1. At its first sitting on 2 June 1998, the International Labour Conference constituted the Committee on Contract Labour. The Committee was originally composed of 194 members (83 Government members, 49 Employer members and 62 Worker members). To achieve equality of voting strength, each Government member entitled to vote was allotted 1,519 votes, each Employer member 2,542 votes and each Worker member 2,009 votes. The composition of the Committee was modified nine times during the session and the number of votes attributed to each member adjusted accordingly.⁽¹⁾ 

2. The Committee elected its Officers as follows:

Chairperson: Mr. L. Mishra (Government member, India) at its first sitting;

Vice-Chairpersons: Mr. B. Noakes (Employer member, Australia); and Mr. J.-C. Parrot (Worker member, Canada) at its first sitting;

Reporter: Mr. J. Saloheimo (Government member, Finland) at its 11th sitting.

3. At its 11th sitting, the Committee appointed a Drafting Committee composed of the following members: Mr. D. Sweeney (Government member, United States), Mr. B. Noakes (Employer member, Australia), Mr. J.-C. Parrot (Worker member, Canada), and the Reporter of the Committee, Mr. J. Saloheimo (Government member, Finland).

4. The Committee held 18 sittings.

5. The Committee had before it a number of reports that had been prepared by the Office, namely Reports V(1), V(2A) and V(2B), entitled "Contract labour", as well as Report V(2B) Addendum. Each of these documents had been referred by the Conference to the Committee in order to assist it in its work.

Introduction

6. The Chairperson thanked the members of the Committee for the confidence it had placed in him and noted that in carrying out his task, he would continue to seek their cooperation and support. Then, the representative of the Secretary-General of the Conference recalled that the previous year, at its 85th Session, the Conference had adopted conclusions with a view to a Convention and Recommendation on contract labour, along with a resolution calling for a second discussion regarding the proposed adoption of such texts. As background to the reports prepared by the Office since the first Conference discussion on contract labour, he noted that the Office had submitted the text of the proposed Convention and Recommendation to the Governments in the form of Report V(1), inviting them to forward amendments or comments thereon, after consulting with the most representative organizations of workers and employers. He explained that the replies received contained a diversity of observations, some endorsing the texts as a basis for a second discussion, while others criticized them on fundamental points and many called upon the Office to provide further clarification on a number of issues.

7. The representative of the Secretary-General then introduced Report V(2A), containing the comments and amendments suggested by governments and workers' and employers' organizations on the proposed Convention and Recommendation. He noted that these replies indicated that a number of important issues of a substantive nature are understood and interpreted differently by ILO constituents, including the very basic points of the definition of "contract labour", the scope of the proposed instruments and the terminology used. Report V(2B) sets out a proposed Convention and Recommendation based on the conclusions adopted by the Conference at its 85th Session, with only minor changes of a drafting nature. He explained that, in order to take into account the concerns raised in the plenary session of the 85th Session of the Conference and the observations set out in Report V(2A), and after consultation with the Workers' group and Employers' group, the Office had drawn up the Addendum to Report V(2B). This document is the working document referred to in the introductions to Reports V(2A) and V(2B).

8. The Addendum to Report V(2B) contains an introductory section and an annex indicating possible changes, intended to facilitate the Committee's discussions, that could be considered as a basis for a Convention and Recommendation on contract labour, as a possible alternative to the proposed texts in Report V(2B). Pursuant to the Addendum, "contract labour" would encompass situations where the conditions of dependency on or subordination to the enterprise using contract labour are similar to those that characterize an employment relationship between the user enterprise and its employees. Both independent contractors who are truly self-employed and workers who are employees of the user enterprise would be outside the definition of contract labour. The representative of the Secretary-General noted that whether the texts set out in Reports V(2B) or those in V(2B) Add. were to be used as the basis of the Committee's second discussion was a decision to be taken by the members of the Committee. Either would, of course, be open to amendment. He also indicated that, should the Committee decide, after examining the texts before it, that its deliberations could not be concluded in a satisfactory manner at the present session of the Conference, it could adopt a resolution asking to have the item placed on the agenda of a future Conference.

9. While acknowledging the difficulties that the Committee had had in dealing with the subject of contract labour, the representative of the Secretary-General recalled that there were some broad areas of agreement. In particular, everyone seemed to agree that greater efforts need to be made to combat abuses related to disguised employment relationships, and to ensure that rights or obligations under labour or social security laws or regulations are not denied or avoided when contract labour is used. He also underlined that there is widespread concern about particular situations involving contract labour that call for redress, and noted that many constituents have taken the position that certain basic guarantees should be enjoyed by all contract workers.

General discussion

10. By way of preliminary remarks on behalf of the Employer members, the Employer Vice-Chairperson stated that the Committee was faced with an extraordinary and unprecedented situation which required careful consideration. He recalled that the first discussion on contract labour had been characterized by difficulties in coming to grips with the conceptual, definitional and linguistic complexities of the subject. There were also difficulties arising from the texts with which the Committee was working. He recalled that, throughout the first Conference discussion, the Employer members had expressed their implacable opposition to the adoption of any instruments on the subject of contract labour. However, they had noted the Worker members' concerns regarding the problem of disguised employment, and had voiced their opposition to fraudulent or illegal arrangements.

11. The Employer Vice-Chairperson noted that, at the end of the Committee's first discussion and during the plenary session of the Conference, the Employers' group had set out in detail the difficulties posed by the texts as adopted the previous year. In the intervening period since the first discussion, these texts had continued to be criticized and to give rise to misgivings on the part of employers and a large number of governments. He then referred to the proposition of the Office in the introduction to Report V(2B) to submit "a working document in advance of the Conference for possible use by the constituents", which had then been submitted as Report V(2B) Add. While noting that this document had been in the hands of the constituents for only a brief period, he expressed the appreciation of his group for the efforts that had been made by the Office in drafting the Addendum to come to grips with the problems that in their view had not been resolved by the first discussion. He remarked that what was being proposed in the Addendum as far as the Convention was concerned was a totally new text, based on a totally different approach and raising new concepts and new options. In their view, the texts set out in the Addendum deserved serious consideration.

12. The Employer Vice-Chairperson also pointed out another unprecedented matter raised by the Office in the explanatory comments in the Addendum to Report V(2B), pointing out the possibility of proposing "a resolution for adoption by the Conference which could request the Governing Body to place the question on the agenda of a future International Labour Conference." In the view of the Employer members, the Office was clearly saying that the Committee was dealing with an extremely difficult subject, that the text adopted the previous year was totally unsuitable and that a totally new approach was needed which could require further discussion.

13. As a final matter, the Employer members noted that, although the position of their group during the first discussion had been one of implacable opposition to the adoption of any instrument on contract labour whatsoever, they did recognize the problem of disguised employment. Having reviewed their stance since the first discussion, the Employer members were prepared to take the initiative to propose that the Committee adopt a Recommendation providing guidelines and setting out procedures for dealing with disguised employment. They urged that the Committee give the proposition serious consideration particularly in the light of the extraordinary situation with which it was faced.

14. The Worker Vice-Chairperson, speaking on behalf of the Worker members, began by pointing out that "contract labour" can mean different things. For many, it means subcontracting or outsourcing. In the public sector, the term may suggest the contracting out of public services or privatization. Subcontracting could be through job contracting or labour-only contracting, with the latter often referred to as "contract labour". The term is also applied with respect to "contracting in" which involves the use of temporary work agencies, staff leasing agencies, dispatching agencies and other enterprises supplying contingent workers. "Contract labour" can also refer to the means by which work is organized in the informal sector through informal agreements arranged by intermediaries, which is particularly prevalent in the agricultural sector. Furthermore, the term could apply to migrant workers, systems of piece-work manufacturing, certain kinds of home work and various types of atypical work, including temporary employment and work similar to self-employment.

