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6.1 General Approach to the International Review

Method: This portion of the report focuses on the evolving direction of labour standards and the CWW in different jurisdictions. Information was generated primarily from two sources — a literature review and a series of telephone discussions with experts in Europe and the United States. The domestic interviews with government labour standards officials also discussed some international issues and trends which could be models or provide certain lessons for Part III. In this regard, the study benefited from the observations by CAALL officials, and some union representatives and employers offered interesting insights as well.

The remarks and observations which follow are based on several different sets of inputs — discussions with 9 knowledgeable international experts in labour standards and 24 of their Canadian counterparts (particularly CAALL members and Canadian firms and unions which professed an interest and knowledge) and a somewhat separate literature review. (An international bibliography is attached in Appendix A.)

The international substudy was designed to focus on labour standards regimes in a number of European Community member and other countries, the United States (federal and selected states), and selected Canadian provinces/territories. This section considers virtually the same themes which were addressed in the evaluation's domestic key informant interviews, as well as in the survey questions (i.e., CWW and a number of priority areas — quality of family life, life-long learning, harassment, security, and quality of working life). Some insights are also provided into how other jurisdictions deal with problems of compliance and enforcement in labour standards.

An important caveat to this analysis should be introduced at this point. There is little question that the culture of work and the policy context are different in Europe than in Canada and the United States. United States and Canadian labour markets are considerably more flexible than their counterparts in Continental Europe. In addition, the application and enforcement of labour standards in Canada are very different (in some ways considerably lighter) from those in Continental Europe. As well, generous worker benefits are more common in Europe, both because of standards and regulations as well as because of the higher degree of unionization. Indeed, it is often argued that the persistently higher unemployment in Europe, compared to the United States, is due to significant differences in benefits and labour standards. The assumption is that firms will be more reluctant to create permanent jobs when the costs of doing so are so much higher. For example, when a permanent employee is fired in Spain, he/she may be entitled to receive severance of 45 days pay for each year of work. Consequently, there are very few permanent new jobs created in Spain. (See Federal Reserve Bank of Philadelphia Business Review, page 28, May/June 1998.)

Overview: The work in this section provides a broad-brush overview of the treatment of critical issues in labour standards regulations. As such, this section discusses some recent international reforms, the importance of the CWW, the treatment of full- and part-time employment, at-home workers, family-friendly policies, and some compliance and enforcement ideas which might have relevance for the Code.

The consistency of these findings is substantial — in general, all sources of information painted a consistent picture of the direction of standards abroad (particularly in Europe and the United States) and the challenges to standards abroad. As well, these findings provide some ideas for dealing with the CWW and NSW issues in Canada, as will be seen below.

The reader will no doubt realize that many of the ideas and suggestions for broadening the scope of the Code or for extending the Code in the direction of better coverage of NSW and CWW have been tried out or emerged in the European scene.

Section 6.2 begins with an overview of illustrative findings on recent changes in labour standards in selected jurisdictions. Appendix C.4 includes additional details of labour standards regimes which have emerged in a number of countries.

6.2 Recent Reforms in Foreign Jurisdictions

Several of the foreign jurisdictions included in this review have recently enacted reforms to their labour standards programs. This was the case in Australia, Sweden, and the European Community. These reforms illustrate the importance that labour standards issues have occupied in the policy agenda of such jurisdictions at the international level, since labour regulations are seen as an important part of the regulatory environment affecting the competitiveness of businesses. This section summarizes some of the key policy objectives behind the modifications to labour laws enacted in the selected jurisdictions.

Australia: In Australia, a major overhaul of the industrial-relations legislation was enacted in 1996. One of the important aspects of the reform was the simplification of the awards system (awards are administrative decisions by the labour standards agency), which was seen as unduly complex and cumbersome for businesses. The objectives of the reform were described in official governmental publications in the following manner:

• to give responsibility for industrial relations and agreement-making to employers and employees at the enterprise and workplace levels;
• to focus the role of the award system on providing a safety net of fair and enforceable minimum wages and conditions;
• to ensure freedom of association;
• to avoid discrimination;
• to assist employees to balance their work and family responsibilities effectively; and
• to assist in giving effect to Australia's international obligations in respect of labour standards.

