ILO is a specialized agency of the United Nations

271st Session
Geneva, March 1998


Report of the Committee on Employment and Social Policy

1. The Committee on Employment and Social Policy met on 16 and 17 March 1998 and was chaired by Ms. Sarmiento (Government, Philippines). The Employer and Worker Vice-Chairpersons were Mr. Katz and Mr. Ito respectively.

2. The Committee had the following agenda:

1. World Labour Report, 1997-98: Industrial relations, democracy and social stability:

2. Progress report on preparations for the Second ILO Enterprise Forum.

3. Preparations for the 1999 International Consultation concerning Follow-up on the World Summit for Social Development:

4. ILO participation in major international conferences on employment issues.

I. World Labour Report, 1997-98: Industrial relations,
democracy and social stability

3. The representative of the Director-General (Mr. Servais, Chief of the ILO Task Force on Industrial Relations) introduced the Office paper. He briefly outlined the main comments made during presentations held in different parts of the world. It had generally been considered that the report presented a review of the problems confronting industrial relations in the world. This was particularly true, for instance, of the efforts to organize temporary and precarious workers, the role of trade unions and employers' organizations in promoting social integration, the differences in the levels of collective bargaining, the impact of globalization, and the causes of falling rates of trade unionization and of new practices in human resources development. The statistical annex had raised much interest and controversy, but an error had occurred in the data on collective agreements in the United Kingdom (which should read 36.5 instead of 25.6). As regards the informal sector, comments had focused on the follow-up to be given to the report. He recalled the various conclusions that should be drawn for future ILO activities in general and for the Industrial Relations and Labour Administration Department.

4. The Worker Vice-Chairperson observed that there was no universal model of industrial relations: rather, they were the product of the culture and tradition specific to each country. It was therefore all the more important that Conventions Nos. 87 and 98 should be observed to ensure an equitable distribution of the benefits stemming from economic activity, particularly in developing countries. He paid tribute to the quality of the Office paper. However, he regretted that its authors had no practical experience of collective bargaining or industrial relations. It did not include any concrete recommendations. It was important that the theoretical content of the report should be translated into concrete activities in the Programme and Budget for 2000-2001: since the necessity of industrial relations systems was not questioned, the ILO should concentrate its efforts on promoting sound industrial relations systems that were consistent with ILO standards. In particular, such systems should respect freedom of association and promote collective bargaining. They should prepare unions, on the basis of the facts contained in the report, to address the risks inherent in the globalization process, to identify the means to overcome the present difficulties of trade unions and to promote transnational collective bargaining in multinational enterprises. He suggested that the Office should hold a tripartite meeting to investigate the legal and institutional barriers to transnational bargaining. The Office should also assist those multinational enterprises interested in experimenting with transnational bargaining. In addition, the ILO should consider promoting the introduction of works councils, similar to those currently being introduced in the EU, on a global scale. The Industrial Relations and Labour Administration Department should be reinforced. It should also be actively involved in the promotion of social dialogue at the national, regional and international levels. The necessity and importance of social dialogue had again been demonstrated recently in the Asian crisis. The social costs of the crisis could have been attenuated if permanent institutions existed for social dialogue. However, the ILO should carry out more concrete activities rather than theoretical research. He underlined the importance of the establishment of a database on labour relations, the need for a study on anti-trade union practices, and for activities to promote existing standards on freedom of association and collective bargaining. In conclusion, he supported the proposals made for the Office to support the prevention of conflicts and the maintenance of industrial peace as a major aspect of its programmes, and to continue efforts already accomplished to organize workers in the informal sector.

5. The Employer Vice-Chairperson found the World Labour Report rich in information, somewhat provocative, but good reading. It was more factual and down-to-earth than some other reports presented to the Committee, but it was difficult to comment on because it lacked any unifying concept. The conceptual basis of the report was to equate industrial relations with labour: there was a difference, and in many countries trade unions accounted for only a small part of the labour force. The report saw trade unions playing not only an economic role, but also a role in promoting democracy and social integration and in the sense that they ensured employment for anyone seeking a job. This had not been substantiated in the report or in recent developments. As for democracy, trade unions did not always represent the views of their workers. Trade unions could not be said to promote employment as they were the major institutions obstructing labour market reforms that would promote employment. The report did not assess the employment and income effects of the issues it raised. In the Committee the focus should be on job creation and the report was silent on this subject. The report noted that there was increasing income inequality. This was however a factor for efficiency in allocating labour and possibly employment creation. In the United States this was accompanied by higher employment and increased incomes, including in the lowest quintile of family incomes. If recent and current increased economic growth in some major OECD countries did not lead to significant increased employment it would be because trade unions were opposed to the necessary structural reforms. Reduced trade union membership and representativity did not necessarily reduce the political influence of trade unions, and in this connection he cited the cases of France and the United States. Mr. Ito seemed to see globalization and the mobility of capital enjoyed by transnational corporations as weakening trade unions and expected a renewed discussion of codes of conduct and monitoring. The effects of globalization had been minimal and the mobility of capital was not the main reason why trade unions found it difficult to organize. There were new forms of work and technology which could operate with or without trade unions. Mr. Ito's claim that trade unions acted as a brake on transnationals was not accurate. The real and only effective checking mechanism was the market. Nowadays the knowledge worker commanded his own price in the labour market. The report was somewhat nostalgic about the old system of industrial relations, although it did identify new trends. Human resources management now constituted an important element of the new employment relationship. This was not negative: it was the way of the future. The Office paper made recommendations which sought to help trade unions to re-establish their traditional role. There were new forms of work and a variety of industrial relations systems, however, and the ILO should be doing more work to analyse them.