15. It could be said, in the view of the Worker members, that contract labour encompasses some of the newest forms of work, combined with some of the oldest forms. The changing forms of work are a reflection of the changes being brought about by new technology and globalization. While new forms of business organization and information technology could be considered key factors in producing wealth, the use of contract labour which might ensue could also give rise to an old form of exploitation, particularly where difficult, dirty or dangerous work, such as in the agricultural sector, are involved. The Worker members stressed that those performing old and new types of work need to be protected, regardless of their recognized employment status. Referring to the fact that in many countries the employment relationship is treated as a special category of contract, they asserted that the justification for such treatment, and indeed the justification for most labour legislation, was founded on the unequal power relationship between workers and employers. Other important reasons for this special treatment include the recognition that labour cannot be treated as a commodity and that market forces alone are incapable of taking all of the interests of civil society into account. The recognition of the employment relationship involves placing obligations on the employer to protect workers, thus ensuring a measure of social justice. The changing nature of work and of business organization has resulted in many workers not being covered by labour legislation because they are not considered "employees", or because they are placed in co-employment or triangular relationships where they are considered to be employees of another enterprise that does not, is not required to or cannot assume all the obligations of an employment relationship. As more workers lose the protection of the employment relationship, the Worker Vice-Chairperson continued, the unequal power relationship persists, requiring governments to rediscover the values and benefits to society that the employment relationship provides.

16. The Worker members went on to stress that contract labour not only gives rise to legal dilemmas: it relates to actual situations affecting millions of workers. They characterized the legal aspect as, in part, one of distinguishing between commercial and labour law, as well as a matter of updating labour law to take into account new forms of work and to address triangular relationships. They asserted that there were two means of addressing the grey area between commercial law and labour law: (i) to make the division between commercial law and labour law more distinct; and (ii) to recognize the different shades of grey and extend some of the protection of labour law to workers, depending on the degree of their subordination or dependency. They submitted that the first approach, being simpler and more predictable, would be favoured by employers who would benefit since it would in practice be difficult to apply labour law to work performed in the grey area. However, in the view of the Worker members, the first approach was unsatisfactory, holding little hope for solving a problem that is likely to grow; the second approach, which is reflected in the draft Convention, would be preferable and more likely to succeed since it is founded upon the principles that originally justified distinguishing employment relationships from commercial relationships. The contribution of an ILO Convention on this subject and at this time is to reaffirm this underlying principle, taking into account the actual situation of these workers. In conclusion, the Workers' group was in favour of a Convention that (i) acknowledges the problem; (ii) obliges governments to take measures preventing recourse to contract labour for the sole purpose of avoiding labour laws; and (iii) encourages governments to extend the specific protection accorded to regular employees to contract workers performing work in similar circumstances.

17. The Government member of Cyprus, noting that contract labour was not common in her country, stated that, as a result of the first Conference discussion on this issue, her Government was aware of the concerns regarding contract workers in other countries. She indicated that her Government supported the view that contract workers should enjoy at least the minimum level of protection enjoyed by employees, keeping in mind the importance of flexibility in the labour market, though not at the cost of basic rights. She suggested that the starting point for the Committee's deliberations should be to determine the scope and definition of contract labour. With respect to the possibility of having a third discussion on the topic, her Government was of the view that such a measure should be resorted to only if found to be necessary after the Committee had made every effort to discuss the issue fully, beginning with the elaboration of a sound definition.

18. Expressing her Government's appreciation of the work represented in Report V(2B) Add., the Government member of Trinidad and Tobago stated that the instruments proposed therein were acceptable and ratifiable, and would provide a sound basis for discussion. Regarding the definition of "contract labour", the Addendum provided a definition that was uncluttered and clear. She stated further that the concern voiced by several countries that contract labour was an evolving phenomenon, making standard setting difficult, was also acknowledged and addressed in the Addendum, particularly by the addition of a Paragraph in the Recommendation, providing for the review of national law and practice to determine whether there are situations involving the use of contract labour calling for the adoption of new measures. She stressed that measures must be taken now to address the ills and abuses manifested by the use of contract labour, which is becoming more prevalent in the changing world of work. She suggested that it is not inconceivable that, one day soon, an instrument on contract labour would be considered as being among the fundamental Conventions. She informed the Committee that her country along with others in the CARICOM region had thoroughly discussed the issues associated with contract labour, and that preliminary surveys had been carried out to determine the extent of the use of contract labour in Barbados, Jamaica, Saint Lucia and Trinidad and Tobago. In Trinidad and Tobago, the Government was in the process of drafting provisions to provide minimum standards for all workers, including contract workers, in much the same way as that proposed in the Office text. She concluded by affirming her Government's commitment to developing an instrument to provide protection to contract workers.

19. The Government member of the United Kingdom, speaking on behalf of the Governments of the Member States of the European Union which were members of the Committee (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom, hereafter referred to as "the Governments of the Member States of the European Union"), noted that they had had only a short time to consider the revised text in the Addendum to Report V(2B). Despite this constraint, the Governments on behalf of whom he spoke were in favour of proceeding with the discussions on the basis of that text. He cautioned that this support did not imply that they necessarily endorsed all the provisions set out in the revised document, and stated that there may be a need to revisit some of the useful discussions held the previous year.

20. Recalling the first discussion held on this subject and the Government responses to the proposed instruments that arose out of that discussion, the Government member of Italy noted that many fundamental concerns had been raised. In particular, she pointed to the problems of definition and scope which had already been raised during the first discussion, stressing the complexity of defining the boundaries between dependency or subordination and truly independent work. She indicated that, given the diverse ways in which this subject had been addressed in different countries, and in spite of difficulties in formulating a legal definition in an international instrument, it is still necessary to take de facto subordination into account and to strive to ensure the provision of a minimum level of protection for these workers. Referring to the proposal of the Employer members to limit the international standard setting in this area to the adoption of a Recommendation, she asserted that this would give rise to the risk that many of these workers would not have any protection. She expressed her Government's appreciation of the attempt made in Report V(2B) Add. to provide a clearer and more flexible text, with a more flexible definition and scope. Her Government was committed to ensuring that the Convention provides for minimum guarantees that could be considered to have become "acquired rights". While agreeing to base the discussions on the proposed instruments set out in Report V(2B) Add., the Government member of Italy suggested that it would be useful to keep in mind the philosophy that had inspired the previous year's discussions and the texts that resulted therefrom. She stressed the need, even if it proved impossible in the course of the second discussion, to adopt a Convention to guarantee the minimum rights of contract workers, that would be sufficiently clear and flexible to attract broad consensus and ratification.

21. The Government member of the United States also suggested that the Addendum to Report V(2B) could provide an alternative approach that would assist to clarify many of the questions and concerns that had remained at the conclusion of the first discussion. He reiterated the four objectives of his Government regarding the work of the Committee, and noted that the first two of these were of particular importance. First, any instrument should attract wide tripartite consensus to enhance the possibility of ratification. In this context, flexibility would be needed due to the different circumstances existing in different countries. Second, his Government would work toward supporting an instrument to the extent that it was consistent with the federal and state law and practice of the United States. Third, the instrument should promote, rather than decrease, job opportunities. Finally, the instrument should not unduly restrict the right of parties to reach voluntary agreements on matters that had, in accordance with national law and practice, been subject to collective agreements. He called on the Committee to consider the possible relationship between existing general international instruments and the instruments under consideration concerning contract labour. He queried whether this group would merit particular attention in a Convention, or whether a Recommendation would be sufficient. Another important issue to be considered was the definition of "contract labour" and the scope of the instrument. Whatever the form of the instrument resulting from the Committee's deliberations, his Government was of the view that it must be sufficiently flexible to be capable of ratification by a large number of member States.

22. The Government member of Norway recalled that, during the previous year's discussion, her Government had expressed concerns regarding the adoption of an international instrument on contract labour. Her Government's primary concern had been that the instrument would create a new category of workers provided with fewer rights than ordinary employees. Despite this reservation, her Government supported the adoption of instruments protecting workers who, in the absence of a recognized contract of employment, perform work under actual conditions of subordination or dependency. She expressed her Government's support for using the Addendum to Report V(2B) as the basis of the Committee's discussions, while noting that several difficulties with the revised texts remain. On the issue of a third discussion, she cautioned that this would establish a new practice in dealing with instruments and would render the Committee's work less efficient. She suggested that the question of whether or not to propose a third discussion be considered at the end of the Committee's work, if found to be necessary at that time.

