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86th Session
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Report V (2A)
Contract labour
Fifth item on the agenda
International Labour Office Geneva
ISBN 92-2-110657-8
ISSN 0074-6681
CONTENTS
Replies received and commentaries
The first discussion of the question of contract labour took place at the 85th Session (1997) of the International Labour Conference. Following that discussion, and in accordance with article 39 of the Standing Orders of the Conference, the International Labour Office prepared and communicated to the governments of member States a report(1) containing a proposed Convention and a proposed Recommendation concerning contract labour, based on the conclusions adopted by the Conference at its 85thSession.
Governments were invited to send any amendments or comments they might wish to make so as to reach the Office by 30 November 1997 at the latest, or to inform it, by the same date, whether they considered that the proposed texts constituted a satisfactory basis for discussion by the Conference at its 86th Session (1998).
At the time of drawing up this report, the Office had received replies from the governments of the following 72 member States:(2) Argentina, Australia, Austria, Bahrain, Barbados, Belarus, Belgium,(3) Botswana, Brazil, Burundi, Canada, Cape Verde, Colombia, Comoros, Costa Rica, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, El Salvador, Finland, France, Gambia, Germany, Greece, Hungary, India, Indonesia, Iraq, Italy, Japan, Jordan, Kenya, Lithuania, Malaysia, Mali, Malta, Mauritius, Mexico, Mozambique, Myanmar, Nepal, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Qatar, Romania, Saudi Arabia, Seychelles, Singapore, Slovakia, South Africa, Spain, Sweden, Switzerland, Syrian Arab Republic, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, United Arab Emirates, United Kingdom, United States, Uruguay, Zambia.
In accordance with article 39, paragraph 6, of the Standing Orders of the Conference, governments were requested to consult the most representative organizations of employers and workers before finalizing their replies and to indicate which organizations they had consulted.
The governments of the following 16 member States stated that their replies had been prepared in consultation with employers' and workers' organizations: Brazil, Canada, Cyprus, Czech Republic, Denmark, Finland, Hungary, Kenya, Mauritius, Norway, Seychelles, Singapore, Sweden, Switzerland, Trinidad and Tobago, Zambia.
In the case of the following 30 member States the replies of employers' and workers' organizations were incorporated into those of the government, were appended or were communicated directly to the Office: Australia, Austria, Belgium, Brazil, Canada, Chad, Colombia, Cyprus, Czech Republic, Denmark, France, Germany, Hungary, India, Italy, Japan, Jordan, Republic of Korea, Malaysia, Mauritius, Netherlands, New Zealand, Norway, Portugal, South Africa, Switzerland, Turkey, United Kingdom, United States, Uruguay.
To ensure that the English and French texts of the proposed Convention and Recommendation concerning contract labour are in the hands of the governments within the time-limit laid down in article 39, paragraph 7, of the Standing Orders of the Conference, these texts have already been published in a separate volume, Report V(2B), that has already been sent to them. The present volume, Report V(2A), which has been drawn up on the basis of the replies from governments and from employers' and workers' organizations, contains the essential points of their observations. It is divided into three sections: the first comprises their general observations on the proposed texts, while the second and third sections contain their observations on the proposed Convention and proposed Recommendation, with the Office commentaries on these observations.
REPLIES RECEIVED AND COMMENTARIES
The substance of the replies received with regard to the proposed Convention and the proposed Recommendation concerning contract labour is given below. The replies are followed, where appropriate, by brief Office commentaries.
The governments of the following 16 member States stated that they had no observations to put forward at the moment or that they considered that the proposed texts constituted a satisfactory basis for discussion at the 86th Session of the International Labour Conference: Argentina, Burundi, Cape Verde, Cuba, Iraq, Jordan, Kenya, Mali, Mozambique, Myanmar, Pakistan, Romania, Saudi Arabia, United Arab Emirates, United Kingdom, Zambia. Some of the countries which considered the texts as a satisfactory basis for discussion also replied to the questions raised in the Office commentaries in Report V(1).
General observations
Argentina
The proposed texts constitute, in principle, a suitable basis for discussion of the subject at the Conference. The texts have considerably clarified a question which was highly confusing in the form in which it was presented prior to the first discussion.
Australia
The adoption in 1998 of any instruments dealing with contract labour which would impede business opportunities, economic progress and efficiency and be counterproductive to improving employment opportunities is fundamentally opposed. It is inappropriate and premature to adopt international standards on a subject which has both commercial and labour relations features. An ILO instrument that deals with matters outside the direct employment relationship would be inconsistent with current Australian law and practice and with the Australian Government's policy of reducing the regulatory burden on business. There is no strong evidence that independent contractors need greater protection than is currently available under commercial and contractual law. Responsible governments cannot support practices which are fraudulent or illegal, and disadvantage workers. However, the adoption of an instrument which has the effect of creating a "third category" of workers can only serve to create conflict with existing legislative frameworks. Contract labour is an extremely broad and complicated issue as shown by the discussions on the subject at the 85th Session of the International Labour Conference. It is difficult to achieve an instrument that can deal with all aspects in a fair and balanced manner. There are still major definitional problems in that there is no clear universal understanding of the meaning of the term "contract labour". Contract labour is not a suitable subject for regulation by a binding international instrument (i.e. a Convention), given the wide variety of conditions and circumstances under which it is exercised and the fact that contractors are predominantly not employees. Despite the Office's minor amendments to the first draft of the proposed Convention and although a Convention on contract labour may be of some value for ILO members with less developed economies, such an instrument would add little to the quality of contractual relationships in Australia.
Australian Chamber of Commerce and Industry (ACCI). The possible adoption of instruments on contract labour is totally opposed and regarded with grave apprehension as they would have serious consequences for economic efficiency, labour market flexibility and employment levels. The concerns and objections raised by the Employers during and at the conclusion of the first discussion remain undiminished. Except in a very limited way, Report V(1) and the suggestions in the Office commentaries do nothing to satisfy employer concerns about the proposed Convention and Recommendation.
Austria
In principle, the proposed instruments constitute a suitable basis for a second discussion at the 86th Session of the Conference.
Association of Austrian Manufacturers (VÖI). The results of the consultations so far have confirmed the impression that this subject is completely unsuitable for inclusion in a formal instrument. Such an instrument would be incompatible with the multitude of agreements concluded with persons who are not employees and who are subject to the most divergent regulations. The question is whether a specific contractual arrangement should be considered as an employment relationship or not. If the employee status is recognized, then the corresponding regulations apply and the employer is under an obligation to meet any entitlements arising from this status. The proposed instruments operate outside the ILO's mandate, which is labour law, and erroneously attempt to resolve the question of status by granting, in case of doubt, some of the entitlements which only employees enjoy. Such an approach would have grave consequences for labour market flexibility and the creation and preservation of employment. It is therefore categorically rejected, rendering detailed comments on sometimes very problematic provisions superfluous. At most, there might be a discussion at the international level on a procedure to establish objective criteria for determining "disguised constructions" that adversely affect entitlements.
Barbados
The content of the proposed instruments is generally acceptable. Subject to the amendments proposed below, their adoption at the next Session of the Conference is therefore endorsed.
Belgium
It is regrettable that the real problem of subcontracting ("sous-traitance") and the provision of workers to user enterprises have not been addressed in the proposed instruments, since the proliferation of these working arrangements is one of the essential labour relations challenges that will have to be met in the future. The instruments appear not to go beyond determining a minimum level of protection for workers who do not clearly fall within the category of employees or the category of independent workers. This way of dealing with the question runs counter to the fundamental principles of Belgian labour law. According to this law, a worker who in practice performs work in return for remuneration under the authority of another person is automatically bound by an oral or written contract of employment, with the result that the protection conferred by legislation is fully applicable. Therefore, an instrument that recognizes the existence of a third category of workers, i.e. workers who are not independent and enjoy only reduced rights as compared to employees, cannot be supported and its ratification cannot be accepted. It would be better to have a Recommendation promoting the progressive expansion, as appropriate, of the protection which workers with a contract of employment enjoy to all workers working under the authority of the person who recruits them (unless they enjoy a more favourable status), whether nationally or internationally. As regards the structure of both proposed instruments, a distinction should be made between the obligations incumbent on the "employer" (i.e. the natural or legal person with whom the contract that is not a contract of employment has been concluded) and the particular problems inherent in a triangular relationship. If no contract has been concluded between the intermediary and the worker, only the relationship between the worker and the user enterprise should be taken into account, as in a bilateral relationship.
Brazil
The adoption of a Recommendation to regulate contract labour would be more advisable than that of a Convention, as the subject is fraught with complexities and covers widely-diverging circumstances, with legal and technical differences existing between various member States and as regards their national practice. A Recommendation would provide greater clarity and general guidance to the various implications of contract labour. Nevertheless, the proposed text with certain amendments for the sake of clarity and consistency constitutes a valid basis for discussion at the next session of the Conference. To the extent that various concepts can be reconciled and controversies regarding the definition of contract labour can be solved, the proposed Convention and Recommendation could be useful instruments for national law and practice.
National Confederation of Industry (CNI). The adoption of a Convention to regulate this matter at the international level is utterly inappropriate, not only because it is premature and incongruous, but also because it imposes rigidities on labour markets, jeopardizes employment levels and thus entails negative socio-economic consequences, particularly in developing countries. When Report VI(2) was examined, the adoption of only a Recommendation was agreed to but after the first discussion, when all the complexities and diversities involved in contract labour became clear, it emerged that it would only be possible to adopt conclusions and general guidelines. The conclusions adopted during the first discussion are unrealistic and offer little evidence of flexibility. The proposed text encroaches upon the domain of legitimate commercial relations that are outside the ILO's mandate.
National Confederation of Commerce (CNC). Instruments which seek to regulate conditions of work for specific situations such as contract labour should not take the form of international standards. The proposed texts are unrealistic and rather inflexible and are an obstacle to the use of contract labour.
Canada
Contract labour is a significant and growing form of employment. It is opportune to develop standards directed at the protection of workers who are involved in the performance of work for a user enterprise while being in actual conditions of dependency on or subordination to the latter. At this stage, however, the instrument should take the form of a non-binding Recommendation. A Convention could only be supported if the following three prerequisites are fulfilled: (1) The definition of "contract labour" refers only to what is considered a "dependent contractor" in Canadian law and practice, i.e. a person who performs work or services for another person under such terms and conditions as to be in a position of dependency on that person analogous to that of an employment relationship. (2) The proposed Convention does not apply to those persons who may carry out work for a user enterprise through a subcontractor with whom they have a genuine contract of employment. (3) The exact scope and meaning of the obligation to promote "equality of treatment" in Article 5 are clarified, as well as the requirements to ensure "the same protection" in Article 6(1) and "adequate protection" in Article 6(2) of the proposed Convention. Until these issues are clarified, only a Recommendation would be appropriate, as it ensures flexibility and maximum acceptance and may over time build support for the development of a Convention.
Canadian Employers' Council (CEC). Any Convention and Recommendation in the proposed form are steadfastly and passionately opposed for several reasons. (1)The framework for the treatment of contract workers is completely inconsistent with the Canadian scheme of employment standards, and undermines the common law tradition of respect for the privity and integrity of contract. During the discussions at the last session of the Conference, the Workers expressed a concern that employers should not avoid their legal obligations to employees by calling them independent entrepreneurs who are not covered by employment and labour standards law; and that employers (user enterprises) should not hide behind fly-by-night subcontractors (referred to as fraudulent at one point) to avoid meeting the user's obligations towards employees doing the user's work. The very simple solution to these two concerns is to ensure that enterprises that are truly employers in accordance with established law honour their legal obligations. A Convention (and the proposed Convention and Recommendation in particular), is not an appropriate method of encouraging remedial action. The term "dependency" or "subordination" contemplates situations involving any substantial contract with a user enterprise by an independent entrepreneur, such as information technology specialists, lawyers, or accountants, to name a few. Such contracts for service are clearly commercial relationships. That the definition raises the notion of similarity with employment relationships proves by contrast that it contemplates commercial relationships as falling within its scope. Even if the definition could be adjusted to encompass only dependent contractors as the definition has developed in Canada, the instrument goes far beyond the scope of domestic legislation. In Canada, all jurisdictions have chosen to treat dependent contractors as employees for labour relations purposes (collective bargaining). Dependent contractors are not treated as employees in other areas of employment standards, such as hours of work, minimum wages, or human rights. The proposed Convention and Recommendation go far beyond labour relations. The definition and scope are inconsistent with domestic law in Canada. The second part of the definition encompasses a worker who "is provided for the user enterprise by a subcontractor or an intermediary". Thus, a worker may have two employers: his or her primary employer with whom he or she has a contractual relationship, and a second with whom his or her employer has a contractual relationship. This creates many problems. It creates inherent conflict between two employers for control of the work environment. It creates constitutional problems, as the two employers may be covered by different employment standards (federal and provincial, or conflicting provincial standards). The well-established law surrounding the integrity and privity of contracts, including respect for the intentions of the parties, is completely undermined, and legal tradition on the liability of employer and employee (and agents) is suddenly turned sideways. These views are not based on excessive sensitivity. The Office Report itself sets out the intent to extend the traditional employment relationship to what has historically been treated as commercial relations. (2) Canada's support for the instruments is specious, raising a question as to the motivation for supporting the instruments. During the 1997 Session of the Conference, the position was taken by some Government representatives that the approval of a Convention and a Recommendation during the discussions in June was tentative, and would be revisited once the substance of such instruments were defined. The instruments have now been defined. The instruments are demonstrably unworkable. The employer community will be extremely disappointed if there is any suggestion that governments are unable to depart from the notion of a Convention and Recommendation at this stage of the game on the basis that it is too late to change direction. The instruments presented in the Report, even with substantial amendment, cannot and will not be ratified by Canada. The concepts are inconsistent with our statutory and common law philosophy on employment and employment standards. The notion of limiting commercial relations in this way is inconsistent with our approach to employment and commercial relations and with our job strategy. Should there be an effort to ratify a Convention along the proposed lines, the employer community will aggressively oppose this effort. The legal community will have grave concerns about the impact of the instruments on various principles and precedents. As the ILO tries to come to terms with its relevance in the new millennium, it ill behoves the Canadian Government and the three parties involved in the ILO to adopt yet one more instrument that is unratifiable, and which is not relevant to most if not all of the countries participating in the debate. To do so deservedly calls the very function and purpose of the ILO into question. (3) The assumptions behind the proposed Convention and Recommendation are contrary to the direction of economic and social development in Canada. They work against economic (and job) growth, and against the trends in the changing nature of work and work organization. The approach to contract labour taken in Report V(1) will undermine this year's positive ILO initiative to adopt a Recommendation to stimulate job creation in small and medium-sized enterprises. Article 5 of the proposed instrument creates a new equity issue between the new category of worker and an employee, reinforcing the fact that the instrument is creating a new form of employee. It severely constrains enterprises, especially seasonal and cyclical enterprises, as they cannot be certain of whether they are effectively entering into an employment contract (of service) or a commercial relationship (for services). This uncertainty is most likely to discourage employment.
Confederation of National Trade Unions (CNTU). Subject to a few reservations, the text of the proposed Convention and Recommendation as adopted by the Conference Committee after the first discussion is acceptable.
Chad
Confederation of Trade Unions of Chad (CST). The adoption of the proposed instruments is supported without amendments. Adoption and ratification of the proposed Convention will no doubt do away with all sorts of abuses in Chad.
Colombia
The texts of the proposed Convention and Recommendation provide a satisfactory basis for discussion at the next session of the Conference.
National Association of Manufacturers (ANDI). It is both premature and inappropriate to attempt to regulate by way of an international instrument a matter such as contract labour in which characteristics typical of both the commercial and the labour spheres can be found. Reference is made to the position reflected in Report VI(2) to the 1997 Conference.
Comoros
The Conference should adopt a Convention on contract labour.
Croatia
The proposed Convention and Recommendation are not relevant for the Republic of Croatia. Under Croatian legislation it is not possible to perform work under another person's orders on the basis of a contract other than a contract of employment and which would accord with the definition of contract labour referred to in Article 1 of the proposed Convention.
Cyprus
The texts of the proposed Convention and Recommendation constitute a satisfactory basis for discussion by the Conference at its 86th Session. The issues identified in the Office commentary need to be discussed further during the second discussion.
Cyprus Employers' and Industrialists' Federation (EIF). Disappointment is expressed with the proposed Convention and Recommendation. Instead of covering all the different aspects of contract labour, as was the initial ambition of the governments involved, the proposed instruments contain confusing definitions and present contract workers as a separate category of employees. In addition, a number of specific provisions contained in the proposed instruments are very difficult to apply.
Pan-Cyprian Federation of Labour (PEO) and Cyprus Workers' Federation (SEK). The proposed texts are a satisfactory basis for discussion.
Czech Republic
Forthcoming Czech labour legislation defines an employment relationship as a relationship on the basis of which work is performed personally under actual conditions of dependency or subordination. This definition aims to distinguish between legal relationships of a civil or commercial nature and employment relationships.
Czech-Moravian Chamber of Trade Unions (C'´MKOS). Will continue to support both instruments.
Confederation of Industry and Transportation of the Czech Republic (SPDCR). Contract labour is a flexible labour market instrument and encourages employment. The ILO's attempt, as currently formulated, to regulate contract labour by an international legal instrument is inappropriate to the creation of jobs.
Confederation of Entrepreneurial and Employers' Union of the Czech Republic (UZSCR). Contract labour is an effective instrument in the struggle against unemployment. As presented after the first discussion and in the prevailing economic conditions, the Convention is not an appropriate form of regulating contract labour.
Denmark
For a number of reasons, the present standard-setting initiative must be considered premature and hazardous and the discussion in the ILO about these important matters is now likely to be closed for a number of years after 1998. The time for making fundamental changes in the legal concepts of "employees" and "self-employed persons" has not yet come. For instance, consideration has not been given to what tax policy and industrial policy consequences this could have: many countries have quite different tax rules for employees and self-employed persons and many countries have initiated major industrial policy measures to promote small and medium-size enterprises. In recent years discussions have been ongoing in academic circles on whether the concepts should be given new definitions, but it is still premature to draw any conclusions. Furthermore, the proposed instruments will not solve all contract labour related problems in a satisfactory manner. The Convention should list criteria to determine whether a person is an employee or not and should explicitly provide that a person who is considered an employee has the same rights as employees in the traditional sense of the word in accordance with national law and practice. Consequently, the definition of a contract worker should exclude real and actual one-man businesses so that the definition corresponds to a proper definition of the employee concept. Furthermore, the Convention should determine when a person or an enterprise is an employer in triangular situations with a view to establishing the rights and duties attached to employer status. The rights and duties as an employer will likewise depend upon national law and practice. An employer who employs persons who are considered employees (contract workers) must not discriminate between these and employees in traditional employment relationships. The proposed texts are opposed to the extent that they create an intermediate group of workers who have only certain rights and not full employee rights. The Convention should concentrate on the protection of employees. The only areas in which the protection may be extended to other persons are safety and health and discrimination.
Danish Employers' Confederation (DA). The nature and the content of the proposed Convention are unacceptable as the basis for an ILO instrument in this field. The Convention intrudes in the social partners' freedom of contract and encroaches upon the managerial domain.
Egypt
The text of the proposed Convention covers basic principles and standards stated in many other international labour Conventions. New in the proposed text is its application to a new category of workers, i.e. contract workers. In the context of national legislation, this category of workers is afforded statutory protection as regards terms of employment, provision of occupational safety and health measures and insurance coverage.
Finland
The first Conference discussion revealed differences of opinion not only on the modalities of regulation, but also on the more fundamental question of whether adopting a Recommendation only would not be sufficient. The Finnish Government voted in favour of a Convention and a Recommendation. This position is sustained, but in line with certain proposals from the Office, more work needs to be done to clarify presently ambiguous points in the Convention before the instrument can win broad ratification. A Convention and a Recommendation on contract labour can exert influence only on certain fringe areas of subcontracting in Finland where the situation is unclear. They will not cause any changes in normal subcontracting.
Employers' Confederation of Service Industries (LTK)/Confederation of Finnish Industry and Employers (TT). Contract labour is absolutely not suitable for regulation by ILO instruments. The ILO is once again creating a Convention that will receive only a very low level of ratification. The Convention will confuse the existing issue, prevent the development of a modern network economy and raise the job-creation threshold.
Federation of Finnish Enterprises (FFE). The proposed Convention and Recommendation create a new contractual concept in between an employment relationship and entrepreneurship. Finnish law and practice have felt no need to create a "contract labour" concept. Therefore, we oppose the adoption of a Convention or Recommendation.
Commission for Local Authority Employers (KT). Contract labour is not a suitable matter for regulation by ILO instruments. The Convention should not be adopted in its present form. The Recommendation in its present form is too detailed.
Central Organization of Finnish Trade Unions (SAK)/Confederation of Salaried Employees (TUK) and the Confederation of Unions for Academic Professions (AKAVA). International regulation of contract labour is extremely important. In Finland, many "contract labour" arrangements are based on an employment contract relationship as defined by the law. Finnish law does not recognize a third category of workers in between employees and entrepreneurs and the workers' organizations oppose the creation of such a third category.
France
Forms of work other than wage employment based on a contract concluded either directly between an employer and a worker or resulting in the provision of labour to a user enterprise should be protected by the adoption of new international standards. Convention No. 181 and Recommendation No. 188 have sufficiently clarified the status of temporary workers. Care must therefore be taken to ensure firstly that the proposed instruments do not interfere with the two instruments adopted in 1997, and secondly that workers who clearly fall within their scope are provided with the protection to which they are legitimately entitled. Defining contract labour as clearly as possible and demarcating exactly the scope of the new instruments are crucial to avoid any overlap or confusion with Convention No. 181 and Recommendation No. 188 and the risk of undermining their scope or effectiveness. The proposed instruments must protect workers operating outside the boundaries of any type of employment contract in conditions of subordination or even dependency equivalent to those characterizing an employment relationship. The present draft texts are confusing and, for this reason, most of the comments made during the preparation of the first discussion remain valid.
French Democratic Confederation of Labour (CFDT). Both instruments generally reflect the concerns expressed during the first discussion in the Conference Committee. For instance, the definition of contract labour is now clear, whereas this was a point of concern before the first discussion. Both instruments make it possible to distinguish contract labour, to define the instances in which it can be used and to establish minimal social rules when an undertaking has recourse to it. Both instruments should be adopted at the forthcoming session of the Conference. The general balance in the text of the proposed Convention should be maintained, while the proposed Recommendation, although generally satisfactory overall, could be enriched.
General Confederation of Labour -- Force Ouvrière (CGT-FO). The words "adequate" and "as appropriate" appear regularly throughout the texts. They should be deleted to avoid any ambiguity.
Gambia
The proposed instruments are supported especially as they relate to equality of treatment, specific protection for contract workers without a contract of employment and effective protection of rights under national labour and social security laws for contract employees with a contract of employment. The State bears responsibility in the social field for ensuring equal remuneration for work of equal value and a working environment which protects the rights and privileges of workers.
Germany
The German Government wondered for a long time whether it was really appropriate to adopt a Convention, since the very concept of "contract labour" raised many difficulties in law for Germany and apparently also for countries with a French-based legal system. However, the first discussion showed that it might be desirable to reach agreement at the international level on minimal protection for workers considered as being engaged in contract labour. Furthermore, the restrictions made by the Conference to the definition of contract labour and the scope of the instrument have removed some of the problems which might arise for Germany and other member States so that, subject to other substantial improvements, the Government could now envisage supporting the adoption of a Convention. This is furthermore what its representative stated on 18 June 1997 during the plenary sitting at the Conference. The text proposed in Report V(1) undeniably constitutes progress. This is the case in particular concerning the restriction introduced in Article 1(c) ("... without becoming formally the employer of these workers") and the exclusion provided for in the third sentence of Article 2(1). It is difficult to know whether the Convention and the Recommendation in their entirety, or only Paragraph 14 of the Recommendation, apply to transfrontier contract labour. This subject was dealt with in many replies to Question 21 of ReportVI(2) submitted to the 1997 Session of the Conference as well as in the discussion on Point 26 of the conclusions contained in this same report, as reproduced in paragraphs 175 and 176 of the report of the Conference committee.
Confederation of German Employers' Associations (BDA). The BDA is opposed to the adoption of international standards on contract labour. Although the proposed texts reflect efforts made to meet some of the objections raised during the first discussion, the principles on which they are based remain fundamentally flawed. These texts take no account of German legislation and practice. Their application would result in serious interference in contract law, in particular the law on contracts for services and the law on work performance contracts. Only labour law falls within the competence of the ILO. Furthermore, the proposed instruments run counter to the efforts made to free the labour market of superfluous regulations and thus to create an environment which encourages investment and job creation. The different forms of independent work, grouped together under the term "contract labour", represent an important source of jobs which should be exploited in the best possible manner. The regulation of "contract labour" by international labour standards would in this respect be a disincentive. If standards were adopted, they would scarcely have any chance of being broadly ratified and applied. The adoption of the standards on contract labour would also run counter to the efforts made to adapt the ILO standard-setting machinery to current needs and realities. It would jeopardize the authority of existing standards and supervisory machinery. It would be better at this point for the ILO to adopt conclusions providing for the establishment of a procedure which would make it possible to establish the status (employee, employee-assimilated person, self-employed person) to which any given worker would be entitled with account being taken of the criteria applicable in the respective country. The national legislation corresponding to this status should then be applied. This would prevent the provisions designed to protect workers from being flouted. The specific characteristics of each country would be respected, since the applicable criteria would be established at the national level. Many application problems would thus be avoided. The Employers have on a number of occasions proposed to cooperate in the preparation of conclusions to this end and they urge the other participants to seriously examine this proposal. Without prejudice to the above, it would be desirable to organize within the framework of the Conference a general debate on the causes and characteristics of contract labour in the different countries. This would allow the phenomenon to be much better understood than is the case today. This debate should be preceded by in-depth research and studies. In particular, there should be an examination of the extent to which "contract labour" originates from the excessively strict regulation of "normal" employment relationships. The proposed Convention infringes contractual freedom, which is one of the basic principles of civil law in Germany. The restriction of this freedom is justified only in order to protect superior interests, such as labour law which protects employees. Other restrictions, unrelated to the employer/employee relationship, would not be in conformity with German law.
German Confederation of Trade Unions (DGB). The DGB is seriously concerned that more and more persons carrying out work in conditions of dependency are not protected by labour and social legislation or are protected only partially because the responsibilities incumbent on the employer are shared between two physical or moral persons. International standards should therefore be adopted to regulate contract labour.
Hungary
Incorporating the contents of the proposed instruments into the national legal system will most probably pose a problem to Hungary as well as to other member States. It would, therefore, be better to adopt only a Recommendation, or to narrow the definition of contract labour and make it more specific. The proposed instruments treat contract labour as a single legal concept, whereas in reality it covers a variety of relationships the legal treatment of which may vary significantly among countries. The concept of contract labour is not compatible with prevailing Hungarian law.
Employers. It cannot be denied that abuse of contract labour occurs in an attempt to evade the obligations ensuing from the employment relationship. Member States should explicitly commit themselves to preventing such cases. Bearing in mind that the proposed instrument is not only inconsistent with Hungarian legislation but with the legislation of many other nations, ratification would not be possible for the majority of member States. The discussion of the proposed instrument should be removed from the agenda.
Workers. The Hungarian employers' conceptual reservations (see under Article 1 and Paragraph 13) are shared by the workers. A Convention such as the one proposed could be supported, but maintaining and safeguarding a fair employment relationship is the priority.