6. Mrs. Sasso-Mazzuferri (Employer member) observed that the report had been presented in Italy by Mr. Servais at the occasion of a High-level Tripartite Round Table in which it had been well received. The employers had especially liked the in-depth analysis of the different industrial relations systems described and of their evolution in relation to globalization. They also pointed out the coverage given to small and medium enterprises in the report and the suggestions made to workers' and employers' organizations in order to counter the weakening rates of unionization. On this question, she underlined that, if the crisis of representativity was less important in her country, it should nevertheless be noted that corporative interest had emerged, thus highlighting the problem raised by illegal workers, a form of "illness" occurring in reaction to the lack of flexibility of the socio-economic system. The changes imposed by globalization were not solely the governments' responsibility, but employers' and workers' organizations should also participate in the identification of the choices to be made. In this regard, she stressed that the Italian social partners were in favour of ILO action to promote social dialogue at all levels with a view to gaining acceptance of the principle of permanent dialogue between unions, employers' associations and governments. Finally, governments should respect the roles given to the different partners in each industrial relations system, and Italian employers were firmly opposed to state intervention in fields such as the reduction of working time, which were clearly the responsibility of bipartite collective bargaining.

7. The representative of the Government of Finland congratulated the Office on its thorough analysis of a difficult subject. It clearly set out the problems faced by trade unions in a global economy. The ILO faced the same problems in that tripartism was the basis of the Organization. If trade unions were considered obstacles to free competition, then the principles underlying the ILO were called into question. It was disappointing that the report did not provide clearer solutions to these problems. It rightly pointed to the problems of exclusion, impoverishment and marginalization, but the causes deserved fuller treatment. The problem lay not with trade union policies but with liberalized trade and capital markets. Similarly, the solution went beyond improved trade union representation in new bargaining models. New social contracts were needed to ensure that work and the benefits of work were available to all. Effective social partners and tripartite cooperation were essential to achieving this. His Government supported further surveys, as suggested in paragraph 61 of the paper, and believed that a declaration on core labour rights was very timely.

8. Mr. Mansfield (Worker member) reiterated the point made by the Worker Vice-Chairperson that the report lacked substantial conclusions as to the implications of recent trends for the ILO and its constituents. The future of trade unionism was in the hands of working men and women, but it also required a level of acceptance from governments and employers. He rejected the statement by the Employer Vice-Chairperson: the existence of active trade unions ensured workers' representation in national, industry and enterprise bargaining, whereby the benefits of economic growth were distributed. Where unions were weak, the outcomes were exploitation, income inequality and the denial of rights. The ILO had an important role to play in facilitating the process of adaptation and change by unions and employers' bodies. It should do practical things rather than simply conduct research in areas where adequate information already existed. The Industrial Relations and Labour Administration Department may need to be strengthened to cope with this task, and ACTRAV should be fully involved. Union membership in Australia and New Zealand had fallen in recent years, and women and part-time workers accounted for a higher proportion of membership. Indonesia and Papua New Guinea both had low levels of union presence. The reasons varied in each case, but there were also some common factors such as changes in technology and the structure of the workforce, and new management styles. The challenge was to influence the process of continual change in a positive way. Promotion of freedom of association should be an essential element of ILO activities. The ILO's limited resources should be used in practical ways, and the research proposals in the paper would have to be rigorously examined. Information on trends was a useful service to provide to countries like Australia, while countries such as Indonesia needed more direct assistance in areas such as organizing and bargaining skills. Social dialogue and tripartism should also be given priority. The ILO should be exploring the potential for union-employer negotiation across national borders. Consideration should be given to the holding of a tripartite conference on collective bargaining at the international level.

9. The representative of the Government of Austria considered that new technology and forms of work that were now global, and the process of modernization and adaptation, could only succeed if enterprises and workers shared the benefits. The involvement of workers in decision-making at national and international levels was essential. An equilibrium would have to be found between flexibility and security. Social protection and competitiveness had been opposed in the past, but the European Union was now looking at ways of building competitiveness through higher standards. Austria was planning a high-level conference on social dialogue. New measures such as the reduction of the working week should be addressed through collective bargaining.