23. The Government member of Canada recalled the reservations expressed by his Government, along with other member States, during the previous year's discussion, concerning the shortcomings in the definition and scope of the instruments, as well as the linguistic problems. He then outlined the Canadian approach to this issue, stressing that no distinct category of contract labour exists in that jurisdiction. He expressed his Government's view that the term used in French, "travailleur employé en sous-traitance", was erroneous. He noted that in Canada, a worker in a situation of dependency, in the sense in which the term was understood by the Committee, is considered to be a "dependent contractor". The Canadian experience illustrated that, over time, working arrangements have emerged that no longer fit within the traditional parameters of employee-employer or master-servant relationships. The Canadian response to this phenomenon has been essentially to treat these new relationships as employment relationships where there exists a situation of dependency comparable to that of a traditional employee. These workers are, therefore, provided with comparable legal protection, particularly with respect to collective relations, minimum employment standards, occupational safety and health, unemployment insurance, workers' compensation, occupational injuries and fundamental rights. Such an approach, he asserted, could apply equally with respect to bilateral and triangular relationships.

24. The Government member of Canada continued by urging the Committee, if it was committed to not creating a third category of worker between employees and independent contractors, to consider seriously the best way to address the reality that should be reflected in any instrument. His country, recognizing that the place of the dependent contractor in labour law is problematic, accepted that these workers could be the subject of an international instrument where, based on certain objective criteria, they could be assimilated to employees. He cautioned, however, that if such assimilation is not accepted, the scope may encroach upon commercial relationships, a third category may be created, and the protection may be weakened. His Government was favourable to basing the discussions on the proposed instruments found in the Addendum to Report V(2B) if that could facilitate the Committee's work, but insisted on the need to limit the coverage to dependent contractors who would be treated as employees.

25. The Government member of India explained that legislation has existed in his country since 1970 to protect contract workers; it goes beyond the protection afforded in the draft instruments, and legislation and jurisprudence have evolved to strengthen this protection. However, he noted, enforcement remains a considerable problem. He emphasized that, in India, contract labour constitutes one of the most exploited categories of workers. Concerning the proposed instruments found in the Addendum to Report V(2B), his Government was of the view that although they diluted the protections provided in the texts which had come out of the previous year's discussions, his Government would, in the light of the lack of consensus on those texts, consider supporting a discussion based on the alternative proposed texts.

26. Having had the benefit of hearing a number of Government members express their views, the Employer Vice-Chairperson elaborated upon some of the key issues. He reaffirmed the basic position of the Employer members that contract labour is inherently an unsuitable subject for standard setting. In this context, he pointed to the difficulty of finding an acceptable definition and of coming to terms with the diversity of national law and practice arising from different historical, economic and development situations. The Employer members were not prepared to accept the position of the Worker members linking subcontracting, outsourcing and contracting out to contract labour in an attempt to restrict the use of contract labour. However, they did endorse the Worker members' view concerning the need to provide protection in the case of disguised employment. The Employer members defined disguised employment as the engagement and treatment of a worker as a contract worker when, according to the tests deemed appropriate in a particular country, that person should be treated as an employee. In their view, the Office approach to contract labour gave rise to definitional and practical difficulties in providing that if a contract worker has some of the characteristics of an employee without having any contract of employment or being in any formal sense an employee, that person, who is neither an independent contractor nor an employee, is to be protected. This characterization, they believed, would lead to the establishment of a third category of worker, about which many governments had expressed concern. The Employer Vice-Chairperson noted that while in many countries certain protections apply to all workers regardless of their status, for example regarding occupational health and safety matters, on other matters there was such a diversity of approaches that it would be impossible, at least at this time, to rationalize them.

27. Referring to the triangular relationship whereby an employee of one enterprise carries out work for another enterprise, the Employer members objected to the Office's approach of making it possible for these workers to be treated as employees of the second enterprise. They recalled their position that a worker is either an employee or is not an employee, to be determined on the basis of the tests that normally apply in determining if a contract of employment exists; where it is found to exist, the person should be regarded as an employee and be endowed with all the concomitant rights. The Employer Vice-Chairperson submitted that, if a worker is an employee of one enterprise, it would only lead to confusion to treat that person as an employee of another enterprise. He reiterated that the Employer members were willing to propose the adoption of a Recommendation to address the key issue of disguised employment, an approach which they believed could attract widespread support. In their view, the definitional problems could be solved in the Recommendation by providing that a worker was either an employee or was not an employee. It would also encourage the adoption of measures to ensure that workers who are entitled to be treated as employees, are so treated. The Recommendation would foresee procedures based on clear and objective criteria, which would be expeditious, accessible and affordable. Educational measures would also be provided for to ensure that workers and employers are aware of the existence of the procedures and the criteria involved. Finally, in cases where the law is deliberately avoided or flouted, it would provide that penalties should be applied.

28. The Government member of the United States explained that the Government members had held a meeting the previous day, attended by 57 delegates from 43 countries. The majority of the delegates at that meeting had expressed their interest in completing the work of the Committee at the present session. Furthermore, he reported that, in an informal vote, 30 of the delegates had acknowledged that they were pleased with the Addendum to Report V(2B) as a basis for discussion, though some concerns had been raised.

29. The Government member of the Syrian Arab Republic commented that, although a year had passed since the first discussion on contract labour, the subject was still giving rise to confusion. He asserted that, in his country, contract labour does not exist, with the exception of subcontracting arrangements found in the agricultural sector: a worker having a contract with a farmer contracts out the work to another worker, but the farmer can rescind that contract. Noting that, pursuant to the proposed instruments in Report V(2B) Add., contract labour encompasses direct and indirect relationships, he questioned how in the case of a direct or bilateral relationship national legislation could characterize such a relationship as anything other than an employment relationship and why such workers could be left without protection. In the view of his Government, the issue of disguised employment does not relate to contract labour, and should be addressed generally through private law and not by way of an international instrument. He suggested that Article 5(a), providing protection in relation to the right to organize and the right to bargain collectively, was not necessary in the light of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the provisions of which apply to all workers. Despite these concerns, his Government was in favour of basing the discussions on Report V(2B) Add.

30. The Government member of Australia began by expressing his Government's support for the general comments made by the Government member of Norway. Although his Government continued to have reservations regarding the appropriateness of standard setting on contract labour, the proposed instruments set out in the Addendum to Report V(2B) would provide the preferred basis for the Committee's discussions. While not perfect, they did allay some of the fears arising out of the previous year's discussion. In particular, the revised texts avoided the confusion created the previous year due to the inclusion of definitions of subcontractors and intermediaries. On the question of whether a third discussion should be proposed, he suggested that the matter be revisited later in the deliberations, and, if deemed to be appropriate at that time, then the Committee should be prepared to take such an initiative.

31. The Government member of Japan also expressed his Government's willingness to support a third discussion on contract labour, if found to be necessary, particularly given that an additional document (Report V(2B) Add.) had been submitted to the delegates for their consideration immediately prior to the Conference, and the complexity of the issues before the Committee. A number of Government members, however, including those from Algeria, China, Peru, South Africa and Switzerland, expressed the view that the Committee's work should be concluded at the present session. The Government member of South Africa stated that to extend the Committee's work to a third year was not desirable due to the precedent it would set and the financial implications involved, since the resources for this could be put to better use. The Government member of Switzerland shared this opinion; in addition he stated that a third discussion could jeopardize the image and credibility of the International Labour Organization.

32. The Government member of South Africa raised the issue of whether there actually was a problem concerning contract labour and, if so, the magnitude of that problem. She remarked that those Government members who had denied the existence of contract labour in their countries may not have examined the actual situation closely enough. She noted some examples of where contract labour could be found in South Africa, including in the transport sector, involving in particular taxi drivers. The situation of labour tenants, sharecroppers and homeworkers was also cited in this context. She asserted that many of these workers could be considered dependent contractors. On the issue of the extent of the problem, she stressed that contract labour was a significant problem, going well beyond disguised employment. She stated that the Committee should formulate a ratifiable Convention that would address the core issues in a manner acceptable to the majority of delegates. She also stated that an effort should be made to ensure that a Convention on contract labour would be consistent with existing ILO instruments, in particular the Private Employment Agencies Convention, 1997 (No. 181).

33. The Government member of Peru, referring to the extensive discussions that had taken place the previous year, noted that each country seemed to have a different definition of contract labour. He stressed the importance of the Committee finding a common approach in order to avoid confusion. There was in the view of his Government a problem caused by the grey area of a third category of worker but this should not prevent the Committee from fulfilling its task. He suggested that some of the confusion in this area was caused by the attempts to transfer commercial relationships to employment relationships, which are distinct. Despite such concerns, his Government was committed to ensuring protection for contract workers.