This reform included several important changes in the area of labour standards, particularly with respect to the award system.

Sweden: In the same year, Sweden also adopted a number of changes designed to modernize its labour standards regulations. Flexibility seemed to have been the dominant objective of the reform, since the Swedish system has traditionally imposed very strict labour regulations, particularly with respect to hiring temporary workers. The government explained the rationale of the new legislation with the following four objectives:

• the need to tackle unemployment and the stated objective of the government to reduce the number of registered unemployed persons by half;
• the need to adapt legislation to the changing labour market;
• the need to provide sound and stable labour laws to encourage flexibility and productivity; and
• the need to promote equal opportunities between men and women.

European Community: The European Community has developed policies in the area of labour laws aimed at protecting the free movement of workers, equal treatment for men and women, basic working conditions, and health and safety at work. Most of these policies have taken the form of Directives imposing guidelines on member states for the adoption of national legislation. New labour standards issues have received some attention over the last few years. Several Directives have been adopted since 1990, such as one recent Directive on part-time work (1997) and another on working time (1993). The European Commission proposes to examine other labour issues and review policies and programs over the next few years, including fixed-time duration contracts, temporary work, home working, and individual redundancies.

Conclusion: Many of the concerns at the forefront of the Canadian policy agenda have also been important in other jurisdictions at the international level. Some issues, such as part-time work, family responsibility, flexibility, international competitiveness, and the CWW have been central considerations in the reform of labour laws in Australia, Sweden, and the European Community.

6.3 The CWW in Different Jurisdictions

New forms of work have not been a primary focus in the policy agenda of the countries reviewed, although some jurisdictions, such as Sweden, have announced their intention to examine these issues in the near future. Telework and dependent contractors have not been the object of specific legislative provisions, although part-time and temporary work is specifically regulated in some countries. Canadian provincial governments have been more active in this dealing with some of these issues, as is noted in Section 6.3.2 below.

6.3.1 Foreign Jurisdictions

Regulation of Temporary Employment In Sweden: In Sweden, labour standards legislation imposes strict limitations on the use of temporary employees and requires that such type of employment be justified by the particular nature of the work to be performed or that the employment be related to practical training apprenticeship. In 1982, legislation was amended to expand further the number of situations where it is permissible to resort to temporary employment. These situations include replacement employees during holidays, piling-up of work due to temporary absences, employment while awaiting compulsory military service, employment of workers who have reached pensionable age, and employment on a trial basis of up to six months.

As part of the recent reforms introduced in 1996, the government sought to introduce greater flexibility in the hiring of new staff. A new contract of employment was created to allow employers to hire staff for a specified period of up to 12 months without giving any special grounds. The same employee may be hired on this type of contract for a maximum of 12 months during a three-year period. The minimum duration of this contract is one month. A maximum of five members of staff may be engaged simultaneously on specified temporary employment contracts with the same employer. Even after these changes, Sweden remains one of the few countries with strict regulations on the use of temporary employment.

Regulation of Part-time Work: New legislation in Australia seeks to remove unnecessary constraints on the use of regular part-time work in the awards system and to provide greater access to part-time work. The policy is based on the recognition that regular part-time employment can have a number of advantages for workers balancing work and family responsibilities or other commitments, such as attending training or education programs. The legislation defines a part-time employee as an "employee who works less than full-time, who has reasonably predictable hours of work and who receives, on a pro-rata basis, equivalent pay and conditions to those specified in an award or awards for full-time employees who do the same work."

The Australian legislation provides that new awards will not include provisions limiting the number or proportion of workers that are employed in regular part-time and casual employment. Awards will include, where appropriate, provisions to facilitate the use of regular part-time workers, and may include provisions relating to the minimum number of consecutive hours that regular part-time employees may be required to work, and provisions facilitating a regular pattern in the hours of work.

