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Since the adoption of the MNE Declaration and its Procedure, a number of communications and requests for assistance relating to alleged wrongdoings by MNEs have been received by the Office. Some of the communications have sought to inform the Office of problems or to ask for international action without requesting that an interpretation of provisions of the Declaration in order to resolve a disagreement on their meaning arising from an actual situation reported. These types of communications were, and are, handled outside the scope of the Procedure for interpretation of the MNE Declaration. They are either handled directly by the Bureau or referred elsewhere in the International Labour Office for appropriate action.
To date, five cases have been the subjects of decisions by the Governing Body:
BIFU Case (1984-1985)
Factual aspects
Following a 1983 review of its business strategy, a United States bank operating in the United Kingdom decided to reduce its staff from about 850 to 650. In February 1984 around 90 employees were dismissed, 49 of whom were asked to leave the bank within two days on the grounds that they were employed in an area which had sensitive commercial implications and their function ceased immediately. The British Department of Employment was notified, as per British law, more than 90 days in advance of these redundancies; the Department treats this notification as confidential until the redundancies occur. Under the law, employers must also inform the representatives of independent recognized trade unions about the redundancies. The Banking, Insurance and Finance Union (BIFU), while claiming to have members among the staff, was not recognized by the bank; therefore, the company was not obliged, under national legislation, to notify the union and did not do so. Each employee made redundant was given a written explanation of the method of selection for redundancy. (GB.229/13/13, Appendix, paras. 7-10)
Interpretation
Procedure for the Examination of Disputes
Regarding the receivability of this request for interpretation, the
discussions at the Committee on Multinational Enterprises of the Governing Body
led to an interpretation of paragraphs 1 and 2 of the procedure for the
examination of disputes, as follows.
Paragraph 1: There must be an actual dispute, arising out of a factual situation, between the parties for an interpretation to be necessary. Therefore, requests for interpretation must be supported by factual evidence to show that there is a dispute. GB.229/13/13, Appendix, para. 13)
Paragraph 2: The mere existence of pertinent national law does not exclude
the interpretation procedure; otherwise, virtually all requests for
interpretation would not be receivable because the declaration concerns areas
already covered by national laws in most member states. The Declaration is not
simply a gap-filling instrument applying only to areas of law not covered by
national legislation. The purpose of this clause is simply to prevent
international institutions from interpreting national legislation and
vice-versa.
The interpretation procedure cannot be duplicative of national procedures, as
national procedures can have no standing to interpret the Declaration. This
interpretation procedure is wholly independent of all national procedures
concerning any given dispute.
There is no requirement for parties to the Declaration to exhaust all possible local remedies before pursuing an interpretation of the Declaration because the Declaration is totally separate from national laws and there exists no hierarchy between the two. (GB.228/19/24, paras. 26-31)
MNE Declaration, paragraph 26: MNEs are required to give reasonable
prior notice of changes, which would have major employment effects
Referring to the Termination of Employment Convention, 1982 (No. 158) as a guide, paragraph 26 requires reasonable prior notice of intended changes in operations to be given to the workers' representatives and their organizations, where such organizations are identifiable under national law and practice. If such representatives and organizations exist, it is insufficient to inform the workers affected on an individual basis.(GB.229/13/13, Appendix, para. 15 and annex).
Belgian Case No. 1 (1987-1988)
Factual aspects
In July 1986, on the eve of the annual vacation, when most workers were on
holiday or temporarily unemployed, the management of the Belgian subsidiary of a
French multinational informed the works council at 10.30 a.m. that it had been
decided to close the plant the same day at 2 p.m. and that 1,034 employees would
be terminated at that time. Simultaneously, the director of the sub-regional
employment service and the joint employer-employee committee of the industrial
branch were likewise so informed.