34. The Government member of Algeria noted the complexity of the subject before the Committee and the difficult task it faced of reaching consensus given the important differences between the various countries. Outlining the situation in his country, he stated that contract labour does not exist, except in the form of the dispatching of workers, a practice which is prohibited by law. However, his Government accepted that contract labour could be a problem in the future due to the pressures of structural adjustment and globalization. His Government did not object to considering the adoption of a Convention and a Recommendation on the subject; however, such instruments needed to be flexible, and to ensure that there would be no discrimination between contract workers and employees. In this context, contract workers should be guaranteed all fundamental rights, including freedom of association, the right to engage in collective bargaining, and social protection.

35. Recalling the views expressed on behalf of the Worker members to the effect that contract labour can mean different things, the Government member of Zimbabwe remarked that in his country it includes workers in enterprises who are not considered employees, despite the fact that they undertake the same work as regular employees. He explained that the contracts of these workers were fixed for specific periods and then perpetually renewed. The employer benefited by the arrangement in avoiding the costs of social benefits, such as in relation to social security and maternity. In closing, he argued that it would be difficult to formulate one definition of contract labour that would be universally acceptable; therefore, his Government was in favour of the adoption of a Recommendation only. For similar reasons, the Government member of Uruguay also supported the adoption of a Recommendation only.

36. The Government member of Argentina supported the statements made by the Government members of Peru and Algeria. He cautioned the Committee that it should avoid creating a new category of worker whose rights would be inferior to those enjoyed in a classical relationship of dependency. He acknowledged that it would be difficult to formulate a definition that would not diminish these rights; therefore, he proposed extending the discussion on the subject.

37. The Government member of China affirmed his Government's support for the adoption of international instruments on contract labour, which should be the product of tripartite discussion and consensus. He commented that the adoption of a Recommendation could be considered if a lack of consensus persists. Regarding the scope of instruments on this topic, he stated that they should cover only those persons not already protected by law, namely, persons who are not in a formal employment relationship. He stressed the importance of ensuring that any instrument adopted would in no way diminish the protection and rights already enjoyed by workers under national law.

38. The Government member of Chile noted that the Committee continued to face numerous difficulties in coming to terms with the subject at issue. She reminded the Committee that contract labour did not encompass all relationships falling outside the classical employment relationship. It was important in the view of her Government that any instrument proposed by the Committee exclude workers who are already protected by existing Conventions. In this context, she cited the Private Employment Agencies Convention, 1997 (No. 181), covering workers supplied by intermediaries. She stated that the aim of the Committee should be to develop a ratifiable Convention. The subcontracting of goods and services was, according to her Government, different from the subcontracting of persons. She suggested that the Committee needed to discuss what type of protection should be provided to workers in triangular relationships. In situations where goods or services are subcontracted to a user enterprise, she raised the issue of how such workers should be protected, noting that in her country protection was provided through the concept of "subsidiary responsibility" (vicarious liability).

39. The Government member of Japan commended the Office on its efforts to facilitate the discussion of the Committee in providing the Addendum to Report V(2B), although it regretted the late dispatch by the Office. The Government supported it being used as the basis of the Committee's discussions. Acknowledging the confusion surrounding the topic of contract labour, he stated that this resulted from the existence of two different approaches to the issue. One approach is to examine the formal contract and determine if there is an employment relationship. The other approach looks at the actual conditions of dependency, in which case full protection may be granted. He stressed that the dependency or subordination of the worker to the user enterprise is the key issue. In defining contract labour, he called on the Committee to specify clearly what type of relationship was to be covered. He expressed concern that the Committee might introduce a third category of workers. Above all, his Government did not want to diminish in any way the extensive protection that workers in some countries already enjoyed.

40. The Government member of Switzerland recalled that, along with the Government members of Canada, Japan and the United States, his Government had expressed reservations concerning the proposed instruments on contract labour arising out of the first discussion on this subject. He remarked that while the Addendum to Report V(2B) proposed a simpler and clearer text and thus was a considerable improvement, his Government remained sceptical. He noted that in his country a person is either an employee or an independent contractor, the former category benefiting from all the statutory rights and advantages. No other type of worker is recognized in Switzerland. He asserted that the Office text attempts to create a third category, thereby decreasing the rights of workers already protected in his country. His Government was in agreement with the Government member of Canada that the term "travail en sous-traitance" was unsatisfactory, and suggested it be replaced by "travail sous contrat autre qu'un contrat de travail". He stressed that the Committee should work toward providing increased protection to contract workers and should in no way decrease the existing protection. In the view of his Government, contract workers should benefit from the same protection provided to employees, and the highest degree of protection provided for in the various relevant Conventions should serve as a reference. He ended by saying that his country would support the adoption of a Recommendation that calls on States to combat the most abusive forms of recourse to contract labour and promotes the assimilation of contract workers to employees.

41. The Employer Vice-Chairperson noted that although a large majority of the Government members had spoken in favour of accepting the Addendum to Report V(2B) as a basis for the discussion, a number of them did so with some reservations. The Employer members were of the view that the new text addressed some, though not all the problems they had raised concerning the text adopted the previous year. They were prepared to support the view expressed by the majority of the Government members to use the Addendum to Report V(2B) as the basis for discussion.

42. The Worker Vice-Chairperson stated that the Addendum had advantages and disadvantages. The advantages included the elimination of the definitions of subcontractor and intermediary, and the clarification that the instrument does not apply where the worker is an employee of the user enterprise, but can apply to employees of other enterprises. The disadvantages resulted, in the view of the Worker members, from the fact that it would be possible for States to ratify only one part of the Convention; the protections were fewer; and insufficient guidance was provided. While preferring the text that arose out of the previous year's discussion, the Worker members were prepared to work with the revised text. However, since the issue of whether a State should be able to exclude certain provisions of the instrument depended upon the substance of the text that would ultimately be agreed upon, the Worker members requested that Article 2(4) of the Convention as proposed in the Addendum be discussed after the rest of the text. The Employer members were not prepared to accept the change in the sequence of the discussion, stating that a clear majority of the Government members had supported, without qualification, the use of the revised text, and noting that a proposal for deferment could be made when the Committee addressed Article 2.

43. The Government members of Uruguay and Spain added their voices in support of using the proposed instruments set out in the Addendum to Report V(2B) as the basis for discussion. As the members of the Committee had unanimously supported this text as a basis for discussion, the Chairperson declared that the instruments proposed therein would be the texts to be considered by the Committee during the remainder of its deliberations.

44. The Worker Vice-Chairperson declared that the Employer members' proposition to limit the Committee's work to the consideration of disguised employment did not address the problems faced by the millions of workers in contract labour situations. Such an approach would merely avoid one subject by addressing another. He recalled that a number of the Governments had already stressed the need for an instrument that goes beyond the situation of disguised or fraudulent employment.

45. The Employer Vice-Chairperson asserted that his group was not trying to substitute one problem for another. The Employer members saw no difficulty in the Committee dealing with disguised employment, particularly since some of the Government members had voiced support for this approach, and certainly many had expressed reservations concerning the creation of a third category of workers and the adoption of a Convention. The Employer Vice-Chairperson stated that very few practical illustrations had been raised by the Government members, and that the Committee should not be concerned with formulating instruments to address the specific problems of taxi drivers, agricultural workers or truck drivers; if any instrument were to be adopted, it should be general in scope. Recalling the statement of the Government member of Zimbabwe, in particular with reference to workers engaged for fixed periods of time, the Employer Vice-Chairperson stated that, in the view of his group, these persons appeared to be employees rather than contract workers, but should be treated as employees. He went on to address a comment that had been made concerning occupational safety and health protection, pointing out that the provision of such protection does not depend on the category into which a worker falls; rather, it is a responsibility resting on the enterprise where the work is being performed.

46. Embarking on a discussion of the particular texts before the Committee, the Government member of Peru commented on the different forms of employment covered by the different parts of the Convention. The first part of the Convention, she stated, deals with specific contracts: contracts of employment, but also those encroaching on the commercial sphere. The second part refers to triangular relationships. She stressed that the Committee needed to be clear in setting out what it wished to regulate, and urged the Committee to look to existing Conventions for guidance.