The general trend in the European Union, in contrast, is to move towards the enactment of specific labour standards designed to protect part-time workers. In December 1997, a Directive was finally adopted to implement a Framework Agreement on Part-time Work, which was concluded with different social partners earlier in the year. The purpose of the agreement is to eliminate discrimination against part-time workers and to improve the quality of part-time work. This Directive provides that part-time workers should not be treated in a less favourable manner than comparable full-time workers in respect of employment conditions solely because they work part-time unless different treatment is justified on objective grounds. Member states are allowed, however, to make access to particular conditions of employment subject to a period of service, time worked, or earnings qualifications.

The Directive also provides that member states should review and eliminate obstacles for part-time work. A worker's refusal to transfer from full-time to part-time work or vice versa should not in itself constitute a valid reason for dismissal. Whenever possible, however, employers should give consideration to requests from employees to increase or reduce their hours of work and should provide timely information on the availability of part-time work in the enterprise. The implementation target date of this Directive for member states is January 20, 2000.

At-Home Work: The issue of at-home work has not been the object of broad labour standards legislation in the countries reviewed. In the United States, the performance of some types of work in an employee's home is prohibited by legislation, unless the employer has obtained prior certification from the Department of Labor.³⁰An example of prohibited work might be in the chemical-manufacturing field, dealing with toxic substances. This provision relates generally to health and safety regulation, since the type of industries requiring such certification are mostly in the manufacturing sector. However, employers wishing to employ at-home workers in these industries are required to, among other things, provide written assurances to the Department that they will comply with the Act's wage and other requirements.

6.3.2 Provincial Jurisdictions

At the provincial level in Canada, there has been more focus on the regulation of part-time work and certain aspects of the new forms of employment. Most provincial employment statutes provide explicitly or implicitly that dependent contractors and part-time employees are covered by the legislation. Some statutes also include special protection specifically for part-time employees. Some illustrations of these types of provisions follow.

Quebec was the first (and is still the only) jurisdiction to ban wage discrimination against part-time workers. This provision provides that part-time workers must receive a rate of pay equal to full-time workers, unless they receive a wage more than twice the rate of the minimum wage. Part-time workers must receive a period of annual vacation equal to that given to full-time employees.

In Saskatchewan, all benefits, such as dental plan, group life plan, or prescription drug plan given to full-time employees, must be extended to part-time employees on a prorated basis. This provision only applies to businesses with at least 10 full-time-equivalent employees and to workers working on average at least 15 hours per week and having completed a qualifying period of 26 weeks. A new provision will require that part-time employees be first to be offered additional work, on a seniority basis, when such work is available.

At-Home Work: With respect to at-home work, several provinces such as British Columbia, Ontario, and Saskatchewan, provide that employers must keep certain records on their home-based employees and, in some cases, must provide a register of home-based employees to the labour standards authority. In Ontario, a special minimum wage applies to at-home workers, equal to 110 percent of the regular minimum wage. The difference is meant to compensate at-home workers for additional costs related to working at home.

6.3.3 Conclusions on Jurisdictional Variations

Some important considerations for Canada can be identified from the following illustrations of various jurisdictional labour legislation. The most important developments have been around the issue of part-time work. Specifically, there is a general trend both nationally and internationally towards the introduction of specific labour standards for the protection of part-time workers. The prohibition against wage discrimination for part-time workers is now embodied in a Directive of the European Union.

Some provincial employment statutes (Quebec and Saskatchewan) have also begun to include specific provisions on part-time-related wage discrimination. At the same time, some jurisdictions have recognized the importance of part-time work for certain categories of workers who have to balance work and family or other responsibilities. An interesting initiative is a new Saskatchewan employment statute which will grant a right of first refusal to part-time workers when additional work is available.

Temporary work has not generally been specifically regulated in the jurisdictions reviewed, except in Sweden, which is now moving away from strict regulations in this area. Home-based work has likewise not been the object of many legislative initiatives, except in some Canadian provinces which have begun to impose certain record-keeping and registration requirements with respect to home-based workers. Ontario has gone one step further by imposing a special minimum wage for home-based workers, thus recognizing that home-based workers often have to bear additional costs not imposed on other workers.

6.4 Family-Friendly Policies and Continuing Education

Family-friendly policies have received considerable attention in the countries reviewed. Indeed, most countries now have labour standards dealing with pregnancy and maternity leaves, and new American family-leave legislation represents an important illustration. Education, in contrast, is less recognized. For example, Sweden is the only country known to have enacted a specific provision requiring employers to grant educational leave to their workers. In Australia, labour tribunals have wide-ranging powers to enact labour standards in the area of family-friendly policies.