India
The proposed Convention and Recommendation are flexible enough to regulate contract labour effectively in the context of increasing contractualization of jobs and services. The "fine-tuning" by the Office of the Proposed Conclusions adopted by the Conference Committee is in order. The proposed texts will be supported for adoption at the forthcoming session of the Conference.
Standing Conference of Public Enterprises (SCOPE). It is noteworthy that the issue under discussion is the regulation of contract labour and not its abolition. In India, contract labour has been abolished pursuant to the Contract Labour (Regulation and Abolition) Act, 1970. Recent case-law of higher courts, in particular the Supreme Court, has confirmed that the abolition of contract labour implies that an employment relationship be established between contract workers and the principal employer. Employers must not object to regulatory provisions seeking to improve the conditions of service of workers, but the abolition of contract labour requires immediate review.
Italy
The Italian Government supports the adoption of an international instrument in the form of an ILO Convention concerning contract labour provided it is sufficiently flexible to allow contract workers to enjoy the minimum protection generally accorded all other workers. The principles concerning contract labour set forth in the proposed Convention raise the complex question of defining the concept of the employed worker (remunerated and therefore subordinate) as opposed to the self-employed worker (independent and, strictly speaking, therefore not subordinate). The term "contract labour" covers many different facets, including what is known as the provision of manpower, which is a sort of "no man's land" between the labour relationship of subordination and forms of non-dependent work. This difference, however, in the context of an international instrument, is unlikely to find expression in a solid legal distinction even though it is true that, for the time being, there is no individual protection. Despite the ILO's effort at making a compilation -- expressly requested in the Conference Committee by Italy on behalf of the countries of the European Union -- a great deal still remains to be done to improve the provisions put forward in the proposed Convention. This is needed in order to avoid any kind of inflexibility and to foster the adoption of an adaptable text that would guarantee that the interests of both the social partners and governments are properly balanced, which would facilitate ratification.
General Confederation of Industry (CONFINDUSTRIA). In accordance with the agreement within the ILO's Employers' Group, the subject matter, being flexible in nature, is not considered to lend itself to international regulation, and in particular not in the form of a Convention. The main difficulties and lack of clarity concern: the definition of a contracting undertaking and contract worker; the notions of dependency and subordination of the worker; the concept of equal treatment between contract workers and workers performing work which is similar; the allocation of responsibility between the user enterprise, the subcontractor and the intermediary; the transfer of responsibility from one party to another, and the provisions concerning a licence or registration as a prerequisite for recourse to contract labour.
Italian Confederation of Small and Medium-Sized Industry (CONFAPI). Legislation deriving from the mistaken postulate that contract labour is somehow related to mafia-style criminality has especially penalized SMEs in the construction sector which have the skills to carry out specific types of work which general enterprises often entrust to subcontractors. Whether an enterprise is operating correctly and honestly or not is something that should be examined through appropriate entrepreneurial approval procedures and not by placing constant legal restrictions on the room for manoeuvre by enterprises.
Japan
It has emerged from the discussions that "contract labour" in the proposed instruments refers to work performed under conditions of substantial employment-like subordination and under a variety of contractual arrangements other than a contract of employment. Rather than focusing on the form of the contract, however, it is necessary to provide protection to persons working under such conditions. This should be the issue for discussion. The actual conditions of contract labour vary from country to country. In Japan, workers enjoy the protection of labour laws if they perform work under conditions of substantial employment-like subordination, regardless of whether a contract of employment has been concluded or not. Many other member States may have a similar system. Therefore, if an instrument on contract labour creates a new category of workers which is different from the originally protected worker, protection of the contract worker may vanish as a result. This would not be appropriate. Therefore, if new instruments concerning contract labour are to be adopted, they should be realistic and flexible, regulate only the necessary matters and allow each member State to take appropriate measures in accordance with its own actual conditions.
Japan Federation of Employers' Associations (NIKKEIREN). In 1997, the Conference Committee was unable to produce a definition of contract labour which was internationally agreed upon. The attitude of the government members of the Conference Committee was regrettable. It may not be reasonable for member States to consider seriously, with a full sense of responsibility, the possibility of ratifying or applying international labour standards adopted at a meeting where only less than half of the registered government members were present. Under such circumstances, a Convention supplemented by a Recommendation on the subject-matter cannot be supported. The Office should be fully aware of the fact that the definitions, actual conditions and laws and regulations pertaining to contract labour vary considerably from country to country. The prime error in the proposed texts is the proposal of a definition which attempts to cover all instances of contract labour instead of dealing with each case differently. The concept of dependency or subordination is confusing and will no doubt cause problems when the texts are applied to member States. Flexibility in accordance with the actual conditions of member States should be ensured. A general discussion should have preceded a discussion on the proposed texts. However, if any instrument is to be adopted at all, it should be a Recommendation which can be flexibly applied to member States and the variety of prevailing situations. Such an instrument should take due account of the fact that contract workers are by nature analogous to self-employed workers as well as ordinary employees. Duplication with the Home Work Convention, 1996 (No. 177) and the Private Employment Agencies Convention, 1997 (No. 181) should be avoided. The Office should reflect upon the fact that recently adopted Conventions concerning non-regular workers have not been ratified in a smooth manner.
Japanese Trade Union Confederation (JTUC-RENGO). The views of the Japanese Government are partially endorsed. It is true that protecting workers performing under conditions of substantial employment-like subordination is more important than identifying the form of the contract. The Government is also correct in pointing out the actual situation in which such workers are protected by domestic laws in many countries, including Japan. However, the Government's view that protecting "contract workers" by adopting an ILO Convention that defines them might actually weaken such protection by differentiating them from workers with ordinary contracts of employment is not shared. It is clear that distinguishing workers only on the basis of whether there is a contract of employment causes a lack of adequate protection and an evasion of laws and taxes. To address these problems, it is important not to make a legal distinction between workers performing work under conditions of substantial employment-like relationship and workers with a contract of employment, except in cases where the worker is obviously self-employed. In view of the various forms which contract labour takes in each country, the definition should set general parameters, so that the Convention covers as broad a range of contract workers as possible, and exclusions from the application of the Convention should be limited to a minimum. The substance of the protection of contract workers should be prescribed as specifically as possible, to ensure application through the measures adopted by each member State. In general, measures in the Convention to protect workers should be strengthened.
Jordan
Amman Chamber of Industry (ACI). A Recommendation rather than a Convention should be adopted on this matter to build up experience with this form of employment and to evaluate its advantages. The Conference should consider the possibility of including in the Convention and the Recommendation the following four elements: (1)The supplier of manpower should obtain a work permit for the worker supplied and should produce this permit to the employer when the contract labour contract is signed, so that the employer is released from the responsibility of obtaining work permits. (2)The contract should include a probationary period not exceeding two months during which the employer can test the worker's competence before signing the definitive contract for the agreed period. (3) The contracts concluded between the supplier and the user enterprise should be renewed annually on the basis of the work permit. (4) The supplier of manpower should be held accountable for financial social security obligations.
Kenya
Federation of Kenya Employers (FKE)/Central Organization of Trade Unions (Kenya) (COTU). The FKE and the COTU welcome the instruments proposed by the International Labour Organization on this crucial subject.
Republic of Korea
Korean Employers' Federation (KEF). Considering the enormous variety of arrangements and national approaches to the contract labour issue, it is highly inappropriate for the ILO to adopt a Convention supplemented by a Recommendation concerning contract labour. The best way to unravel the issue of contract labour is to adopt ILO guidelines to guarantee workers due protection whenever an employment relationship with an enterprise is established.
Malaysia
The proposed Convention and Recommendation reflect the decisions of the Conference Committee after its discussions at the 1997 Session. During those discussions, reservation was made with respect to Article 6 of the proposed Convention.
Malaysian Employers Federation (MEF). The proposed Convention is not supported. The MEF endorses the comments of the International Employers' Organization. Contracting is a legitimate form of activity involving a commercial relationship and there is no good reason for a Convention to interfere in a commercial relationship. Nowadays most countries need a flexible labour market in order to increase productive employment and international regulations governing contract work will only have the opposite effect.
Malaysian Trades Union Congress (MTUC). The proposed Convention and Recommendation are supported.
Malta
There are no objections to the proposed texts of the Convention and Recommendation.
Mauritius
Mauritius Employers' Federation (MEF). Strong reservations regarding the adoption of the proposed Convention. The notion of contract labour is very complex and encompasses very different realities and somewhat vague legal concepts which are not uniformly interpreted in all member States.
Nepal
The proposed instruments are very important and timely. The basic concept of the instruments and the measures to be taken under them will protect vulnerable contract workers and are, therefore, supported.
Netherlands
Labour law protection should be provided to persons working within a relationship which is not clearly identified as an employment relationship from the outset. Provided contract workers are effectively protected as proposed by the Convention, the text should leave it up to member States to determine how such labour law protection is to be provided. The Netherlands' position as regards the proposed Convention depends on its compatibility with new national legislative proposals determining the relationship between an employment agency and a temporary worker made available to a user enterprise (triangular set-up). See the comments under Article 1.
Netherlands Trade Union Confederation (FNV). ILO Conventions, particularly those meant to protect workers in vulnerable and atypical working situations (e.g. the Homework Convention and the proposed Convention concerning contract labour) should not focus their definition and scope on the existence or absence of a (formal or recognized) contract of employment. The reason for this strong conviction is twofold: (1) Many instances of abuse by employers of workers who perform work in dependency and subordination to them result directly from the fact that they are denied employee status, at least vis-à-vis the user enterprise. Furthermore, in many countries intermediaries and private employment agencies are flourishing because in this way, user enterprises can disclaim all responsibility for the workers they employ. The fact that these workers sometimes have a "contract of employment" with the intermediary is no guarantee at all for their protection, either as regards the user enterprise on whose shopfloor they are performing the work (e.g. health and safety hazards, working hours) or in respect of their rights to reasonable wages and social security (e.g. fly-by-night agencies which disappear when wages are due). (2) Enjoying the benefits of a contract of employment is in many countries not only a question of having concluded a formal and recognized contract, but may also be dependent on court decisions ruling that the various aspects of a practical situation must lead to the conclusion that a "contract of employment" exists. In other words, many workers who are denied employee status are in fact employees, but will enjoy protection of this status only if they dare challenge the denial of their employer in court (which is often after they have lost their job). Thus, employee status in the direct relationship with the user enterprise may only be taken as a decisive criterion if it is recognized. Therefore, the recommended course for an ILO Convention, which must be applied and be applicable in great variety of legal systems, would be to depart from the contract of employment concept as a decisive criterion, and to describe all the facts (dependency and subordination) which should lead to responsibility of the employer/user enterprise for the protection of those who perform work for his enterprise. This primary responsibility of the user enterprise can only be shifted to the intermediary or agency, if and to the extent that it results in sufficient and adequate protection for the workers concerned. For this reason, only the fact that a member State may argue that, according to law and practice in that country, such workers otherwise enjoy adequate protection (rather than the fact in itself that someone is an employee of a private employment agency, as already provided in Article 2(2)) should allow for exclusion from the scope of the instrument. In this respect, the comments of the Netherlands Government regarding the exclusion of workers having a contract of employment with a private employment agency from the scope of the proposed Convention are inconsistent and, therefore, opposed. The Netherlands Government itself recognizes that in its national legal system (according to existing rules but also according to new bills now being discussed in Parliament), the protection of these workers not only depends on or is derived from the employment relationship between the worker and the agency. For instance, with regard to health and safety regulations, working time, and the payment of taxes and social insurances the responsibility of the user enterprise is clearly regulated.
New Zealand
The adoption of any instrument on contract labour is opposed. No further amendments or comments are made on the proposed Convention and Recommendation.
New Zealand Employers' Federation (NZEF). Some countries may have problems with some so-called contract labour arrangements, but this is not the situation in New Zealand. It is difficult to understand how a Convention of this kind, with its major definitional deficiencies, would alleviate any such problems. If anything, the uncertainty surrounding the question of who exactly is covered by the Convention would be more likely to exacerbate them. Difficulties consequent upon the Convention would undoubtedly entail a considerable reluctance to ratify.
Norway
See the comments in preparation of the first discussion and the position adopted during this first discussion. There still exist several difficulties about putting forward a proposal on contract labour. The experiences from the Conference confirm that this is a complicated subject, and that it might be difficult to reach agreement on a document that can be adopted by most of the member States. However, the adoption of standards for workers without a recognized contract of employment performing work under actual conditions of subordination and dependency is supported.
Confederation of Norwegian Business and Industry (NHO). Practice and problems concerning contract labour vary from country to country. In some developing countries the use of contract labour is common in agriculture and in the building industry. Intermediaries often mediate between enterprises and workers without assuming the employer's responsibilities. Such arrangements are illegal in other countries. The instruments contain many special provisions that will be difficult to enforce and that will create problems for national legislation in most countries. It will not be possible for the ILO to monitor whether countries which ratify the Convention actually implement it. It is a matter of great concern that the most important provisions in the Convention, such as the definition, were agreed upon with only 25 per cent of the government members voting. The member States that were the most positive during the debate had very little familiarity with the subject and seldom or never ratify Conventions. At the end of the debate several governments expressed serious concern and many subsequently said that they would like to reconsider their position. The ILO is built upon the principle of tripartism. This principle presupposes cooperation. The intention is lost if two parties have the ability to force upon the third party something to which it is totally opposed. From different sides concern has been expressed about the future role of the ILO. Instead of doing useful developing work, with a view to promoting economic growth and greater employment, the Organization risks becoming merely a producer of Conventions. Different opinions and practices among the member States make it impossible to reach consensus, ensure subsequent ratification and implementation by more than a few member States. The possibility of a Norwegian ratification of the proposed instrument must be considered low. The outcome of the second discussion at the next session of the Conference is, therefore, of great importance.
Portugal
The proposed instruments are a satisfactory basis for a second discussion of the topic, subject to comments on specific proposed provisions.
Confederation of Portuguese Industry (CIP). The adoption of international standards on contract labour is completely rejected and the draft texts do not offer a realistic or a constructive basis for discussion. The topic does not lend itself to the adoption of international provisions, as the Employers stressed during the first discussion. The conclusions drawn from this discussion were not very realistic nor even very clear. Hence, any instrument adopted on that basis would not function and a considerable number of countries, if not all, would be unable to ratify it. It would be preferable for the ILO to carry out and distribute comparative studies to help member States to resolve the problem, instead of adopting standards. The real problem to be resolved is not the lawful use of contract labour, but the need to combat illegal fraudulent practices undermining or denying workers' rights and guarantees under contract labour arrangements. Approaches, arrangements, systems and last but not least terminology vary enormously from one member State to another, making it impossible to adopt a valid definition of the concept. The concept of "contract labour" is muddled and ambiguous, as are the concepts of "contract worker" and "intermediary" appearing in the conclusions on the basis of which the proposed Convention was drawn up. The ambiguity is such that self-employment could fall within the proposed concept of contract labour. This is clearly not appropriate, runs counter to prevailing circumstances and is not acceptable. Clearly covered also is the situation in which one undertaking provides a service to another undertaking on the latter's work premises. In fact, workers are assigned their work duties as workers of the service provider and the service provider assumes all obligations in its capacity as employer. Imposing a sharing of responsibilities between undertakings to discharge obligations is anomalous. The shortcomings of the conclusions and the absurdity of adopting an international instrument on the basis of such conclusions could be exemplified in other ways. Contract labour must be seen as a flexible formula which is part of a modern economy and illustrates the need for cooperation and optimum interaction between undertakings in the context of globalization. Contract labour enhances competitiveness, contributes to the development of small and medium-sized enterprises and generates worldwide employment. In these circumstances, regulation should be left to member States, which are more familiar with the characteristics of the phenomenon and flexibility requirements in their different national contexts.
General Confederation of Portuguese Workers (CGTP). The texts of the proposed Convention and Recommendation are generally endorsed, subject to comments on specific proposed provisions.
General Union of Workers (UGT). The texts of the proposed Convention and Recommendation reflect the conclusions which the Conference Committee was able to reach after its first discussion. Nevertheless, the instruments, and in particular the proposed Convention, need to be further developed to provide an adequate response to the questions raised, for instance, by the Office. Those comments, particularly as regards clarification of aspects emerging from the first discussion and an in-depth examination of the proposed instruments, should be duly considered. In addition, the proposed Recommendation contains elements which could be incorporated into the Convention.
Seychelles
The content of the proposed Convention and Recommendation is generally satisfactory.
Singapore
It is not necessary to have an instrument to protect the employment conditions of persons engaged in contract work where there is no employer-employee relationship. Such persons are under a "contract for service" arrangement and are basically self-employed. Contract persons offer their services and expertise on commercial and business matters. Tasks performed under contract work are normally of the form of ad hoc projects or impromptu services required, such as plumbing, where it is not feasible for the user enterprise to establish an employer-employee relationship with the contract worker. The main feature of contract work is the flexibility enjoyed by the contract worker in delivering services within the framework of a "contract for service" stipulating the desired end result of the service, the remuneration to be received upon completion and the penalties imposed for any failure to meet the conditions stated in the contract. To establish a Convention and Recommendation governing the terms and conditions of contract work would inevitably impose rigidities on the flexible nature of contract work. Flexibility is the very basis for the prevalence of contract work today.
Slovakia
The texts of the proposed Convention and Recommendation are a satisfactory basis for discussion.
South Africa
Federation of Unions of South Africa (FEDUSA). Contract workers are extremely vulnerable as they fall outside the scope and protection of labour laws, hence the need for the adoption of a Convention.
Spain
Without prejudice to observations on specific provisions below, the general thrust of the proposed instruments on contract labour does not pose internal problems for the Spanish social security system, since contract workers in Spain are not only treated in accordance with their particular situation, but also enjoy a level of protection similar to that of other workers.
Sweden
In the report prior to the first discussion in 1997, the opinion was expressed that, by placing the subject of contract labour on the Conference agenda, the ILO had raised a contemporary matter of urgent concern which, however, had been analysed very little and was very hard to regulate even at national level. Three provisions of Swedish law referring specifically to conditions termed "contract labour" were mentioned in ReportVI(1) of last year. This time, the constituent members of the Swedish tripartite ILO Committee have divergent opinions concerning a new ILO instrument and its content. Endorsed is the view that a party regarded as an employee in fact shall be treated as such. Prior to any discussion on the possibility and relevance of framing a special ILO instrument on contract labour, a distinction should be made between two fundamental questions: (1) In what situation and by what criteria can a person be classified, under national labour law, as an employee or as an independent contractor? (2)How must employer responsibility be apportioned in trilateral situations, i.e. if the employee/contractor has two different parties with whom, one way or another, they will deal when the work is performed or its conditions determined? The employee concept in Sweden is relatively comprehensive and any attempts to narrow down the prevailing employee concept and recognize an intermediate category between employees and self-employed persons are unlikely to succeed. During the debate, several governments expressed apprehension of an instrument which would in fact create an intermediate form between an employee and a self-employed person and threaten to impair safeguards for some workers who at present have full security of employment. Any new international instrument must not prejudice the rights already enjoyed by workers under national legislation and practice. The character of ILO instruments as minimum standards is clearly stated, for example, in article 19(8) of the ILO Constitution. In sum, if the contract labour concept in the final instruments includes persons outside the Swedish employee concept, ratification by Sweden would call for extensive amendments to prevailing law in order for persons other than "employees" to be assured of the rights and protection which the Convention envisages.
Switzerland
Neither the drafts nor the proposed conclusions of the Conference Committee have remedied the irrelevance of the proposed instruments: the object of the proposed instruments as well as a precise definition of contract labour remain elusive. As such, only a Recommendation can be supported, at most. A binding Convention would diminish the current level of protection in Switzerland. In practice, it would create a new category of workers who would not be employees enjoying the protection of an employment relationship, but individuals enjoying certain employee rights. In Switzerland, it would have the perverse effect that some persons who until now were employees would be considered contract workers enjoying less protection.
Confederation of Swiss Employers (UPS), in consultation with the Swiss Machines Industry Association (ASM) and the Convention of Employers of the Watch Industry (CP). Any instrument on contract labour, be it a Convention or a Recommendation, is firmly opposed. The question of contract labour is not suitable for an international instrument considering the multitude of forms in which this type of work presents itself in different countries. Moreover, the proposed texts venture far into the domain of enterprises' legitimate commercial relations. As such the subject does not fall within the competence of the ILO. The proposed instruments differ only marginally from the texts submitted to the 1997 Session of the Conference and in no way dispel the serious concerns expressed by the Employers. The views expressed prior to the first discussion remain valid. The Conference Committee should limit itself to the adoption of conclusions and general guidelines to tackle the major problem, i.e. fraudulent and illegal schemes stripping workers of the guarantees offered by an employment relationship.
CP. The Conference should not fall into the trap of turning a contract labour contract into a slightly different version of the contract of employment. The user enterprise as well as the contract worker must indeed have an interest in establishing a contract labour relationship rather than an employment relationship (independent work organization for the worker, less burdensome investment and more flexibility for the enterprise).
Swiss Federation of Trade Unions (USS/SGB). The adoption of a Convention and a Recommendation is supported. The number of service arrangements which do not involve clear-cut independent occupations or positions protected by a contract of employment is visibly increasing. The protection which labour law should offer is often not guaranteed. Even if under Swiss law most workers employed under conditions of dependency would not be contract workers (as defined by the proposed Convention), it must be assumed, given the differing possible definitions of the term, that the situation in many countries is different. It is, moreover, difficult to foresee how the situation will develop in Switzerland in the medium and long term. Hope is expressed that the Swiss Government will endorse the position of the European Union and support adoption. Prohibiting recourse to contract labour for the sole purpose of circumventing labour standards is particularly important. Persons working under similar conditions of dependency or subordination must be treated according to regular contracts of employment as employees. It appears to be essential to stand fast by the principle that no new category of workers enjoying only limited protection is created.
Syrian Arab Republic
The texts of the proposed Convention and Recommendation constitute a suitable basis for discussion at the next session of the Conference.
Togo
The texts of the proposed Convention and Recommendation are a satisfactory basis for discussion at the 86th Session of the Conference.
Turkey
Confederation of Turkish Employers' Associations (TISK). Certain provisions of the proposed Convention have the effect of deterring and even eradicating the use of subcontractors. To discourage this use by regulating it by law amounts to paralyzing a country's economic life. Therefore, these provisions must be revised. However, not regulating subcontracting should not be considered a justification of its use in bad faith, nor should subcontracting justify informal sector activities. All illegal practices are subject to sanctions and should therefore be dealt with under criminal law instead of labour law.
Confederation of Turkish Trade Unions (TÜRK-IS). See observations made during the deliberations of the Conference Committee in 1997.
United Kingdom
Confederation of British Industry (CBI). The introduction of a Convention on contract labour has been strongly opposed in the past. For a number of reasons set out below, no form of binding international instrument is appropriate or could be effectively applied in this area. The practice of contracting is admittedly growing in the United Kingdom and elsewhere as contract labour arrangements evolve to meet the demands of both employers and employees. For example, contracting may help workers develop working time arrangements which help to balance work and family needs. Such arrangements offer an important flexibility which should be nurtured, provided that proper protection, where a genuine employment relationship exists, is developed at national level. Such protection is already available in the United Kingdom. It is a matter of deep concern that the proposals as currently drafted would discourage, if not render impossible, the use of all forms of contract labour. Problems do not arise in this area because of the use of contract labour in itself, but because contracting can be used to disguise employment relationships in order to deny workers their rights. Hence, the thrust of the proposals -- to regulate all contract labour arrangements -- is misguided and in our opinion, fundamentally flawed. What is needed is a set of objective criteria, effectively applied in each member State, to define when employment relationships do and do not exist. This is an area where ILO guidelines might be helpful, but it is not amenable to ratifiable international standards, not least because of the considerable variance in national practice and the definitional problems this presents. In conclusion, the proposals set out in Report V(1) cannot be supported. The definitional difficulties (see the comments under Article 1) would be insuperable at international level. Furthermore, the approach which argues that contract workers should enjoy equality of treatment with permanent staff of user enterprises (see the comments under Article 5) is wrong in itself, would be extremely costly and would strongly deter the future use of contract labour.
United States
Because of the complexity of the issue of contract labour, it is recommended that a detailed discussion of several specific issues, including the scope and coverage of the definition of contract labour as used in this instrument as well as unclear and possibly confusing language in certain Articles and recommendations, be conducted by the full Committee on Contract Labour during the initial meetings of the Committee in June 1998 and prior to any voting on final Convention and/or Recommendation language. This will allow all constituents to obtain a full and clear understanding of the employment relationships included within the scope of the contract labour definition and will generate a discussion of any unclear or inconsistent language formulated by the Committee during the first session. It is essential that all member States have a clear understanding of the full scope and impact of the proposed Convention and Recommendation items to ensure consistency and flexibility of the final language so as not to make it impossible for member States to ratify the Convention.
Uruguay
Workers. It is both timely and positive to deal with the subject of contract labour in an international labour Convention as this question daily affects a large number of workers. Contract labour should be dealt with in a Convention supplemented by a Recommendation. The proposed text none the less contains some inaccuracies and/or ambiguities which, if not corrected, would hinder the effective application of the Convention.
Zambia
Zambia Federation of Employers (ZFE)/Zambia Congress of Trade Unions (ZCTU). The proposed texts appear to be satisfactory and may form the basis for discussion at the next session of the Conference.
European Federation of Cleaning Industries
The current proposal on contract labour should not be adopted. The Conference Committee's conclusions are unsettling, not in the least because the definition of contract labour lacks precision and seems to include cleaning services. The cleaning industry should be expressly excluded from the instruments' scope. All employees in the cleaning business enjoy a regular employment relationship. The ILO proposal to impose equal treatment between employees of a service contractor and those of the user enterprise, completely ignores the trend towards specialization. Moreover, since a large part of the costs in the cleaning sector is due to wages and social contributions, equal wage treatment could lead to a total negation of the competitive advantage of labour intensive services and cleaning services in particular.
International Organization of Employers
The conclusions of the first discussion on contract labour were clearly such as to discourage -- if not render impossible -- the use of all forms of contract labour. It is an example of the negative approach by the ILO to any work relations which do not fit the typical classical model of the first half of this century: a permanent full-time job, if possible in the manufacturing industry. Times have changed. Work relations nowadays are more complex, more flexible. Possible abuses must be remedied. The ILO will regain credibility only if it follows present-day practices and modern thinking. The texts proposed for the second discussion reach far into the area of legitimate commercial contracting, an area which is off limits for the ILO. The real problem which needs to be resolved does not relate to the legitimate practice of "contracting", but the issue of the "proof of an employment relationship" in order to fight fraudulent or illegal arrangements which seek to deny workers the benefits of an employment relationship. Any future conclusions should only address this problem. The Conference should limit itself to general conclusions together with a request to the ILO to undertake comparative studies to help national authorities choose methods best adapted to their national conditions. The proposed instruments are based on a completely different approach. The ambition to cover all the different forms of contract labour has led to confusing definitions and has made contract workers a separate category of employees. In addition to this fundamental contradiction the proposed instruments contain many specific provisions which would be difficult to apply and give cause for concern.
Office commentary
The general observations reiterate many of the views concerning the adoption of international labour standards on contract labour expressed during the first discussion in 1997. Due to its diversity and complexity, the subject under consideration is assessed very differently as regards the desirability and possibility of regulating it at the international level. While the employers' organizations believe that the first discussion did not produce satisfactory results and that acceptable instruments are not achievable, the workers' organizations maintain the importance of adopting a Convention supplemented by a Recommendation. A number of governments have indicated in their general observations that the texts adopted in 1997 constitute a suitable basis for discussion in 1998.