47. The Government member of Cyprus asked the secretariat to indicate what relationships were not included within the scope of the proposed instruments. She also called for more discussion concerning disguised employment and commercial relationships. In response to the first question, the representative of the Secretary-General acknowledged that one of the elements provoking confusion is the concept of "employee". He explained that there were countries where employee status is identified with the existence of an employment contract. Other countries, however, distinguish between employees with a contract of employment and those workers who do not have a contract of employment but, due to conditions of dependency or subordination, are regarded as being in an employment relationship. The second category would fall under the definition of contract labour in the definition provided. The question is then whether this group is to be entitled to full protection as employees or to specific protection. With regard to the workers who would be excluded, he mentioned independent contractors whose relationship was not characterized by a sufficient degree of dependency or subordination; thus they would be regarded as being truly independent. He stated that a more detailed elaboration of the jobs that could be excluded would be a matter for national law and practice.

48. The Government member of the Syrian Arab Republic stated that his Government understood that Part I of the proposed Convention applies to workers in a direct bilateral relationship or in a triangular relationship. In an indirect triangular relationship the worker would enjoy protection under Part I and in addition, under Part II, responsibility would be apportioned between the original employer and the user enterprise. He queried whether, in an indirect triangular relationship, a worker would enjoy the full protection provided for in the Convention, as well as the protection afforded to employees pursuant to labour law. The Government member of the Netherlands also requested clarification on the relationship between Parts I and II. In addition, he queried whether the exclusion of employees of private employment agencies in Article 2 implied that the proposed Convention fully covered other workers made available by a private employment agency to a user enterprise.

49. The representative of the Secretary-General clarified that Article 1, which is the definition applicable to the entire proposed Convention, focuses on the relationship between the worker and the user enterprise, and addresses both bilateral and triangular relationships. Part II, however, deals specifically with employees of another enterprise and concerns the allocation of responsibility between the two enterprises, which is only one manifestation of a triangular relationship. He confirmed that workers in a triangular arrangement would benefit from the same protection as contract workers in general. He also confirmed that workers made available to a user enterprise by a private employment agency, and who were not employees of the agency, were within the scope of the proposed Convention.

50. In an attempt to achieve a common understanding, the Government member of Japan asked whether the term "employee" as used in the proposed Convention applied only to workers with a formal contract of employment. The representative of the Secretary-General responded that "employee" did indeed mean a worker with a contract of employment, though some countries recognize employee status in the absence of a contract of employment.

51. The Employer Vice-Chairperson asked for information as to the consequences of providing workers with the formal status of an employee regardless of the existence of an employment contract. He queried whether it would be appropriate to give all workers who had the characteristics of an employee the status of an employee. The representative of the Secretary-General pointed out that in some countries, particularly in some European countries, the same protection is given to both categories of workers.

52. The Government member of Canada pointed to the need for clarification of the definition and the scope of the proposed Convention. He suggested that the Committee address three preliminary questions. Firstly, in seeking a definition of contract labour, the Committee must ask whether, pursuant to national legislation, there is a category of workers that has a relationship with an employer that is not recognized as an employment relationship, but which is characterized by a degree of dependency or subordination similar to that of an employment relationship. If the answer to this question is no, then the sole purpose of the discussion, in the view of his Government, would be for ILO Members to assure themselves that any protection that already exists is effectively applied. If, however, the answer is yes, the second question becomes relevant, that is whether the Committee wants to afford protection to this group. If the response is affirmative, then the Committee must decide if it wishes to treat them differently than those in a recognized employment relationship. If yes, a third category would be created. If no, then the task of the Committee would be to find ways to assimilate these workers to employees.

53. The Government member of Spain stated that the category of people needing protection should be clearly defined. In the view of her country, focus should be placed on the bilateral relationship, since triangular relationships give rise to fewer problems. Two types of bilateral situations were mentioned, namely where a relationship appears to be commercial in nature but is in fact an employment relationship, and where the relationship falls between that of an independent contractor and an employee. She characterized the approach taken in the proposed texts as encroaching on the scope of independent contractors, since they were clearly not involved in an employment relationship.

54. The Government member of South Africa responded to the questions posed by the Government member of Canada by saying that yes, such workers did exist and indeed needed protection. She posed an additional question concerning the existing law and practice in countries that already protected these workers. In South Africa, she noted, formalistic tests exist to determine whether there is an employment relationship. She emphasized the need for substantive tests based on the concept of dependency and subordination. She expressed her Government's concern regarding the concept of assimilation, cautioning that it might be appropriate and possible in some, but not in other, situations. She suggested that this concern could be addressed through the introduction of the notion of equity.

55. The Government member of the United States sought to clarify the scope of the definition of contract labour through the process of elimination. He stated his understanding that independent contractors, employees of the user enterprise and fraudulent employment relationships were not within the scope of the proposed Convention. The secretariat confirmed this view. He asked the secretariat to clarify what the situation would be if a company hired workers from another company to expand their computer system. Would those employees be considered to be contract labour, and would this depend on who was paying them or the length of time they were working with the second company? The representative of the Secretary-General replied that it would depend on the degree of dependency or subordination. If the computer company sent workers just to install the equipment, there would not be a sufficient degree of dependency or subordination. However, if a long period was involved or a permanent servicing of the system, the situation could be different. He stressed the importance of the degree of dependency or subordination in determining whether contract labour could be considered to be involved or not.

56. The Government member of Chile pointed out, firstly, that in countries such as hers reference is made not to a contract of employment, but rather to an employment relationship, which is based on dependency and subordination. Where there is an employment relationship, there is deemed to be an employment contract, regardless of the formal arrangements. Secondly, she stated that the concepts of dependency and subordination needed to be clarified, in particular she raised concerns regarding situations of semi-dependency and semi-subordination, and queried whether such concepts should be included in the instruments. She stressed that any international standard on this subject should be of a general nature and flexible enough to reflect the various national situations.

57. The Government member of Argentina was concerned that the Committee was entering into a grey area that confused employment contracts and commercial arrangements. As these areas were already addressed in many countries through national legislation and the Constitution, consideration needed to be given to clarifying the role that an international instrument could play. In the view of his country, the proposed Convention was attempting to establish a new category of worker, which would give rise to confusion concerning the responsibilities involved and the varying level of guarantees. His country was of the view that a person either was or was not an employee.

58. A member of the secretariat responded to the concern raised by a number of Government members to the effect that the provisions of any Convention ultimately adopted on contract labour could diminish protections already existing pursuant to national law. She referred to article 19(8) of the ILO Constitution which makes it clear that the adoption or ratification of a Convention would not affect any law, custom or agreement which provides more favourable conditions to the workers concerned.

59. The Government member of Mexico commented that the scope of the instrument needed to be more clearly defined, and the objective of the instrument should be to guarantee a minimum level of protection to all contract workers. The scope should be defined, in the opinion of his Government, to address the problem of the triangular relationship since in such a situation it is often not clear who bears responsibility for the worker. He explained that, in his country, three criteria need to be met in order for an employment relationship to be found to exist: (i) performance of work by the worker himself or herself; (ii) a relationship of subordination; and (iii) the worker receives wages for the work performed. The instrument, he asserted, should clearly define the function and scope of the protections, and should not confuse situations, such as where services are provided exclusively to one enterprise, and where they are provided to many. The apportionment or sharing of responsibilities where two enterprises are involved, he stated, needed to be addressed.

60. The Employer Vice-Chairperson recalled the comment of the representative of the Secretary-General that there are several countries where workers are considered as being in an employment relationship due to the conditions of dependency and subordination under which they work, and are, despite the absence of a contract of employment, entitled to full protection as employees. He questioned how prevalent this approach was, and remarked that there are also many countries where these workers are provided with only partial protection. He reiterated the Employer members' view that where such workers have the characteristics of employees, they should be entitled to the formal status of employees, with all the legal protection such status involves. He also recalled that the problem perceived by his group is that there is often an absence of a clear means of dealing with fraudulent arrangements, and that this was the problem that needed to be addressed. With reference to the comment made by the Government member of South Africa as to the need for a substantive rather than a formalistic test for the determination of the existence of an employment relationship, he responded that the substance of such tests is indeed important. Such tests, he stated, should be global in nature, and should involve consideration of a number of criteria. He then commented on the example of the worker hired to expand a company's computer system raised by the Government member of the United States. He asserted that his group could not accept the view of the representative of the Secretary-General that, on a continuity test, this person could fall within the scope of the proposed Convention since, in their view, this worker would clearly be considered an independent contractor under any other employment test. He raised the difficulty of drawing lines when speaking of degrees of dependency or subordination. He asked the secretariat to clarify the meaning of "assimilation" which had been raised during the discussions, as well as the meaning of "similar to" found in Article 1 of the proposed Convention.