Australia: One of the objectives of new legislation in Australia is to assist employees "to balance their work and family responsibilities effectively through the development of mutually beneficial work practices with employers." Moreover, the legislation prohibits discrimination in employment relationships on the ground of "family responsibilities." The labour tribunal must take these two objectives into account in the performance of its award-making function.

More specifically, the labour tribunal is allowed to make awards in relation to:

• ordinary hours of work and the times within which they are performed, rest breaks, notice periods, and variations in working hours;
• personal/career leave, including sick leave, family leave, bereavement leave, compassionate leave, and other like forms of leave;
• parental leave, including maternity and adoption leave;
• allocation of time for working overtime or for casual or shift work; and
• types of employment, such as full-time employment, casual employment, regular part-time employment, and shift work.

There is no legislation at the Australian federal level imposing uniform labour standards in the areas of family-friendly policies. Therefore, requirements will vary among industries on the basis of applicable awards. In addition to legislation, Australia also promotes education and the development of innovative family work environments by encouraging workplaces to conduct "audits" or surveys of the family-supportiveness of workplace practices.

Sweden: In Sweden, a female employee is entitled to receive up to 14 weeks of complete leave in connection with the birth of her child or breast feeding. Complete leaves are also available to all parents until the child reaches the age of 18 months. Parental leaves in the form of a reduction in working hours may be available until a child reaches the age of eight years, and temporary leaves are available to care for a child. Most of these leaves can give rise to benefits under the National Insurance Act.

Sweden also has legislation providing employees with educational leaves. The Employee's Right to Educational Leave Act (1974) increased the opportunity for employees to be granted leave of absence from work to pursue studies for varying periods. The legislation provides that all employees who have been employed for the preceding 6 months or at least 12 months in the preceding two years are entitled to leave of absence to pursue educational programs. When a significant part of the training program concerns trade-union matters, this qualifying period is waived. Employers are allowed to require that the leave be postponed within certain limits.

United Kingdom: Several provisions in the British legislation relate to pregnancy and maternity leaves or pay. First, all pregnant employees are entitled to reasonable time off to keep appointments made on the advice of a registered medical practitioner, midwife, or health visitor for antenatal care. Second, all pregnant employees are entitled to a period of statutory maternity leave of up to 14 weeks, regardless of their length of service. During these 14 weeks, the employee is entitled to the benefit of all normal terms and conditions of employment, except remuneration. However, a woman may be eligible for statutory maternity pay or maternity allowances if she qualifies under the minimum eligibility rules. Female employees with at least two years of continuous employment are eligible for additional maternity leave which may bring their total period of leave to around 40 weeks overall.

United States: In the United States, the Family and Medical Leave Act (FMLA) was originally enacted in 1993 and is intended to provide a means for employees to balance their work and family responsibilities by taking unpaid leave in certain circumstances. The FMLA provides entitlement to job-protected, unpaid leave of up to 12 weeks during any 12 months for the following reasons:

• birth and care of the employee's child or adoption of a child;
• care of an immediate family member who has a serious health condition; or
• for the employee's own serious health condition.

During a period of FMLA leave, an employer must maintain any group benefit that the employee was receiving at the same level and in the same manner as it would be if the employee had continued to work. Under most circumstances, an employee may elect, or the employer may require, the use of any accrued paid leave (vacation, sick, personal, etc.) before the commencement of unpaid FMLA leave.

Canadian Provincial Jurisdictions: In Canada, all jurisdictions reviewed have adopted maternity leaves of about 18 weeks and parental leaves varying between 12 and 52 weeks. Bereavement leaves are available in British Columbia, Quebec, and Ontario, while only British Columbia and Quebec have enacted family-related leaves for the care, health, or education of a child or other close family members. Quebec is the only jurisdiction providing extensive family-related leaves, including leaves for the wedding of a close family member and short-term leaves for the birth or adoption of a child and for illness or accidents.