10. Ms. O'Donovan (Worker member) found the report useful in that it challenged everyone to reflect on the changes taking place in the field of labour relations. She found the remarks by the Employer Vice-Chairperson regarding trade unions less than constructive. Trade unions in Ireland were agents of change in a way that promoted fair wages and working conditions, job security, and career development. In Ireland increasing employment had not been based on part-time or temporary jobs, but rather on good jobs with decent wages and conditions. She found the suggestion of a survey on anti-trade union practices in paragraph 49 of the report useful, and felt it should look not only at blatant forms, but also at the more subtle ways in which multinational enterprises in developing countries discouraged collective bargaining.

11. The representative of the Government of India congratulated the Office on both the report and the paper before the Committee. Research was an important tool for policy-making and the report was timely in view of the changes taking place as a result of globalization. The report highlighted the limitations of national policy in a global economy. The deteriorating employment situation worldwide had been attributed to globalization, and the employment relationship was changing, yet labour laws remained the same. Given that international labour standards were the guiding principles in drafting national labour laws, the ILO should take the initiative to formulate new standards applicable to the changing labour relations context. Collective bargaining and social dialogue were essential in each national context. International factors were growing in importance and the ILO needed to produce a new policy instrument dealing with international collective bargaining. In developing countries such as India the informal sector played a large role, and the ILO should further its work on employment relations in this sector.

12. The representative of the Government of Canada congratulated the Office on the report, which revealed a profound change in labour relations as a result of globalization. Her Government believed that globalization offered the means to improve the living conditions of workers, but economic growth had to go together with the protection of social values and of workers' rights. The report offered interesting proposals for further research, and follow-up work was required. However, a number of governments, including Canada, wished to see the Office formulate an overall research strategy before approving individual research proposals such as those before the Committee. The role of governments in labour relations was shifting from that of a provider or regulator to that of a facilitator, and the report could have presented a more comprehensive view of strategies adopted by governments in response to the new social reality.

13. The representative of the Government of Bangladesh felt that the report was based primarily on the experience of highly industrialized countries and did not reflect the situation at the macroeconomic or enterprise levels in developing countries. It would be necessary to exercise discretion in relating the findings of the report to developing countries like Bangladesh.

14. The representative of the Government of France congratulated the Office on the report, which was unrivalled. There had, however, been certain problems of distribution which needed to be addressed in that the press had had access to the report before the constituents, which made it difficult for them to comment. The media concentrated on the decline in trade union membership, and this had done considerable harm which constituents had been unable to undo. The Government had organized a seminar and published additional information in an attempt to place the unfortunate headlines in their proper context. The report set out the major changes taking place as a result of globalization. Key issues were the need for trade unions to adapt to the increasing individualization of employment relations, the need for employers' organizations to embrace an increasingly diverse range of enterprises, the need to recognize that commercial rights were taking priority over social and labour rights, the importance of collective bargaining and social dialogue, including at the transnational level, and their reinforcement by the ILO in order to ensure democracy and social cohesion.

15. The representative of the Government of the United States also expressed appreciation for the report. He agreed that high and persistent joblessness was the cause of many social and labour problems. It was essential to have appropriate policies to adapt to globalization, and his Government supported the ILO's efforts to help governments and the social partners frame effective policies. Empirical evidence supported the favourable impact of outward-looking, market-oriented policies on trade and growth. A high-employment economy brought economic and social benefits. The rate of unemployment in the United States had been below 6 per cent for three years at the present rate of employment growth, which was around 300,000 jobs per month. Inflation was low and the federal budget deficit was being reduced. The lesson to be drawn from the US experience was that open markets, limited budget deficits and investments in technology and people yielded widespread benefits. Commenting on the repercussions of the report for the ILO's activities, he emphasized the need for up-to-date information, promotion of the right to organize, the study of human resources management practices and the problems associated with new forms of employment.

16. The representative of the Government of Hungary congratulated the Office on the report, which was unique and offered some important messages, although it was rather limited in its guidelines for future action. Part IV of the report held unique value for the social partners. Economic success at the macroeconomic and enterprise level required well-balanced labour relations. Economic growth, democracy, labour relations and social dialogue were closely related. Hungary had managed to effect a radical adjustment process peacefully because of its tripartite negotiating structure. Foreign direct investment was very important in Hungary, and transnational enterprises generally had good collective labour relations. The problem lay mostly with small family-run firms. Trade unions were important when economic transformation placed workers in a vulnerable situation. Government regulations and labour inspection were more effective when there were trade unions to monitor compliance. The ILO's advice and help was required in these tasks.

17. The representative of the Government of China found the report valuable for its analysis of changes in labour relations. Sound labour relations were critical to ensure effective enterprises, economic development, social stability and workers' rights. However, labour relations had to evolve and adapt to the social and economic features of each country, and solutions should not be based on one model only. Labour relations could not be held responsible for increasing income inequality, unemployment and social exclusion, which were the result of economic forces that labour relations could not determine. The ILO should continue to study these developments and help governments build the capacity to handle labour relations questions.