The observations of member States contained in this report have, however, revealed that a number of important issues of a substantive nature such as, inter alia, the definition of "contract labour", the scope of the proposed instruments and the terminology to be used are understood and interpreted differently by the ILO constituents. The suggestions made by the Office in Report V(1) to introduce changes in the text of the proposed instruments did not receive sufficient support to allow it to modify this text. Under these circumstances and in order to not to delay the despatch of ReportV(2B), in accordance with article 39, paragraph 7, of the Standing Orders of the Conference, which requires that a final report containing the text of the proposed instruments should be prepared "on the basis of the replies received", the text of the proposed instruments contained in Report V(2B) has undergone minimal changes of a drafting nature.
The diversity of the observations made, the questions raised by member States concerning some of the fundamental concepts, the complexity of the issues involved and the requests made to the Office for clarification of some of these issues, including the statement made during the plenary session of the Conference in 1997 on behalf of Canada, Japan, Switzerland and the United States, would, however, appear to require further consideration by the Office which the time available did not permit. The Office will endeavour to explore ways to address these various concerns and try to clarify the various types of situations covered by the definition of "contract labour" and identify more clearly provisions in the texts of the proposed instruments which are relevant to each of these particular situations. In this regard, the Office envisages submitting a working document in advance of the Conference, for possible use by constituents.
The Office would also like to draw attention to the fact that a significant number of observations contain proposals to introduce other changes into the texts of the instruments under discussion. Some of these proposals are of a drafting nature, others aimed at introducing substantive changes. The Office believes that many of these proposals need further consideration by the Conference Committee in 1998, before they can be introduced or rejected. That is why only a few changes of a drafting nature have been made in the texts of the proposed instruments. Those proposals which had already been put forward and commented on in Report VI(2) and which have been repeatedly suggested in the observations of member States are not addressed in the Office commentary below.
Observations on the proposed Convention
concerning contract labour
(4)
The General Conference of the International Labour Organization,
Having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its 86th Session on June 1998,
Having regard to the growing recourse to contract labour, and recognizing that it is appropriate to adopt new standards on the subject with a view to ensuring that contract workers enjoy adequate protection,
Having decided upon the adoption of certain proposals with regard to contract labour, which is the fifth item on the agenda of the session, and
Having determined that these proposals shall take the form of an international Convention;
adopts this day of June of the year one thousand nine hundred and ninety-eight the following Convention, which may be cited as the Contract Labour Convention, 1998.
Observations on the Preamble
Comoros. The Preamble of the instrument should acknowledge that the growing importance of contract labour warrants the adoption of new standards on the subject in order to afford the workers concerned adequate protection.
Egypt. The Preamble should mention to Conventions referring explicitly to contract labour, including the Indigenous and Tribal Peoples Convention, 1989 (No. 169), the Labour Clauses (Public Contracts) Convention, 1949 (No. 94), as well as Conventions referring implicitly to contract labour, including the Labour Inspection Convention, 1947 (No. 81), the Termination of Employment Convention, 1982 (No. 158), and the Safety and Health in Construction Convention, 1988 (No. 167).
El Salvador. The focus on the growing recourse to contract labour is a valid one considering the rapidly increasing number of employment relationships established in the context of subcontracting.
Switzerland. UPS/ASM/CP. It is striking that, at a time of globalization, contract labour is dealt with only with a view to providing adequate protection to the worker, without underlining its importance for the flexibility of enterprises and the employment opportunities that flow from it.
Office commentary
The proposal made in one of the observations to refer in the proposed Preamble to the ILO instruments concerning matters related to contract labour is similar to that already made during the first discussion and which was not taken up by the Conference in 1997. Another observation suggested that the proposed Preamble should underline the importance of contract labour as a source of flexibility and employment creation. A similar amendment, introduced during the first discussion, was not accepted by the Conference Committee in 1997. The text of the proposed Preamble therefore remains unchanged.
Article 1
For the purposes of this Convention:
(a) the term "contract labour" means work performed for a natural or legal person (referred to as a "user enterprise") by a person (referred to as a "contract worker") where the work is performed by the worker personally under actual conditions of dependency on or subordination to the user enterprise and these conditions are similar to those that characterize an employment relationship under national law and practice and where either:
i(i) the work is performed pursuant to a direct contractual arrangement between the worker and the user enterprise; or
(ii) the worker is provided for the user enterprise by a subcontractor or an intermediary;
(b) the term "subcontractor" means a natural or legal person who performs work for a user enterprise under a contractual arrangement with it, other than a contract of employment;
(c) the term "intermediary" means a natural or legal person who makes contract workers available to a user enterprise without becoming formally the employer of these workers.
Observations on Article 1
Australia. (a) For the purpose of the instrument, contract labour should be defined by the presence of a contractual relationship, and not by the legal status of the principal contractor independently of the contractual relationship. A distinction should be made between contracts for service and contracts of service. Persons who work under a contract for service are regarded, in Australian jurisprudence, as "independent contractors", where no employment relationship exists. Persons who work under a contract of service are regarded as "employees", governed by an employment relationship. The terms and conditions of "independent contractors" have generally not been regulated in the same way as for employees. Their arrangements are covered by the normal principles of contractual and commercial law. However, some occupational, health and safety legislation also applies to independent contractors. Furthermore, Australian law allows the review of contracts for services made by independent contractors. The phrase "actual conditions of dependency on or subordination to" may prove to be difficult to apply. Potentially, a person may be held to be an independent contractor under domestic law, but could also be found to be performing "contract labour" in accordance with the Convention. This subparagraph should specify that a contract for the provision of labour (rather than services) exists between the user enterprise and the worker. The use of the phrase "these conditions are similar to those that characterize an employment relationship under national law and practice ..." potentially broadens the application of the proposed Convention to types of contractual arrangements which, in Australian law, would normally be held to be contracts for services. As the report correctly points out, if any disguised employment relationship exists between parties, the conditions for dependency and subordination will be as for any other employer-employee relationship. Thus, use of the phrase "similar to those that" only serves to imply a "third category" of workers. It is suggested that the word "similar" be replaced with a phrase such as "substantially the same", in order to minimize this risk. (b) In Australian law, a subcontractor is generally a natural or legal person who is engaged in a contractual relationship with another natural or legal person (the principal contractor) who originally contracted with the user enterprise to provide services. The contractual arrangement set out in the proposed definition is what would be recognized in Australian law as a contract for services, with the legal or natural person being an "independent contractor". Accordingly, the use of the term "subcontractor" has the potential to cause confusion. (c) The use of the term "intermediary" is too broad, and may extend obligations beyond the contracting parties. Any proposed concept should more precisely address the relationship between the various parties. It would be more appropriate to define the role as that of an "agent".
ACCI. The Office is right to suggest to include once again the reference to a contractual arrangement not involving a contract of employment, which was removed during the first discussion. None the less, the definition remains totally unacceptable because it goes far beyond what is necessary to deal with the only serious issue, namely, fraudulent or illegal arrangements. In addition, the definition is conceptually confusing, contains an invalid use of the term "subcontractor" and interferes with commercial relationships. Consistency of terminology, such as "contract of employment", "recognized contract of employment", "formal employment relationship" is preferable, unless variation is expressly required by the context. The Office proposal to delete the phrase "are similar to those that" from the definition is agreed to, although the Office proposal involves acceptance of the Employers' argument that the original text did indeed create a third category of worker who is not an employee nor an independent worker, but something in between. The Office proposal introduces greater clarity into the definition, but the definition itself remains unacceptable.
Austria. (a) The phrase "workers who, in accordance with national law and practice, have a recognized contract of employment with the user enterprise" should again be incorporated into the definition in Article 1 and the corresponding reference in Article 2 should be deleted. It has been argued that no "third category" between employees and self-employed persons should be created and that, therefore, a broad definition of "contract labour" has been chosen. However, it could be counterargued that the present construction (broad definition and exclusion from the scope) also fails to solve the question of which contractual relationships fall within the scope of the proposed Convention. Classical employment relationships are excluded, but there remains another category of contractual relationships, to which the proposed Convention applies. Therefore, the following change to (i) is proposed: "the work is performed pursuant to a direct contractual arrangement between the worker and the user enterprise which cannot be qualified as a contract of employment." If classical employment relationships are intended to be covered by the proposed Convention, the latter should explicitly provide that the minimum protection for contract workers does not affect the application of more favourable member State provisions governing classical employment relationships. As regards the use of the word "similar" with reference to conditions of dependency or subordination, the proposed Convention should encompass all persons who in view of their economic or organizational dependency on the user enterprise and the imputation of profits and losses to the user enterprise demonstrate a need for the same kind of protection. In any event, persons who should be considered as self-employed workers under national laws, regulations or court decisions should not be covered by the Convention (cf. the Home Work Convention, 1996 (No. 177)). The present text of (a) does not sufficiently meet these goals. To make it clear that self-employed workers are excluded, the wording used in Article 1(a) of the Home Work Convention, 1996 (No. 177), could perhaps be retained. The phrase "... are similar to those that ..." should be redrafted to read "... are predominantly similar to those that...", to make it clear that when various conditions are present, contract labour only exists if those conditions of dependency prevail that are similar to those that characterize an employment relationship. Furthermore, Paragraph 2 of the proposed Recommendation should be incorporated into the Convention. Member States would then have to take these criteria, which are presently only examples, into account when assessing whether the condition of "dependency on or subordination to" the user enterprise is fulfilled. It should be made clear that the criteria do not have to be fulfilled simultaneously, but that what matters is quantitative and qualitative predominance of the essential characteristics in the light of the actual contractual relationship. As regards the diverging direct and indirect references to contracts of employment in Articles 1 and 2(1), either "employment relationship" or "contract of employment" should be used consistently throughout the text. Article 1(a) establishes the definition of "contract labour" and "contract worker". In the German text the word "Arbeitnehmer" (which can mean employee) should consistently be replaced by the word "Vertragsarbeiter" (contract worker). (b) The proposed definition of "subcontractor" contradicts (a) (ii). If the latter stipulates that the worker is provided for the user enterprise by a subcontractor, (b) cannot define a subcontractor as a "person who performs work for a user enterprise under a contractual arrangement with it, other than a contract of employment." A subcontractor should be defined as "a natural or legal person who provides his or her own workforce to a user enterprise to perform work, without there being a contractual relationship as an employee or a contract worker established between the user enterprise and the workers." (c) It follows from this provision that the intermediary, by making "contract workers" available to a user enterprise, does not become either the employer or the principal. This raises the question of whether these cases should be separately dealt with at all. The worker made available in such cases will enter into a contractual relationship with the user enterprise (employer), according to which the contracting parties will either be employer/worker or principal/contract worker. The latter contractual relationship, however, is covered by (a) (i). The activity by which an intermediary makes workers available to a user enterprise should, therefore, not be the subject of the proposed Convention. The text of (c) should be deleted, as well as the words "or an intermediary" in (a) (ii).
Barbados. (1)(a) The words "are similar to those that" should be deleted. (i) The words "other than a contract of employment" should be inserted after "the worker and the user enterprise" to make a distinction between the contract worker and the employee, i.e. between a contractual relationship and an employment relationship. (b)and (c) The term "contractual relationship" should be used throughout the text when referring to the relationship between the user enterprise and the worker, since both the employee and the contract worker establish some type of contractual relationship, be it a contract of or a contract for service. On the other hand, the term "contract of employment" should be used throughout the text in reference to an employer-employee relationship.
Belarus. According to Belorussian labour law, subordination is one of the key characteristics of a contract of employment distinguishing the latter from a contractual arrangement under commercial law, including a subcontracting arrangement. According to the Civil Code of Belarus, a subcontracting contractual arrangement does not involve subordination between the parties concerned. This is the reason why the provisions of labour legislation do not apply to subcontracting arrangements. Therefore, the words "subordination to the user enterprise and these conditions are similar to those that characterize an employment relationship under national law and practice" do not seem to be appropriate for inclusion in the definition of "contract labour". Articles 5, 6, 7 and 8 of the proposed Convention and Paragraphs 3, 4, 5 and 12 of the proposed Recommendation are therefore not acceptable.
Belgium. From the definition it emerges clearly that the proposed Convention does not apply to what is generally understood as "travail en sous-traitance" (contract labour), i.e. work performed by a natural or legal person for the benefit of a user enterprise which does not exercise over this natural or legal person or over the workers of the latter the authority that normally characterizes a contract of employment. Finding a suitable French term for the relationships concerned is especially difficult because of the pressure to find a legal description of a phenomenon which does not exist. The proposals of the Office refer to the terminology of the French Labour Code, but apparently do not solve the problem because this terminology covers situations which are again different from those envisaged in the proposed instruments. Subject to the observations made below, a distinction can be made between two kinds of scope: (1) The instruments would cover only workers who are not bound by a contract of employment with the user enterprise or with an intermediary. This hypothesis would require the adaptation of Article 2(1) and would also result in the recognition of a third category of workers who are not bound by contract of employment nor fulfil the conditions to be considered self-employed workers. (2) The instruments cover workers who do not have a contract of employment with the user enterprise and (a) have either concluded another contract with the user enterprise, or (b) have concluded a contract of employment or another contract with an intermediary. In the first hypothesis the fundamental problem is the same as in situations in which there is an intermediary and in which there is none: there is no protection because there is no contract of employment and the large majority of ILO instruments do not apply. A second problem might be the division of responsibility (or shared responsibility) between the user enterprise and the intermediary. In the second hypothesis, the instruments must govern two fundamentally different questions: (i) the status of workers who do not have a contract of employment, regardless of whether they are recruited directly by the user enterprise or by the intermediary; (ii) the division of responsibility or joint responsibility of the user enterprise and the intermediary for those workers who have a contract of employment with the intermediary. The provision of (i) is irrelevant for workers bound by a contract of employment. In fact, only Article 4(a) and (b) is relevant for these workers and should, therefore, be treated differently in the Convention. In view of these difficulties, it would seem better not to mingle provisions dealing with the status of workers bound by a contract of employment with either the user enterprise or with the intermediary with the provisions dealing with workers who are not bound by a contract of employment with the user enterprise or with the intermediary.
National Labour Council (CNT). It appears from the scope that the proposed Convention aims to regulate an intricate set of situations, including bilateral as well as triangular relationships. In spite of its title and broad scope, the proposed Convention does not deal with "sous-traitance" proper: in a 1996 opinion the CNT defined "sous-traitance" as a situation in which a contractor ("sous-traitant") concludes a contract for services with a principal to perform specific work for the account of the principal on his own or with the assistance of his own personnel. The attempt to regulate bilateral and triangular arrangements in one and the same text leads to confusion and ambiguity. Under the present text, the workers concerned run the risk of not being considered to be bound by a contract of employment anymore. There is indeed a danger that the instrument will create, in addition to employees and independent workers, a kind of third category of persons who do their work "under actual conditions of dependency on or subordination to a user enterprise", such conditions being "similar to those that characterize an employment relationship". Such a category should not be created, and indeed the Office itself has realized that the scope, definition and title of the proposed instrument are problematic. The international context is complex and it is difficult to reflect all situations in a single text without formulating ambiguous and vague provisions. International regulation, however, must be clear and straightforward so as not to make life difficult for member States that already have regulations that meet the objectives pursued. The instrument to be adopted should, therefore, focus on the situation which is the most problematic and which therefore has the greatest need of a legal framework. The first Conference discussion suggested that this is the situation in which an "intermediary" is involved (Article 1(c)), i.e. a natural or legal person providing workers to a user enterprise, without the intermediary or user enterprise taking responsibility as an employer. Moreover, the instrument should guarantee that all persons having an employment relationship are covered by ILO standards. Member States must take the necessary measures to expose abuses involving concealed employment relationships. Therefore, the following strategy is proposed: (1) Member States should be required to establish a transparent system, in accordance with national law and practice, that makes it possible to determine whether an employment relationship exists. Once the employment relationship is demonstrated, workers would enjoy the protection offered by national and international regulations. (2) An adequate system should be developed for protecting workers made available against abuses, in particular where the aim is to circumvent labour law or social security regulations. This can be done, as in Belgium, by prohibiting in principle any provision of workers to third parties other than through temporary work agencies. Exceptions can be granted provided the activity for which the exception is granted meets certain conditions and is well monitored, and the legal status of the workers is secure as regards conditions of work and remuneration, safety and health, and social security coverage. In addition, equality of treatment between permanent workers of the user enterprise and workers made available must be ensured. (c) Employees of private employment agencies have been excluded from the scope of the proposed instrument, since they are covered by the Private Employment Agency Convention, 1997 (No. 181). Excluding these employees is, however, justified only if national legislation affording them adequate protection has been adopted. Such a precondition should be added to the Convention.
Botswana. (a) The deletion of the phrase "are similar to those that" would add meaning and clarity to the definition of contract labour. Where it is found that a person is working under a disguised relationship, that there is indeed an employment relationship under national law and practice and that the work is performed under actual conditions of dependency on or subordination to the user enterprise, that person would automatically be treated as an employee and enjoy protection.
Brazil. (a) The definition of the different forms of contract labour proved to be the most controversial issue during the first discussion. This is sufficient reason for a wide-ranging second discussion in the Conference Committee. Contract labour as defined in this Article would be assimilated in the Brazilian legal system to temporary work in the broad sense of the term, as regulated by Act No. 6019 of 1974, and thus not be consistent with national practice. The provision in its current form might indeed give the impression that contract labour also includes situations in which a contract worker and a user enterprise have established an employee-employer relationship, whereas a contract labour relationship presupposes the contrary, i.e. that no contract of employment has been concluded by the worker and the user enterprise. (c) The concept of "intermediary" is another matter of concern to the extent that an intermediary can be a natural person. Contract labour is an exceptional legal regime and, unless certain precautions are taken, the fact that natural persons, as intermediaries, provide workers for a user enterprise, without such intermediaries acquiring the status of employer vis-à-vis the workers, may result in "haggling". In general, the proposed definitions are inherently ambiguous, reflecting the difficulties involved in establishing an unequivocal definition of a contractual working arrangement that takes different forms in different member States.
CNI. The Office proposes that reference once again be made to a contractual relationship that is not a contract of employment. While this proposal is valid, the definition remains totally unacceptable. The definitions are obscure and ambiguous and do not reflect the differences that exist in different countries and different languages.
CNC. The notion of workers who have a recognized contract of employment with the user enterprise should indeed be excluded from the definition of contract labour for the reasons set out by the Office. Even then, however, the definitions remain unacceptable. They are obscure and ambiguous and do not reflect the diverging concepts found in various countries and different languages.
Single Central Organization of Workers (CUT). The contract labour regime should be accepted as an exceptional legal regime and the actors involved should be legal persons. In the definition of "user enterprise" and "intermediary", it is unacceptable that these can be natural persons. Labour standards should favour a direct relationship between the worker and the user enterprise and only exceptionally allow for an intermediary or a secondary legal connection. Accepting that an intermediary or agent for contract labour can be a physical person amounts to legalizing "haggling". This possibility should be excluded.
Canada. In the French text, "travail en sous-traitance" should be replaced by "travail sous contrat" wherever it appears as the French equivalent of "contract labour". Ambiguities resulting from the fact that "travail en sous-traitance" could potentially be considered as synonymous with "contracting out" should in any case be resolved. See the General observations for the required coverage of the "dependent contractor" in Canadian labour law and practice. (a) Concerns have been expressed that the instrument would provide a basis for unwarranted intrusion in commercial relationships. These concerns were addressed in paragraph 32 of the Provisional Record No. 18 of the first Conference discussion, in which the Office explained that dependency means "dependency, which is recognized by national law and practice as a characteristic of an employment relationship" and that it had not introduced the word "economic" in the text.
CEC. See the comments under General observations. The CEC has no position on the alternate phraseology of "contract worker" in French or Spanish, as a definition in any language is unacceptable.
Canadian Labour Congress (CLC). The definition in the current text is satisfactory. "Travail sous contrat" is the preferred French translation of "contract labour".
CNTU. The notion of a contractual arrangement other than a contract of employment should not reappear in the definition. The definition is complete as it stands and implies this notion. The notion of "recognized contract of employment" should be used where appropriate. The phrase "are similar to those that" should not be deleted, since this would make the text much too narrow and restrain the meaning intended by the Conference Committee. The expression "travail en sous-traitance" is ambiguous in that it simultaneously conveys different realities which in English are indicated by the terms "contract labour" and "contracting out". "Travail sous contrat" is, therefore, more acceptable.
Comoros. The expression "contract labour" should refer to work performed by a contract worker for a natural or legal person. The term "subcontracting" should refer to any natural or legal person who concludes a contract to have work performed or a service provided to a user enterprise.
Costa Rica. (a) The concept used here is that of work performed personally by the worker and it should apply both to bilateral (direct) and triangular (indirect) relationships but not to commercial arrangements. This explanation of the definition of contract labour and the two different situations described in the Article are endorsed. The idea of a contractual arrangement not involving a contract of employment between the user enterprise and the worker should be retained as a key element in the definition, since it indicates most clearly that no contract of employment has been concluded by the worker and the user enterprise. This gives the instrument greater clarity and allows it to cover a contract labour relationship more precisely. Furthermore, a single concept, such as "contract of employment", "recognized contract of employment" or "formal employment relationship" should be used throughout the text. The words "similar to" should be deleted. The Conference Committee was right in stating that the words imply that a third category of workers is being created. Workers should not lose their status as such by virtue of being a contract worker. As regards the most fitting translation of "contract labour" in French and Spanish, preference should be given to alternative (b)indicated in the Office commentary.
Croatia. The definition of "contract labour" is not clear enough and, as proposed, would seem not to exist in Croatia.
Cyprus. A contractual arrangement involving a recognized contract of employment between the user enterprise and the worker should be excluded from the definition of "contract labour". The same terminology with regard to direct or indirect references to contracts of employment should be used throughout the texts in the interest of consistency. (a) The word "similar" should be avoided.
EIF. The different forms of contract labour vary widely and therefore need to be dealt with separately. Certain forms of contract labour should be explicitly excluded. The concept of dependency or subordination in the proposed Convention is confusing and difficult to apply. This matter should be left to the competent national authorities.
Czech Republic. The proposed instruments should clearly define "contract labour" and distinguish this type of relationship from those of a commercial or civil kind. Only then would member States be able to ratify them.
Denmark. (a) In Denmark, persons in a state of dependency, but not in a state of subordination, are considered self-employed, irrespective of the fact that the relationship may in some respects be similar to an employee relationship. Such is, for instance, the case of small supplier-subcontractors. There may be a need to discuss whether this group should have some of the rights usually reserved for employees, for instance, as regards safety and health and discrimination. However, it is not appropriate or useful to treat this group as employees. It is not clear whether the ILO actually intends that there be a difference between conditions of dependency and conditions of subordination or whether the two terms are synonymous (in which case the present formulation should not be used in a legal instrument). There is, in particular, a problem when it is stipulated that the conditions of dependency or subordination are of a kind characterizing an employment relationship. The definition of "contract labour" should therefore be reworded so that it refers to work performed under conditions of dependency and conditions of subordination. This would mean that small self-employed businesses would still be considered self-employed. It is true that these self-employed groups are often in a situation resembling that of employees, but including them in the concept of "employees" would certainly not be appropriate either. Furthermore, applying the criteria in Paragraph 2 of the proposed Recommendation would in a large number of cases result in the person who works under conditions of subordination being considered an employee. In reality, it is extremely difficult, if not impossible, to find a person who works under conditions of dependency, but not in conditions of subordination. The expression "these conditions are similar to those" should also be deleted so as to eliminate any doubt that this Convention might create a new group of employees who do not enjoy full employee rights. (b) and (c) There is a difference as to whether the worker has been made available by a "subcontractor" or an "intermediary". A "subcontractor" is an enterprise which concludes a contract for the performance of work or the provision of services on its own account, at its own risk and with its own employees for a different enterprise. It is a matter of principle that the subcontractor bears the financial responsibility as well as the other employer's obligations towards the employee. Employees of the subcontractor are covered by the general rules on protection of workers and do not need to be protected under this Convention. An "intermediary", however, is a person who provides the worker without having any independent employer obligations in relation to the worker. This type of worker should be protected by the Convention.
DA. The Article is unacceptable and the definition makes no sense. The proposed Convention creates a new "detached" category which is inserted between employees and self-employed persons and purports to solve the problems of the persons in this category.
Ecuador. The term "contract labour" is ambiguous and might be confusing with respect to the definition of an employment relationship, in the general sense of the term, under the labour law of Ecuador. It is suggested that the scope of the word "similar" be defined to avoid any possible errors in interpretation. (i) This is certainly a topic for discussion in view of the adoption of a Convention on a type of work which is becoming increasingly important. The proposed Convention uses three expressions to refer to the employment relationship under consideration: contract of employment; recognized contract of employment; and recognized employment relationship. For the purposes of clarity, it is suggested that the expression "duly authorized contract of employment" should be used when reference is made to a contract directly concluded between the employer and the worker.
Egypt. (a)(i) This provision should be deleted, because in this case the contract worker would be considered a regular employee of the enterprise pursuant to the contractual arrangement or an employer. The definition should be confined to(a)(ii), which states that the worker is provided for the user enterprise by a subcontractor or an intermediary. (b) The term "natural person" should be deleted, as there is no justification for any contractual arrangement between the worker and the user enterprise as indicated in (a)(i) above.
El Salvador. The terminology of the provision should be made more specific so as not to create an impression that "contract labour" encompasses the whole range of situations in which a contract worker and a user enterprise have established an employment relationship. The Conference Committee removed from the definition of "contract labour" the idea of a contractual arrangement not involving a contract of employment between the user enterprise and the worker. This has raised the question of whether the non-existence of a contract of employment should not be a key element in the definition of "contract labour", considering that a contract labour relationship necessarily implies that no contract of employment has been concluded between the user enterprise and the worker. (b) and (c) The discrepancies in terminology in the text with regard to direct and indirect references to contract of employment which also appear in Article 2(1) should be eliminated. At the same time, a single concept of "contract labour" should be formulated. The need to maintain or eliminate the words "are similar to those that" should be considered. As regards the translation of the term "contract labour" in French and Spanish, the phrase "travail sous contrat" (a suggestion made during the first discussion) is preferred.
Finland. (a) In its present form, Article 1 makes a clear distinction in (i) and (ii) between a bilateral and a triangular relationship. The Committee deliberations removed the distinguishing element of contract labour, i.e. the lack of an employment relationship between the contract worker and the user enterprise, from the definition and placed it in Article 2 on the scope of application of the Convention. The Office proposes to reinstate the element in the definition, arguing that if the definition does not mention the absence of an employment relationship, the Convention could perhaps be interpreted as being applicable also to contract workers who have an employment relationship with the user enterprise. However, it does not seem necessary for the definition to refer specifically to the absence of an employment relationship between the contract worker and the user enterprise. What is extremely important is that the Convention does not force member States to create a third category of work contracts under national labour law, somewhere between an employment contract and a contract with an independent entrepreneur. The Office proposal would have exactly the effect that the change made to the text by the Committee sought to avoid. Finland supports an approach whereby those member States whose legislation already sustains a broad concept of "worker", "employment relationship" or "employment contract" would therewith fulfil their obligations with respect to bilateral agreements for the performance of work arising from (i). This would be the case if employment contracts were excluded from the Convention's coverage, as prescribed in Article 2. It would then only be necessary to extend the range of persons to be protected in this respect in legal systems where the concept of an employment contract has only a limited scope: protection would have to be extended there to all persons performing work in actual conditions of dependency or subordination. As regards the proposed deletion of the words "are similar to those that", in fact the provision would be clarified if the entire phrase "and these conditions are similar to those that characterize an employment relationship under national law and practice" were deleted. The proposed instruments seek to define the dependency of a contract worker in two different ways. The definition contained in the proposed Convention, which itself leaves room for interpretation, refers to the national characteristics of an employment relationship. On the other hand, Paragraph 2 of the proposed Recommendation provides a long list of criteria designed to define a worker's dependency or subordination. The latter method is sufficient, and the reference could be dropped from Article 1. (b) It may be advisable to reduce the very wide scope of the definition, inter alia by excluding private employment agencies from the definition. (b) and (c) The proposed use throughout the text of a single term to cover the concepts "contract of employment", "recognized contract of employment", and "formal employment relationship" is supported.