Negotiations between the management and the trade unions were initiated after the complete closure of the plant, which resulted in a settlement, accepted by the great majority of the workers, over the indemnities to be paid. Since the firm could not be induced to reconsider its decision to close the plant, a social plan was drawn up, which exceeded Belgian legal requirements, providing for extensive wage guarantees and assistance with retraining. (GB.239/14/24, Appendix, paras. 6-8)
Interpretation
Declaration as a whole: Provisions of the Declaration cannot be taken in
isolation to define its aims or purposes
The Declaration constitutes an articulated whole, in which the introduction (paragraphs 1-7) states the broad aim, paragraphs 8-10 state the policies of general application, and the remaining sections state the means of attaining the stated goals in specific areas. Given the interlocking nature of the provisions, they cannot be taken in isolation to define its aims and purposes.(GB.239/14/24, Appendix, para. 13)
Paragraphs 1-7: The twin aims of the Declaration are interdependent and one
cannot be pursued independently of the other
The twin aims of the Declaration set out in Paragraph 2 are (a) encouraging the positive contributions of MNEs to social and economic progress, and (b) minimizing and resolving the difficulties to which MNEs' operations may give rise. These aims are interdependent and neither can be pursued with disregard to the other. To consider that the minimisation of negative social repercussions alone per se fulfils the purpose of the Declaration is incorrect. Any such action must be in harmony with the twin goal of contributing to economic and social progress and must also be compatible with the national social and economic policy imperatives. (GB.239/14/24, Appendix, paras. 11-12 and 16)
Paragraphs 4,5,7: No one party to the Declaration can be considered as its
main beneficiary
The principles set out in the Declaration are commended to governments, workers' organizations, employers' organizations, and MNEs. The prescriptions of the Declaration are designed to contribute to the central aim of social progress; therefore, no one party can be considered as a main beneficiary of the Declaration. (GB.239/14/24, Appendix, paras. 14 and 16)
IUF Case (1992)
Factual aspects
By a letter dated 16 April 1992 the International Union of Food and Allied Workers' Associations (IUF) submitted, on behalf of one of its members, a formal request for an interpretation of the Tripartite Declaration. The submission made specific reference to paragraphs 1, 2, 8 and 45 of the Declaration and concerned the decision of a multinational enterprise to expand its investment in a country where, according to the IUF, there is a total disregard for all workers' and human rights. The IUF claimed that such an investment violated both the letter and the spirit of the Declaration, the aim of which is "to encourage the positive contribution which multinational enterprises can make to economic and social progress." The IUF further argued that the company in question signed an investment agreement and began production in the country at a time when responsible transnational corporations were choosing not to invest there. In view of the government's disrespect of freedom of expression and association, the company's investment did not contribute to economic and social progress (paragraph 8) nor could it promote equality of opportunity and treatment (paragraphs 22-23) given the government's policies of exacerbating political and ethnic discrimination. (GB.254/MNE/4/6, paras. 1-3)
Interpretation
Paragraph 1 of the Procedure for the Examination of Disputes
An "actual situation" was intended to refer only to "labour-management disputes." A situation that did not relate to an actual dispute between workers and management or between the enterprise and the government was not an "actual situation" requiring an interpretation. There was no evidence of an actual dispute between workers and management or government leading to a disagreement over the interpretation of the Declaration, the request was therefore considered irreceivable by a majority of the members of the Subcommittee. (GB.255/10/12)
ICEF Case (1993-1995)
Factual aspects
The secretary-general of a union was appointed to participate in a sectoral tripartite meeting. The union leader requested his employer to: (a) grant him "union leave" (paid leave, non-deductible from annual vacation) to attend the session; and (b) provide him with company safety and health information for use at the meeting. The employer granted "leave without pay" and declined to provide safety information and statistics on the grounds that these "are proprietary and for company use" only. Following unsuccessful appeals, within the company and to the Government, the union requested the Government to submit to the ILO a formal request for interpretation of paragraphs 37, 38 and 39 of the Declaration. Since the Government had not acted within the 3-month time limit specified in paragraph 6 of the Procedure, the International Federation of Chemical, Energy and General Workers' Unions (ICEF) submitted, by virtue of paragraph 5(c) of the Procedure, a request for interpretation in 1994. (GB.264/13, Appendix, paras. 1-4)
Interpretation
Two conflicting interpretations were proposed by the members of the
Subcommittee, who were unable to approve either of them, the report GB.264/13
was therefore submitted to the Governing Body for information only.