18. The Employer Vice-Chairperson expressed his displeasure at the late receipt of the Office paper. The recommendations in it were backward-looking and the ILO should look to the future. Few trade unions -- and the Australians were an exception to this -- had contributed to employment growth because they blocked reforms that would promote labour market flexibility. On the issue of declining trade union membership, he reiterated that transnational corporations were not responsible. Transnationals, cross-border investment and trade were increasing rapidly. This obviously made life difficult for national organizations. Because of this obvious state of affairs it would be difficult to envisage mutinational collective bargaining. Trade unions, however, still had considerable political influence, and they should use this to bring the trade union movement up to date.

19. The representative of the Government of the United Kingdom wanted to see more debate on the new forms of work emerging and how to cope with them. Trade unions and employers' organizations would need to prepare their members to adapt to new forms of technology and production, particularly through lifelong learning. Governments should address the structural rigidities that prevented labour markets from adjusting to technological change or external competition.

20. The Worker Vice-Chairperson responded that it was not the primary task of the trade union movement to help companies become more competitive or profitable. Nor was it the primary job of trade unions to create employment. Trade unions were there to negotiate with employers to ensure good jobs and decent conditions of work. Trade unions and employers often necessarily represented different interests and were therefore opposed. However, through the negotiation process it was possible to build agreement and trust. Industrial relations systems differed from country to country, but Conventions Nos. 87 and 98 were universal and had to be respected everywhere. Transnational corporations were not to be condemned in their entirety. Where they contributed to social development, they were to be welcomed, but where they constrained trade union rights, they were to be condemned.

21. Mr. Taqi (Assistant Director-General), referring to the question on lifelong learning posed by the previous speaker, pointed out that the next issue of World Employment would be on the issue of training. He thanked members for their positive contributions and observed that the report had been widely acknowledged as a substantial and valuable document whose shortcomings were errors of omission rather than commission. A number of members had called the document provocative: this was praise if it meant that the report had identified relevant issues and discussed them in a forthright way. He wanted researchers in the Office to feel that they could be forthright in order to provide material that was thought-provoking and of greater value to constituents. He agreed with the representative of the Government of France that the system of disseminating ILO reports could be improved. The reactions to the report and in particular to the second part of the paper would help in formulating programme and budget proposals for the next biennium as part of the research strategy mentioned by the Canadian Government representative.

Progress report on preparations for the
Second ILO Enterprise Forum

22. Mr. Hultin (Assistant Director-General) stated that since November 1997 a number of tripartite working group sessions had taken place with representatives of the Workers and Employers and their secretariats. The Office paper reflected these discussions. The work of the tripartite working group had been informed throughout by the Committee's discussion in November 1997. The next Forum was seen as an opportunity for open exchanges of experience. Every attempt would be made to address the concerns of enterprises in the Forum.

23. The first sitting of the Forum would in reality set the scene for the second, third and fourth, which would be held simultaneously and would deal with a succession of themes designed to address participants' interests. The first session was concerned not only with how the world saw enterprises, but also with how enterprises themselves addressed the world and the challenges of globalization. The theme of the changing market-place would lead into three other sessions on human resource-based competitive strategies, corporate citizenship and social initiatives, and tapping the employment potential of small business, which would concentrate especially on the needs of youth and women and on promoting the right environment for creating quality jobs in enterprises. It was now foreseen that the Forum would take place in November 1999, reflecting the decision of the tripartite working group.

24. The Employer Vice-Chairperson considered that more work needed to be done. The Office paper was obviously the outcome of a committee approach. He wondered how these themes would attract business people. As regards the scene-setting session, the theme of advancing technology and global change was obsolete for many employers, and probably also for workers' representatives. The theme of change in the market-place seemed now to arise at every meeting. Perhaps the answer to this was to have only one major keynote speaker. If the ILO had anything unique to offer business people, it was in the area of "working with the workers". The topic likely to attract business people would be something related to human resource-based competitive strategies. In this context, the word "savagely" in the reference to the undermining of job security should be deleted. The idea of corporate citizenship foreseen in session 3 should form a distinct and discrete segment of the Forum. This had to be a theme of the Forum in order to satisfy the Workers, and this was where all questions of social labelling and social responsibility should be considered.

25. As regards the question of the employment potential of small business, the question had arisen of why the session should be limited to small businesses alone. The challenge usually was to create conditions to permit enterprises of whatever size to flourish. A regulatory and legislative climate was needed that permitted enterprises of all sizes to respond rapidly to downsizing and other structural changes. He therefore wondered whether the idea of concurrent meetings was the best one. He understood why three simultaneous meetings had certain attractions, but many participants would want to take an active part in discussing all of the themes on offer. One way of dealing with this would be to sharply reduce the number of panellists from ten, and even to less than six, and to concentrate on a small number of top-quality panellists. Some members of his group felt there was merit in considering advance regional discussions, which could be based on the work of the multidisciplinary teams. The International Institute for Labour Studies had conducted several workshops on very similar themes. He asked whether it would not be possible for the findings of such workshops to be also available at the Forum.