LTK/TT. The definition of contract labour is complicated, difficult to understand and exceedingly vague. It implies the creation of a new, third category of work somewhere in between work performed on the basis of a contract of employment and as an entrepreneur. The effect on triangular arrangements will be that the definition also covers workers who already have a recognized employment relationship. This will interfere with commercial arrangements, which fall outside the ILO's jurisdiction.
KT. The definition of contract labour does not provide a totally clear, independent interpretation of the concept. It ultimately leaves contract labour to be defined in negative terms, as "no employment relationship". It should be possible to define contract labour in both the proposed Convention and Recommendation as a situation in which a person agrees to perform work for a work supplier without any employment relationship being involved. This would provide the necessary flexibility. Such agreements have already been concluded with, for instance, freelance workers and other persons selling services as independent entrepreneurs.
SAK/STTK/AKAVA. The definition of "contract labour" is acceptably worded. It is essential for the Convention to cover disguised as well as triangular employment relationships. For the sake of clarity, it may be wise to state in the initial definition that a legal employment relationship with the user enterprise automatically excludes the person concerned from the Convention's scope. The phrase "are similar to those that" should not be deleted, as it is important to underline the similarity of contract labour and work performed on the basis of an employment relationship under national law, since there are already several worker categories recognized. The clearest term describing the employment relationship to be used throughout the text is "legally established contract of employment".
France. CFDT. In the French version, "travail en sous-traitance" is less ambiguous than "travail sous contrat" and should be retained. Since the definition of contract labour is clear, new terminology would not provide any extra clarification.
CGT-FO. Creating a third category of workers is out of the question, so the text should not harbour the slightest ambiguity in this regard. The wording based on sectionL. 125-2 of the French Labour Code should not be retained. Section L. 125-2 of the French Labour Code applies to "travailleurs sous contrat", i.e. all employees. "Travail en sous-traitance" refers to "travailleurs sous contrat" (service enterprise) performing work for a user enterprise (triangular or indirect relationship). If there are bilateral relations, in law there is a contract of employment, but this should not exclude a "travail en sous-traitance" relationship.
Germany. As suggested by the Office, Article 1 could state that the definition of contract labour does not cover "workers who, in accordance with national law and practice, have a recognized contract of employment with the user enterprise". The second sentence of Article 2(1) could then be deleted. Since Paragraph 2 of the proposed Recommendation refers to Article 1 of the Convention, a consistent definition would thus be guaranteed. The words "and these conditions are similar to those" should be deleted. This would make it clear that, in a disguised employment relationship, the conditions of dependency and subordination are the same as those of any other employer-employee relationship recognized by national law and practice. (b) and (c) In the interest of consistency between these two subparagraphs, Article 2(1) and Articles 5 and 6 of the proposed Convention, the words "recognized contract of employment" or "recognized employment relationship" should be used throughout the text. (c) The restriction "without becoming formally the employer of these workers" should at any rate be maintained.
BDA. German case-law has developed a very practical, but also a very broad concept of "employee". The application of provisions protecting the employee is tied to this concept. Although the proposed Convention does not directly alter this notion, the envisaged protection of contract workers mirrors the protection of employees. Indirectly the employee concept is thus broadened so as to include contract workers. Such a widening of the scope of protective legislation can under no condition be accepted. Fundamentally flawed are the proposed Convention's definitions of "contract labour", "user enterprise", "contract worker", "subcontractor" and "intermediary". Sections of the law on contracts of employment are freely blended here with the law on contracts for services, the law on work performance contracts, the law on business management contracts, the law on contracts for services and materials and the law on agency contracts. The definitions lack the necessary clarity. In Germany, a large number of services are provided and a lot of work is performed by independent individuals. The criterion of economic dependency equally affects a large number of individuals and undertakings considered to be independent according to German law. For instance, so-called single-enterprise suppliers are economically dependent upon their principal. On the other hand, the principal is also in many ways dependent on the services of the supplier. Such a relationship of mutual dependency is normal for contractual relationships. Well-calibrated contractual relationships of this kind should, however, not be regulated to the extent envisaged in the proposed Convention. Some of these independent occupations are specifically protected by the law on commercial representatives. The law has deliberately qualified these occupations as self-employed, but they will now be forced to abide by labour law rules. It is not clear to what extent the Convention applies to persons who under German law are known as "employee-assimilated persons". Such persons operate on the basis of a contract for services or a work performance contract, but are in some respects placed on the same footing as employees because of their economic dependency (e.g. jurisdiction of the labour courts over legal disputes, applicability of the Collective Labour Agreements Act). In other respects, these persons are not subject to German labour law. The dependency criterion, which is not further defined in the Convention, highlights how difficult it is to lay down demarcation criteria by law in this regard. German case-law recognizes personal instead of economic dependency as the criterion to distinguish employees from independent persons and has developed a variety of criteria to determine "personal dependency". German courts assess every case on its merits and give more weight to one criterion or another depending on the case. The proposed Convention suffers from another contradiction for which it is hard to conceive a solution. While an individual who provides a service to a company performs "contract labour", there would be no "contract labour" when two or more persons provide the same service (for instance when they have founded an association together under the German Civil Code). The implementation of a Convention on contract labour will give rise to extensive bureaucratic measures. User enterprises will have to make social security contributions to the competent authorities, where they will have to be administered and competent supervision will be required. New claims, and corresponding bureaucratic expenses, will accrue from the obligation to provide social security and ensuring compliance with protective legislation will result in added administrative expenditure. All this will lead to increasing costs, decreasing demand for "contract labour" and lower levels of employment.
DGB. (c) The phrase "without formally becoming the employer of these workers" should be deleted. The deletion will, according to German law, bring leased workers into the scope of the Convention.
Greece. (a) The removal of the notion of a contractual arrangement not involving a contract of employment from the beginning of the definition is endorsed. There is equally no objection to deleting the phrase "are similar to those that" to the extent that the Office considers that this would clarify the definition. In the French text, the phrase "travail sous contrat pour l'exécution d'un certain travail ou la fourniture de certains services" is preferred, because it is more precise and detailed. (b) and (c) With a view to consistency it would be useful to have a definition of the term "contract of employment" which appears throughout the text.
Hungary. (b) In view of the fact that legal persons may in no way act as employees, the term "subcontractor" is impossible to interpret in respect of the former. In conjunction with (a)(ii) the term is again ambiguous because if the worker is provided by an employment agency, the actual legal relationship is between the legal person in question and the user company. However, the employee of the subcontractor is bound by a legal relationship with the subcontractor, whereas the user company provides only the premises for the work. Finally, according to (c), an employment agency means a natural or a legal person providing contract workers to the user company without formally becoming the employer of these workers. According to Article 2(1), however, the Convention does not apply to employees of private employment agencies made available to a user company for performing contract work. It is necessary to provide in this respect that the employees of the employment agency have a legal relationship with the employment agency, and that no legal relationship is established between these persons and the user company.
Employers. The notions of contract labour, subcontractor and intermediary should be omitted from the text as their definition is confused, ambiguous and illogical.
India. All India Trade Union Congress (AITUC). (b) The term "subcontractor" should be replaced by the term "contractor and subcontractor". The term "subcontractor" cannot take the place of the word "contractor". See the comments under Article 6 on the protection of employment of contract workers.
Indonesia. (a) The definition of contract labour should contain two elements: (1)the work is for a definite period and/or a specified job, and (2) from the point of view of the type of work or the activities involved, any job could be categorized as "contract labour". (b) and (c) Agreed.
Italy. See comments under General observations.
Japan. (a) The final part of the subparagraph should be amended as follows: "...where the work is performed by the worker personally under actual conditions of dependency on or subordination to the user enterprise and these conditions are equivalent to those that characterize an employment relationship under national law and practice, except that there is no contract of employment between the worker and the user enterprise and where either; (i) the work is performed pursuant to a direct contractual arrangement other than a contract of employment between the worker and the user enterprise, or (ii) the worker is provided for the user enterprise by a subcontractor or an intermediary (excluding the case where the worker is employed by a private employment agency)." In order to make it clear that a third category of workers is not being created, the word "equivalent" should be used instead of "similar" and the absence of a contract of employment between the user enterprise and the worker should be indicated. Moreover, the definition should reflect two conditions: there is no contract of employment between the user enterprise and the worker, and the worker is not employed by a private employment agency. (b) and (c) It is not clear whether "being formally the employer" requires a contract of employment. Nor is it clear how "a recognized contract of employment" differs from a simple "contract of employment" or what it precisely is. The provisions related to definition and exclusion from the scope should be clear so that each member State can easily judge which situations come under which category and can apply the Convention in accordance with their actual conditions. Therefore, "contract of employment" is the most appropriate term of the three proposed.
NIKKEIREN. The terms "contract labour", "contract workers", "subcontractors" and "intermediary" are defined differently among member States. Instead of providing a uniform definition, any definition as well as the procedures for reaching such a definition should be determined in accordance with the actual circumstances of each member State.
JTUC-RENGO. Contract labour taking the form of disguised or triangular employment relationships should be defined more clearly.
Republic of Korea. KEF. The concept of "dependency ... or subordination ... similar to ..." cannot be an objective criterion to determine the status of a worker. Any attempt to create an exhaustive list of criteria for such a decision will face problems because of the variety of arrangements in the field of contract labour. The concept is therefore unacceptable.
Lithuania. (a) The definition of contract labour should be corrected. From the point of view of property and organization, a person performing work under a contractual arrangement is not subordinate to and is independent of the "user enterprise". A contract worker performs work using his own property and at his own risk. On the other hand, an employee performs work according to established rules under conditions of subordination to the administration, while the property belongs to the enterprise. (b) It would be better to use the term "contract worker" or "contractor", because "subcontractor" means a natural or legal person (specialized enterprise) entrusted by the general contractor to perform specialized or complex work.
Mauritius. (a) The words "are similar to those" should be maintained. Otherwise, persons working under a normal contract of employment would also be considered contract workers.
Mexico. (a) The terms "dependency" and "subordination" used in the proposed texts allude to the possibility that a contract of employment between the user enterprise and the worker might exist. According to the Committee drafting the proposed Convention, this is not correct. The confusion is compounded by the statement that these conditions are similar to those that characterize employment relationships under national law and practice. The notion of "contract labour" should be clarified. For example, in the light of Mexican legislation the concept used in the proposed Convention really constitutes an employment relationship with all its legal consequences. As such, formally recognized contracts of employment with user enterprises may not be excluded from the application of the proposed Convention, as Article 2(1) provides. To that extent, the points of the proposed Recommendation in relation to the obligations arising from the employment relationship laid down in the Labour Act are inadequate. Likewise, subparagraph (i) could be understood as a conventional employment relationship in which there is also a direct contractual relationship between the worker and the user enterprise. (c) Instead of the present definition the following is suggested: "An intermediary is a person who contracts or is involved in contracting one or more workers to perform work for an employer."
Netherlands. During the preparation of the first discussion, it was suggested that contract workers who have a contract of employment with the person making them available to a user enterprise, and who work for that enterprise under actual conditions of dependency on or subordination to the user enterprise, should be excluded from the scope of the Convention since they already enjoy the protection of a contract of employment. Triangular relationships which do not involve a contract of employment between the worker and the person making him or her available to the user enterprise should, therefore, be covered by the Convention, at least inasfar as a contract of employment with the user enterprise does not exist. This view is based on the finding that Convention No. 181 does not afford temporary workers the same protection as the Convention on contract labour -- a view which is clearly shared by the Office, judging from the remark on page 5 of Report V (1). However, the text of the proposed Convention raises two problems. (1) All triangular relationships which come under the category of "subcontracting" and in which the worker can be said to be working "under actual conditions of dependency on or subordination to" the user enterprise fall within the scope of the Convention, even if there is a contract of employment between the subcontractor and the worker. (2) It is unclear to what extent temporary workers provided by employment agencies are covered by the proposed Convention. The definition of an intermediary in Article 1 (c) suggests that temporary workers who do not have a contract of employment with the person providing them come within the scope of the Convention. Article 2 (1) excluding "employees of private employment agencies" points in the same direction. On the other hand, the Office commentary on page 53 of Report VI (2) points in a different direction: the exclusion of "workers" would indicate the exclusion of all temporary staff. As it is important that temporary workers who do not have a contract of employment with the employment agency come within the scope of the Convention, the Office must indicate in the short term whether the present wording of Article 2 (1) should be taken to mean that only temporary workers with a contract of employment are excluded from the scope of the Convention. Further, the Government of the Netherlands needs to know before determining its position on the scope of the proposed Convention whether the latter permits member States to impose obligations on the person making the worker available instead of on the user enterprise if there is a contract of employment between the person making the worker available and the worker. If the answer is in the affirmative, the Convention should unambiguously say so. (a) The Office's premise that contract labour presupposes that no contract of employment has been concluded by the worker and the user enterprise is correct. Its proposal to include this aspect in the definition can be accepted. But we oppose the proposal to delete the words "are similar to those that", since this does not clarify the text. The definition does not attempt to define an employment relationship legally, but describes a factual situation to which the Convention then accords a minimum level of protection. The words "are similar to those that" are essential in this connection. If they are omitted, the text would read "... these conditions characterize an employment relationship under national ...", in other words there is then a contract of employment to which the Convention accords a lower level of protection. The present text is preferable. (b) and (c) With a view to uniformity when direct or indirect reference is made to the notion of contract of employment, the term "contract of employment" is preferable.
FNV. The absence of a contract of employment between the user enterprise and the worker is not a key element, as the Office suggests, with the support of the Government of the Netherlands. However, a text referring to the absence of a "recognized contract of employment" would be acceptable and should be used throughout the instruments. The FNV agrees with the Government of the Netherlands that the Office suggestion to remove the reference to "similar conditions" is neither helpful nor necessary to prevent confusion about a possible "third category". The notion of a "third category" will again give rise to discussion at the next session of the Conference.
The Office dilemma is that, on the one hand, it does not want to add a third category without on the other hand implying that this would essentially mean that, according to the Convention, whoever seems to be an employee has to be treated as an employee and, therefore, is an employee. But, because this is apparently not what the Office wishes to state explicitly, there is only one solution left: not to take the legal employee status as a starting-point, but the fact that a person is in a specific situation and under certain conditions needs protection. That person may be an employee (of the user enterprise or the intermediary), but it is not necessary to determine this beforehand, and it is not relevant if protection is needed. To afford workers who are denied employee status in their relationship with the user enterprise protection, two different approaches are possible: (1) To declare these workers "employees" of the user enterprise (and, for instance, put the burden of proof that they might not be employees on the user enterprise). According to this approach there is clearly no third category created. However, this approach is probably unacceptable to the majority of the ILO member States. (2) To afford them basic protection, regardless of their legal status. This approach in itself does not lead to a "third category", but would not prevent some countries from creating in their legislation a third category if they decide that this would be the best legal way to afford the workers adequate protection. It is recalled that the same discussion was held prior to adoption of the Homework Convention: member States may implement this Convention either by including homeworkers in their regular labour legislation, or by enacting specific legislation for homeworkers. The proposed Convention has opted for the second solution. However, it might be useful to clarify to member States that this does not prevent them from giving preference to the first solution at the national level.
New Zealand. NZEF. It is a key tenet of New Zealand law that the nature of the contract is a matter for the contracting parties to decide. Article 1 would remove the distinction between persons employed under contracts of service (i.e. as employees) and under contracts for services (i.e. as independent contractors), particularly those contracted to one enterprise only. Many persons prefer to work as contractors rather than as employees and the proposed Convention would entirely override the contractual position into which they have knowingly and willingly entered and deprive individuals of the attendant tax and other advantages which that relationship bestows. The fact that Article 2 makes provision for competent authorities to exclude from the Convention's scope "particular categories of workers" is some indication of the difficulties which the framers of the Convention themselves envisage. It is not a provision which will alleviate the problem which will arise where, while doing similar work, some persons are employed as independent contractors while others choose to work as employees.
Norway. The instrument should more unequivocally address the real issue, i.e. to secure for workers who perform work under actual conditions of subordination and dependency minimum protection against exploitation from the user enterprise or intermediaries. Whether the worker has a recognized employment relationship or not is irrelevant with regard to the right to minimum protection. The rights of the contract worker contained in this instrument should preferably also be harmonized with the rights of employees according to national law. This would both avoid the impression that a third category of workers is created and secure rights for the category of workers who in reality perform work in a disguised employment relationship. The definition should not include self-employed persons who for legitimate reasons are recognized as such by national law and practice, for instance lawyers. (a) The proposal to delete the expression "are similar to those that" is one of the necessary, but not sufficient, measures to avoid the impression that a third category of workers is being created. As the focus of the current proposal is on "contract labour", Article 1 or Article 2(1) should also provide a general exclusion of "workers who, in accordance with national law and practice, have a recognized contract of employment that gives better rights than the rights according to this instrument". This implies that workers who have a recognized contract of employment with enterprises other than the user enterprise, are equally excluded from the instrument. Like the employees of the user enterprise, these workers are supposed to enjoy the necessary protection according to their employment contract and should therefore not be covered by this instrument. However, any worker with a recognized contract of employment should be included in the instrument, if he or she does not have the minimum rights according to the instrument. A general exclusion as suggested above would be an important measure to avoid the impression that a third category of workers is being created. (b) and (c) In the interest of consistency of terminology the expression "workers with a recognized employment relationship (according to national law and practice)" should be used in Articles 1 and 2.
NHO. As an amendment, it is proposed that in accordance with national law and practice, procedures should be established which will allow the determination as to whether an employment relationship exists. Such procedures should be accessible and based on objective criteria which enable a clear differentiation to be made between commercial and employment relationships. Where an employment relationship is found to exist, the procedures should make it possible to identify the employer so as to ensure that the latter discharges his or her obligation as an employer. This proposal will also improve the ability of member States to ratify the instrument. The proposed amendment, which was also put forward by the Employers during the first discussion, would make detailed provisions unnecessary. The current definition characterizes the relationship between the contract worker and the user enterprise as one of dependency and subordination similar to that of an employment relationship. With such a wide definition the instrument establishes a new "third group" which has neither an employment relationship nor a contract relationship with the user enterprise. According to this definition, the term "contract worker" will not be identical with the Norwegian definition of an employment relationship. According to Norwegian legislation the establishment of such a new employment relationship requires changes in labour, social and tax legislation. Persons that are usually treated as self-employed, for instance attorneys, might be defined as employees of the user enterprise. A recognized employment relationship between the worker and the subcontractor is not excluded; for instance, employees of security companies used to guard government buildings might be considered government employees.
LO. The definition should make it clear that the term "contract labour" does not include an employment relationship between the user enterprise and the worker. The instruments should contain a consistent definition of an employment relationship. The term "contract labour" is given too narrow a definition in Article 1 of the proposed Convention and Paragraph 2 of the proposed Recommendation. The essence of the term "contract labour" is that the worker performs work under conditions of dependency on or subordination to the user enterprise. Paragraph 2 of the proposed Recommendation contains an incomplete list of relevant criteria to decide whether such dependency/subordination exists. These criteria are more or less similar to those used in different national legal systems to determine whether there is an employment relationship or not, as in Norway. As the Convention will not apply to workers who, in accordance with national law and practice, have a recognized contract of employment with the user enterprise, the instrument will not have any practical influence on the legislation of many countries. The definition of contract labour should therefore be extended. This could be done by more accurately specifying the criteria mentioned in Paragraph 2 of the proposed Recommendation. This would lower the threshold for establishing the possible existence of such a dependency or subordination between the worker and user enterprise. Furthermore, the criteria should be more compelling, so that national authorities have a smaller margin of discretion on the question whether there is dependency or subordination or not. The criteria should be transferred from the proposed Recommendation to Article 1 of the proposed Convention. Accordingly, the sentence "and these conditions are similar to those that characterize an employment relationship under national law and practice" should be deleted.
Poland. Polish labour law already seems to provide the protection which the Convention aims to offer. Section 22 of the Polish Labour Code stipulates that it is the performance of work upon request of the employer and not the name of the contract which constitutes an employment relationship. To conclude a contract under civil law in circumstances where a contract of employment should have been concluded is even an offence and labour inspection services can file lawsuits to have the existence of an employment relationship established, irrespective also of the legal personality of the employer.
Portugal. There is no objection to removal of a contractual relationship not involving a contract of employment between the user enterprise and the worker from the definition of contract labour and its inclusion in the provision concerning the scope (Article 2(1) of the proposed Convention). According to the CGTP, the expression "contract of employment" should be used to ensure consistent terminology. As regards the proposal to delete the words "are similar to those that", it would be preferable to retain this wording since it would cover a broader range of situations. As regards the translation of the term "contract labour" in French and Spanish, the French-speaking countries are better placed to decide on a translation best fitting the actual situation. It appears, nevertheless, that none of the two solutions put forward seems particularly fortunate: the first seems to be too reductionist, while the second adds circumlocutions which are redundant ("pour l'execution d'un certain travail") or lead to confusion ("ou la fourniture de certains services").
CIP. The definitions adopted are very broad. They not only try to cover contract labour, but encroach into the domain of commercial law. Commercial and contract labour spheres must clearly be demarcated. Having certain working arrangements such as temporary work explicitly excluded is absolutely essential. (a) The concept of subordination is unclear and its implementation problematical. A long, albeit not exhaustive list of criteria is, of course, not appropriate for an international instrument. The question should, therefore, be left to the national authorities.
CGTP. See comments of the Government.
Qatar. (a) The text should distinguish more clearly between the subcontractor and the intermediary. The subcontractor is the workers' employer, provides the workers to the user enterprise and thus has obligations towards the workers. An intermediary's obligations towards the workers expire as soon as he has provided the workers to the user enterprise. The final lines of subparagraph (a) should, therefore, read as follows: "where the work is performed: (i) pursuant to a direct contractual arrangement between the worker and the user enterprise; (ii) through a subcontractor; (iii) by a worker provided to the user enterprise by an intermediary."
Slovakia. (a) The word "subordination" should be deleted. "Dependency" is a broad notion already including "subordination".
South Africa. (a) The proposal to transfer the exclusion from the Convention of employees with a recognized employment relationship with the user enterprise from Article 2 to Article 1(a) is acceptable. The proposal to delete the phrase "or similar to those that" is not supported. Its deletion would have the effect of making the test for determining whether a person is a "contract worker" stricter than is currently the case. It is possible to imagine a situation in which a contract worker's conditions of dependency or subordination are similar to, but not the same as, those of an employee. The statement that a "third category of workers is being created" requires some comment. The danger could be avoided by inserting the words "the same as or" before "similar". (b) and (c) The appropriate term to be used throughout the text is "recognized employment relationship"; it is preferred to the use of "contract".
FEDUSA. To clarify and enhance the meaning of the text the words "... and these conditions are similar to those that characterize an employment relationship ..." should be replaced by "... and these conditions are the same as those of an employment relationship ...". Otherwise, the definition should be kept as it is. The reference to the idea of a contractual arrangement not involving a contract of employment between the user enterprise and the worker should not be included.
Spain. It does not seem desirable to return to the original definition of "contract labour" as opposed to what was adopted by the Conference Committee, since it does not provide any clarification and does not constitute a fundamental concept. According to the proposed Convention there are three forms of contract labour: (1) a direct bilateral relationship between a user enterprise and a worker, without there being a contract of employment; (2) a trilateral relationship between a user enterprise and a worker made available by a subcontractor, without it being specified whether the subcontractor is the employer or whether a contract of employment between them exists or not; (3) a trilateral relationship in which the subcontractor is substituted by an intermediary with whom the worker has no contract of employment. The three cases have in common that the worker provides his services in conditions of effective dependency on or subordination to the user enterprise. As such, contract labour could cover a disguised employment relationship (as the conditions of dependency and subordination are similar to those of an employment relationship) or even self-employment (Paragraph 2(e) of the proposed Recommendation refers to the extent to which the contract worker may run the risk of losses in performing the work). Dependency and subordination are indeed elements which characterize the employment relationship, but other elements exist alongside these, such as the carrying out of work for a third party, remuneration, etc. In Spain the contractor is responsible for carrying out work or providing services, the contract being concluded with a view to accomplishing a result and without reference being made to individual workers. The contractor acts as an entrepreneur and is responsible for allocating the workers and giving them directions. As such the element of dependency or subordination does not arise, nor is there ground for speaking of a disguised employment relationship, since the other elements characterizing an employment relationship are not present. Nevertheless, the entire text is about establishing the obligation to guarantee the same elements of protection as are bestowed in an employment relationship. Therefore, the definition of contract labour needs to be established very clearly, in both positive and negative terms. Paragraph 2(h) of the proposed Recommendation matches the criterion used in the Workers Charter (Act No. 8) and in the Act regulating temporary work agencies, including the social security responsibilities incumbent upon the main entrepreneur, when work or services are contracted out, upon entrepreneurs providing and those receiving the workforce, and upon temporary work agencies and user enterprises. If no limitation is placed on the other aspects to be taken into account, confusion could arise leading to a belief that there is a third category of workers. Instead of focusing on dependency and subordination, as the proposed definition does, it would be better to define contract labour in terms of work performed under conditions presenting one or more of the elements characterizing the employment relationship. (a) The word "similar" does not add any meaning: the proposed Convention and Recommendation as a whole do create a third category of workers, whether or not the word "similar" is included. "Travail sous contrat pour l'exécution d'un certain travail ou de la fourniture de certains services" is the preferred translation of "contract labour". (b) and (c) The single term for direct and indirect references to contracts of employment should be "contract of employment".
Sweden. The proposed Convention applies to all persons who, in keeping with the definition in Article 1, are to be regarded as contract workers. The only persons excluded are those who have a contract of employment with the user enterprise or, as employees of private employment agencies, are made available to a user enterprise. To avoid potential problems of interpretation, (a) should be rephrased as follows: "the term "contract labour" means work performed for a natural or legal person (referred to as a "user enterprise") by a person (referred to as a "contract worker") where the work is performed by the worker personally without a recognized contract of employment and the actual conditions of dependency on or subordination to the user enterprise are similar to those that characterize an employment relationship under national law and practice and where either: ..." Judging from this wide scope the Convention appears to include many situations in which an enterprise engages a contracting enterprise for certain tasks. Sometimes the person performing work may have a relationship of dependency on the user enterprise resembling that which characterizes employee status. Situations of this kind are often found in the construction and consulting sectors, for example. In many of these situations, Swedish labour law regards the worker as an employee of the user enterprise, even though, formally speaking, there is no contract involved. This is not always the case, however. On the contrary, there will be a number of cases where the Convention applies without an employee relationship of this kind being deemed to exist. The intermediary situation can also cause problems. There are situations in which an independent exchange centre of some kind refers workers to short-term assignments without an employment relationship being established. Artist agencies and road haulage depots are two such examples. Another situation in which the Convention may apply occurs when a small contracting enterprise is engaged for certain tasks in circumstances in which the conditions of service are principally decided by the user enterprise.