61. Responding first to the meaning of "assimilation", the representative of the Secretary-General pointed out that this term is not found in the proposed Convention or Recommendation, but had been raised by the Government member of Canada. He stated that the term would mean, in the context of contract labour, that a worker would be treated as an employee for specified purposes. Concerning the use of the term "similar to", found in Article 1 of the proposed Convention, he noted that it did not mean "identical to", but rather the use of the term was a recognition that there are different degrees of dependency and subordination. He remarked that, therefore, the range of tests that could be applied to determine dependency or subordination in the case of contract workers could be different from those used to determine employee status. The Employer Vice-Chairperson stated that such a definition of "similar to" introduced new difficulties, and that the definition set out in the proposed Convention was totally unsuitable.

62. The Government member of Spain stated that, given the differences in the legal systems of the countries present, it would not be possible for a Convention to accommodate the establishment of a fixed common minimum level of protection. The Committee's objective should, therefore, in the view of her Government, be to provide generally applicable guidelines to combat fraudulent employment relationships.

63. The Worker Vice-Chairperson stressed that contract labour is a real situation facing real workers and poses a challenge for labour law. The problem is a growing one that, in the view of the Worker members, must be addressed sooner or later by all countries. He commented that most of the Government members seemed to accept the need for standard setting to address this problem. The Worker members acknowledged that the approach adopted must be flexible and broad enough to take into account the member States' different legal systems, but that the Convention should also be anchored in fundamental principles. He raised the issue of the problem created by the difference existing between commercial and employment contracts, namely contracts among equals versus contracts among unequals. He asserted that a Convention needed to address the situation whereby an employer structures or manipulates relationships in such a way as to avoid an employment relationship. He maintained that some of that manipulation constituted fraud, but some was lawful; however, in both cases, protection would be needed. He went on to state that the issue of contract labour is not limited, as it affects millions of workers in construction, agriculture, manufacturing and transport, as had been illustrated in Report VI(1). The Worker Vice-Chairperson illustrated his point by enumerating the types of workers affected, and giving examples of particular situations. Amongst others, examples were drawn from the construction industry where carpenters may be considered as small building companies, and from the agricultural sector where crop-pickers may be regarded as agricultural service companies. In addition, he noted that migrant plantation workers, employed by intermediaries, are often not provided with social protection by either the plantation owner or the intermediary. Continuing his illustration, he gave an example from the information technology sector, where a programmer may work alongside a computer company employee who is performing equal work under equal circumstances but does not receive comparable benefits. The programmer is an employee of another company set up for that purpose. Individual cases were highlighted such as that of a construction worker who was killed on-site but who was not the subject of compensation, due to uncertainty as to the identity of his employer. Another case occurred where several workers lost their lives in a serious industrial accident and their identity could not even be determined. Other cases mentioned included taxi drivers who are regarded as transportation providers even though they do not own the vehicle they drive, and long-haul truck drivers whose wage rates are fixed by major freight companies but who are obliged to purchase their own equipment. The Worker Vice-Chairperson continued with the example of hotel workers who were once employees but who now perform the same work on a piece-rate basis, and home-care workers, looking after the sick and elderly, who may not themselves benefit from minimum social protection. In short, he concluded by stating that millions of workers are dependent, as far as rates of pay, and hours and content of work, including orders and promotions, are concerned, on someone who is not their employer. Contract labour, he stressed, is a growing phenomenon, resulting in workers being deprived of their rights to minimum protection and to bargain collectively over wages and working conditions.

64. In the light of the Worker Vice-Chairperson's remarks, the Government member of Lesotho queried whether the situation of contract labour could not better be dealt with at the national level. In response, the Worker Vice-Chairperson stated that it would be in the general interest of society to recognize and address the problem at the international level. He went on to note that whether or not a worker was protected would ultimately depend upon how the relationship was characterized at the national level. The Employer Vice-Chairperson interpreted the remarks of the Government member of Lesotho as meaning that the complexity of the subject made it difficult to address at an international level.

65. The Government member of France suggested that, in attempting to define contract labour, a positive definition should be adopted that could be inspired by the notion of "false self-employment" as it is termed in his country. Those workers in a situation of dependency or subordination similar to the situation of an employee should benefit from equal treatment with employees. His Government was of the view that States should establish the procedures necessary to ensure such equality of treatment. He recalled the terms on equality of treatment in Article 5 of the proposed Convention as it had emerged from the previous year's discussion (and which no longer appears in the draft Convention as set out in Report V(2B) Add.). If equality of treatment could not be put in place, then the Committee should seek to meet the dynamic objective of formulating guarantees that would evolve to meet changes in the world of work.

Consideration of the proposed text
contained in Report V(2B) Add.

A. Proposed Convention concerning contract labour

Preamble

66. The Government members of Argentina, Brazil, Chile, Guatemala and Mexico submitted an amendment to delete the title of the proposed Convention and the entire text of the Preamble. The Government member of Chile stated that the justification for the proposed amendment was that, in their view, the entire text under discussion was unclear and superficial and thus inadequate to protect this category of worker. She pointed out that the Government members had had difficulty in understanding the scope of application of the proposed instrument and it had been impossible for them to reach a consensus. Acknowledging that the issue is of vital importance to millions of workers worldwide, she stated that further general discussion was needed to determine the scope of application, formulate a systematic structure and determine what type of instrument was appropriate for adoption.

67. The Government member of Argentina observed that the differences between the members of the Committee arose due to linguistic, terminological and conceptual problems in the proposed texts. If the Committee was unable to clearly define the subject matter with which they were dealing, then further difficulties would be generated, including increasing the precariousness of contracts. His Government recommended that a prudent approach be taken given the lack of a common conceptual understanding of the term "contract labour". He urged that any further discussion of this subject should include a discussion of the scope of individual contracts of employment. The Government member of Guatemala endorsed the comments made by the previous speakers. Her Government was concerned that the objectives of the instrument and the definition of the group of workers to be covered remained unclear. She urged the Committee to reconsider the definition in a way to ensure that it would in no way undermine the existing rights of workers. However, given the late stage of the discussions on this issue, her Government believed that it would be impossible during this session to reach an agreement on such a definition; thus they had proposed the amendment under consideration.

68. The Government member of Spain also associated herself with the remarks of the previous speakers. She explained that, although her Government accepted that the proposed texts under consideration were an improvement over those that arose out of the previous year's discussion, they were still inadequate. She pointed out that Article 1 of the proposed Convention addressed four groups of workers; her Government believed that it would be illogical and inappropriate to apply one standard of protection to such diverse categories of workers.

69. In supporting the proposed amendment, the Government member of Peru noted that the differences in interpretation between languages and countries had already been evident during the previous year's discussion. He stated that, in his country, a regime of subcontracting through intermediaries exists which was different from that found in some other countries. He stressed that any instrument adopted needed to generate productive employment and ensure adequate protection as work continues to evolve in the next century.

70. The Employer Vice-Chairperson declared his group's support for the proposed amendment, noting that it was inspired by many of the same views that they had been expressing. He recalled that the Employer members had repeatedly raised the linguistic, conceptual and definitional difficulties with the text, and had insisted that this was not a suitable subject for standard setting. Contract labour being a dynamic and evolving contributor to job creation, the Employer members could not support the adoption of any new standard which would invariably interfere with ordinary commercial relationships. They would view any action that led to the adoption of an instrument on this subject with the utmost seriousness. Although they accepted that the texts under discussion were better than the previous texts, these still did not provide an acceptable basis for consideration of an international instrument. The Employer Vice-Chairperson stated that his group would consider taking strong action should the Committee go forward to propose instruments based on the proposed texts.

71. While recognizing the existence of problems concerning terminology in the proposed Convention, the Worker members believed that these were not insurmountable. The Worker Vice-Chairperson stated that his group opposed the amendment to delete the Preamble, citing two primary reasons. First, contract labourers around the world would not be adequately protected in the absence of an ILO Convention. Second, they believed that the Committee should only decide the question as to the nature of the instrument to be adopted after having had the benefit of a full discussion on the definition, which would include a discussion of the linguistic concerns. He emphasized that the Worker members were realistic in their view of the role of the Convention: it should ensure that the justification for and principles governing the employment relationship are not lost in the changing world of work. He urged the Committee not to forestall further standard setting on the issue, and to recognize the modest and flexible nature of the proposed Convention. The proposal to consider the definition, before determining what form any instrument should take, was endorsed by the Government members of Australia, China and India.

