Outside cp knowledge icsi8[1][1][1].4.06

INSTITUTE OF COMPANY SECRETARIES 8 th April 2006 LABOUR LAW REFORMS AND GLOBALISED MARKETS by: A.Malik Deputy labour commissioner Haryana

INSTITUTE OF COMPANY SECRETARIES
GLOBALISED MARKETS AND COMPETITION.
THE CHANGING WAYS OF CONDUCTING BUSINESS.
RAPID CHANGE IN TECHNOLOGIES.
MOBILITY OF LABOUR.
NEED FOR FLEXIBILITY OF ORGANISATIONS
NEED TO CATER TO CLIENTS LOCATED IN DIFFERENT TIME ZONES OF THE WORLD.
SOCIAL AND CULTURAL CHANGE DUE TO SO MANY CHANGES.
LAWS MUST CONFORM TO THE NEED OF CHANGING TIMES.
HOW TO CONFORM TO THE REQUIREMENTS OF SOCIAL CLAUSE OF THE WTO WITHOUT HARM TO THE INDUSTRY.
CALL FOR LABOUR LAW REFORMS

The discussion of social conditions in international trade concerns the relationships among trade, labour standards, economic growth and socio-economic development.
The interest in these relationships is as old as the theory of international trade.
Necker, the finance minister of Louis XIV, is reported to have observed that a country that abolished work on Sundays would place itself at a disadvantage with countries where work continued seven days a week.

The relationship between labour standards and trade is normally discussed when an ailing industry needs to be restructured or in a case of regional economic integration.
Managers of labour intensive industries tend to explain their economic misfortunes by pointing to foreign competition from goods produced by what they call "cheap labour." As for regional economic integration, the creation of a common market requires the gradual harmonisation of economic, monetary, fiscal and also social policies and labour reforms.

QUESTIONS ARISING
Why is there renewed interest in the relationship between trade and labour standards and labour reforms?
What are the economic arguments?
What is the appropriate forum in which to discuss and take action on trade and labour standards?
How do we select core trade-related labour standards?
How do we promote trade-related labour standards and labour reforms?

1.Why is there renewed interest in the relationship between trade and labour standards and compliance of labour laws?
This is from a combination of arguments that have been put forward in recent years by economists, labour union leaders, government officials, businessmen and human rights advocates
Neo-liberal economists believe that government regulation of labour conditions is an undesirable interference with labour markets and that it produces inefficient market outcomes.
Labour union leaders in developed countries argue that the rise of unemployment and the disparity in wage differentials between workers in their countries is the result of the liberalisation of world trade, and in particular trade between countries with low labour standards and countries with high standards.

Human rights advocates, noting that certain fundamental labour rights, like freedom of association or the prohibition of forced labour and child labour, are also fundamental human rights, argue that such rights contribute to socio-economic development and should be observed by all countries as a matter of public policy.
Governments of developed countries , noting the growing mobility and interdependence of factors of production as well as the internationalisation of methods of production and marketing, call for trade-related rules on investment, competition policy, environment and also labour. Certain of these governments have made proposals to establish a formal link between core labour standards and international trade and investment. In their view, countries where core labour standards are not observed should not benefit from the worldwide liberalisation of rules on international trade and investment.

QUESTIONS ARISING
2. What are the economic arguments?
What is the evidence from economic and international trade theory? Do core labour standards improve or impede economic efficiency? Do core labour standards strengthen foreign trade or does foreign trade strengthen core labour standards? Economic studies on the interaction of international trade and fundamental labour standards are few, conflicting and inconclusive.

QUESTIONS ARISING
3. What is the appropriate forum in which to discuss and take action on trade and labour standards?
- After globalization as it has happened the obvious choice is the WTO

QUESTIONS ARISING
4. How do we select core trade-related labour standards?
5. How do we promote trade-related labour standards?

The core labour standards have been crystallized to nine major issues based on --
The eleven conventions of the International Labour Organization,
The UN’s Universal Declaration of Human Rights and
The Convention on Rights of the Child.
These 9 major issues are as follows -

1. Child Labor: No workers under the age of 15; minimum lowered to 14 for countries operating under the ILO Convention 138 developing-country exception; remediation of any child found to be working.
2. Forced Labor: No forced labor, including prison or debt bondage labor; no lodging of deposits or identity papers by employers or outside recruiters.

3. Health and Safety: Provide a safe and healthy work environment; take steps to prevent injuries; regular health and safety worker training; system to detect threats to health and safety; access to bathrooms and potable water.
4. Freedom of Association and Right to Collective Bargaining: Respect the right to form and join trade unions and bargain collectively; where law prohibits these freedoms, facilitate parallel means of association and bargaining.

5.Discrimination: No discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age; no sexual harassment
6.Discipline: No corporal punishment, mental or physical coercion or verbal abuse

Working Hours: Comply with the applicable law but, in any event, no more than 48 hours per week with at least one day off for every seven day period; voluntary overtime paid at a premium rate and not to exceed 12 hours per week on a regular basis; overtime may be mandatory if part of a collective bargaining agreement.
Compensation: Wages paid for a standard work week must meet the legal and industry standards and be sufficient to meet the basic need of workers and their families; no disciplinary deductions

9.Management Systems: Facilities seeking to gain and maintain certification must go beyond simple compliance to integrate the standard into their management systems and practices.

LABOUR REFORMS AND GLOBALISED MARKETS
THERE CANNOT BE ANY COMPROMISE ON CORE ISSUES LISTED ABOVE OR ELSE IT WILL ATTRACT TRADE BARRIERS.
REFORMS MUST CONFORM TO THE NEEDS OF THE EMERGING BUSINESS SCENARIO.
THERE SHOULD BE NO INTERFERENCE FROM THE LABOUR LAWS BEYOND THE FUNDAMENTAL ISSUES OF MINIMUM STANDARDS.
THERE HAS TO BE UNIFORMITY IN VARIOUS CONCEPTS AND DEFINITIONS IN LAWS RELATED TO DIFFERENT ASPECTS OF LABOUR RELATIONS.
THE ISSUES OF INDUSTRIAL GROWTH WITH INCREASED AND BETTER EMPLOYMENT OPPORTUNITIES HAS TO BE THE FOCUS.
THE RECOMMENDATIONS OF THE SECOND NATIONAL COMMISSION ON LABOUR ARE VERY EXHAUSTIVE AND GIVE CONSTRUCTIVE RECOMMENDATIONS FOR LABOUR REFORMS.

CONCLUSIONS
If an organization has to do business globally then it is not only necessary to follow the standards but is also necessary to genuinely ensure good management practices so that these issues become secondary or only a base for the harmonious working of an organization. No buyer in the international market is prepared to tolerate any insecurity to his business on account of hygiene, quality, uninterrupted supply of goods and most of all image as a good and morally upright business oraganisation. So compliance of labour laws is not only is essential but makes good business sense. and labour law reforms are as important to facilitate compliance.

THANK YOU

Outside cp knowledge icsi8[1][1][1].4.06

by Pavan Kumar Vijay

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Outside cp knowledge icsi8[1][1][1].4.06 Presentation Transcript