Conclusion Regarding Education and Family-Friendly Policies: Most jurisdictions reviewed have not yet enacted innovative provisions in the areas of family-friendly policies or continuing education. All jurisdictions reviewed provide for maternity leaves, but few have extended these provisions to cover other family-related responsibilities.

British Columbia and Quebec have shown leadership in this area by enacting specific family-related leaves for the care, health, or education of a child or other close family members. In Australia, labour tribunals have wide-ranging powers to make awards relating to family-related leaves. With respect to continuing education, only Sweden allows employees to take leaves of absence to pursue formal studies or other training programs. Most importantly, American legislation on family leave provides an interesting point of reference because of the intertwining of the American and Canadian economies.

6.5 Some Compliance and Enforcement Considerations

Discussions with international experts triggered a number of compliance and enforcement suggestions — some of them rather similar to those which surfaced in the evaluation's domestic interviews.

In general terms, the compliance and enforcement ideas seem to reflect unique aspects of the kinds of jurisdictions examined. These can be divided for discussion purposes into the United States and the European models.

The United States Model: As noted elsewhere in this report, labour standards issues appear to be low on the public-policy agenda in the United States. The tendency is to minimize labour standards costs on employers because of the need to attract new investment. At the same time, the income inequalities have widened to such an extent that, at the federal level, the Clinton administration has raised the minimum wage. Up to very recently, this kind of change would have been very difficult to introduce.

Overall, however, the main United States approach continues to be laissez faire. For example, New York State, which in some respect resembles Quebec and Ontario, has become very laissez faire as regards regulatory direction. The emphasis at the State-government level is very much on a business-friendly environment, which officials associate with strong levels of job creation. Labour standards enforcement has not been discarded, but the State government is stressing very much the voluntary approach. Prosecutions and fines, it is suggested, should be focused only on the "egregious" or repeat violator. In case of a first violation, it is often seen as lack of knowledge, and the employer is required to attend a seminar on the issue. There has been a corresponding shift from routine audits to a focus on flagrant violations.

The evaluation interviews with public officials in the United States also stressed the informational and voluntary approaches to handling compliance problems. Along with the laissez faire direction, there is considerable support for consultation exercises in the labour-regulations field. Indeed, the resurgence of industrial at-home work in New York State since the 1980s has resulted in a number of useful industry/labour task forces. Finally, in terms of ensuring compliance and enforcement, the United States approach stresses the voluntary enforcement approach and relies heavily on unions in the unionized sectors of the economy.

The European Model: As already noted, the European model relies more on establishing strong labour standards through regulations or through collective bargaining. This is not to suggest that the firms like the system that has emerged, but they have gotten used to the system. Though employers complain about the lack of flexibility in their operations, they have aggressively used part-time employment and dependent contractors to obtain labour-force flexibility.

With respect to some specific ideas (e.g., for the encouragement of life-long learning), one approach used in the United Kingdom has been a training levy to support a joint industry training body (e.g., construction). This approach overcomes the risk of poaching of a trained employee by one firm from another.

In terms of the process of changing the regulations, British officials indicated that before any changes are introduced there are extensive discussions with stakeholders to achieve consensus and avoid design flaws. However, the United Kingdom is about to introduce a number of European Directives, which for that country will prove difficult. The UK model, as in the case of the American approach, is much more attuned to individual rights and less intrusive to the employee/employer relationship than the Continental European model.

In France, the government attempts to achieve compliance with new labour-market directions by adapting the regulations to collective bargaining wherever possible. Financial incentives are sometimes offered to the firms to achieve labour standards objectives, but this approach is not always very efficient. There is no guarantee that employers will not take the money but then use the funds for an unintended purpose.

France also uses the equivalent of sectoral bargaining for smaller firms. The term used in our interview was "mutualization." Mutualization was seen as a way of balancing the wishes of employers for stability and flexibility against the interests of workers for bargaining power.

6.6 Lessons from the International Review

As in North America, there is considerable interest in Europe in the CWW. American and European officials identified virtually the same problems with NSW as their Canadian counterparts; however, this issue is tackled very differently in Europe than in North America. The CWW is not seen to be as large a regulatory challenge in Europe as in Canada.

