance, the first Hours of Work (Industry) Convention, 1919 requires a maximum of a 48 hour week, and has been ratified by 52 out of 185 member states. 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 present constitution of the ILO comes from the Declaration of Philadelphia 1944, and under the Declaration on Fundamental Principles and Rights at Work 1998 classified eight conventions as core. Together these require freedom to join a union, bargain collectively and take action (Conventions Nos 87 and 98) abolition of forced labour (29 and 105) abolition labour by children before the end of compulsory school (138 and 182) and no discrimination at work (Nos 100 and 111). Compliance with the core Conventions is obligatory from the fact of membership, even if the country has not ratified the Convention in question. To ensure compliance, the ILO is limited to gathering evidence and reporting on member states' progress, so that publicity will put public and international pressure to reform the laws. Global reports on core standards are produced yearly, while individual reports on countries who have ratified other Conventions are compiled on a bi-annual or perhaps less frequent basis.

Because the ILOs enforcement and sanction mechanisms are weak, there has been significant discussion about incorporating labour standards in the World Trade Organisation's operation, since its formation in 1994. The WTO oversees, primarily, the General Agreement on Tariffs and Trade which is a treaty aimed at reducing customs, tariffs and other barriers to free import and export of goods, services and capital between its 157 member countries. Unlike for the ILO, if the WTO rules on trade are contravened, member states who secure a judgment by the Dispute Settlement procedures (effective a judicial process) may retaliate through trade sanctions. This could include reimposition of targeted tariffs against the non-compliant country. 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. An explicit reference to core labour standards could allow action where a WTO member state is found to be in breach of ILO standards. Opponents argue that such an approach could backfire and undermine labour rights, as a country's industries, and therefore its workforce, are necessarily harmed but without any guarantee that labour reform would take place. Furthermore it was argued in the Singapore Ministerial Declaration 1996 that "the comparative advantage of countries, particularly low-age developing countries, must in now way be put into question." Accordingly it is argued that countries ought to be able to take advantage of low wages and poor conditions at work as a comparative advantage in order to boost their exports. Similarly it is disputed that business will relocate production to low wage countries from higher wage countries such as the UK, because that choice depends mostly on productivity of workers. The view of many labour lawyers and economists remains that more trade, in the context of weaker bargaining power and mobility for workers, still allows for business to opportunistically take advantage of workers by moving production, and that a coordinated multilateral approach with targeted measures against specific exports is preferable. While the WTO has yet to incorporate labour rights into its procedures for dispute settlements, many countries began to make bilateral agreements that protected core labour standards instead. Moreover, in domestic tariff regulations not yet touched by the WTO agreements, countries have given preference to other countries who do respect core labour rights, for example under the EU Tariff Preference Regulation, articles 7 and 8.

While the debate over labour standards applied by the ILO and the WTO seeks to balance standards with free movement of capital globally, conflicts of laws (or private international law) issues arise where workers move from home to go abroad. If a worker from the UK performs part of her job in other countries (a "peripatetic" worker) or if a worker is engaged in the UK to work as an expatriate abroad, an employer may seek to characterise the contract of employment as being governed by other countries laws, where labour rights may be less favourable than at home. In Lawson v Serco Ltd three joined appeals went to the House of Lords. Mr Lawson worked for a multinational business on Ascension Island, a British territory as a security guard. Mr Botham worked in Germany for the Ministry of Defence. Mr Crofts, and his copilots, worked mostly in the air for a Hong Kong airline, though his contract stated he was based at Heathrow. All sought to claim unfair dismissal, but their employers argued they should not be covered by the territorial reach of the Employment Rights Act 1996. Lord Hoffmann held that, first, if workers are in Great Britain, they are covered. Second, peripatetic workers like Mr Crofts would be covered if they are ordinarily working in the UK, but that this could take account of the company's basings policy. Third, if workers were expatriate the general rule was they would not be covered, but that exceptionally if there was a "close connection" between the work and the UK they would be covered. This meant that Lawson and Botham would have claims, because both Lawson and Botham's position was in a British enclave, which made a close enough connection. Subsequent cases have emphasised that the categories of expatriate worker who will exceptionally be covered are not closed. So in Duncombe v Secretary of State for Children, Schools and Families an employee of the UK government teaching in EU schools could claim unfair dismissal because their employer held their connection close to the UK. Then, in Ravat v Halliburton Manufacturing and Services Ltd an employee in Libya, working for a German company that was part of the American multinational oil conglomerate Halliburton, was still covered by UK unfair dismissal rights because he was given an assurance that his contract would come under UK law. This established a close connection. The result is that access to mandatory employment rights mirrors the framework for contractual claims under the EU Rome I Regulation article 8. It is also necessary that a UK court has jurisdiction to hear a claim, which under the Brussels I Regulation article 19, requires the worker habitually works in the UK, or was engaged there. Both EU Regulations emphasise that the rules should be applied with the purpose of protecting the worker.

As well as having legal protection for workers rights, an objective of trade unions has been to organise their members across borders in the same way that multinational corporations have organised their production globally. 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. However, this kind of coordination has been recently been brought to a halt in the European Union in two controversial decisions. In Laval Ltd v Swedish Builders Union a group of Latvian workers were sent to a construction site in Sweden on low pay. The local Swedish Union took industrial action to make Laval Ltd sign up to the local collective agreement. Under the Posted Workers Directive, article 3 lays down minimum standards for workers being posted away from home so that workers always receive at least the minimum rights that they would have at home in case their place of work has lower minimum rights. Article 3(7) goes on to say that this "shall not prevent application of terms and conditions of employment which are more favourable to workers". Most people thought this meant that more favourable conditions could be given than the minimum (e.g. in Latvian law) by the host state's legislation or a collective agreement. However, in an interpretation seen as astonishing by many, the ECJ said that only the posting state could raise standards beyond its minimum for posted workers, and any attempt by the host state, or a collective agreement (unless the collective agreement is declared universal under article 3(8)) would be an infringement of the business' freedom to provide services under TFEU article 56. 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. However, in The Rosella, the ECJ also held that a blockade by the International Transport Workers Federation against a business that was using an Estonian flag of convenience (i.e. saying it was operating under Estonian law to avoid labour standards of Finland) infringed the business' right of free establishment under TFEU article 49. The ECJ said that it recognised the workers' "right to strike" in accordance with ILO Convention 87, but said that its use must be proportionately to the right of the business' establishment. 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.