26. The Worker Vice-Chairperson said that there would be further opportunities to discuss such questions as the invitations to be issued, but it was already appropriate to discuss the thematic framework and the timing. He had been pleased to note that four meetings of the tripartite working group had taken place as a result in part of the views expressed by the Workers' group after the first Enterprise Forum. He commended those responsible, including the Workers' and Employers' representatives who had been involved in the consultation.

27. The Workers' group was in agreement with much of the content of the paper. The third theme, which was concerned with codes of conduct and social labelling, would lead to a substantive debate assuring concrete progress. The fourth, which concerned the employment potential of small business, should draw heavily on the expected June 1998 International Labour Conference Recommendation on general conditions for stimulating job-creation in small and medium enterprises. The Workers' group expected discussion there to focus on quality jobs and on the protection of workers in small and medium-sized enterprises. It was important, in relation to the second theme, to avoid discussions that might lead to conclusions undermining the interests of workers. The focus should be on working with trade unions to enhance the skills and productivity of workers, rather than using human resource management techniques to undermine trade unions. The proposed dates of the Forum were acceptable to the Workers' group. However, they would have no objection to further changes if these were needed in order to ensure maximum participation. He hoped the Office would facilitate the participation of workers in the Forum. One obstacle to this was the high cost of attendance: one possible way to facilitate worker participation would be to synchronize the Forum with other ILO meetings and events.

28. The representative of the Government of Finland said that the proposal to hold a second Forum was a good one. He had taken note of the preliminary statement of the proposed themes, and had noted these with satisfaction. However, more emphasis ought to be given to the increasingly important themes of lifelong learning and team-based strategies. It was important in an information society to seek all possible ways of promoting idea-based value production. There was room for further adjustments as time went by, particularly in the areas mentioned by Mr. Katz, and he wished good luck to the endeavour.

29. Mr. Anand (Employer member) said that multidisciplinary teams could play an important part in preparations for the second Forum. It was now universally acknowledged that enterprises were at the centre of economic growth for development. At a time of rapidly rising unemployment, the value of enterprise to the development of society was recognized. For this reason, there was a need for practical input based on real regional experience, and not mere academic theorizing. People needed to see how the successful build-up of enterprise on the ground was a pivotal factor in social stability, economic growth and development. The idea of using the multidisciplinary teams ought initially to be on a pilot basis using the regular resources available to them.

30. Mr. Mansfield (Worker member) supported the comments made by the Worker Vice-Chairperson. The structure of the proposed Forum had already been the subject of considerable discussion. The result of this had been a balanced and attractive programme addressing the four themes of the changing market-place, human resource-based competitive strategies, corporate citizenship and social initiatives, and the employment potential of small business. This seemed much more balanced than had been the case at the first Forum. Clearly, the activity of the tripartite working group had been valuable, and further modification would no doubt be possible in the light of the present discussions. The first Forum had been very well attended, even though the programme was not as attractive as that of the second. Commenting on the suggestion for regional workshops, he feared that this might generate too much work too quickly. Because planning for the Forum was itself a major task, he cautioned against any possible dilution of the effort this would require. He fully supported the comments by the representative of the Government of Finland. There should be greater emphasis on skill development, vocational training and innovation. These ought to be key elements, and no doubt other valuable ideas would emerge during planning for the Forum.

31. The representative of the Government of the United States said that the first Forum had been very valuable, because it had brought in outside ideas and thinking. Change was occurring so rapidly worldwide, and much could be learned from eminent speakers. He recalled a contribution by a senior representative of the management of Lufthansa, who had presented challenging concepts in a global perspective. He hoped that Workers' representatives would be in a position to offer similarly global perspectives on the occasion of the next Forum. The panels should have much fewer members -- well under seven -- and high-level panellists and contributors should be found.

32. The Worker Vice-Chairperson referred again to the paper produced by the tripartite working group. The present discussion could be continued at a meeting of the Officers of the Committee to see what implications they might have for the format of the Forum. It would then be possible to review this in greater detail at the November 1998 session of the Governing Body.

33. Mr. Hultin (Assistant Director-General), responding to the discussion, said that many useful ideas had been put forward. These would be thoroughly discussed and suitable conclusions proposed. The Working Party would continue to meet regularly. Although November 1999 seemed far in the future, time passed very quickly and it was important not to lose the momentum of the useful tripartite working discussions. The representative of the United States Government had stressed the importance of fresh outside thinking. This meant that all promotional possibilities for the Forum beyond the ILO's own constituency were of immense value in ensuring the breadth, range and quality of discussion at the Forum. It was important to create as much interest as possible within the varied circles in which members of the Committee moved. The tripartite working group would continue to meet and would present a full report on progress at the November 1998 session of the Governing Body.