Belgian Case no. 2 (1997-1998)
Factual aspects
In February 1997 a senior executive from the multinational's headquarters, located in another country, announced at a press conference that the Belgian factory would be closed in July of that year. Later the same day the local enterprise's works council was informed that, due to poor overall performance the previous year and the need to concentrate and streamline production at a few sites, headquarters had decided to discontinue orders for products assembled at the local subsidiary, and that this would entail complete closure of the plant. Pursuant to national legislation, this information was later communicated to the staff and the various authorities concerned. (GB.272/MNE/1 confidential, para. 3)
Interpretation
Paragraph 1 of the Procedure for the Examination of Disputes
The procedure can be used to clarify the Declaration as long as the parties
continue to be in disagreement over the Declaration's meaning and the dispute
arose from an actual situation. This is so even where the resolution of the
question raised is no longer necessary to resolve the dispute from which it
arose. A major purpose of the procedure, to clarify the meaning of the
declaration for its better application in the future, is served by interpreting
disagreements over its meaning despite the resolution of the underlying dispute.
A prior decision by the OECD on the same disputed issue is not binding on the ILO and cannot prevent the ILO from fulfilling its responsibility of interpreting its own rules within its own role and mandate. (GB.270/MNE/1 confidential)
Paragraph 8: The Declaration can never excuse compliance with domestic or
international substantive safeguards
There is no reasonable basis for interpreting the Declaration to permit the exemption of any party from complying with substantive safeguards under either domestic laws or international standards. This would be inconsistent with the Declaration's ultimate goal, laid out in paragraph 5, of furthering social progress. (GB.272/MNE/1 confidential, para. 21)
Paragraph 10: Consultations are required for situations, which would have
major employment effects, other than an entity's closure
Paragraph 10's call for consultations between the MNEs, the government and the employers' and workers' organizations, fully applies to situations, other than the closure of entities, in which areas of interest to the Declaration are raised. (GB.272/MNE/1 confidential, para. 26)
Paragraph 25: National laws cannot limit the goals of stable and secure
employment envisaged in the Declaration; the Declaration can supplement national
laws
The call for the provision of stable and secure employment in paragraph 25 can supplement existing domestic laws, rules, and procedures in this area. Paragraph 25 cannot be limited by any national legislation. (GB.272/MNE/1 confidential, para. 29)
Paragraph 26 - MNEs are required to give reasonable prior notice of changes,
which would have major employment effects
Paragraph 26 foresees that management would give reasonable prior notice of
any changes, which would have major employment effects. Notice after the final,
irrevocable decision has been made but before its implementation is
insufficient. Prior notice is necessary to facilitate discussions and possible
mitigation or minimisation of the negative employment effects.
This call for the provision of reasonable notice by MNEs to governments and employers' and workers' organizations of any changes in operations can supplement existing domestic laws, rules, and procedures. Paragraph 26 cannot be limited by any national legislation. (GB.272/MNE/1 confidential, para. 33)
Paragraph 52 (formerly 51) - Management representatives at negotiations must
be empowered to take decisions on the matters in dispute
Full compliance with paragraph 52 requires MNEs to ensure that management representatives vested with the authority to take decisions on the matters in dispute are available to negotiate with the workers' representatives. If the local entity of the MNE is not in the position to make decisions, a management representative from the head office of the MNE must be contactable by workers' representatives for negotiations. (GB.272/MNE/1 confidential, para. 36)
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