Most of our European discussions focused on the problem of implementing broader European Directives, rather than focusing only on the CWW. This is not to imply that the political implementation process is easy or smooth in Europe. Some countries, particularly the United Kingdom, are having to introduce labour standards measures that until very recently they would never have contemplated. In fact, there is considerable member-state reluctance to adopting the European Union Directives without very careful study and negotiation with their own internal stakeholders.

At the national level, it is interesting to consider the differences in approach to working-time issues, which are at the heart of the family-friendly link into labour standards. Over the past 20 years, for example, the United States federal government has not had a systematic policy on working time. The German government, in contrast, tried to use its influence to forestall the push to shorter working hours and has passed legislation designed to foster numerical flexibility and working-time flexibility at the firm level. The French government has actively pushed for work-sharing policies while at the same time passing legislation helping firms by increasing numerical as well as working-time flexibility.

Increasing numerical flexibility provides employers the means to vary the amounts of hours of work and the size of the workforce over the business cycle. Increased numerical flexibility is associated with the ability to use temporary workers, part-time workers, etc., and is seen as a way of lowering labour costs. Increasing working-time flexibility from an employer's perspective is seen to mean altering work-time schedules more freely to meet changing demand conditions.

"Unlike in the United States, shorter working hours have been at the center of the societal debates over working time in many European countries, including France and Germany. In both France and Germany, the full-time work week and work year was shortened in the 1980's. In France the government legislated shorter working hours while in Germany the unions succeeded in gaining reduced full-time work weeks through collective negotiations with employers. Shorter working hours were seen as beneficial in and of themselves as well as critical for job creation" (Sam Rosenberg, June 13-15 Symposium on Changes in Working Time in Canada and the United States, mimeo, 1996, p.2).

The European experience and direction, while interesting, cannot be easily replicated in North America. While Europe and Canada share many commonalities (among them being overlapping jurisdictions for labour standards), nevertheless the unions have a significantly larger presence in Europe than in Canada. In addition, Europe's (excluding the UK) policies in the job creation area are widely regarded as insufficient, and over-regulation is often pointed to as a reason for the lack of job creation in Europe. A recent Federal Reserve study indicated that "Generous worker benefits are more common in Europe than in the United States and may be a contributor to the persistently high unemployment rates in Europe... A prominent hypothesis is that the United States has created many more jobs than Europe over the last 30 years because US labour markets are more flexible" (Federal Reserve Bank of Philadelphia, Business Review, May/June, 1998).

The practical side of these differences can be seen in the European Council's four pillars of its labour-market policy:

• training and education;
• entrepreneurship;
• adaptability of the regulatory framework through negotiations with the various stakeholder organizations (i.e., social partners); and
• the provision of equal opportunity to all employees (i.e., non-standard workers).

While the above goals may seem to be in common with the usual objectives expressed by the Canadian officials, nevertheless the third and fourth pillars are not clearly prominent in Canada's labour standards program at this time.

International competitiveness and international human rights play a role in the labour standards regulations issues: "International labor standards have become the newest point of contention in trade disputes between industrial and developing countries. Are they necessary or are they disguised protectionism?" (Stephen S. Golub, "Are International Labor Standards Needed to Prevent Social Dumping?" IMF Finance & Development, December 1997, p. 20).

Overall, this review and particularly the interviews with international contacts indicated a number of key points. The most important of these appears to be that pushing labour standards in the direction of family-friendly policies and related initiatives is desirable and reflects trends among some of Canada's major trading partners. Such efforts may offset problems in the CWW, such as part-time work, and would echo initiatives under way internationally. These international variations might be worthy of an international comparative investigation of impacts.

Overall, the international review provided a useful picture of CWW issues and how other jurisdictions are attempting to deal with these. Importantly, these exchanges with international contacts suggested considerable interest in ongoing discussions and sharing of information. For many of these contacts, the international exchanges of views were seen as new and stimulating — an opening of a type of exchange which most of our international key informants had not previously experienced.

These discussions point to good potential for further international exchanges on labour standards and what they should look like in the future — perhaps building these initial contacts towards a more comprehensive look at possible future initiatives, such as might unfold within a formal Delphi process.

Footnotes

30	For example, work using toxic substances.