Switzerland. As regards terminology, the French version should use a term other than the problematic "travail en sous-traitance", for instance "travail sous contrat autre qu'un contrat de travail". The scope of the Convention, both ratione personae and ratione materiae causes fundamental problems from the point of view of Swiss positive law on contracts of employment and social insurance. In Switzerland, courts take the economic reality into account in determining whether a worker is an employee or self-employed, not the label which parties have attached to their relationship. The economic reality is assessed on the basis of a number of criteria such as the degree of autonomy in organizing the work, the obligation to follow instructions, etc. In the light of these criteria it is unclear as to whom the proposed text would apply, given that even workers who are employed on a task-by-task basis have been considered self-employed workers. Furthermore, pursuant to the second sentence of Article 2(1), the Convention is not applicable to workers who have a recognized contract of employment. Conversely, pursuant to Article 1(a), the Convention applies to workers who perform their work under actual conditions of dependency on or subordination to the user enterprise, these conditions being similar to those that characterize an employment relationship. Swiss social security law covers workers if the factual conditions indicate that they are employees, irrespective of the existence of a recognized contract of employment. If parties qualify their contractual relationship as one of common law, the worker does not automatically become self-employed under Swiss social security law: the worker under a services contract or an agency contract is not systematically considered self-employed. Therefore, the Convention is pointless from the point of view of Swiss social security law. Instead of stating definitions which do not match reality and which are incompatible with contractual freedom, the Convention would better refer to the law and practice of the various member States.
UPS/ASM/CP: The proposals formulated by the Office, particularly the suggestion to delete the phrase "are similar to those that", certainly clarify the text. However, the definition of contract labour remains unacceptable.
Syrian Arab Republic. In an indirect, triangular relationship in which a worker performs work for a user enterprise pursuant to a contractual arrangement between this enterprise and another enterprise which is the employer of the worker (sometimes referred to as the subcontractor), the worker retains the contractual relationship he has with the employer who referred him to the user enterprise and enjoys all the labour rights guaranteed by labour law. In a second type of triangular relationship the contract worker who has been referred to the user enterprise by an intermediary is at the service of and has a direct contractual relationship with the user enterprise immediately after having been referred to it.
Thailand. (a) It is preferable to delete the phrase "are similar to those that" on the grounds that the "actual conditions of dependency on or subordination to" should be the same as those of an employment relationship.
Trinidad and Tobago. The Office may wish to consider whether the inclusion of a definition of "contract of employment" would serve to further clarify the definition of "contract labour". (a) To ensure clarity, the phrase in the Office text of Report VI(2), 1997, "pursuant to a contractual arrangement other than a contract of employment" should be added at the end of the second line. With this inclusion, the phrase "are similar to those that" should be retained since it seems to further distinguish between the two types of contractual relationships. (c) The word "formally" should be omitted since, used in conjunction with "intermediary", it appears superfluous.
Tunisia. (a) It is advisable to maintain the word "similar" in the definition of contract worker to highlight the slight difference with the traditional employment relationship. "Identical" or "analogous" ("à l'instar") are possible alternatives. (c) The definition of the term "intermediary" could create an impression that private employment agencies are included whereas in fact they are excluded from the scope by virtue of Article 2. To avoid any ambiguity either the word should be avoided, or it should be more precisely defined.
Turkey. The ratification of the proposed Convention by Turkey after adoption may be difficult. The definition of a subcontractor in Turkish legislation differs from that contained in the proposed Convention and joint liability is only possible where a subcontractor operates a specified section of the undertaking or one of its subordinate facilities alongside the workers of the principal employer.
United Kingdom. CBI. It is important that there is no confusion between the essentially close relationship between employer and employee and the rights and responsibilities that this implies and the rather different relationship between a contractor who provides services and the user of such services. Any attempt to graft on to the latter relationship any employment nexus is strongly opposed. The ILO proposals would do precisely this. There are a number of quite different relationships which the text attempts to incorporate into a single approach toward contract labour: (1) Bilateral relations between a user enterprise and a self-employed worker who has a commercial contract with the enterprise. Where a person is genuinely self-employed, labour law does not apply and therefore such relationships lie beyond the scope of the ILO. While the ILO argues that such contracts may disguise an employment relationship, this is not an argument for developing a broad approach to contract labour, but rather to ensure that member States have appropriate measures for reclassifying such cases on a consistent basis. (2) Trilateral relations between the user enterprise, a worker and a subcontractor. Such arrangements are increasingly common in modern economies and form a key to efficiency-enhancing flexibility. In the United Kingdom the most common type of subcontracting involves the use of service companies operating as subcontractors within the premises of the user enterprise, such as cafeterias, cleaning firms, security companies, etc. Inclusion of such contracts for service in an ILO Convention would bring the Government's Compulsory Competitive Tendering scheme into its scope. By allowing companies to focus on their "core business", such contracting enhances efficiency, often through economies of scale. Subcontracting can also include instances when a company asks other enterprises to manufacture certain parts of its own product, often in another geographical area. It would be nonsensical in such cases to suggest that an employment relationship exists between the user enterprise and the employees of such subcontractors. For the ILO to interfere in such commercial relationships would be beyond its remit.
United States. The Office's explanation in the proposed texts of Report V(1) of the scope of the contract labour definition applying to both bilateral and triangular relationships is supported, as well as the Office's suggestion that Article 1 and Article2 should be consistent in addressing the element of a contractual arrangement not involving a contract of employment between the user enterprise and the worker. Language should be added: clause (a) or a separate clause (d) should provide that the definition of contract labour does not involve the situation in which a contract worker and a user enterprise have established an employer-employee relationship. The Office's suggestion that with respect to any discussion of "a contract of employment" the same term should be used consistently throughout the report is equally supported. The term to be used should be "contract of employment". The phrase "are similar to those that" with reference to the conditions of dependency and subordination in the definition should be eliminated, as suggested by the Office. Every effort should be made to ensure a clear understanding that there is no intention of creating a third category of worker.
European Federation of Cleaning Industries. The ILO definition of contract labour and its consequences on equal treatment appear to affect two types of workers in the cleaning industry. Firstly, workers who are employed by a subcontracting company, such as cleaning enterprises and, secondly, self-employed workers who are considered as independent subcontractors by the user enterprise. The ILO should address the issue of disguised employment and exploitation of workers by independent subcontractors who are not covered by collective agreements.
International Organization of Employers. There is such an enormous variety of arrangements and national approaches to the subject that the Conference Committee could only come up with highly ambiguous and confusing definitions of "contract labour", "subcontractor" and "intermediary". In addition, terminology differs from country to country and from language to language. The discussion concerns bilateral and trilateral relations between an enterprise and a worker. In bilateral terms, there is the self-employed person who has a commercial contract with one or more companies to produce a certain result, with the work being organized by the self-employed person himself. Arguing that self-employment may be used fraudulently, with the objective of evading coverage by labour legislation or collective agreements, the ILO attempts to deal with the matter in an instrument, although such a relationship is not subject to labour law. However, to counter fraud various countries have developed their own legal procedures to reclassify, according to objective criteria, so-called self-employed persons as salaried employees. There is hence no third category of workers, i.e. workers with an indeterminate status, as the ILO approach suggests. Fraud must not just be assumed, but must be demonstrated after proper legal procedure. Employers in the Conference Committee made it clear that they do not support fraud. Trilateral relationships have become more and more frequent because of their obvious efficiency. A trilateral relationship appears when a service company operates as a subcontractor within the premises of the user enterprise (e.g. cafeterias, cleaning firms, etc.). The workers carrying out these service functions are employees of the service company, not of the user enterprise. The user enterprise can in no way be held responsible, as it has no control over the workers. Sharing responsibilities would simply lead to confusion and would have the most negative effects for the worker. Consequences in the fiscal and social security field could be far-reaching. "Subcontracting" can also mean that a company asks other enterprises to manufacture certain parts of its products. In this case it would be absolutely impossible to imagine any legal relationship between the user enterprise and the employees of such subcontractors. Finally, a "subcontracting" firm may provide workers to a user enterprise, without there being an employment contract between such workers and the subcontracting firm. This practice is prohibited in a number of countries and seems to exist especially in the agricultural or construction sectors of several developing countries. In this case, the subcontractor is merely an intermediary who does not assume any employer obligations towards the workers. The full responsibility lies with the user enterprise. The list of these relationships is not exhaustive, but illustrates the extreme complexity of work relations covered by the notion of "contract labour". The protection of workers involved in these relationships is and must be ensured by different methods. Abuses aimed at avoiding coverage by social legislation must be corrected. In sum, the prime error is in the definitions which attempt to cover all cases of contract labour. The ILO supervisory machinery would not be able to monitor the application of a Convention with such heterogeneous provisions. The concept of dependency or subordination is also confusing and its application problematic. The question should be left to national authorities.
Office commentary
The problem concerning the definition of "contract labour" has received extensive coverage (as can be seen in the observations of member States). A significant number of the observations emphasized that the wording adopted by the Conference Committee needs further improvement to make it clearer, more concise and practicable. The Office also believes that this wording has still a significant potential for improvement.
In Report V(1) the Office emphasized the key conceptual role of the notion of "a contractual arrangement other than a contract of employment with the user enterprise", which was removed by the Conference Committee in 1997 from the provision containing the definition of "contract labour", making it absolutely clear that no contract of employment can exist between a contract worker and a user enterprise. Therefore, for the sake of consistency and clarity, this notion, which is already used in (b), has been reintroduced in (a)(i) of this proposed Article.
The Office has also found it appropriate to introduce two drafting changes which were put forward in the observations, namely to replace the word "worker" in (a) by the word "contract worker"; and to revisit the definition of "subcontractor" in (b) with a view to emphasizing that, for the purposes of the proposed instruments, the subcontractor does not necessarily always perform work itself but can also contract out the work (or part of it) to another enterprise.
As regards the proposal to consider both "user enterprise" and "intermediary" as legal persons only, the Office would like to draw attention to the fact that a similar proposal had already been put forward in Report VI(2) but was not taken up during the first discussion in 1997. The phrase "natural and legal person" is standard legal usage and has been used in other ILO instruments, for example, in Conventions Nos. 177 and181.
Article 2
(1) The Convention shall apply to all branches of economic activity and to all contract workers. It shall not apply to workers who, in accordance with national law and practice, have a recognized contract of employment with the user enterprise. It shall not apply to employees of private employment agencies who are made available to a user enterprise to perform contract labour.
(2) The competent authority, after consulting the most representative organizations of employers and workers, may exclude from the application of the Convention or of certain provisions thereof:
(a) particular categories of contract workers who otherwise enjoy adequate protection; or
(b) particular branches of economic activity when the application of the Convention in respect of them would raise special problems of a substantial nature.
(3) A Member which ratifies the Convention shall specify, in its first report under article22 of the Constitution of the International Labour Organization, any exclusion of which it avails itself under Paragraph 2 and give the reasons therefor.
Observations on Article 2
Australia. (1) There are still concerns regarding the employees of independent contractors. Australian industrial relations law does not distinguish between employees of independent contractors and other employees. Persons who are employees are already covered by existing ILO instruments. Any problems experienced by employees of independent contractors would therefore be more appropriately handled through the provisions of these instruments where the employment relationship indicates they should be regarded as genuine employees, that is, employed under a contract of service. (2) The instrument should leave it to the discretion of individual Members, if they so wish, to exclude particular branches of economic activity or particular categories of contract workers. (3) The requirement to report any exclusions is a useful measure of accountability to ensure that States which have ratified the Convention are acting consistently with their obligations. However, the requirements must be flexible and allow for additions or changes to the exemptions at a later date, e.g. in the case of sectors where difficulties in application become evident because of new practices. Exclusions should not be limited to those identified in the first report. The Convention should make it clear that additions or changes to the exemptions can be made after the provision of the first article 22 report.
ACCI. The proposed renumbering is endorsed. The Office comment concerning the exclusion of employees of private employment agencies is gratuitous given the clear intent of the Conference Committee. It is of the greatest importance that this exclusion remains intact.
Austria. (1) The second sentence should be deleted and incorporated into Article 1. See the comments under Article 1. The exception in the third sentence should be made with explicit reference to the Private Employment Agencies Convention, 1997 (No.181), and Recommendation, 1997 (No. 188). Moreover, the scope of the Convention should provide a demarcation from the Home Work Convention, 1996 (No. 177), and the corresponding Recommendation, 1996 (No. 184).
Barbados. (1) See comments under Article 1 as to the direct or indirect references to contracts of employment.
Canada. (1) At the end of the second sentence, the words "or with the subcontractor" should be added. This would be consistent with a presumption that the instrument is not intended to afford protection to those persons who already enjoy it, in this case, through a recognized contract of employment. The exclusion in the final sentence of "employees of private employment agencies who are made available to a user enterprise to perform contract labour" is acceptable on the basis that these employees are covered by the Private Employment Agencies Convention, 1997 (No. 181). Efforts should be continued to ensure, however, that the proposed Convention's protection is not bypassed through the establishment of sham private employment agency relationships. (2) Agreed. (3) The words "first report" should be replaced by "reports" in order to allow for changes to the exclusions at a later date in the light of changing conditions.
CNTU. The changes proposed by the Office are endorsed.
Comoros. (1), (2) and (3) Accepted in principle. Exclusion from the application of the Convention or of certain of its provisions should solve all potential problems, particularly those of developing countries where the economy is taking on new forms of development.
Costa Rica. Endorsed.
Denmark. (1) In the third sentence, only those "employees of private employment agencies" should be excluded from the scope of the Convention who are employed by those agencies and who enjoy full employee protection. In many countries, private employment agencies only act as an intermediary and are not employers in relation to the persons made available to the user enterprise. These employees should be covered by the Convention. (2)(b) As a matter of principle, no particular branches of economic activity should be excluded.
Danish Confederation of Trade Unions (LO). (2)(b) As a matter of principle, no particular branches of economic activity should be excluded.
Egypt. The Convention should apply to all branches of economic activity.
El Salvador. This standard has been correctly drafted. The provisions of the Private Employment Agencies Convention, 1997 (No. 181), and Recommendation, 1997 (No. 188), are pertinent.
Finland. (1) See comments under Article 1 on uniform terminology. The editorial changes proposed by the Office are endorsed. The aim of the third sentence is to distinguish the scope of the proposed Convention from that of the Private Employment Agencies Convention, 1997 (No. 181). This objective is endorsed, but the wording may prove to be problematic. By expressly referring to Convention No. 181, the term "contract labour" could be clarified so as to totally exclude the use of hired labour.
LTK/TT. (1) It should be stipulated that the Convention does not apply to cases in which the employee already has a valid employment relationship that is recognized by national law and practice. The words "with the user enterprise" should, therefore, be deleted. Since the use of hired labour is covered by the Private Employment Agencies Convention, 1997 (No. 181), this Article should unquestionably contain an exclusion clause placing labour leasing outside the scope of the Convention.
SAK/STTK/AKAVA. (1) The sentence referring to employees of private employment agencies should be deleted. If necessary, possible confusion may be eliminated by giving priority either to the proposed Convention or to the Private Employment Agencies Convention, 1997 (No. 181), when both are applicable and a Member has ratified them both. (2)(b) This provision should also be deleted, or the words "and the workers concerned otherwise enjoy adequate protection" should be added at the end. Another viable option would be to redraft the text in line with Article 2(b) of the Private Employment Agencies Convention, 1997 (No. 181).
France. CGT-FO. (1) The exclusion of "employees of private employment agencies who are made available to a user enterprise to perform contract labour" is questionable. The application of the Convention concerns "contract workers" belonging to private employment agencies, provided to an undertaking ordering the work or service and performing specified work under the responsibility of the latter. Excluded from the Convention may be employees who having concluded a contract of employment with a user enterprise, perform for a different user enterprise (and/or different work supplier) work which belongs to the core activity of their undertaking. For instance, a car equipment manufacturer cannot be considered as the subcontractor of a car manufacturer, but if the equipment manufacturer relies on workforce provided by a private employment agency to accomplish various jobs which are limited in time, then these workers are "contract workers" ("travailleurs en sous-traitance"). As a rule, if an undertaking with a core activity has concluded a commercial contract with an undertaking ordering work or services, then the former cannot be considered as an undertaking employing contract labour in the sense of the Convention.
Germany. (1) See comments under Article 1. The third sentence must at any rate be maintained.
DGB. (1) The second sentence should be deleted, with the intention to bring leased workers within the scope of the Convention. (2) and (3) should be deleted. The proposed Convention aims at affording contract workers only a minimum protection. Further possibilities of exclusion as provided in (2) and (3) are not compatible with this aim. If Article 2(2) is deleted, (3) is also superfluous.
Greece. There is no objection to the commentaries and proposed changes.
Hungary. See comments under Article 1.
Indonesia. (1) Agreed. However, contract labour should be limited to the following types of work: (a) temporary work or work accomplished on a once-only basis; (b)work which does not exceed a duration of three months; (c) seasonal work; (d) non-permanent work; (e) work which is related to a product which is new or still being tried out. (2) and (3) Agreed.
Japan. (1) The word "recognized" should be deleted from the second sentence, as it is unclear what a "recognized contract of employment" means. The third sentence should be deleted and the substance incorporated in Article 1. See comments under Article 1.
NIKKEIREN. Employees of private employment agencies and temporary work agencies covered by Convention No. 181 should be naturally excluded from the definition of contract workers.
JTUC-RENGO. Employees of private employment agencies who are made available to user enterprises should not be excluded from the application of the Convention, because at present such workers are not sufficiently protected by domestic law.
Mexico. (1) There is some contradiction with Article 1(a)(ii) which states that contract labour also involves the worker who "is provided for the user enterprise by a subcontractor or an intermediary". This should be clarified.
Netherlands. See comments under Article 1. Temporary work must fall within the scope of the proposed Convention inasfar as there is no contract of employment between the employment agency and the temporary worker.
FNV. (1) See comments under General observations. The exclusion of employees of private employment agencies from the scope of the Convention is strongly opposed, for the following reasons: (1) The adoption of Convention No. 181 (revising Convention No. 96) is not a valid reason for the exclusion of these workers, since the main objective of Convention No. 181 is the smooth functioning of labour markets, rather than the protection of the workers concerned. The fact that Convention No. 181 also contains some provisions on adequate protection of workers only means that the forthcoming session of the Conference should be careful not to adopt contradictory provisions. (2) Ratification of the Convention No. 181 does not automatically imply ratification of a Convention on contract labour, if adopted. Both instruments should be intrinsically logical, so that they can stand alone. If employees of private employment agencies are excluded from the scope of the Contract Labour Convention, a country that ratified only the latter would not have to afford workers of private employment agencies adequate protection. (3) The fact that the worker may be partly protected by his employment contract with the private employment agency does not protect this worker in his (indirect) factual relationship with the user enterprise (e.g. as regards health and safety, freedom of association). It is sufficient to provide in Article 2(2) that member States have the possibility to exclude particular categories of workers if these workers otherwise enjoy adequate protection. Such a category could also be that of employees of private employment agencies. If the exclusion of employees of private employment agencies is maintained, it is suggested that the word "employee" in (1) be replaced by the words "workers with a recognized contract of employment" in order to prevent possible confusion.
Norway. See comments under Article 1. (1) In the final sentence, account should also be taken of the provisions of the Fee-Charging Employment Agencies Convention (Revised), 1949 (No. 96).
Portugal. (1) See comment under Article 1 as regards the exclusion of workers having concluded a recognized contract of employment with the user enterprise. This sentence covers what the original definition sought to address with the phrase "pursuant to a contractual arrangement other than a contract of employment with the user enterprise". (2) No objection.
South Africa. FEDUSA. The drafting changes are acceptable.
Spain. Maintaining "scope" appears to be more in line with the contents of this provision. Replacing "from all or any provisions of its Part V" by "certain provisions thereof" is not a drafting change, but a substantial change.
Switzerland. See comments under Article 1.
UPS/ASM/CP. The renumbering is approved. It should also be pointed out that the Convention does not apply to employees of private employment agencies. The Committee's intention in this regard is clear and does not justify the Office's observation to the contrary that account should be taken of Convention No. 181.
SGB. As regards the scope of the proposed Convention, Switzerland should endorse the present text.
Tunisia. (2) The drafting changes to the first sentence are endorsed.
United States. (1) The passage excluding "workers who, in accordance with national law and practice, have a recognized contract of employment with the user enterprise" should be made consistent with Article 1. With respect to the exclusion of "employees of private employment agencies who are made available to a user enterprise to perform contract labour", the Committee should review the decision to exclude these workers in the light of the protections (but not the same protections as in this instrument) provided in the Private Employment Agencies Convention, 1997 (No.181). (2) The two drafting changes made by the Office should be implemented.
European Federation of Cleaning Industries. The proposed conclusions appear to put "temporary work" and "subcontracting" on a par. These issues should be treated separately, notably because employees of subcontractors in the cleaning industry are fully protected by sectoral collective agreements.
International Confederation of Temporary Work Businesses. The exclusion of employment agencies from any ILO instrument on contract labour is supported. The recently adopted Private Employment Agencies Convention, 1997 (No. 181), and Recommendation, 1997 (No. 188), provide adequate protection for workers of private employment agencies.
International Organization of Employers. Whereas the present definition of "contract labour" may implicitly exclude certain forms of "contract labour" (in addition to employees of private employment agencies), such exclusions should at any rate be spelled out clearly.
Office commentary
Although no substantive changes have been made to this proposed Article, the Office would like to draw attention to the second sentence in Paragraph (1). As mentioned under proposed Article 1 above, the absence of a contract of employment between the contract worker and the user enterprise is of key conceptual importance for the definition of "contract labour". The very definition of "contract labour" already excludes the possibility of the existence of a contract of employment between the contract worker and the user enterprise. The Conference Committee might therefore reconsider the appropriateness of the second sentence in the proposed Article 2(1) delineating the scope of the proposed instruments.
It was proposed in one of the observations to replace the words "first report" in Paragraph (3) by the word "reports". The Office considers that the question as to whether the exclusions under Paragraph (2) can only be made at the time a member State ratifies the proposed Convention and informs the Office about it in its first report, or whether this can happen at any time with information provided in reports under article 22 of the Constitution of the International Labour Organization, is of a substantive nature and falls within the competence of the Conference itself.
A number of other observations stressed the importance of making reference to and demarcating the relationship with Conventions Nos. 177 and 181 and their accompanying Recommendations in this draft Article. The Office notes that the text adopted during the first discussion in 1997 establishes a demarcation with the scope of Convention No. 181 and its accompanying Recommendation. As regards the issue of relationship with Convention No. 177 and its accompanying Recommendation, the Office believes this to be a matter which can be addressed only by the Conference itself. As far as the Office's understanding of this matter is concerned, two approaches can be discussed in 1998: either the workers who fall within the scope of Convention No. 177 and its accompanying Recommendation fall within the scope of the proposed instruments on contract labour or are excluded from it. In any decision on the matter, it should be noted that the scope of Convention No. 177 and its accompanying Recommendation and that of the proposed instruments on contract labour are defined according to different criteria: the place of work for home workers and contractual status in the case of contract workers. Attention is also drawn to Article 9 of the proposed Convention on contract labour which, in accordance with article 19(8) of the ILO's Constitution, envisages that its provisions shall not affect more favourable provisions under other ILO Conventions applicable to contract workers.
Article 3
The Member shall ensure that adequate measures, in accordance with national law and practice, are taken to prevent accidents and injury to the health of contract workers arising out of, linked with or occurring in the course of contract labour.
Observations on Article 3
Australia. It may be appropriate for the following sentence to be inserted in Article3 and, if required, in Article 6(2)(c) and Paragraph 7 of the proposed Recommendation: "Contract labour employed under a contract for service should be treated in the same way and have the same rights as those employed under a contract of service for all occupational health and safety (OHS) purposes." This sentence must be incorporated for identification of duty-of-care responsibility for OHS issues where contract labour is employed, and should not be construed to be related to other aspects of the employment relationship. Irrespective of whether a person is employed under a contract of service, or a contract for service, it is clear that primary responsibility for OHS rests with an employer/owner/occupier in Australia. The foundation of OHS preventive legislation in all Australian jurisdictions is Robens-based law where principal responsibility rests with the employer. Furthermore, it is noted that OHS is a field in workplace relations where there are commonly shared values and prevention goals amongst employers, employees and government. Finally, there appears to be duplication of this provision in Article 6(2). The rationale for the parallel inclusion should be clarified.
Canada. The words "in so far as is reasonably practicable" should be added after the word "ensure" to make the provision more realistic in terms of a competent authority's capacities.
Comoros. The instrument should provide that obligations and duties laid down in national legislation regarding occupational safety and health matters in particular as regards keeping the workplace safe and healthy, rest upon the undertaking or the subcontractor who is responsible for the machines, equipment, tools and materials used to perform the work.
Denmark. The proposed text is acceptable. Under Danish law, the user enterprise is responsible for safety and health at work. In principle, this also applies in those cases where the work is performed in the home of the contract worker. See comments under Article 1 concerning the extension of protection to all workers, including those who fall in the category of employees, as long as they are working in the user enterprise.
Egypt. The proposed text is endorsed.
Greece. The proposed text is endorsed.
Indonesia. The proposed text is endorsed.
New Zealand. NZEF. All contractors are automatically covered by New Zealand's health and safety legislation.
Sweden. The requirements of Articles 3 and 6(2)(c) are very general and, in Sweden, they are essentially satisfied by the provisions of the Work Environment Act, 1977, the Working Hours (Domestic Employment) Act, 1970, the Work Environment Ordinance, 1977, and Ordinances issued by the National Board of Occupational Safety and Health. Certain problems result, however, from the extensive scope of the Convention.
Switzerland. Swiss federal legislation on accident compensation contains provisions on the prevention of accidents and occupational diseases, which apply to all undertakings employing workers in Switzerland, subject to limited and well-defined exceptions. It is the employer who is responsible for the safety of his employees in the first place, herein assisted by his employees. As from 1 January 1998, every employer must ensure that all employed workers, including those provided by a third company, are informed about the risks which their activity entails and the prevention measures to be taken.
UPS/ASM/CP. The principles are acceptable.
Office commentary
Two proposals have been made with regard to possible changes in the text of this proposed Article. It was suggested in one of the observations to insert the following sentence (and, if required, into draft Article 6(2)(c) of the Convention and draft Paragraph 7 of the Recommendation): "Contract labour employed under a contract for service should be treated in the same way and have the same rights as those employed under a contract of service for all occupational health and safety (OHS) purposes". In another observation it was proposed that after "ensure", the words "insofar as is reasonably practicable" should be added. The Office believes that, due to their substantive nature and importance, both proposals can be considered only by the Conference itself in 1998. The text is therefore submitted unchanged.
Article 4
Measures shall be taken, in accordance with national law and practice:
(a) to promote adequate protection in relation to the payment of:
i(i) amounts due to contract workers for the work performed; and
(ii) any social insurance contributions payable on behalf of such workers in relation to this work;
(b) to ensure that the responsibilities for fulfilling the financial obligations envisaged in subparagraph (a) above are clearly determined; and
(c) to ensure that contract workers receive compensation in case of injury or disease resulting from the performance of contract labour.
Observations on Article 4
Australia. This obligation is stated in terms wide enough to include various approaches to protect contract payments, which would usually entail proceedings taken in accordance with the relevant legislation in a court or tribunal.
Austria. (a) It is unclear how (a) relates to Article 6(2)(d) and (e). (i) The phrase "amounts due to contract workers" should be changed to read "remuneration payable to". (ii) In the German text "Arbeitnehmer" should be replaced by "Vertragsarbeiter". See comments under Article 1.
Canada. Agreed.
Denmark. Articles 4 to 6 should be deleted and replaced by a single Article to read as follows: "Measures shall be taken, in accordance with national law and practice, to ensure that contract workers receive the same protection as workers with a recognized employment relationship."
Egypt. Yes, by determining joint liability between the subcontractor and the user enterprise.