Preparations for the 1999 International Consultation concerning Follow-up on the World Summit for Social Development

(a) Further discussion of the recommendations concerning
the key areas for future action at the national level
identified in the Synthesis Report of the ACC Task Force
on Full Employment and Sustainable Livelihoods

(b) Progress report on the implementation of the
ILO country employment reviews

(c) Agenda of the International Consultation and participation

34. The Director of the Employment and Training Department (Mr. Sengenberger) introduced this item on the agenda, which involved three elements that were thematically related and focused on the ILO's activities and efforts to follow up on Commitment 3 of the Copenhagen Declaration and Programme of Action. At the centre of that Commitment was the promotion of the goal of full employment. On the first element he noted that the Committee had requested a further discussion of paragraph 22 of the paper submitted in November 1997 which summarized the main issues and findings contained in the Synthesis Report of the ACC Task Force on Full Employment and Sustainable Livelihoods.(1)  The Employers' group had been generally in agreement with the conclusions and had found them similar to others discussed in previous ILO forums. However, the group had expressed scepticism about basing conclusions on the sample of countries reviewed, had disagreed with their order of priority and had emphasized the need to present a stimulating package of policy measures to governments and the social partners. The Workers' group had endorsed most of the general policy framework and guidelines in paragraph 22, but had expressed reservations on the conclusions regarding structural adjustment and liberalization, which they said were at variance with the findings in the main text. The Workers' group had also pointed to the poor working conditions that might result from deregulation and had emphasized the need for human resource development to enhance the quality of employment. The Government members, while expressing overall agreement with the conclusions, had found them rather general. He pointed out that paragraph 22 was a summary of the Synthesis Report and was indeed general. A fuller review of measures was in the country reports themselves which, for those reviews undertaken by the ILO, had been fully endorsed by the tripartite constituencies in each country. The Office would be better placed to elaborate policy conclusions after employment policy reviews in more countries.

35. The Office paper on the second element(2)  provided an account of the employment policy reviews currently being conducted by the Office. These were at various stages, and in Brazil was relatively advanced. The reviews in Ukraine, Kenya and Barbados had been initiated. Côte d'Ivoire had formally given its consent. In the current series of reviews four industrialized countries were included -- Austria, Ireland, the Netherlands and Denmark. These were frequently referred to for their innovative employment and labour market policies and systems of tripartite consultation. The Office paper on the third element(3)  contained a possible agenda and list of participants for the International Consultation concerning Follow-up on the Social Summit. The list of participants proposed in the paper was tentative. Responding to a query from the Worker Vice-Chairperson on the relationship between the International Consultation and the proposal for an employment conference in the year 2000 contained in paragraph 69 of the Governing Body paper concerning the preliminary consultation on the Programme and Budget proposals for 2000-2001,(4)  he said that the International Consultation, as provided for in the Programme and Budget for 1998-99, could be seen as preparatory to the conference, which was likely to be larger in terms of scope and participation. The Governing Body should decide whether to accept one or both of the proposals.

36. The Worker Vice-Chairperson suggested that a set of policy conclusions with a view to attaining the goal of full employment should be formulated and adopted by the Committee to guide the preparation of the report for the proposed International Consultation. The Workers' group had some reservations in respect of paragraph 22 of document GB.270/ESP/1/1. They would propose some modifications to the bulleted items concerning macroeconomic and structural adjustment policies and regretted the omission of any focus on EPZs and the insufficient attention given to reductions in programmes on education and vocational training caused by fiscal restraints. The emphasis in the text on control of inflation was misplaced, since it was generally under control; at present the danger was deflation. Structural adjustment and liberalization policies had been implemented for more than a decade, with few benefits in the field of employment. Commitment 8 of the Copenhagen Declaration maintained that social development goals should be upheld in structural adjustment programmes and sound social policies should be devised through social dialogue. Some parts of paragraph 22 needed to be amended. On the third element, he pointed to the limitations of the employment policy reviews conducted within the inter-agency framework, and asked the Office to follow the modalities in the Office paper of March 1996. The Workers' group generally welcomed the selection of countries, but felt that the Asian region was not adequately represented, especially countries confronted with serious financial crises. He welcomed the proposal on the International Consultation and fully supported the proposed agenda items. He asked whether the International Consultation could be scheduled closer to the Second Enterprise Forum in order to save resources and allow greater worker participation.