72. The Government member of Cyprus opposed the proposed amendment, as her Government believed that there was a need for a Convention on contract labour. The Government member of the United Kingdom, speaking on behalf of the Governments of the Member States of the European Union, with the exception of Spain, also opposed the amendment. The Government member of Austria explained that the revised Office text had been accepted as providing a good basis for discussion; what was being proposed through the amendment would only render the discussions more difficult. The Government member of the United States expressed his Government's opposition to the proposed amendment; however, he stated that there was still a need for greater clarity in the definitions. Similar views to those expressed by the Government member of the United States were voiced by the Government members of Canada and Cameroon. The Government member of Trinidad and Tobago commented that, although it was unfortunate that the Committee had not had the benefit of a full discussion on the changes in the world of work, her Government believed that the Committee could fruitfully continue with its work as there seemed to be a consensus on the need to ensure at least a minimum level of protection for all workers.

73. The Government member of Mexico clarified that the proposed amendment did not seek to avoid the subject being addressed; rather its objective was to ensure a high level of protection for these workers, which could not be achieved on the basis of the proposed text. He contended that, in order to further this objective, it would be necessary to discuss the subject again in the future on the basis of a clearer and more realistic text. The Government member of Chile reiterated the need for these workers to be protected by granting them equal treatment and not through casualization and a diminution of their rights.

74. The Government member of South Africa, in opposing the amendment, urged the Committee to focus on the need to protect workers without a contract of employment working under conditions of dependency or subordination. She commented further that these workers deserved protection and, therefore, the Committee should not postpone its consideration of the instruments before them. Rather than adopt the proposed amendment, she asserted that the Committee should continue to address the issues, including the problems of terminology; in this context, she drew the attention of the Committee to the need to discuss Articles 1, 2 and 4 of the proposed Convention.

75. The Government member of Peru questioned the scope of the proposed Convention, stating that the Committee should not seek to regulate something without being clear as to the scope of what was to be regulated. The speaker stated that any Convention adopted must be ratifiable and capable of being applied in practice. She emphasized the view of her country that any Convention must contribute to social peace and not cause conflict. Similar sentiments were expressed by the Government member of Brazil, who stated in addition her Government's objection to the proposed Convention because it confused private law, commercial law and labour law concepts. Her Government was also of the view that the proposed Convention created a third category of worker, thus weakening protections already existing under national law.

76. The Employer Vice-Chairperson suggested that underlying the concerns that had been raised was the notion of the need for a third discussion on this subject, and he reminded the Committee that it was the Office that had raised the possibility of a third discussion in its introduction to Report V(2B) Add. Furthermore, he noted that the members of the Committee had had little time to consider the revised text found in that report. The Government member of Chile confirmed that, as a result of the proposed amendment, it was hoped that this session could be devoted to a general conceptual discussion, with the prospect of a third discussion being put on the agenda of a future Conference. The Government member of Cyprus, however, stated that it was still premature to decide whether or not a third discussion would be appropriate.

77. The Government member of Argentina, responding to the remarks of the Government member of Cyprus, argued that the Committee should not be prepared to adopt a Convention at any cost and should more extensively debate the issues involved. His Government accepted that a legitimate problem exists that must be solved, but this could not be done by creating a category of "second-class" workers benefiting from less protection. The Government members of Brazil, El Salvador and Uruguay supported the proposed amendment and further conceptual debate on the subject.

78. The Government member of India expressed concern at what appeared to be a diminishing level of consensus. In stating his Government's opposition to the amendment, he noted that contract labourers, including homeworkers, agricultural workers and construction workers, constitute a significant and vulnerable part of the workforce, who are denied social security and other benefits and are in need of protection. He urged the Committee to reflect seriously upon the needs of these workers and not to postpone such consideration to a later date.

79. The Employer Vice-Chairperson, in response to the remarks of the Government member of India, stressed that any consensus based on the text of the proposed instruments would not include the Employers' group: it would attract their total opposition. He also remarked that the Committee had been informed earlier of the existence of a law in India for the abolition of contract labour, going beyond what was proposed in the draft instrument. If this is the case, the adoption of an international instrument on the subject would make no difference in that country.

80. To illustrate the linguistic problems apparent in the French and Spanish versions of the proposed instruments, the Government member of Canada provided a literal translation into English of the terms used in the other languages, which would result in the text being called the Proposed Convention on subcontracting (or outsourcing). He demonstrated how those members of the Committee who were not using the English text of the proposed instrument might well have difficulty understanding precisely what evils it was seeking to remedy.

81. To clarify the situation facing the Committee should the proposed amendment be adopted, a member of the secretariat recalled that the Committee had taken the decision to base its discussion on the Addendum to Report V(2B) and move on to examining the proposed instruments. It had a mandate to report to the plenary of the Conference on the basis of the documents that had been referred to it. In accordance with the Standing Orders of the Conference, the Committee was obliged to consider all amendments that had been submitted to it. She pointed out that if the amendment to delete, now under discussion, was adopted, the Committee would move on to the next Article. If, later in the proceedings, substantive Articles were adopted, a Preamble of a purely formalistic nature would need to be added, which would be done by the Drafting Committee. In response to the call by a number of the Committee members to continue a general discussion on the matter, the member of the secretariat stated that it was not within the power of the Committee to formally substitute a general discussion for the mandate it had been given by the Conference, which was to report back on the basis of reports containing proposed instruments. Referring to the point made by the Employer Vice-Chairperson, that the intention of the proposed amendment was to oppose the adoption of a Convention in favour of a Recommendation, the member of the secretariat stated that, nevertheless, if the amendment were adopted, the Committee would still be obliged to consider the other Articles of the draft Convention, which could be taken up for inclusion in a Recommendation. As a practical matter, she noted that the Committee could continue to discuss the relevant issues generally in the context of the particular Articles. The Employer Vice-Chairperson commented that as the Committee had been discussing the issues in a general manner, it could continue to do so.

82. Since the amendment under consideration seemed to be based on the need for a third discussion on contract labour, the Employer Vice-Chairperson requested clarification as to how the Committee could achieve this. In response, a member of the secretariat stated that, to act on the desire expressed by several Committee members to have an additional discussion at another session of the International Labour Conference, a member of the Committee would need to propose a draft Conference resolution for consideration by the Committee. The submission and adoption of this resolution in the Committee would be governed by the provisions of articles 63 and 65 of the Standing Orders of the Conference. She went on to explain that, if adopted, the resolution would be referred, along with the Committee's report, to the plenary of the Conference for adoption. Regarding the possible content of such a resolution, she reminded the Committee that different procedures applied for placing an item on the agenda of the Conference for standard setting or for the purpose of a general discussion. Different rules also applied regarding the timing of a possible further discussion. A resolution could also recommend that the Conference take other action, such as asking the Office to undertake more research. She noted that, since a resolution would necessarily recommend action to be taken by the Conference, it would have no legal effect on the work of the Committee, and the discussion on the proposed instruments would normally continue.

83. The Government member of the United States proposed a motion, pursuant to article 63 of the Standing Orders, to postpone consideration of the amendments on the Preamble until the Committee had fully considered Article 1 of the proposed Convention. The Government members of Argentina, Brazil, Canada, Chile, China, Guatemala, Japan, Mexico, Peru, South Africa and Spain supported the motion. The Worker members also expressed their support. The Employer Vice-Chairperson explained that his group had proposed amendments to Article 1 which were based on the assumption that a decision would already have been taken as to the form of the instrument. Despite this difficulty, the Employer members were willing to support the view expressed by the majority to commence with a discussion of Article 1, on the understanding that they would need to seek the cooperation of the Committee in respect of certain of their proposed amendments to that Article.