Finland. LTK/TT. Opposed. See comments under Articles 1 and 2.
Greece. The proposed text is endorsed.
Indonesia. (a)-(c) Agreed.
Japan. Articles 4, 5 and 6 should be replaced by a new Article 4 and a new Article5. The new Article 4 would aim at the general elimination of discrimination regardless of whether workers have a contract of employment or not and would read as follows: "In order to promote equality of occupational treatment, a Member shall, in accordance with national law and practice, take the necessary measures to ensure that contract workers are treated without discrimination on the basis of race, colour, sex, religion, political opinion, national extraction or social origin during the working period." The new Article 5 would provide for general measures for protection, taking into account the provisions of Articles 5(1), 11 and 12 of the Private Employment Agencies Convention, 1997 (No. 181). It would read as follows: "A Member shall, in accordance with national law and practice, take the necessary measures to ensure that contract workers enjoy adequate protection with regard to: (a) the right to organize and the right to bargain collectively; (b) minimum age; (c) the payment of amounts payable to contract workers for the work performed; (d) the payment of any social insurance contributions payable on behalf of contract workers in relation to the work performed; (e) working time and other working conditions; (f) maternity protection; (g) occupational safety and health; (h) statutory social security."
New Zealand. NZEF. All contractors in New Zealand are entitled to accident compensation for any injury suffered in the course of their (self-)employment activities.
Sweden. This Article is noted with gratification, at least as regards social security and the payment protection which Members are called upon to provide in (a), in the sense that it is to be made clear where responsibility for such payments lies. This is highly important, especially if "contract labour" is also to include persons employed by intermediaries. The possibility of shared employers' responsibility is still more clearly expressed in Paragraph 8 of the proposed Recommendation.
Switzerland. (a)(ii) and (b) If the contract worker is self-employed, he alone is responsible for paying the contributions. If he is an employee, it is his employer's responsibility.
UPS/ASM/CP. These principles are endorsed.
Turkey. See comments under Article 1.
Office commentary
It was proposed in one of the observations to replace the phrase "amounts due" by the phrase "remuneration payable". Two alternative texts were put forward in two other observations. The Office believes that, while the alternative texts seem to be relevant for discussion by the Conference itself in 1998, the first proposal to replace the phrase "amount due" by the phrase "remuneration payable" needs some clarification. This provision as drafted allows for a broad interpretation of what should be protected under this provision, which would include not only remuneration but all other entitlements which might be due to contract workers under national law and practice, such as compensatory award or severance pay, for example. The text has therefore not been changed.
Article 5
The Member shall promote equality of treatment between contract workers and workers with a recognized employment relationship, taking into account the conditions applicable to other workers performing work which is essentially similar, under similar conditions.
Observations on Article 5
Australia. This Article is drafted very broadly, potentially giving rise to a wide range of comparators in respect of whom contract workers should be afforded equality of treatment. This may make this provision difficult to implement in practice. Paragraph 4 of the proposed Recommendation refers to employees of the user enterprise, or, as the case may be, employees of the subcontractor or intermediary as possible groups of comparators. However, noting that the terms of a Recommendation do not impose obligations upon Members, it may be appropriate for the limitation to be placed in the text of the proposed Convention.
ACCI. For the reasons stated during the first discussion, this is the most objectionable of the provisions of the proposed Convention. It is totally unacceptable, incapable of being implemented, and should be deleted instead of reconsidered.
Austria. According to Article 6(2), member States have a margin of discretion to judge, firstly, whether measures to ensure adequate protection are necessary at all ("as appropriate"), and, secondly, which protection is adequate. Unlike in Article 6(1) the yardstick is not the worker having a recognized employment relationship. Article 5 considerably reduces this margin of discretion and this leads to problems of interpretation. This Article should equally use consistent terminology and refer to either "employment relationship" or "contract of employment", in accordance with Article 1.
Bahrain. The underlying rationale of this Article is to ensure equal treatment between workers performing the same work in the user enterprise. Experience shows, however, that the text of Article 5 would deprive contract labour of its content and of the benefits derived by employers. This would run counter to the prevailing globalization and the trend towards unusual forms of employment. In fact, it is difficult or even impossible to establish equality between a permanent worker and a contract worker in the user enterprise. In order to reflect new global trends, Article 5 should be amended to take account of both the employers' interests in having recourse to contract labour and the worker's interest in being protected, but with no obligation for the employer to treat contract workers on an equal footing with the permanent workers in the user enterprise.
Barbados. The proposed text seems to imply a comparison with workers outside the workplace. This may pose problems for the collective bargaining process. The Convention should seek to ensure that the dependent contractor is not worse off than employees of the user enterprise or of the subcontractor working on the same work-site. Article 5 should be worded like Paragraph 4 of the proposed Recommendation as the latter clearly identifies the groups to be compared.
Belarus. See comments under Article 1.
Botswana. The proposed text does not capture the consensus reached within the Conference Committee at the end of the first discussion, the intention of which was to ensure that rights and obligations of contract workers are not circumvented by employers when contract labour is used.
Brazil. Despite the objections of the CNI, this Article can be implemented provided the concept of contract labour and the expression "formally recognized working relationship" are better defined, in so far as contract labour may also constitute a formally recognized working relationship.
CNI/CNC. Articles 5 and 6 are unacceptable and impossible to apply and should be deleted.
Canada. The precise meaning and scope of the obligation to promote "equality of treatment" must be clarified, as well as the fields in which it is meant to apply. If the term means equality under the law, then this would presumably allow accommodation of different terms and conditions for different categories of workers under contractual arrangements, e.g. through collective bargaining. If, on the other hand, "equality of treatment" means that the user enterprise must in all respects give the same working conditions to contract workers as to recognized employees doing similar work, compliance may be difficult to achieve. "Equitable treatment" may be more appropriate than "equality of treatment". This would imply that workers who may be technically but not substantially the same may be treated differently under this Article. A qualifier such as "employees of the user, the subcontractor, or the intermediary" should be added to the term "other workers" to make it more useful as a reference point. Thus it would be recognized that there may be instances where "contract workers" could be working for a user enterprise, side by side with "employees" of the user enterprise or "employees" of a subcontractor also doing work for the user enterprise.
CNTU. The Office proposals to improve consistency and accuracy of the texts are endorsed. More concrete proposals are necessary, however, to prevent that the scope of the text be watered down.
Costa Rica. On the need to distinguish more clearly between the two categories of contract workers, this provision is vague and should be substantially reviewed. If the intention is to eliminate any contract labour situation because it has negative consequences for the worker, then no distinction should be made between different categories of contract workers. The categories should be eliminated and the proposed Convention should set forth the different contract labour situations which can arise. The comparator groups for the purposes of equality of treatment should be defined as workers who are directly employed and contract workers, the aim being to put all workers on a similar footing.
Denmark. See comments under Article 4. It is of crucial importance that the implementation of equality of treatment in the proposed instruments does not create an intermediate group with only some rights and not full employee rights. Article 5 does not establish an equality of treatment principle, but merely a principle to the effect that member States shall promote equality of treatment between contract workers and workers with a recognized employment relationship. Article 5 should be deleted in favour of a provision clearly stating that no discrimination of any kind may take place due to the special nature of the employment relationship.
DA. This provision seeks to create a procedural role in a field which would suspend the major elements of bargaining machinery on the Danish labour market and is detrimental to the free right of collective bargaining.
Ecuador. If the suggestion made under Article 1 is retained, the words "recognized employment relationship" would be replaced by the new term.
Egypt. This Article is in conformity with Egyptian legislation.
El Salvador. It is important to establish clearly the content of this provision so as not to jeopardize the achievement of its objective, i.e. equality of treatment between contract workers.
Finland. The content of Article 5, which had been added to the proposed Convention, created considerable controversy in the Conference Committee. Contract labour is a new and complex subject for legal regulation and an equal treatment approach, calling for a case-by-case comparison, is too vague to be used here. Instead, the rights of a contract worker should be defined and individually specified, as is the case in the other Articles of the Convention. As regards the comparator group to be used in equal treatment matters and on the substance of protection, it must be pointed out that the whole Convention aims at guaranteeing a certain level of protection to contract workers working in a user enterprise. On the other hand, comparisons with user enterprise employees doing essentially similar work may involve problems, as the operations of the user enterprise and the subcontractor may be organized on a completely different basis. The equality of treatment approach referred to in this Article needs further consideration.
LTK/TT. This Article should not be adopted on the basis of the concepts used in the proposed Convention. See comments under Articles 1 and 2.
France. CGT-FO. This Article will be reviewed during the second discussion. Whenever workers in France perform work for whatever type or form of undertaking, their rights are effectively protected under labour and social security legislation.
Germany. See comments under Article 1(c).
DGB. A second sentence should be added as follows: "The legal criteria for the application of the relevant legislation shall be prescribed so as to ensure that all persons who perform work in conditions of economic dependency on only a few user enterprises and who do not operate on the market in their own business interests enjoy the protection bestowed by national labour and social security legislation."
Greece. There is no objection to the reformulation of the content of this Article with a view to distinguishing more clearly between the contract workers with a contract of employment (for instance, concluded with the subcontractor) and those without such a contract (for instance, because they are provided by an intermediary), or to define more clearly the allocation of responsibilities among the potential employers when the contract worker already has a contract of employment.
Indonesia. Agreed.
Japan. See comments under Article 4. The proposed Article 5 should be deleted, because the working situations of "contract workers" and those of workers with a contract of employment vary from case to case and it is difficult to ensure equal treatment between them.
NIKKEIREN. The labour conditions and treatment of a contract worker are decided upon between a contract worker and a subcontractor in accordance with the specific nature of the contract labour. It is, therefore, not necessary to compare them with those of employees of the user enterprise. Whether a contract worker is an employee of a subcontractor, a user enterprise or an intermediary depends on the content of the contract and the definition of contract workers. A uniform provision should, therefore, not be made on the issue. If contract workers are not self-employed, they are usually considered employees of a subcontractor.
Republic of Korea. KEF. The idea of allocating responsibilities among user enterprises, subcontractors and intermediaries is unacceptable. The best course would be to determine the responsible party according to who is the actual employer. Moreover, the word "similar" used in this Article will create problems. The process for evaluating the degree of similarity entitling a worker to the same treatment as that of regular workers will be extremely difficult.
Netherlands. A proposal can only be made when a position has been taken on the scope of the Convention, and in particular the extent to which triangular relationships fall within that scope. The Netherlands will determine its position as soon as the Office has answered the two questions formulated under Article 1.
FNV. The Office requests the views of member States on (1) the comparator groups for purposes of equal treatment, and (2) the content of the protection bestowed. A distinction may be warranted, not so much based on the existence of a contract of employment, but as regards "direct" and "triangular" relationships. In "direct" relationships (in the sense of Article 1, (a)(i), which are often "disguised" employment relationships), equal treatment with workers of the user enterprise is the only logical solution. In triangular relationships, however, it might indeed be more logical to emulate Convention No. 181 and provide an obligation for member States to allocate the respective responsibilities with regard to various forms of protection to private employment agencies and user enterprises. This solution could assuage some of the concerns of employers and governments about the effect of Article 5, i.e. possibly divergent working conditions for direct employees of user enterprises and workers of subcontractors, especially when these divergent conditions are negotiated in collective agreements. Article 5 of the proposed Convention could then be redrafted as follows: "The Member shall promote equality of treatment between contract workers and workers with a recognized employment relationship with the user enterprise or, as the case may be, with the subcontractor or intermediary, taking into account ...". Furthermore, a new Article could be inserted after Article 6, which would read as follows: "A Member shall determine and allocate, in accordance with national law and practice, the respective responsibilities of subcontractors/intermediaries and of user enterprises in relation to the issues mentioned in Article 6(a) to (e).
Norway. The provision as currently worded does not belong in the Convention. In Norway, the wage settlement system is handled by employers' and workers' organizations and it is not seen as current policy to lay down statutory provisions concerning, for instance, equal payment. The provision could be more acceptable if it were more precise as regards in respect of what member States should promote equal treatment.
NHO. According to this Article contract workers will be afforded equal treatment with workers with a recognized employment relationship. The measures will also take into consideration the treatment of work which is essentially similar, performed under similar conditions and requiring similar qualifications. The consequence of this proposal is that contract workers may claim equal treatment with anyone, so that it will be impossible to enact such a right. Established rights covered by the proposal, such as wage settlement, collective bargaining, etc., have traditionally not been subject to legislation in Norway.
LO. This Article should be discussed together with Article 6 of the Convention and Paragraphs 4 and 5 of the Recommendation. The observations on page 5 of the report are endorsed.
Poland. Polish labour law already seems to provide the protection the proposed Convention seeks to offer.
Portugal. There is no objection to combining this Article with Article 6 and Paragraphs 4 and 5 of the proposed Recommendation provided the provisions of the proposed Convention and those of the Recommendation are not confused and the comparison is used only for the purpose of analysis.
CIP. Establishing the principle of equality of treatment between contract workers and other workers in enterprises is inappropriate in many ways. The basic principles of labour law (freedom of association, the right to bargain collectively, etc.) are applicable at all times to all enterprises but the rights emerging from specific employment relationships must be determined at the level of the given enterprise.
CGTP. Articles 5 and 6 of the proposed Convention and Paragraphs 4 and 5 of the Proposed Recommendation should be redrafted in order to make a distinction between contract workers employed under subcontracting arrangements who have a contract of employment and those who do not. Such a distinction would make it possible to establish the necessary higher protection for contract workers who do not have a contract of employment. Responsibilities with regard to these workers could then be more specifically shared between the subcontractor or intermediary and the user enterprise. It would thus be possible to guarantee them the effective exercise of their rights under labour legislation or social security legislation.
Qatar. For the sake of clarity, the text should be reworded as follows: "The Member shall promote equality of treatment between contract workers and workers employed under statutory employment contracts, taking into account ...".
Singapore. It is unrealistic for the instruments to accord contract labour the same protection in regard to working terms and conditions as that applicable to persons with a "recognized employment relationship", as proposed in Articles 5 and 6 of the Convention. This is because contract workers are themselves not bound by the same responsibilities as "bona fide" employees. The effect of having such "equal" treatment will be that user enterprises will have to fulfil the full obligations expected of an employer although they will have no right to control such contract labour. It would also be difficult, due to the nature of their work, to provide standard forms of employment protection and standard terms and conditions to contract workers. For instance, it would not be practical for contract workers who provide their service under a contract for service to a user enterprise to be given the right to organize and to bargain collectively in view of the transient nature of their work with the enterprise and their not being subject to the control of the user enterprise in the same way as an employee of the latter.
South Africa. It is true that a conceptual problem arises from the fact that certain contract workers will also fall into the category of "workers with a recognized employment relationship". It is suggested that this Article be redrafted as follows: "Members shall promote equality of treatment between contract workers and other workers performing similar work under similar conditions."
FEDUSA. The Office comments are endorsed.
Spain. In so far as the Office comments suggest the need to review the entire focus of the proposed Convention and Recommendation, they deserve full support. The suggestions on this point, however, appear to be only variations on the same theme, and as such do not constitute the best approach.
Switzerland. The provision is acceptable provided the obligation does not extend beyond promoting equality of treatment. Ensuring equality of treatment in Switzerland is possible only as regards men and women workers, since the amount of remuneration can be freely negotiated. There is no need to distinguish more clearly between the two categories of contract workers, taking into account the two comparator groups for the purposes of equality of treatment mentioned in Paragraph 4 of the proposed Recommendation. The notion "workers with a recognized employment relationship" is sufficient and has the advantage of not overburdening the text.
UPS/ASM/CP. See CP's comments under the General observations. The essentially flexible nature of contract labour must be safeguarded. For example, if companyA in Geneva must ensure that the wages paid by subcontractor B in Franches-
Montagnes are equivalent to those paid by company A every time companyA places an order with subcontractor B, then this is tantamount to economic nonsense. Article 5 is the most objectionable provision of the proposed Convention. It is completely unacceptable, inapplicable and should be deleted.
Trinidad and Tobago. This Article may be more clearly worded as follows: "The Member should promote equality of treatment between contract workers and workers with a recognized employment relationship where the work being performed is essentially similar, is performed under similar conditions and requires similar qualifications."
Tunisia. The expression "recognized employment relationship" should be more precisely defined. The provisions of this Article should be harmonized with those of Paragraph 4 of the proposed Recommendation on the categories of workers in comparison with whom equality of treatment will be ensured; it is suggested that the final part of Article 5 should read: "... workers performing work which is essentially similar, under similar conditions and requiring similar qualifications."
Turkey. TISK. The notion of "subcontractor" is so broadly defined that it covers almost all types of work performed under a contract. For instance, if an enterprise producing a given car model procures certain parts for this model from another firm, the latter may well be considered a subcontractor. All automobile subindustries may thus be drawn within the concept of subcontractor. Yet it is well known that the use of "subcontractors" stems from the need to procure expert services from an expert firm. Thus subcontracting contributes to the creation of small and medium size enterprises and to the development of the national economy. Turkish legislation distinguishes between three types of "subcontractors". Having only one such category in the future is out of the question and should also not be acceptable in other countries.
United Kingdom. CBI. A Convention which required equality of treatment for any of the categories of subcontractor described in the comments under Article 1 with permanent employees of the user enterprise would be absolutely inappropriate. Unless there is a hidden employment relationship, it would be wrong to expect a self-
employed contractor to enjoy the same terms and conditions as an employee of the user company; special commercial advantages accrue to self-employed workers which are not available to employees in recognition of the fact that they are a quite separate category of worker. Equally, where a person is employed by a subcontractor it is normally clear that they have an employment relationship with that firm and not with the user enterprise. It is therefore only proper that their employer should define their terms and conditions of employment.
United States. These issues should be discussed in detail by the Committee early on in the 1998 Session of the Conference prior to any voting on a Convention or Recommendation.
Uruguay. It would be appropriate to reexamine Articles 5 and 6(1), as there is no recognition of a third category of workers, separate from contract workers and workers with a recognized employment relationship. Contract workers are either independent workers (without a work contract) or workers with a work contract, sufficient to determine in the latter case who their employer is (user enterprise subcontractor or intermediary) and the respective responsibilities and protection.
Workers. The Convention should promote, as a central principle, equality of treatment for all workers without distinction.
European Federation of Cleaning Industries. In some of the EFCI member States, the sole fact of bringing the status of employees of cleaning companies into line with that of workers of the user enterprise is illegal. Such a practice would introduce unequal treatment of employees within an economic sector, the employees of cleaning companies being covered by different collective agreements in force with user enterprises. It would engender a clear conflict of law between the proposed Convention and national rules.
International Organization of Employers. The promotion of the concept of equality of treatment between contract workers and other employees of the user enterprise or of the subcontractor or of the intermediary is inappropriate. Basic labour law principles (right to organize, to bargain collectively, etc.) are in any case applicable to all companies. Specific labour relations rights should be determined at the level of the actual employer.
Office commentary
Both the first Conference discussion in 1997 and the observations of member States reveal that the issues of "equality of treatment", "the same protection" and "adequate protection" addressed in Articles 5 and 6 of the proposed Convention and Paragraph 4 of the proposed Recommendation still remain very controversial. This is due, inter alia, to the fact that the text of the proposed instruments, as adopted by the Conference in 1997, does not specify clearly the relevance of each of these protections to various types of situations covered by the definition of "contract labour". Although the texts of these draft provisions are submitted unchanged, the Office will address this problem in more detail in the working document mentioned under the General observations above.
Article 6
(1) Measures shall be taken to ensure that contract workers receive the same protection as workers with a recognized employment relationship with regard to:
(a) the right to organize and the right to bargain collectively;
(b) freedom from discrimination in employment and occupation on the basis of race, colour, sex, religion, political opinion, national extraction or social origin;
(c) minimum age.
(2) Measures shall be taken, as appropriate, to ensure that contract workers enjoy adequate protection as regards:
(a) working time and other working conditions;
(b) maternity protection;
(c) occupational safety and health;
(d) remuneration;
(e) statutory social security.
Observations on Article 6
Australia. (1)(b). Perhaps an exception in relation to the inherent requirements of the job should be included, to avoid placing unduly harsh requirements on contracting parties. This would ensure consistency with Article 1(2) of the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), which states: "Any distinction, exclusion or preference in respect of a particular job based on the inherent requirements thereof shall not be deemed to be discrimination." Otherwise, contracting parties will face more onerous obligations in respect of contract workers than they would in respect of any employees that they may have. (1)(c) Article 6(1) appears to address the core principles, in which case Article 6(1)(c) could be more appropriately phrased as "exploitative child labour". (2)(c) There appears to be duplication with Article 3 and the rationale for the parallel inclusion should be clarified.
ACCI. See comments under Article 5.
Austria. Further to the comments under Article 4, (d) and (e), could be deleted.
Barbados. The terminology recommended under Article 1, if adopted, should clarify this Article. (1)(b) The list should include physical challenge and age.
Belarus. See comments under Article 1.
Brazil. See comments under Article 5.
CNI/CNC. See comments under Article 5.
Canada. See comments under General observations. (1)(b) Add "or any other ground of discrimination addressed in national law and practice".
CNTU. See comments under Article 5.
Comoros. Every worker must in discharging his or her functions enjoy adequate protection in all areas. The instrument should provide that contract labour is as good as any other work and that no discrimination of any kind should prevail against contract workers.
Cyprus. EIF. The basic principles of labour law listed in Paragraph 1 apply to all enterprises, so that the concept of equality of treatment between contract workers and other employees of the user enterprise or of the subcontractor or of the intermediary is inappropriate. Specific labour relations rights have to be determined at the level of the employer.
Denmark. It is appropriate that certain rights are fully protected, while only adequate protection needs to be ensured in other fields. It is difficult to see the arguments which justify the proposed classification. Instead, it should be stated clearly that contract workers have the same rights as employees in the traditional sense in accordance with national law and practice and that no discrimination may take place in any way due to the special nature of the employment relationship. Article 6 should be redrafted along these lines and (a) to (e) should be deleted. See comments under Article 4.
Ecuador. Agreed, provided the employment relationship is referred to as suggested in Article 1.
Egypt. Yes, as the measures provided for in this Article reiterate basic international standards and principles, which provide for the necessity of according appropriate terms of employment to workers, whatever form the contractual relationship with their employer takes. Such standards are set forth in the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87), the Right to Organize and Collective Bargaining Convention, 1949 (No. 98), the Discrimination (Employment and Occupation) Convention, 1958 (No. 111), the Minimum Age Convention, 1973 (No. 138), in addition to Conventions determining hours of work, including the Labour Inspection Convention, 1947 (No. 81), Conventions on occupational safety and health and the social security Conventions, all ratified by Egypt. Their provisions are applied in a comprehensive way to various categories of workers who have a contractual relationship with employers, whether they have a direct or an indirect relationship with the user enterprise.
El Salvador. The provisions of this Article reaffirm the need for equal treatment which should be established between contract workers and workers with a recognized employment relationship.
Finland. In general, the proposed Article can be supported. (2)(c) Article 3 contains a different and more binding provision on occupational safety. The reference to occupational safety should, therefore, be removed from this subparagraph.
LTK/TT. Article 6 regulates the relations between an employer and his employees. On the other hand, independent entrepreneurs cannot be guaranteed a right to collective bargaining. In the case of persons with employment relationships, scrutiny should be based on the relationship between the worker and his own employer and on that employer's sphere of operations, irrespective of whether the worker is a "contract worker" or some other kind of employee.
SAK/STTK/AKAVA. (2) The words "as appropriate" should be deleted. (b) should be replaced by "maternity protection and parental protection and benefits". The following should be added: (f) minimum wages, (g) compensation in case of insolvency and protection of workers' claims, (h) compensation in case of occupational accidents or diseases, and (i) access to training.
Germany. See comments under Article 11(c). (2)(e) See the reply of Germany to Question 8(h) in Report VI(2) to the 1997 Session of the Conference which still stands as formulated.
DGB. (1)(c) The full stop after the words "minimum age" should be replaced by a semicolon. (2) The first two lines should be deleted and clauses (a) to (e) should be renumbered (d) to (h). The Convention cannot contribute to improving the protection of contract workers unless it also helps to clarify who is to be considered as an employee and who is not, and hence who is to enjoy the protection bestowed by labour and social legislation and who is not. If the distinctions are blurred or left to national law, practices will continue which will only have a twofold advantage for employers: one derived from the classical employment relationship, the aim of which is to obtain dependent labour, and one derived from commercial law, the effect of which is to leave responsibility for the contractors' social security to the contractors themselves. The aim of the instrument should be to cover persons who need protection. They need this protection because new technology and organization structures have diluted their personal dependency established by contract or their direct integration into the enterprise. An important indicator of the need for protection is the degree of economic dependency expressed in terms of working for the economic goals of another party. If, in addition, the contractor is not operating on the market in his own business interests, then clearly he cannot be treated as a partner under commercial and company law. Therefore, he requires the full protection afforded by labour and social security legislation. At the same time, it remains necessary, after amending Article 5 as proposed, to list in detail the protection rights to be guaranteed for contract workers and to assign equal value to each of these rights. This would remove the incentive to use contractual arrangements as a means of evading the financial burden of the system of protection afforded under labour and social security legislation.
Greece. There is no objection to the text of this Article.
Hungary. Rights and duties arising from a legal relationship differ according to the nature of the legal relationship. Rights such as the right to collective bargaining, the definition of working hours, the various protections to which mothers are entitled, etc., are only relevant for working relationships in the broad sense of the term. The provisions are impossible to apply to legal relationships established according to the Civil Code (assignment, entrepreneurs' contract).
India. AITUC. The definition of "employment relationship" should be amended in the Convention along the lines of the Indian Constitution and the Indian Contract Labour (Regulation and Abolition) Act, 1970. The right to work is a fundamental right and should be protected accordingly. In addition, user enterprises may not resort to fake contracts to take undue advantage of prevailing unemployment. The Convention provides social security measures, but does not guarantee the employment of contract workers, nor does it prohibit fake contracts. As such the proposed Convention only promotes welfare.
Indonesia. (1)-(2) Agreed.
Japan. See comments under Article 4.
NIKKEIREN. It is essential that workers, whether they work as contract workers or not, enjoy adequate general protection. However, since laws and regulations among member States, contract relations between subcontractors and user enterprises, and the actual conditions of contract labour vary to a large extent, the instrument should only point out the importance of the protection to be enjoyed by contract workers, with specific measures being left to member States. In this context, (1)(a)-(c) and (2)(a)-(e) should be treated as mere examples.
JTUC-RENGO. The text divides the spheres with respect to which equal treatment is to be provided into two categories with differing degrees of obligation. All aspects of equal treatment should be equally obligatory.
Malaysia. See comments under General observations.
Mauritius. (2)(a) The nature of the protection to be afforded in respect of remuneration should be clearly specified.
Netherlands. FNV. Article 6 does not need any changes. (1)(a)-(c) Perhaps it should be clarified that in triangular relationships the basic principles of freedom of association, freedom of discrimination, and minimum age are valid and applicable both in the relationship between worker and the user enterprise and in the relationship between the worker and the subcontractor/intermediary.
Norway. (2)(a) The phrase "and other working conditions" should be more precisely defined.
LO. See comments under Article 5.
Portugal. See comments under Article 5.
Seychelles. Contract labour as defined under Article 1 should ensure that contract workers who have a contract of employment in the case of a triangular employment relationship should enjoy adequate protection in accordance with national law and practice as provided under Article 6 of the proposed Convention.
Singapore. See comments under Article 5.