37. The Employer Vice-Chairperson agreed that there was a risk of deflation. Japan in particular could do more to stimulate growth with beneficial effects both at home and abroad. Paragraph 22 of GB.270/ESP/1/1 was not entirely satisfactory; on macroeconomic policy it was anodyne and lacked any meaningful statement on the real obstacles to employment creation. The paragraph lacked the boldness to recommend effective action to reform domestic labour markets. The London G-8 Chairperson's conclusions talked of the need for structural reforms to remove barriers to the creation of jobs and to ensure that all markets functioned efficiently, in particular labour, capital and product markets, to enable small and medium enterprises to set up and expand. Even the ILO papers written in advance of the Social Summit had been simple and more forthright on labour market issues. As regards the second element, the country employment policy reviews were interesting, but he regretted that the Committee would only be given a summary prepared by the Office. The employment policy reviews would be more effective if the Committee itself could conduct country examinations. The review of OECD countries should point to the role played by temporary and part-time work in their successful employment performance. The review of the Ukraine, where there was continuing tension between reformers and anti-reformers, should be straightforward in showing the need for economic reform. The agenda proposed for the International Consultation (in the third element) also failed to recognize that the principal obstacle to employment generation was structural, and not the growth of demand, and there was no mention of labour market flexibility. Experience in Western Europe showed that levels of unemployment increased in each cycle. In paragraph 4 of the paper on the International Consultation, the quality of employment was overemphasized: the unemployed could never, for example, participate in decision-making. There was no understanding displayed of what constituted a disincentive for entrepreneurs to hire labour rather than substitute capital for labour.

38. The representative of the Government of India remarked that, while the Social Summit set the goal of full, productive and freely chosen employment for all, and most governments were party to its Declaration, recent experience suggested that it might not be possible to achieve this goal in the near future. Things had taken a turn for the worse, especially in the employment and social sectors, as brought out by World Employment. It seemed doubtful whether the prescriptions currently available were adequate to meet the challenge. While India had undertaken several measures of economic reform, structural adjustment programmes and liberalization of trade, the impact of these was yet to be accurately assessed. His Government wished to wait before requesting an ILO country employment review. However, it would like to attend the 1999 Consultation.

39. The representative of the Government of China expressed his country's full support for the International Consultation which, given the mandate extended to the ILO by the Social Summit, would be a significant undertaking. The Office ought to report faithfully the progress made so far in the field of employment and the constraints faced. The International Consultation should also put forward specific and practical measures for job creation. Given Asia's size and population, the participation of Asian countries, as currently foreseen, appeared inadequate.

40. Mr. Mansfield (Worker member), commenting on paragraph 22 of GB.270/ESP/1/1 asked whether there could be tripartite agreement on a revised text. Such a text should recommend a general domestic framework that would promote high economic and employment growth. The Workers had both presentational and substantial objections to the text of paragraph 22 and felt it needed revision. He hoped that a revised text could be used in both 1999 for the International Consultation and the following year for the possible employment conference. However, the Committee's work was slow in relation to the massive dimension of the unemployment problem, which had such serious effects on both young and old workers. In response to the Employer Vice-Chairperson he considered that the proposed agenda for the International Consultation was consistent with the terms used in the conclusions of the Social Summit. In response to the Employer Vice-Chairperson's comments on structural unemployment, he noted that structural reforms had not reduced unemployment in Australia, and the criteria for monetary union had brought a self-imposed brake on European growth. It was desirable for the International Consultation to review the ILO's progress in the promotion of core labour standards. Finally he asked whether the International Consultation could be scheduled immediately before the Enterprise Forum.

41. The representative of the Government of the Russian Federation extended full support for the International Consultation and for the agenda proposed by the Office, and stated that his Government looked forward to participating in it. The Office should include the Russian Federation in the employment policy reviews, since the new multidisciplinary team in Moscow would be helpful in this regard.

42. The representative of the Government of France noted that both quality and quantity of employment were important. In terms of international experience France would never abandon its social protection. He supported the two meetings proposed by the Office. However disappointing employment trends might have been since Copenhagen, that should change neither the direction of the ILO, as expressed in World Employment, nor serve to relax the commitments made at the Social Summit. The ILO should assert that full employment was possible. Governments should ask the ILO to continue its actions and policies proceeding directly from the commitments made at Copenhagen.

43. The representative of the Government of Japan, supporting the International Consultation, expressed his country's interest in participating.

44. The Worker Vice-Chairperson fully supported the views of the representative of the Government of France, especially with regard to the commitment to full employment. He repeated his request to bring the dates of the International Consultation closer to those of the Second Enterprise Forum.

45. The Employer Vice-Chairperson doubted whether any increase in growth in Western Europe would significantly benefit employment, since the structural component of unemployment was very high. While the United States model of employment growth was not necessarily appropriate to countries with different systems and traditions, it could certainly not be used as an excuse not to reform labour markets. Most of the 2 million jobs created within the last six months were of high quality, and even low-wage jobs gave the unemployed valuable work experience and allowed them to move up the wage ladder. But the proposed agenda for the International Consultation did not tackle the issue of micro-level reforms. The G-8 group was able to make clear statements; why could not the ILO? Finally he welcomed the idea of an employment policy review for the Russian Federation.

46. Mr. Anand (Employer member) noted the need for a report from governments on the efforts and resources they had allocated to meeting the commitments made at Copenhagen. India should participate in the International Consultation.

