Negotiating for Decent Work in the Age of Globalization in South Asia and China

National labor markets face common challenges created by globalization dynamics.

In terms of product and process innovation, greater competition and constant adoption to changing market, the demands of globalization are setting standards that will become the main characteristics of the international market, said Athadua Seneviratne, Minister of Labour Relations and Manpower participating as the Chief Guest at the Tripartite Meeting held on Negotiating for Decent Work in the Age of Globalization in South Asia and China, on 26th October at Ahungalla, Sri Lanka.

With the changes in productive process and the transformation of the employment relationships, it is inevitable to design new and more efficient strategies to maintain industrial harmony, the Minister added. He said that all such strategies should be premised on the principle that each social partner seeks protecting his interests, but at the same time respect and promotes the interests of the others, thus creating a spirit of dialogue and cooperation.

“The labour relation in Sri Lanka which is one of the main causes for major industrial disputes is non-recognition of trade unions. In most instances it is the failure of mutual respect of social partners at workplaces. Therefore the culture of labour relations that we promote should be based on recognition of human dignity and reappraising of human work. It would thus create an environment of dialogue and agreement among the social partners.”

Sri Lanka has experienced many crisis situations affecting its citizens since the entering of the 21st millennium, viz tsunami, the food crisis, fuel and natural disasters, the global economic down turn etc.

Sri Lanka has initiated dialogues at national, provincial and enterprise level to address the issue of unemployment and taken a few administrative measures such as expeditious action on appeals from the employers for relief and defer payment of social security contributions, shorter working periods etc. “We have also introduced stimulus packages for which the entitlement is determined on the criteria of maintaining 2008 level of employment. These measures are basically introduced to minimize the negative impact on employment.”

In the post conflict environment the main challenges ahead in Sri Lanka are reintegration, reconstruction, generation of employment opportunities, promoting decent work and restoring normalcy and democratic processes and institutions in the war affected areas.

The government of Sri Lanka and the social partners has joined hands towards building a new era of peace, reconstruction, and reconciliation in the country. At the ILO 90th Anniversary celebrations held in April 2009 the tripartite constituents launched and signed a Framework for Social Dialogue committing themselves to work jointly to use social dialogue as a tool to achieving goals of Decent Work Country Programme.

Sri Lanka is committed to the promotion of collective bargaining in the country, though we are aware of the existing constraints in full implementation of the convention such as bargaining in the public sector, in the informal sector and the effects of new employment relationships.
Collective bargaining would be the most effective way in reconciling the legitimate aspirations of workers and economic constraints faced by the employers. The application of the convention would be successful, if only the parties to collective bargaining act in good faith, said Minister Senevirathne.

The tripartite meeting is an unprecedented one as nowhere in Asia or globally has such an event taken place to mark the right to collective bargaining, a core value of the ILO as it celebrates 60 years of existence as an important tool for labour market governance, inextricably linked with freedom of association, said Tine Staermose, Director ILO Office for Sri Lanka, “Both rights are rooted in the ILO Constitution and the Declaration of Philadelphia.”

At the 1995 World Summit on Social Development in Copenhagen and in the 1998 ILO Declaration of Fundamental Principles and Rights at Work, the core value has been reaffirmed by the international community.

The governing board members of the ILO is in the process of providing and improving technical advisory services to the ILO constituencies in pursuance of the social dialogue strategic objective including in relation to collective bargaining, she said.

In the 14th Asian Regional Meeting held in 2006 in Busan, the social partners and the governments decided to improve effective labour market governance by adopting, implementing and reviewing labour laws and social policies against the objectives of full and productive work sought by the Decent Work Agenda. The meeting also requested the Office to assist the governments and the social partners in developing further initiatives to promote the ratification and full implementation of the ILO Conventions concerning freedom of association and the effective recognition of the right to organize and bargain collectively and to promote the development of up to date and reliable statistics and data gathering to assist in fact based research, comparison and decision making.

The Tripartite Meeting Negotiating for Decent Work in the Age of Globalization in South Asia and China will follow up on all the recommendation of the ILO Declaration of Fundamental Principles and Rights at Work and build up on current in depth research being carried out by the ILO globally, in South Asia and in China.

The Tripartite Meeting would attempt to have a better understanding of the current status and evolution of collective bargaining in South Asia and China and the way it has been affected by globalization, understand the capacity that collective bargaining has to adapt and evolve in the context of a rapidly changing industrial relations environment, responding to pressures arising from globalization, analyze and understand the role that collective bargaining has played in all regions to mitigate the effects of the crisis at all levels of bargaining with a particular focus on the enterprise, and promote collective bargaining as a fundamental right and discuss in what ways it can be promoted and further used to contribute to the Decent Work Agenda of the ILO in South Asia and China.

Research has demonstrated that countries with highly coordinated collective bargaining tend to have less inequality in wages, lower and less persistent unemployment, and fewer and shorter strikes than countries where collective bargaining is less established. Collective bargaining has proven to be a useful tool to deal with the negative effects of economic crisis and the best mechanism to find common solutions to the current challenges in the workplace, said Leyla Tegmo-Reddy, Director, ILO Sub Regional Office for South Asia, New Delhi.

She added that still severe limitations continue to exist in South Asia and the rest of the world in law and practice for organizations to exercise their right fully; legal constraints to form associations in a variety of categories of workers, including workers in agriculture and in the public sector as well as domestic workers and workers in export processing zones.

She emphasized that there should be a legislative framework which provides the necessary guarantees, institutions to facilitate collective bargaining and to address possible conflicts and an efficient labour administration are essential for freedom of association and collective bargaining.

“The role of governments of providing an enabling environment is of paramount importance.” According to Reddy, globalization has resulted in more intense competition and economic liberalization has also brought some challenges for the full development of the right to collective bargaining in South Asia.

The sign of the times is not better for the unions. The emergence of sectors where unions do not have a tradition of organizing; repeated violations of the right to form organizations for a number of categories of workers, the difficulties for the social partners, including employers, to reach out to groups of workers particularly those who are most vulnerable, is weakening the trade union movement in South Asia.

Tayo Fashoyin, Director Industrial and Employment Relations (Dialogue) Department International Labour Office, Geneva, said that research evidence has shown the system of joint determination to have helped in building cooperation and trust between employers and their workers, “just as it has the capacity to promote efficient use of the human and nonhuman resources for enterprise productivity and competitiveness. It is a system of management which has the potential for building a solid basis for social partnership and industrial governance. “Through this method of dialogue and negotiation, grievances and disputes are resolved often amicably by the parties themselves.

The Employment Relations Department works in collaboration with several other units in the ILO, the Workers’ Activities Bureau and the Employers’ Activities Bureau, both of which are responsible for guiding their respective constituent in making the best and effective use of collective bargaining and the consultative machinery.

“Organizations of workers and employers must be free, independent and strong enough to make effective use of the collective bargaining machinery. There should not legal or administrative impediments that make it impossible for either side to realize the objective of joint determination of the conditions of employment.”

Changhee Lee, a Senior Specialist on IR and Social Dialogue of the ILO Office for China and Mongolia said that in general non union firms have higher internal wage inequality than unionized firms. Unions with democratic organizational strengths have less internal wage inequality and union autonomy does not appear to have any impact on wage inequality.
However existence of unions alone does not have any effect on supplementary pension and medical benefits, locations are important. Unions with democratic management practices are able to increase fringe benefits for workers.

Good unions produce some desirable outcomes and they can improve intra firm wage distribution. Good unions are growing, but not yet a majority.

- Asian Tribune -