South Africa. The words "workers with a recognized employment relationship" should be replaced by "other workers". The comments on the difference made between contract workers who have a bilateral relationship and those who have a triangular relationship are endorsed. For this reason it is believed that a provision having the effect of Paragraph 8(1) of the proposed Recommendation should be included in the Convention. It could read as follows: "Any measure introduced by a Member in respect of a matter dealt with in Articles 2 to 7 shall specify, in the case of a worker provided for a user enterprise by a subcontractor or an intermediary, the respective responsibility of the subcontractor (or the intermediary as the case may be) and the user enterprise."
FEDUSA. The Office comments are endorsed.
Sweden.(2)(c) See comments under Article 3. (d) Questions concerning pay and economic benefits in Sweden are left to the labour market parties to agree on between themselves. The Committee does not know to what extent collective agreements include provisions relating to contract workers as defined in the proposed Convention, but the general view is that remuneration questions are to remain a matter for the labour market parties and are not to be made a subject of statutory regulation.
Switzerland. CP. (1) is acceptable, in contrast to (2). See comments under Article5.
Trinidad and Tobago. (1)(b) The words "political opinion" should be replaced by "political affiliation" and "minimum age" by "age". There should also be a reference to "socio-economic status". (2) Provision should also be made for illness.
Tunisia. The expression "workers with a recognized employment relationship" should be more precisely defined.
Turkey. TISK. These measures may well hamper and even eliminate all forms of subcontracting. Even trade agreements may be adversely affected by such regulation. The scope of the proposed Article 6 is so wide that all other types of contracts which do no involve a subcontractor relationship may come within its purview.
United States. These issues should be discussed in detail by the Committee early on during the 1998 Session of the Conference prior to any voting on a Convention or Recommendation.
Uruguay. (1) See comments under Article 5.
Office commentary
In addition to what has been said under proposed Article 5, the Office would like to make the following comments on some proposals put forward in the observations of member States concerning this Article.
It was proposed in two observations to remove subparagraphs (c), (d) and (e) from Paragraph (2) of draft Article 6 on the grounds that Article 3 and Article 4(a) address the same issues. The Office is of the view that this proposal should be regarded from two different perspectives: their purposes and methods of application. The purposes of draft Article 3 and draft Articles 4(a) and 6(2) are different (to "prevent accidents and injury ..." and to provide (or ensure) "adequate protection", accordingly). As regards the methods of application, proposed Article 3 envisages "adequate measures" to be taken "in accordance with national law and practice"; proposed Article 4(a) provides "measures" to be taken "in accordance with national law and practice"; and proposed Article 6(2) mentions measures to be taken "as appropriate ...".
In another observation, clarification was requested of the phrase "other working conditions" in subparagraph (2)(a). The Office believes that, together with working time, this provision should apply to other working conditions such as weekly rest, holidays with or without pay, sick leave, or education leave. Similar language has been used in a number of ILO instruments, including recently the adopted Convention No.181 (Article 11(d)). There were also two other proposals made in the observations to change the wording of some provisions contained in paragraph (1). In this regard, the Office notes that subparagraph (1)(a) seems to have been construed as placing emphasis on basic workers' rights, envisaged in a number of ILO instruments, including Conventions Nos. 98 and 111, and the language applied in it is similar to that used in the above-mentioned instruments.
The Office did not consider itself in a position to make any changes and therefore the text has remained unchanged.
Article 7
The Member shall take measures to ensure that rights or obligations under labour or social security laws or regulations are not denied or avoided when contract labour is used.
Observations on Article 7
Australia. ACCI. The Office comments are strongly opposed since they appear to propose the imposition of penalties on employers even where contract labour is not in use.
Austria. This provision should be deleted in favour of a provision imposing assimilation in general. The obligation on member States to apply the Convention pursuant to Article 8 would be appropriate. However, the obligation to ensure that regulations will not be avoided when contract labour is used should be deleted in view of the problems of evidence it will create.
Barbados. There appears to be some divergence with Paragraph 5 of the Recommendation in that the Recommendation seems to imply that the rights or obligations under labour or social security regulations are only applicable to contract workers in specific circumstances instead of being generally applicable. Article 7 should be redrafted as follows: "The Member shall take measures to ensure that the rights or obligations of the contract worker are not denied or avoided under labour or social security laws or regulations."
Belarus. See comments under Article 1.
Botswana. The limited scope of the Article is adequate.
Brazil. See comments under Article 5.
CNI/CNC. The Office's reference to the difference that would exist between the provisions of Article 7 of the proposed Convention and Paragraph 5 of the proposed Recommendation, as well as the Office's comments, are rejected, because they seem to seek to impose sanctions on employers, even when they do not have recourse to contract labour.
Canada. The words "measures to ensure" should be clarified given the inevitability of such abuses and the limited capacity of competent authorities to guarantee that such abuses do not take place. "Measures to ensure" may be replaced by "measures to discourage", for instance by assimilating the contract worker to the subcontractor or user enterprise, where evasion of responsibilities has been found to occur.
CLC. The text of Point 11 of the Proposed Conclusions of Report VI(2) is preferable to the text of Article 7, because the latter is useless in cases in which governments do not, in fact, have relevant legislation.
CNTU. The provisions of Article 7 do not raise a problem in conjunction with Paragraph 5 of the Recommendation. The objective of Recommendations is to elaborate points raised in the Convention or to offer standards to countries which are not a party to the Convention. Since in the latter case there is no formal commitment to legislate in the sense of the Convention, it is suggested that specific measures be taken correcting the most abusive situations. For countries that have ratified a Convention, the Recommendation specifies a course to tackle the subject.
Costa Rica. The Article needs to be more explicit, given the fact that the measures adopted to safeguard protection of the contract worker must in most cases be derived from the Convention.
Denmark. It is important to introduce the principle that contract workers are not used with a view to denying or avoiding rights or obligations under labour or social security laws or regulations. This principle becomes less pertinent if a genuine principle of equal treatment such as that suggested in the comments under Article 5 is established. A provision to this effect might be included in the Preamble.
DA. Does not agree with the Office observations according to which the legal effects of the proposed Convention seem to extend beyond contract labour.
Ecuador. See comments under Article 6.
Egypt. This Article is necessary as it refers to measures to ensure that rights and obligations are not denied. Such measures may include penalties on enterprises denying rights and obligations for this category of workers. National legislation provides penalties for non-compliance with national legal provisions.
El Salvador. This provision of the proposed Convention should be reformulated to eliminate discrepancies with the provisions of the Recommendation.
Finland. As regards the limited scope of this Article, there should not be any far-reaching regulation, for instance, restricting companies' right to choose whether to run certain business operations with their own personnel or by contracting the work out.
SAK/STTK/AKAVA. The text of the former Point 11 of Report VI(2) to the 1997 Conference was better. The proposed Article should be amended as follows: "The Member shall take measures to ensure that contract labour is not used for the purposes of denying rights or avoiding obligations under labour or social security laws and regulations."
France. CGT-FO. In the French text, the words "pour faire en sorte que" should be replaced by "pour que".
Germany. The phrase "when contract labour is used" and its German equivalent are indeed likely to give rise to difficulties in interpretation. The obligation arising from this Article should apply not only to situations in which contract labour is already in use (for the purpose of denying rights or avoiding obligations). One solution could be to emulate the wording of the French version.
Greece. A comparison between Article 7 of the proposed Convention and Paragraph 5 of the proposed Recommendation illustrates the broader scope of Paragraph 5. It may be understood that member States are under an obligation to take the measures envisaged by Article 7 only if contract labour results in denying or avoiding rights or obligations under labour or social security laws or regulations. It may therefore be preferable to merge the two provisions in a legally more accurate and more meaningful Article 7 of the Convention.
Indonesia. Agreed.
Japan. The actual difference between contract labour and work performed on the basis of a contract of employment varies from case to case. The provision should be amended as follows to indicate that every member State must take the necessary measures appropriate to actual conditions: "The Member shall take measures, as necessary and appropriate in the light of the actual conditions, to ensure that rights or obligations under labour or social security laws or regulations are not denied or avoided when contract labour is used."
Mauritius. This Article should be redrafted so as to make clear whose "rights or obligations" are being referred to.
Netherlands. Paragraph 5 of the proposed Recommendation goes a little further than Article 7 of the proposed Convention in stating that "contract workers should be assimilated". Since the word "assimilated" provides more scope than the Office's proposal, the original text is preferable.
FNV. The FNV would like to see Paragraph 5 of the Recommendation integrated into Article 7 of the proposed Convention, which would make the latter more effective.
Norway. LO. The provision in Paragraph 5 of the proposed Recommendation should be incorporated in Article 7 of the proposed Convention.
South Africa. The problem referred to could be avoided by the following reformulation: "The Member shall take measures to ensure that no person may engage, provide or use contract labour to deny or avoid rights or obligations under labour or social security laws or obligations."
FEDUSA. The Office comments are not clear. Protection can only be afforded when contract labour is used and not before. Protection must begin at the moment the work begins.
Spain. The differences between Article 7 of the Convention and Paragraph 5 of the Recommendation are obvious and do not give rise to any comment, since the level of precision in both cases appears to be consistent with the nature of the instrument in which they are incorporated. The scope of both subsections is exactly the same at the time of application.
Switzerland. The method to distinguish between employees and self-employed workers based on economic reality instead of the legal terms of a contractual arrangement should ensure that obligations under social security regulations are not denied or avoided.
UPS/ASM/CP. This provision appears to suggest sanctions for employers and is opposed. See comments under Articles 5 and 6.
Syrian Arab Republic. As regards the different scope of this Article and Paragraph5 of the proposed Recommendation, it is necessary to broaden the limited scope of Article 7 and include every person who could be considered a contract worker irrespective of whether or not a contract has been concluded.
United States. These issues should be discussed in detail by the Committee during the early stages of the Conference prior to any voting on a Convention or Recommendation.
Office commentary
The text adopted by the Conference in 1997 replaced the original Office text under Point 11 of the Proposed Conclusions (Report VI(2)). The intention behind these changes, as explained when the amendment was introduced, was to express this Point in a positive manner without altering the substance. The original intention of the Office was to prevent the use of contract labour with the sole or main purpose of denying or avoiding obligations under labour and social security laws. The new text instead addressed only de facto situations in which contract labour is already in use. In ReportV(1) the Office therefore invited member States to comment on that provision. The observations, made by a number of member States, assess differently such a limitation; some are in favour of the text adopted in 1997, while others are not. Because of the diversity of these observations, the Office has not introduced changes to this proposed Article.
Article 8
(1) The Convention shall be applied by means of laws or regulations or by any other means consistent with national practice, such as court decisions, arbitration awards or collective agreements.
(2) Effective measures appropriate to the means chosen pursuant to Paragraph 1 shall be taken to ensure the proper application and enforcement of regulations or provisions concerning contract labour through adequate inspection or otherwise.
(3) Adequate remedies, including penalties where appropriate, shall be provided for and effectively applied in case of violations of the regulations or provisions referred to in Paragraph 2.
Observations on Article 8
Australia. ACCI. The proposed renumbering is endorsed.
Belarus. See comments under Article 1.
Brazil. CNI/CNC. No objection to the new numbering as proposed.
Canada. (1), (2) and (3) Agreed.
CSN. Agreed.
Comoros. (1) All international instruments automatically become a national statute upon ratification. Ratification is, therefore, sufficient to ensure effective application on the national level. As a consequence, there is no need to provide that the instrument must be applied by means of court decisions, arbitration awards or collective agreements or by any other means consistent with national practice. (2) The Convention should provide that national labour inspection services must supervise legislation pertaining to contract workers.
Costa Rica. Agreed.
Ecuador. Agreed.
Egypt. (3) should be deleted, as this subparagraph is implied in Article 7, which provides for measures to ensure that rights and obligations are not denied.
El Salvador. Agreed.
Finland. The provisions are acceptable.
LTK/TT. Sanctions based on the concepts of the proposed Convention are not conceivable.
Greece. Article 8 in its new form is approved if it makes the text more precise from a legal and substantial point of view.
Indonesia. (1)-(3) Agreed.
Japan. NIKKEIREN. Contract labour should be recognized as a normal economic activity, and therefore, excessive inspection should be avoided. If there are no appropriate means, however, it is necessary to take adequate and effective measures in order to protect contract workers from dishonest brokers.
New Zealand. NZEF. See comments under Article 6.
Portugal. Nothing seems to prevent a merger of Points 4, 14 and 15 included in this Article, with the appropriate drafting changes that such merger necessitates.
South Africa. FEDUSA. The grouping of the provisions is endorsed. (2) However, a direct reference to the Convention as was the case in the former text would be preferable.
Spain. Agreed.
Switzerland. UPS/ASM/CP. Agreed.
United States. Agreed.
Office commentary
Two proposals have been made with regard to the text of this proposed Article. One observation proposed the deletion of paragraph (3) since its provision is already implied in Article 7. In another observation it was proposed to redraft paragraph (2) so that mention would be made that national labour inspection services must supervise legislation pertaining to contract workers. The Office has not considered that there was sufficient support for the suggested changes and has thus left the text of this proposed Article unchanged.
Article 9
The provisions of the Convention shall not affect more favourable provisions under other international labour Conventions applicable to the workers concerned.
Observations on Article 9
Canada. Agreed.
Egypt. This is a provision common to all international Conventions.
Finland. The provision is acceptable.
Office commentary
No changes have been proposed by the Office.
Observations on the proposed Recommendation
concerning contract labour
(5)
The General Conference of the International Labour Organization,
Having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its 86th Session on June 1998,
Having decided upon the adoption of certain proposals with regard to contract labour, which is the fifth item on the agenda of the session, and
Having determined that these proposals shall take the form of a Recommendation supplementing the Contract Labour Convention, 1998;
adopts this day of June of the year one thousand nine hundred and ninety-eight the following Recommendation, which may be cited as the Contract Labour Recommendation, 1998:
1. The provisions of this Recommendation should be applied in conjunction with those of the Contract Labour Convention, 1998 (hereafter referred to as "the Convention").
Observations on Paragraph 1
Australia. If a Recommendation is to be adopted, it should be autonomous and not supplement a Convention.
ACCI. The Office proposal to delete the word "supplement" is opposed. It should remain clear as an important general principle that the Recommendation can be considered independently from the proposed Convention, if the latter has not been ratified.
Brazil. It should be possible to consider the Recommendation independently from a decision on the ratification of the Convention. The text in its present form makes it very difficult to apply the Recommendation separately from the Convention, ratification of which several countries will oppose.
CNI/CNC. The word "supplement" must not be deleted. The phrasing must clearly indicate that the proposed Recommendation can be considered separately from the proposed Convention, if this is not ratified. This is a general principle that deserves support, particularly when the adoption of a Convention and a Recommendation is opposed.
Canada. The term "applied" should be replaced with the term "considered" to reflect that Recommendations provide guidelines which may inspire member States in the application of the requirements of the Convention, but that also Recommendations are not subject to ratification and, therefore, impose no obligation even on States which ratify the corresponding Conventions. See the comments under General observations on the prerequisites to be fulfilled before considering a Convention.
CEC. See comments under General observations.
CNTU. Agreed.
Costa Rica. Agreed.
Denmark. DA. The word "supplement" should be retained in accordance with general practice in order to ensure that the Recommendation can stand alone.
Egypt. Agreed.
Finland. The provisions of the proposed Recommendation should be applied alongside those of the proposed Convention. The Recommendation contains provisions clarifying various aspects of contract labour that for most part can be supported.
France. CFDT. Replace "should" by "shall".
Germany. BDA. See comments under the General observations and Article 1 of the proposed Convention. In future, standard-setting Recommendations should always be able to stand independently of Conventions. Therefore, the phrase "supplementing the ... Convention" should be deleted in the Preamble of Recommendations.
Greece. Agreed.
Indonesia. Agreed.
Republic of Korea. KEF. The word "supplement" and the definitions of terms deleted by the Office should be restored to enable consideration of the proposed Recommendation independently of the proposed Convention.
Portugal. Maintaining the tenor of former Point 17 of the conclusions would be more appropriate than deleting the word "supplement" as proposed by the Office. It should be clear that the Convention and the Recommendation are different instruments with a different degree of force. The proposed change could somewhat blur the distinction.
Spain. Agreed.
Switzerland. UPS/ASM/CP. The word "supplement" should be restored and replace the words "be applied in conjunction with". Thus it will be clear that the proposed Recommendation can be considered independently of the proposed Convention in cases where the latter has not been ratified. The independent status of Recommendations is a fundamental principle that must be defended. The position taken by the Office to apply the proposed Recommendation only in conjunction with the proposed Convention is opposed.
Syrian Arab Republic. Deleting the word "supplement" gives the provisions of the Recommendation an autonomous character, which is contrary to their natural role: a Recommendation supplements and specifies the provisions mentioned in the relevant Convention. It is equally noted that the word "supplement" continues to be used in the Preamble of the proposed Recommendation, as is the usual practice in adopting Recommendations related to Conventions.
United States. Agreed.
Office commentary
Three proposals have been made in the observations with regard to this proposed Paragraph.
The first is to replace the word "applied" in this Paragraph by the word "considered", in order to reflect the fact that Recommendations provide guidelines, which may inspire member States in the application of the provisions of Conventions. The second proposal suggests replacing the phrase "be applied in conjunction with" by the word "supplement". The Office notes that Point 17 of the Proposed Conclusions with a view to a proposed Recommendation adopted by the Conference in 1997 included both terms. The changes introduced in Report V(1) were of a drafting nature and aimed at making both the Preamble of the proposed Recommendation and Paragraph 1 consistent with the standard language used in the ILO instruments. The third proposal is for the Recommendation to be considered independently of the Convention. As already explained in Report V(1), since the definitions in Paragraphs 1, 2 and 3 of Point 18 of the Proposed Conclusions adopted by the Committee in 1997 are identical to the definitions contained in what is now Article 1 of the proposed Convention and since, according to its Paragraph 1, the proposed Recommendation would be applied in conjunction with the Proposed Convention, the definitions in the proposed Recommendation were omitted. The Office has not therefore introduced changes to this provision.
2. In determining, for the purposes of the definition of the term "contract labour", whether the conditions of dependency or subordination referred to in Article 1(a) of the Convention are met, a Member could consider one or more criteria, including but not limited to, the following:
(a) the extent to which the user enterprise determines when and how work should be performed, including working time and other conditions of work of the contract worker;
(b) whether the user enterprise pays amounts due to the contract worker periodically and according to pre-established criteria;
(c) the extent of supervisory authority and control of the user enterprise over the contract worker in respect to the work performed, including disciplinary authority;
(d) the extent to which the user enterprise makes investments and provides tools, materials and machinery, among other things, to perform the work concerned;
(e) whether the contract worker can make profits or run the risk of losses in performing the work;
(f) whether the work is performed on a regular and continuous basis;
(g) whether the contract worker works for a single user enterprise;
(h) the extent to which the work performed is integrated into the normal activities of the user enterprise;
(i) whether the user enterprise provides substantial job-specific training to the contract worker.
Observations on Paragraph 2
Australia. These are all acceptable indicators of a contract for services. The flexible use of one or several factors enables the relationship to be identified accurately in a range of circumstances. To make the text clearer, the words "for the purposes of being a contract worker" should be added after "conditions of dependency or subordination" and before the word "referred".
ACCI. The Office proposal is rejected as it implies that no sense can be made of the proposed Recommendation without consulting the proposed Convention. See comments under Paragraph 1.
Austria. See comments on Article 1 regarding the incorporation of this Paragraph into the proposed Convention. It is important not to allow member States to freely choose and apply criteria and thus arbitrarily demarcate contract labour from an independent activity, since this would most probably lead to inconsistent practice in the member States. Flexibility in distinguishing contract labour from an independent activity is necessary, but this is already achieved by the fact that the criteria in the proposed provision have a wide scope and that their enumeration is not exhaustive. This should already be sufficient to accommodate varying arrangements prevailing in member States. (g) This criterion should be developed. Work performances for a limited number of user enterprises can also indicate dependency, while only work performances for an unlimited number and steadily rotating pool of user enterprises demonstrate independence.
Brazil. CNI/CNC. See comments under Paragraph 1.
Canada. Agreed.
CEC. See comments under General observations.
CNTU. The Conference Committee quite explicitly thought it was necessary to repeat certain provisions of the proposed Convention in view of the stimulating role of the proposed Recommendation in countries that do not ratify the Convention. For this reason the omission proposed by the Office cannot be supported.
Costa Rica. Agreed.
Cyprus. See comments under Article 1. This is inappropriate for an international instrument.
Denmark. See comments under Article 1. (e) This condition should be deleted.
DA. The proposal to retain only Paragraph 4 of Point 18 of the Conference Committee conclusions with a cross-reference to the proposed Convention implies that the Recommendation may not be given effect without the Convention. Logically, the definition should be retained in the Recommendation.
Egypt. This Paragraph addresses the regulation of the relationship between the worker and the user enterprise through the determination of a number of criteria. These criteria should be determined by the enterprise, within the framework of international labour standards addressing such principles. For example, when an enterprise determines working time, it should observe the provisions respecting night work as regards women and children, and when it determines hours of work, it should observe the criteria of eight hours per day, as provided for by the Labour Inspection Convention. (e) to(g) should be deleted to ensure flexibility of demand for the employment of this category of workers.
Germany. DGB. This Paragraph should be replaced entirely by the following text: "In determining, for the purposes of the definition of the term 'contract labour', whether the conditions of dependency or subordination referred to in Article 1(a) of the Convention are met, national legislation shall ensure that at least the category of persons referred to in the second sentence of Article 5 of the Convention concerning contract labour (in the wording proposed by the DGB) enjoys the full protection afforded to workers. If these criteria are met, protection should also be extended to persons who use their own equipment and employees in carrying out the work, as well as those who perform work for more than one enterprise at a time. The status of the contract worker who does not fall within the concept of employee should be reserved for persons having a degree of leeway for operating in their own business interests, but who none the less are to a large extent dependent on the user enterprise. The following criteria could be taken into account for this purpose: (a) the number of persons employed by the contractor, (b) the number of enterprises for which he works at a time, and (c) real influence on price-setting."
Greece. There is no objection to the changes made under the condition that the definition in the proposed Convention is reflected in the corresponding Paragraph in the proposed Recommendation.
Indonesia. Agreed.
Republic of Korea. KEF. See comments made under Paragraph 1. The list of criteria should be deleted. The determination of dependency or subordination should be left to national authorities.
Norway. (b) The subparagraph should read as follows: "whether the worker receives remuneration as salary or equal payment". A subparagraph (j) should be added to read as follows: "whether the worker has a duty to personally carry out the work and cannot be replaced by assistants on his or her own account".
LO: See comments on Article 1 of the proposed Convention.
Portugal. CIP. See comments on Article 1 of the proposed Convention.
Switzerland. The criteria listed mostly correspond to the criteria developed by Swiss case-law and scholars, or at least do not contradict those criteria.
United States. The recommended changes to this Paragraph are supported for the reasons stated in Report V(1).
International Organization of Employers. See comments under Article 1. The long list of criteria is inappropriate for an international instrument. The question should be left to the competent national authorities.
Office commentary
As regards the proposal put forward in the observations to redraft this Paragraph in order to allow a Recommendation to stand alone, see the Office commentary under proposed Paragraph 1 above. The text is submitted with a few changes of a drafting nature.
3. Appropriate measures should be taken to ensure that contract workers are informed, in an appropriate and easily understandable manner, about their conditions of work and amounts due to them, including how these amounts will be determined.
Observations on Paragraph 3
Australia. The wording of the Paragraph could include a provision recommending that the method of calculation or the actual amount should be specified in the contract, according to national law and practice.
Belarus. See comments under Article 1.
Canada. Agreed.
CEC. Paragraph 3 requires measures to dictate the form and terms of commercial contracts; this is inappropriate for an instrument on employment and labour standards. If, on the other hand, this instrument is to apply to employees only, then this provision, as are many others, is a moot one and unnecessary.
Comoros. Informing workers about their conditions of work and amounts payable to them is such a fundamental and general rule that it does not have to be mentioned in a separate provision. Contract workers should therefore not be discriminated against on this point.
Egypt. This is important to protect workers in line with international standards.
France. CFDT. Replace "amounts" by "earnings" ("revenus").
Germany. DGB. This Paragraph should be included in Article 6 of the proposed Convention as an additional Paragraph. Informing the contract workers concerned of their conditions of work can help ensure that protective provisions are applied.
Indonesia. Agreed.
Switzerland. UPS/ASM/CP. The information on conditions of work appears to be self-evident. The passage on how to determine the amounts due will create problems of interpretation and should be deleted.
Office commentary
The Office proposes some minor drafting changes to the text with a view to avoiding repetition of the word "appropriate" and to improving style.
4. Measures should be taken, as appropriate, to ensure that contract workers are afforded equal treatment with employees of the user enterprise or, as the case may be, with employees of the subcontractor or of the intermediary, for performing work which is essentially similar, under similar conditions and requiring similar qualifications.
Observations on Paragraph 4
Australia. As is the case for Article 1(c) of the proposed Convention, the use of the term "intermediary" is too broad, and may extend obligations beyond the contracting parties. Any proposed concept should more precisely address the relationship between the various parties. It would be more appropriate to define the role as that of an "agent".
ACCI. This Paragraph is totally opposed. It is undesirable even from the workers' point of view, incapable of being applied, and seeks to cut across commercial relationships.
Austria. See comments under Article 1 on the legal relationships discerned within a contract labour context as they emerge from the definition in Article 1 of the proposed Convention. Where contract labour relationships are established on a triangular basis equality of treatment or assimilation should more specifically be ensured between the workers of the subcontractor and the workers (both employees and contract workers) of the user enterprise. Equality of treatment or assimilation with the employees of an intermediary is irrelevant, since by definition there can only be contract labour if there is dependency on or subordination to the user enterprise, and consequently the contract labour relationship exists only between the contract worker and the user enterprise, and never between the contract worker and the intermediary. Triangular contract labour arrangements can, in Austria's view, concern only the allocation of employer obligations to the user enterprise, subcontractor or intermediary or the sharing of these obligations among these parties. Finally, the question of whether contract labour is used to avoid labour or social security laws or regulations or not should not determine whether contract workers are assimilated to employees of the user enterprise; most of the time this would be difficult to prove.
Belarus. See comments under Article 1.
Brazil. Despite the objections of the CNI, it is possible to implement this Paragraph since, as in Paragraph 5, the issues come within the purview of employment relations, which is the subject of the proposed Recommendation.
CNI/CNC. This Paragraph is opposed. It cannot be applied and interferes in matters that fall within the domain of commercial relations.
Canada. Agreed, provided that the words "as appropriate" are retained and the scope of the term "equal treatment" is clarified. See comments under Article 5.
CEC. This Paragraph again presents the equity issue and is strongly opposed.
CNTU. Agreed.
Costa Rica. See comments under Article 5.
Egypt. The words "as appropriate" should be deleted, as the measures to ensure that contract workers are afforded equal treatment with employees of the user enterprise should be mandatory.
Finland. See comments under Article 5 of the proposed Convention.
LTK/TT. The vague wording is not suitable for inclusion in an ILO instrument.
SAK/STTK/AKAVA. The words "as appropriate" should be removed.
France. CFDT. Replace "... are afforded ..." by "... are at least afforded ...".
Germany. As in Articles 5 and 6 of the proposed Convention, it would be advisable for the sentence to read as follows "... equal treatment with employees with a recognized employment relationship, ..." or "... equal treatment with employees with a recognized contract of employment, ...".
Greece. This Paragraph could be examined together with Paragraph 5.
Indonesia. Agreed.
Japan. This Paragraph should be deleted. The difference between contract labour and work performed on the basis of a contract of employment varies from case to case and it is difficult to achieve equal treatment between them.