47. Mr. Taqi (Assistant Director-General) clarified that paragraph 22 of GB.270/ESP/1/1 was a summary of points in a synthesis report. That exercise had been useful, but was over. The points would not be used word for word in the report for the International Consultation. Turning to the employment policy reviews, he doubted whether the Office could handle a greater number. New Zealand had not wished to participate because of workload problems related to internal administrative restructuring. Pakistan had given favourable indications that it was prepared to host a review, and he hoped to have a definitive decision shortly. Once completed, the Committee would not only receive a synthesis of the reviews but would also have available the individual country reports. As regards the International Consultation, a formal proposal would be made to the Governing Body in March 1999 on its agenda, date and participation. The agenda items seemed acceptable to the Committee, even if the annotations had received some criticism. The report to the meeting would focus primarily on the quantity of employment, but would also cover qualitative aspects. It would incorporate, besides the CEPRs, various research carried out in 1998-99. It would attempt to provide an honest analysis, and would not shy away from tackling various sensitive issues, such as labour market flexibility. Many governments would no doubt wish to attend the consultation, but it would be difficult to accommodate a large number. The Office's proposals would be formulated after consultations with the regional groups. He noted that the idea of convening a world employment conference in 2000 had received considerable support in the Committee.

48. Mr. Sengenberger (Director, Employment and Training Department) reiterated that the empirical basis for paragraph 22 of GB.270/ESP/1/1 was slim and would be broadened by the increased number of country reviews and by other activities in 1998-99. One such activity were the action programmes on the social dimensions of structural adjustment. The issue of deflation had not been broached, since it concerned OECD countries whose reviews were only beginning. A regional balance was needed for the country reviews, and for the ILO's work in general. It was possible that an Asian country embroiled in the current financial crisis would be a good candidate for an employment review. His department was working with the MDTs to study national action taken as follow-up on the Social Summit.

ILO participation in major international conferences
on employment issues

49. Mr. Oechslin (Employer member) related his participation at the Kobe and London G-8 conferences on employment. He applauded the initiative to invite the Workers' and Employers' groups to make statements to such conferences, and hoped that this would lead to a real dialogue between governments and workers' and employers' organizations. He expressed his appreciation that the ILO and the OECD had been invited. As regards the substance, he pointed to the great importance attached, both in Kobe and London, to the crucial role of enterprises in job creation and urged that this be incorporated in the work of the Office.

50. The Worker Vice-Chairperson also expressed appreciation that the ILO and the OECD had been, since the Lille conference in 1996, invited to the G-8 conferences on employment, and that subsequently the ICFTU and IOE had also been invited. With increasing globalization, such a step was significant in order to foster social dialogue at the international level and needed to be further encouraged. He praised the Director-General for his presentation at the London conference, especially his elaboration on how the adverse social impact of the Asian economic crisis could be greatly reduced by fostering tripartite dialogue. He pointed to the Director-General's emphasis on the critical role of ILO core labour standards, and the Office's preparations for a Declaration on fundamental principles and rights. He welcomed the outcome of various issues discussed in London and Kobe, especially with regard to the development of core labour standards; tripartism and collective bargaining; good-quality and secure jobs; the fair distribution of increased wealth; and the key role of lifelong learning and training. However, such conclusions, unless properly implemented, would have little meaning.

51. The representative of the Government of the United Kingdom assured the Committee that the Kobe and London discussions had allowed a useful exchange of views on what did or did not work well in the areas covered by their conclusions. The statements by the IOE, ICFTU, ILO and OECD had been well received. The Government of the United Kingdom was seeking a third way to social justice, between "unbridled individualism" and old-style government intervention. It believed that employment was the path out of social exclusion and that greater productive employment would sustain faster growth. Reform of the country's welfare state was fully consistent with the principles of social justice and solidarity. The priority in social expenditure was for active labour market policies to offer opportunities matched by obligations to the young and long-term unemployed and not to lock people into dependency. Subject to decent standards of fairness, governments could best provide job security through education and an employment service that helped people to find new jobs and retraining. The Government of the United Kingdom welcomed the role played by the trade unions in supporting work-based learning and looked forward to working with the social partners in making lifelong learning a reality.

52. The Employer Vice-Chairperson noted that the economic, social and welfare systems of all countries were in constant evolution. All countries experimented with new approaches. He strongly rejected the phrase "unbridled individualism" if it were meant to refer to practices in the United States, where there were various checks on unbridled behaviour

* * *

Other business

53. The representative of the Government of Germany drew the Committee's attention to the Hanover World Exhibition to be held in the year 2000 and known as Expo 2000. While the ILO would be represented in the United Nations pavilion, there would also be separate thematic displays including one on "the future of work". The ILO would no doubt want to participate in that in some way, but time was running short and he hoped that his statement would lead to a decision on the ILO's involvement.

Geneva, 20 March 1998.

1. GB.270/ESP/1/1.

2. GB.271/ESP/3/2.

3. GB.271/ESP/3/3.

4. GB.271/5.

Updated by VC. Approved by NdW. Last update: 26 January 2000.