NIKKEIREN. The comments made under Article 5 are equally valid here.
Republic of Korea. KEF. See comments made under Article 5.
Mauritius. The words "or of the intermediary" should be deleted inasmuch as, under the proposed Convention, an intermediary cannot be considered as an employer of a contract worker.
Norway. See comments under Article 5.
LO. See comments under Article 5.
Portugal. There is no objection to considering this provision together with other relevant provisions, as long as the provisions of the Convention are not confused with those of the Recommendation and comparison takes place only for the purposes of analysis.
CIP. See comments under Article 5.
Spain. See comments under Article 5.
Switzerland. UPS/ASM/CP. See comments under Article 5. This Paragraph cuts across commercial relations, is not applicable, and therefore firmly opposed.
United States. These issues should be discussed in detail by the Committee during the early stages of the 1998 Session of the Conference prior to any voting on a proposed Convention or Recommendation.
Uruguay. This does not seem to be in keeping with the definition of "intermediary" in Article 1(c) of the proposed Convention. The reference to intermediary should be deleted.
International Organization of Employers. See comments under Article 5.
Office commentary
Reference is made to the Office commentary under draft Article 5 above. The text is therefore submitted unchanged.
5. In specified circumstances (for example, where contract labour is used mainly or solely for the purpose of denying rights or avoiding obligations under labour or social security laws and regulations), contract workers should be assimilated to employees of the user enterprise or, as the case may be, to employees of the subcontractor or of the intermediary.
Observations on Paragraph 5
Australia. This would be consistent with the operation of the common law of employment.
ACCI. In drafting terms, the Office proposal, which again acknowledges the employers' arguments about the potential creation of a third category of worker, is acceptable. However, the Paragraph remains totally unacceptable since it seeks to create legal relationships where none exists and to cut across commercial relationships.
Austria. See comments under Paragraph 4.
Barbados. Accepted.
Belarus. See comments under Article 1.
Botswana. The words "assimilated to" are preferable since they clearly describe a scenario where contract workers who were initially not employees of a user enterprise are transformed into employees of the user enterprise, subcontractor or intermediary, as the case may be.
Brazil. CNI/CNC. The Office correctly considers that this provision might be seen as creating a third category of workers. Furthermore, the Paragraph is unacceptable because it seeks to create legal relationships where these do not exist, straying into the domain of commercial relationships.
Canada. Agreed. However, the purpose of Point 5, which is to discourage illegitimate recourse to contract labour, may be better achieved by assimilating contract workers to the employees of the user enterprise.
CEC. This Paragraph deals with the assimilation of contract workers to other employees, regardless of the contractual arrangement that may have been negotiated between the parties. Paragraphs 4 and 5 promote uncertainty in commercial relations, and are contrary to the well-established legal traditions of contract law and the law with respect to employment.
CNTU. "Recognized as" is a more appropriate wording.
Costa Rica. It is important to ensure equal treatment between workers, not as regards the circumstances in which they are employed. The use of the word
"assimilated" is inappropriate, since it refers to a difference and implies a third category of workers.
Ecuador. The phrase "treated as" would make it clear that this text is not intended to provide for treatment which might lead "workers performing contract labour" being seen as a third category of workers.
Egypt. This provision should be deleted, as it is included in Paragraph 4. The text of Article 8(3) of the proposed Convention is sufficient, in that it provides for penalties to be applied in case of violation of the regulation or provisions referred to in the Convention.
Finland. In any event, the words "treated as" would be better than "assimilated to". However, it is doubtful whether the assimilation referred to would in any case lead to the desired legal consequences. These consequences would not necessarily be either proportionately severe or otherwise suitable.
LTK/TT. The vague wording is not suitable for inclusion in an ILO instrument.
SAK/STTK/AKAVA. The provision should be supplemented, for instance by inserting "or with the effect" after the words "for the purpose". The phrase best suited to replace the word "assimilated" is "recognized as".
France. CFDT. "Recognized as" should be retained. The Paragraph seeks to avoid creating a new category of workers who would be pseudo-independent workers. The instrument would thus dissuade those who plan to have recourse to contract labour to profit from social deregulation.
Germany. "Recognized as" is indeed a more appropriate wording than "assimilated" to make it clear that "workers performing contract labour" are not seen as a third category of workers. If "assimilated" is retained, "contract workers" should be expanded to "... contract workers with a recognized employment relationship, ..." or "... contract workers with a recognized contract of employment, ...".
Greece. There is no objection to replacing "assimilated" by "treated as" on the condition that it clarifies the provision from a legal and substantial point of view, as was already stressed with respect to Article 1.
Indonesia. Agreed.
Japan. The motivation for assimilating contract workers to workers with a contract of employment should be specified in this Paragraph which should be amended as follows: "In specified circumstances (for example, where contract labour is used mainly or solely for the purpose of denying rights or avoiding obligations under labour or social security laws and regulations even though the actual conditions are the same as those of the workers with a contract of employment), contract workers should be assimilated to employees of the user enterprise or, as the case may be, to employees of the subcontractor or of the intermediary."
NIKKEIREN. This provision is not necessary, because it is obviously improper to avoid legal obligations. In cases in which contract labour is improperly used, appropriate existing systems could be used to deal with the matter.
Mauritius. The words "or the intermediary" should be deleted and the words "treated as" are preferable to "assimilated to".
Mexico. The words "assimilated to" should be replaced by "treated as".
Netherlands. See comments under Article 7.
Norway. "Recognized as" is a more appropriate wording.
LO. See comments under Article 5. The word "assimilated" should be replaced by the phrase "recognized as".
Portugal. The word "assimilated" is preferred to "recognized as" or "treated as" because it is more comprehensive. See comments under Article 5 of the proposed Convention.
CIP. See comments under Article 5 of the proposed Convention.
Switzerland. UPS/ASM/CP. The Office is right to point out that the text is not intended to provide for treatment which might lead to "workers performing contract labour" being seen as a third category of workers. The Paragraph remains totally unacceptable, nevertheless.
Syrian Arab Republic. The phrase "treated as" is preferable to the words "recognized as" in order to dissipate concerns expressed in the Conference Committee during the first discussion. See comments under Article 7 on the alignment between the two provisions. Contract workers should be treated equally with employees as long as they perform similar work under similar conditions and have the same qualifications.
Trinidad and Tobago. The words "assimilated to" should be replaced by the words "recognized as", and the words "and receive all entitlement afforded to such employees" should be added at the end of the sentence.
United States. These issues should be discussed in detail by the Committee during the early stages of the 1998 Session of the Conference prior to any voting on a Convention or Recommendation. The word "assimilated" should be replaced so as to make it clear that the text is not intended to imply that "workers performing contract labour" are considered as a third category of workers. "Treated as" would seem to be a more appropriate wording. The Committee should carefully review this and other provisions of both the proposed Convention and Recommendation to ensure consistency with respect to the definitions, scope and limitations of the proposed instruments.
Uruguay. See comments under Paragraph 4.
Office commentary
In Report V(1) the Office invited member States to comment on whether or not the phrase "recognized as" or "treated as" should replace the word "assimilated" in order to make it clear that this text is not intended to provide for treatment which might lead to contract workers being seen as a third category of workers. Since the majority of the observations concerning this Paragraph were in favour of such a change, the Office has replaced the word "assimilated" by the phrase "treated as".
6. In accordance with national law and practice, contract workers should not be made available to a user enterprise to replace workers of that enterprise who are on strike.
Observations on Paragraph 6
Australia. The qualifier "in accordance with national law and practice" has been added. In Australia, in accordance with the Federal Workplace Relations Act, 1996, contract workers may replace employees for the duration of the period in which employees are taking protected industrial action. However, in this case replacement by contact labour does not affect the continuity of employment of the employee engaging in protected industrial action. Paragraph 6 is superfluous given that it duplicates principles set out by the Committee on Freedom of Association of the Governing Body of the ILO. All member States are considered bound by these principles.
Canada. In preparing for the first discussion, Canada had suggested the addition of "in accordance with national law and practice" to make the provision applicable only where replacement workers are prohibited/restricted, generally, by legislation or practice in a particular jurisdiction, for instance in Canada in the provinces of British Columbia and Quebec. Although the current text contains the words "in accordance with national law and practice", the provision may still be problematic for Canada given the ILO Office interpretation in Paragraph 154 of Provisional Record No. 18 of the first discussion, "that the phrase does not in any way restrict the need to comply with the substantive provisions of the text, but provides considerable flexibility in the means of implementation."
CEC. This Paragraph is illogical in that it seeks to bar a certain type of worker from being used as a replacement worker during a strike, but not all workers. This is clearly an attempt to intercede in collective bargaining in a manner beyond the scope of this discussion. In any event, the CEC is strongly opposed to setting up barriers to the use of replacement workers. The right of an employer to maintain operations in the face of a work stoppage is the historical counterweight to the right to strike, as set out in the seminal Woods Report, and is the very foundation of the labour relations model in Canada. It may be that some jurisdictions feel justified in undermining this balance. However, the CEC and many governments are firmly opposed to such restrictions. Contrary to the inaccurate insinuation by Canada's representatives at the last session of the ILC, replacement worker restrictions are still very uncommon in Canadian jurisdictions, and have been overtly rejected in some provinces.
Comoros. The instrument may provide that national legislation prohibits contract labour in specified circumstances such as those mentioned in this Paragraph and in Paragraph 7.
Czech Republic. Confederation of Arts and Culture (KUK). In the event that a Convention supplemented by a Recommendation is adopted, this Paragraph should be directly inserted into the Convention.
Egypt. Yes.
Finland. Finnish law does not contain provisions on this matter.
LTK/TT. Labour disputes are covered by rules and practices at the national level, which should not be confused by some made-up "contract worker" concept.
France. CFDT. Replace "should" by "shall" or "can".
Indonesia. Agreed, provided that the strike is due to occupational and not political reasons.
Japan. This Paragraph should be deleted. The problem of replacing workers who are on strike should be discussed in the light of the employer's right to manage and freedom to hire. Pursuant to the principle of labour-management autonomy, this issue should be settled by agreement between labour and management.
NIKKEIREN. This provision should not be included; the matter should be examined on a case-by-case basis, taking into account management prerogatives and the employer's right to hire.
Norway. This provision does not fall within the scope of the instrument which is to ensure that the contract workers enjoy adequate protection. It should therefore be deleted.
NHO. The right to strike is not dealt with in other ILO instruments. Besides, this provision seeks to protect employees against contract workers and has no place in a Recommendation seeking to protect contract workers.
Switzerland. UPS/ASM/CP. Opposed.
Tunisia. It would be advisable to enable user enterprises to replace their workers with contract workers to provide essential services, as defined by the Committee on Freedom of Association.
Uruguay. Workers. Calling on contract workers in such circumstances should be explicitly prohibited.
Office commentary
The Office has made no changes to this provision.
7.Measures should be taken to ensure that contract workers may refuse to perform work which they have reasonable justification to believe poses a serious danger to their safety and health.
Observations on Paragraph 7
Canada. Agreed.
CEC. This Paragraph is so trite as to be meaningless.
Comoros. See comments under Paragraph 6.
Egypt. Yes.
Indonesia. Agreed, provided that such danger is justified by an expert or authorized officer.
Switzerland. The origin of this provision is unclear. The original questionnaire mentioned only the possibility of prohibiting contract labour in certain cases, but did not anticipate workers being able to refuse to perform work which they have reasonable justification to believe poses a serious danger to their safety and health. According to Swiss law, a worker can refuse work, but only if prior to the refusal he has requested his employer to undertake the necessary preparation for the normal performance of the work. This provision, which applies to employees, does not appear to go as far as permitting contract workers to take an autonomous decision.
Trinidad and Tobago. This provision should be reworded as follows: "Measures should be taken to ensure that contract workers may refuse to perform work or to work in an environment which they have reasonable justification to believe poses a serious danger to their safety and health."
Office commentary
The Office has made no changes to this provision.
8. (1) National law and practice might allocate the respective responsibilities of the subcontractor (or the intermediary, as the case may be) and the user enterprise for fulfilling obligations towards contract workers, taking into account the extent of the workers' dependency on or subordination to them.
(2) When the party responsible for fulfilling the obligations referred to in subparagraph (1) does not meet them, the other party, where appropriate, should be made responsible for doing so.
Observations on Paragraph 8
Australia. This contradicts the doctrine of privity of contract whereby persons should not be bound to an agreement to which they are not party. This area of law should be adequately governed by legal provisions regarding contracts, corporations and in some cases, criminal law where the absence of privity could lead to inequity. The precise circumstances in which liability is shared should be left to the discretion of individual Members.
ACCI. The intention behind the Office proposal is appreciated, but "apportion" and "allocate" produce the same unacceptable result.
Austria. The obligation in Article 4(b) of the proposed Convention for member States to determine at least one party responsible for fulfilling the financial obligations envisaged in subparagraph (a) is welcomed, and should be expanded to cover all claims of contract workers, including those regarding working conditions. There can be no question of allocating obligations in triangular arrangements to the subcontractor, as the subcontractor is simply the formal employer of the worker (employee or contract worker). The passage in (1) according to which the allocation of responsibilities must take account of the extent of the workers' dependency or subordination, should be taken to mean that in order to determine this extent the criteria of Paragraph2 must again be considered and there should be an explicit reference to this provision. Finally, in the German text, the expression "Arbeitnehmer" in (1) should be replaced by the expression "Vertragsarbeiter".
Brazil. CNI/CNC. Both "apportion" and "allocate" are equally unacceptable.
Canada. (1) The following words should be added at the end: "or according to who has control over the circumstances under which the work is performed". In a specific situation, this may mean, for example, that a subcontractor or intermediary may have a responsibility to inform an individual that they have certain health and safety rights such as access to information on hazardous substances; the user enterprise would have obligations relating to the premises, for instance building safety and fire exits, etc., and an obligation to provide information that is relevant in the actual job setting. (2) Agreed.
CEC. Paragraphs 8 and 9 are simply impossible to enforce where there is a multiplicity of relationships with variations in control over aspects of the work, and possibly different and conflicting legislation governing the various parties.
Costa Rica. Endorsed.
Cyprus. EIF. The apportionment of responsibilities between user enterprises, subcontractors and intermediaries and the transmission of those responsibilities/obligations from one to another are unacceptable. Such a "solidarity" principle is confusing and does not encourage responsible attitudes.
Egypt. Responsibilities should not be shared for fulfilling obligations towards contract workers by the subcontractor, the user enterprise, or the intermediary. There should be several liability among them in order to avoid evasion by any party in the event of an infringement.
Indonesia. (1)-(2) Agreed.
Japan. NIKKEIREN. Since contract labour is performed on the basis of a contract between a contract worker and a subcontractor, the responsibility for fulfilling the financial obligations should be borne only by the subcontractor unless otherwise provided by a special agreement between the parties concerned.
Norway. The provisions do not harmonize with the principles of Norwegian legislation and current policy does not anticipate the enactment of statutory provisions on these subjects.
Portugal. Nothing seems to stand in the way of the proposed amendment.
CIP. The sharing of liability between the user enterprise, the subcontractor and the intermediary, as well as the shifting of responsibility and obligations are unacceptable. The principle of solidarity, in addition to being unacceptable, could give rise to greater confusion.
Slovakia. (1) The words "(or the intermediary, as the case may be)" should be deleted. By virtue of the definition given in Article 1(c), the intermediary cannot become an employer, not even pro forma, and cannot be vested with the rights and duties of an employer towards workers.
Spain. The term "atribuir" is totally inappropriate in Spanish and does not convey the intended meaning. The word "repartir" or even better "distribuir" should be used.
Switzerland. UPS/ASM/CP. Both subparagraphs as well as the principle of joint and several liability are opposed.
United States. The word "apportion" should be replaced by the word "allocate".
Uruguay. The wording "responsibilities towards contract workers" does not seek to divide responsibilities among two supposed employers, but to determine who is or was the employer and his responsibility. This approach is not endorsed.
Workers. (1) and (2) This instrument should regulate the responsibility of subcontractors, including those enterprises providing seasonal labour.
International Organization of Employers. See the comments of Cyprus above.
Office commentary
The Office has found it appropriate for reasons of consistency to restructure this provision by including in it as a separate subparagraph (3) the text of Paragraph 9 of the Recommendation. All the other paragraphs below have been renumbered accordingly.
9. To the extent provided for by national law, financial obligations towards a contract worker might be jointly and severally shared by the subcontractor and the user enterprise or by the intermediary and the user enterprise, or by all of them, as the case may be.
Observations on Paragraph 9
Australia. This provision should take into account the obligations as outlined in the terms of the contract concerning the relationship between the user enterprise, subcontractor and the intermediary.
ACCI. The proposed redrafting does nothing to lessen the objections against this Paragraph.
Brazil. CNI/CNC. The objections against this Paragraph still stand.
Canada. Agreed.
CEC. See comments under Paragraph 8.
Costa Rica. Endorsed.
Indonesia. Agreed.
Japan. NIKKEIREN. See comments under Paragraph 8.
Norway. See comments under Paragraph 8.
NHO. The proposal on jointly and severally shared obligations is not based upon legal obligations, and does not harmonize with Norwegian legislation. It is also incompatible with the Norwegian wage guarantee system.
Portugal. No objection.
CIP. See comments under Paragraph 8.
Spain. The proposal is completely rejected. In Spanish "responsabilidad mancomunada" (joint responsibility) is a completely different type of liability from that of "responsabilidad solidaria" (several responsibility) and less far-reaching. By introducing a drafting change the fundamental substance of the text agreed upon in the Conference Committee has been changed. Moreover liability can never be "mancomunada y solidaria" ("joint and several") because these terms are opposed. On the other hand the Office has not corrected the phrase "o en todas partes, según sea el caso ..." ("or by all of them, as the case may be"), which is not only meaningless, but would makes it conceivable that States arbitrarily impose such liabilities on persons or entities entirely unrelated to the factual relationship on the basis of which services are provided.
Switzerland. The problems which joint liability raises as regards payment of remuneration or social security contributions have been set out before. Joint liability does not exist under Swiss social security law. For certain risks the contributions vary depending on the degree to which workers are exposed in a particular undertaking or category of undertakings. If a worker is employed by several undertakings, every undertaking must recalculate its contributions depending on the risks its activities represent.
UPS/ASM/CP. See comments under Paragraph 8.
United States. Endorsed.
Uruguay. It would be appropriate to reexamine the wording of this point, perhaps on the basis of section 3 of Act No. 10.449 in force in our country, which reads: "All employers or contractors who use subcontractors or intermediaries will nonetheless remain subsidiarily responsible for paying the minimum wage."
International Organization of Employers. See comments under Paragraph 8.
Office commentary
See Office commentary under the previous Paragraph. The Office has made no changes to this provision.
10. In the event of insolvency of the user enterprise, the subcontractor or the intermediary, the outstanding claims of a contract worker should be given the same priorities as those established by national law and practice with regard to a worker's claims against his or her employer.
Observations on Paragraph 10
Australia. As suggested in Paragraph 9, the assignment of priorities may differ according to the nature of the relationship between the user enterprise, the subcontractor or the intermediary as defined in the terms of the contract.
Canada. Agreed.
CEC. Paragraphs 10 and 11 are further unacceptable intrusions into the commercial field.
Egypt. Yes, within the limits of several liability and national laws and regulations.
Indonesia. Agreed.
Japan. NIKKEIREN. Financial obligations towards a contract worker should be determined between a subcontractor and a contract worker. Since distribution of financial obligations varies according to the content of an individual contract and national laws of member States, a uniform provision should not be made on the financial obligations in the event of insolvency.
Norway. This provision is acceptable provided that the definition of contract labour depends on whether the contract worker is in fact an employee or not.
Portugal. CIP. See comments under Paragraph 8 of the Recommendation.
Uruguay. See comments under Articles 5 and 6(1).
Office commentary
The Office has made no changes to this provision.
11. (1) Recourse to contract labour might, in accordance with national laws and regulations, be made subject to an obligation incumbent on the subcontractor or the intermediary to register with or to obtain a licence from the competent authority.
(2) Registration or licensing might depend upon the subcontractor or the intermediary demonstrating its viability and capacity to meet its obligations towards contract workers, or posting a bond sufficient to cover its obligations to such workers.
Observations on Paragraph 11
Barbados. (1)-(2) The word "might" should be replaced by "shall".
Canada. Agreed, providing that "in accordance with national laws or regulations" means that subcontractors and intermediaries could be treated as other businesses are treated in a particular jurisdiction with respect to the need to register or receive licenses, or to post a bond. To create special obligations in this regard for subcontractors and intermediaries would create an unnecessary regulatory burden.
CEC. See comments under Paragraph 10.
Cyprus. EIF. Licensing or registration as a precondition to provide contract labour will discourage recourse to such form of employment.
Egypt. This is a regulatory measure which seeks to ensure workers' protection when they engage in work with a subcontractor or an intermediary. It could be dealt with by national laws and regulations.
Finland. Finnish law does not currently provide a duty of this kind. Earlier experiences with registration and licence procedures in Finland are not very encouraging. However, an arrangement of this kind may help to increase protection, depending on the national circumstances, so the inclusion of this provision is not opposed as such.
LTK/TT. The general trend is to abolish the need for licenses and notification duties. The ILO should be working in the same direction.
Indonesia. (1)-(2) Agreed.
Japan. NIKKEIREN. There should be no provision imposing an obligation to register with or obtain a licence from the competent authority, since regulations should be kept to a minimum. Such obligation will raise company costs and adversely affect job creation.
Portugal. CIP. Making registration and licensing a compulsory prerequisite for hiring contract labour is a questionable procedure and, given the scenarios in which it takes place, would constitute a strong and undesirable disincentive to the recruitment of contract workers.
Switzerland. UPS/ASM/CP. The Paragraph is completely opposed. It constitutes an intrusion of the State into the domain of commercial relations and infringes upon the freedom to contract. Employment cannot be created by authorizations or regulations imposing bonds.
Uruguay. The provision is opposed. It establishes requirements for the subcontractor or intermediary which are required in company legislation.
International Organization of Employers. Licensing or registration as a precondition for the provision of contract labour will discourage recourse to it. This is yet another example of the negative approach by the ILO to any work relations which do not fit the typical classical model of the first half of this century. See comments under general observations.
Office commentary
The Office has made no changes to this provision.
12. (1) Measures appropriate to national conditions should be taken, where necessary, to encourage collective bargaining as a means of determining and improving the terms and conditions of work of contract workers.
(2) Any obstacles to the exercise of the right of contract workers to join organizations of their choice and to participate in the activities of such organizations should be identified and eliminated.
Observations on Paragraph 12
Belarus. See comments under Article 1.
Canada. (1) Agreed. (2) Add the phrase "in so far as is reasonably practicable" before the words "identified and eliminated" to make the provision more realistic in terms of a competent authority's capacities.
CEC. This Paragraph is inappropriate for third parties and independent entrepreneurs.
Egypt. The protection provided for in this Paragraph is essential for contract workers, who due to their precarious status are exposed to pressure by the user enterprise.
Indonesia. (1)-(2) Agreed.
Japan. The actual difference between contract labour and work performed on the basis of a contract of employment varies from case to case. The provision should be amended as follows to indicate that every member State must take the necessary measures appropriate to actual conditions: "Any obstacles to the exercise of the right of contract workers to join organizations of their choice and to participate in the activities of such organizations should be identified and eliminated, as necessary and appropriate in the light of actual conditions."
Switzerland. UPS/ASM/CP. (1) Any system of collective bargaining must observe the freedom to contract or not to contract. Collective bargaining must remain the privilege of the social partners and must remain free from interference by the public authority. The Paragraph is rejected. (2) It would be more simple to provide that the principle of freedom of association must be respected.
Uruguay. See comments under Articles 5 and 6(1).
Office commentary
This Paragraph is a new text introduced by the Conference Committee itself during the first discussion in 1997. It was proposed in one of the observations to add in subparagraph (2) the phrase "in so far as is reasonably practicable" before the phrase "identified and eliminated". The Office believes that such a substantive change can be introduced only by the Conference Committee itself in 1998. The text is therefore submitted unchanged.
13. Members should, where possible, compile, keep up to date and make publicly available statistics and other information on contract labour.
Observations on Paragraph 13
Australia. While accurate statistics would be useful, an information gathering requirement may provide distorted results due to the range of relationships included as contract labour, and the hidden character of some classes of contract labour, such as homework. Although it would be useful it should not be mandatory to collect and compile statistics.
Canada. Agreed.
CEC. This Paragraph is an unnecessary exercise inconsistent with the role of government in developed economies.
Egypt. Statistical data can be compiled by the State authorities concerned in accordance with national laws and regulations.
Hungary. Employers. Statistical data collection of an undefined subject such as contract labour is impossible. See comments under Article 1.
Indonesia. Agreed.
Japan. NIKKEIREN. The content of the work performed by contract workers varies considerably and changes frequently. Under these circumstances, it is very difficult to grasp the actual situation of contract labour. The instrument, therefore, should only point out the importance, rather than the obligation, of compiling and updating statistics and other information, and of making them publicly available.
Switzerland. Reference is made to the reservations expressed in Report VI(2), without denying that the compilation of such statistics is useful.
UPS/ASM/CP. This bureaucratic provision will only create jobs for statisticians.
Office commentary
The Office has made no changes to this provision.
14. A Member should take measures, as appropriate, to provide protection to contract workers from other countries who perform work in its territory.
Observations on Paragraph 14
Australia. ACCI. The minor drafting change proposed by the Office is approved.
Austria. This provision should be incorporated into the Convention. The Convention should more precisely stipulate that the conditions of work and remuneration of foreign workers made available must be assimilated to those applicable to comparable national workers.
Brazil. CNI/CNC. No objection.
Canada. Agreed.
CEC. This Paragraph only makes sense if the rest of the Recommendation is logical and acceptable, which is not the case.
CNTU. Agreed.
Comoros. The protection envisaged should include safety and health conditions and ensuring that migrant workers are granted all benefits.
Costa Rica. Endorsed.
Egypt. Endorsed.
Greece. Endorsed.
Indonesia. Endorsed.
Mexico. This Paragraph should be carefully analysed taking into account that, although the Committee mentions that the question will be considered solely from the point of view of the receiver country, there are more complex situations which are part of the globalization process and which might give rise to difficulties in interpreting standards or, in certain cases, applying sanctions.
Portugal. Endorsed.
Spain. Endorsed.
Switzerland. It was proposed in Report VI(2) to prohibit the cross-border supply of contract workers, considering the special characteristics of this type of work and the difficulties affecting workers' protection. The proposed Recommendation does not appear to provide such prohibition, but it is important to have a provision such as this one which imposes special protection for citizens from another country, if only to avoid wage dumping. Foreigners are covered by the various Swiss social security provisions to the same extent as Swiss citizens and they enjoy almost complete equality of treatment in receiving benefits on Swiss territory.
Trinidad and Tobago. Add a Paragraph 15 with the following text: "Members should take measures as far as possible to have contract labour assimilated to recognized employment relationships after a prescribed period of continuous employment."
United States. Endorsed.
Office commentary
Only a minor drafting change has been made to this provision. For the purposes of consistency with other provisions of the proposed instruments, the words "A Member" have been replaced by the word "Members".
1. ILO: Contract Labour, Report V(1), International Labour Conference, 86th Session, Geneva, 1998.
2. Replies that arrived too late to be included in the report may be consulted by delegates at the Conference.
3. The Government of Belgium included with its reply an opinion from the National Labour Council (CNT).
4. The observations are preceded by the relevant texts as given in the proposed Convention set out in Report V(1).
5. The observations are preceded by the relevant texts as given in the proposed Recommendation set out in Report V(1).