Article 1

84. As had been requested by several members of the Committee, an open discussion on the definition under Article 1 took place prior to consideration of the specific amendments that had been submitted. The Government member of Argentina explained that his understanding of "subcontratación", as found in the Spanish text of the proposed definition, is subcontracting involving a relationship between a subcontractor, the user enterprise and the worker. He commented that, pursuant to the law of his country and other Latin American countries, this relationship is addressed to ensure shared responsibility between the two enterprises and full guarantees to the worker. The Government members of Chile and Peru confirmed that this indeed was also the situation in their countries regarding "subcontratación", and they also therefore questioned the appropriateness of this term as used in the proposed instrument. The Government member of Argentina noted that the definition proposed in the draft instruments includes bilateral relationships and not merely the trilateral one characteristic of his region. His Government was particularly concerned that, pursuant to the proposed definition, individual contracts with workers would be permitted, which could undermine collective agreements, to the detriment of those workers. His Government objected to the introduction of individual contracts in countries where they are not prevalent, taking workers out from under the umbrella of collective agreements, and risking the creation of second-class workers. The Government member of the United States commented that, had the equivalent words found in the Spanish and French translations of the texts been included in the English version, i.e. subcontracting, his Government would also have had serious problems with the definition.

85. The Government member of Canada asserted that the fundamental question was the situations the proposed Convention was seeking to address through the definition in Article 1. He reiterated his Government's position regarding the linguistic difficulties, pointing out that what had been termed "contract labour" in the English text, had been translated into French and Spanish as "subcontracting". Despite the use of this term in the Spanish and French texts, the subject under discussion was not subcontracting, and he observed that the terms "subcontracting" or "outsourcing" are absent from the English text. He emphasized that, pursuant to the dictionary definition of "subcontracting", it necessarily involves a triangular relationship. As a result of these linguistic differences, he underscored the importance of clearly identifying the problem to which the Committee was seeking to find a solution. In the view of his Government, the objective was essentially to ensure that workers who do not automatically have employee status, but who are in a position of dependence or subordination comparable to that of employees, should be recognized as having certain guarantees. Such protection was necessary, he asserted, since in the labour market there exist workers who are marginalized because they essentially fall through a gap in the definition of "employee" and thus are outside the scope of the labour law. He outlined how this situation has been addressed under Canadian law: those workers in a relationship of subordination or dependency are considered to be "dependent contractors" as opposed to "independent contractors", and the term "employee" has been defined for certain purposes as including a dependent contractor.

86. The Government member of Cyprus maintained that the Office definition of contract labour, as it appears in the revised text, represented an improvement over the previous definition, as it was simpler and more flexible. She argued that the proposed instrument was not intended to cover independent contractors, rather only those workers who were more or less employees, due to their position of subordination or dependency. She indicated, however, that it was not as clear whether disguised employment was outside the scope of the definition. In addition, she questioned whether the terms "dependency" and "subordination" both needed to be included since they appeared to be quite similar. The representative of the Secretary-General responded that the term "dependency" characterizes mainly the economic aspects of the contract labour relationship. In this context, he pointed to certain criteria found in the proposed Recommendation, including the extent to which the user enterprise makes investments and provides tools, etc. to perform the work; whether the worker can make profits or run the risk of losses in performing the work; and whether the worker works for a single user enterprise. Regarding the term "subordination", he explained that it relates mainly to the organizational aspects of the relationship. Examples of criteria for determining subordination could also be found in the proposed Recommendation, including the extent to which the user enterprise determines when and how work should be performed, whether the user enterprise pays amounts due to the worker periodically and according to pre-established criteria, and the extent of supervisory authority or control of the user enterprise over the worker with respect to the work performed.

87. The Government member of Chile, while agreeing that there were linguistic difficulties with the proposed definition, stated that the central concerns did not stem simply from these difficulties, but rather from significant conceptual differences. One main issue is the need to determine who the employer is, for purposes of establishing responsibility. She explained that in her country, unlike in some other countries, any worker performing work under conditions of subordination and dependency would be treated as an employee. She recalled that the secretariat had assured the Committee that countries providing a higher level of protection than that required under a Convention that might be adopted on contract labour, could still ratify the instrument. In the view of her Government, however, the lower level of protection in a Convention could give rise to pressure to deregulate, and thus to create a third category of workers with minimal protection. With respect to the issue of fraudulent relationships, she indicated that, where existing rights are violated, it is the responsibility of the State to ensure that the law is applied. This was especially important in her country, where 90 per cent of the workforce had only the law to rely on. She noted that the proposed Part II of the Convention was of considerable interest, however, since it addressed triangular relationships.

88. The Government member of Peru stated that the Committee had reached a critical point in its deliberations in seeking to establish a clear, objective and transparent definition. He recalled that 1998 marked the 50th anniversary of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). He suggested that the Committee's work should be inspired by the broad scope and accessibility of that Convention. In the view of his Government, the scope of "contract labour" remained unclear, in particular there was confusion as to whether it included both bilateral and triangular relationships. If only bilateral employer-employee relationships were to be addressed, his Government could not accept the need for an international instrument, since such relationships were already well defined in national law and international instruments.

89. The Government member of Spain commented that difficulties arose from the linguistic problems mentioned by a number of other speakers, as well as the various concepts and objectives being confused in the text. She restated her Government's position that it would be inappropriate to apply one standard of protection to the diverse situations encompassed by the definition in the proposed Convention. She raised the concern that the instrument could result in the creation of a category of second-class employment with a lower level of protection. On the other hand, with respect to self-employed workers, Article 5 of the proposed Convention could provide too much protection. Regarding fraudulent employment, her Government did not believe that the approach taken by the proposed instrument was appropriate. The Government member of Guatemala endorsed the views expressed by the Government member of Spain. She added that the labour legislation in her country could not accommodate the definition provided in the proposed Convention, since it would result in the creation of a third category of worker and diminish the rights that workers already enjoy. In the view of her Government, this third category does not exist in Guatemala; therefore, finding an acceptable term would likely prove difficult.

90. The Government member of South Africa responded to the concern raised by a number of speakers that the proposed Convention risked creating a category of second-class workers. If that were the case, she stated, it would be contrary to the principles upon which the ILO is based; however, that was not the objective of the instrument. She referred to the Office report illustrating that, while there are workers who still work within the traditional employment relationship, that situation is becoming less and less prevalent, giving way to a number of different situations. She repeated the examples of workers in the transport sector and homeworkers who are not paid a formal wage. She urged the Committee to acknowledge that there exists a group of workers outside the conventional employment relationship, but working under a similar form of subordination or dependency. Once the existence of the situation was acknowledged, she suggested that the Committee would then be able to examine how best to protect these workers, including giving consideration to the concern raised by a number of Committee members as to the need for equality of treatment.

91. Accepting the existence of linguistic and conceptual difficulties in the proposed definition, and different customs and traditions affecting the approach to this subject, the Government member of India encouraged the Committee to try to understand and acknowledge the very serious problems faced by the vast number of contract labourers in many countries. These workers, he explained, often receive a lower wage than regular employees, are denied social benefits, health and safety protection and job security, and are often exposed to dangerous working conditions. These workers, he submitted, can be found in all sectors of activity, including construction, agriculture, plantations, manufacturing, docks and hotels. In his country, these workers number in the millions, and there was, in the opinion of his Government, an urgent need to provide protective measures for such workers. He recalled that the role of the ILO is to promote workers' rights and to assist in protecting the unprotected. While his Government was prepared to accept the proposed definition, he suggested that the Committee members objecting to the definition should make efforts to formulate an alternative that would be acceptable to them, rather than postponing consideration of this important matter.

92. The Government member of Japan acknowledged that there were differences in legal systems and described the labour law system relative to the coverage of workers in Japan. In that country, it is not necessary for workers to have a formal employment contract in order to be considered employees; the actual nature of the relationship is examined, rather than the form. He explained that the criteria of dependency and subordination were also used to determine the existence of an employment relationship. The proposed definition, therefore, was in these respects acceptable to his Government. However, the term "similar to" was problematic, in their view, since it could create a third category of worker. He contended that problems could also be caused by the fact that it would be difficult to reach consensus on the meaning of the term "employee", which varies from country to country.

93. The Worker Vice-Chairperson pointed out that the mandate of the ILO is not limited to protecting employees, but extends to all workers. The formulation of a definition of contract labour would, in the view of his group, provide an important contribution at a critical point in time. He noted that the formulation of a definition did not create obligations; the Committee would have the opportunity to determine the scope of the obligations when discussing the other Articles of the proposed Convention. He stressed that the role of the Committee was to seek to define an actual situation where workers perform work under conditions of dependency or subordination but do not, for whatever reasons, receive protection. The instrument under discussion, he stressed, is not directed at determining how businesses are organized, nor did it concern itself with the type of work that could be done or the nature of the arrangements between enterprises. He assured the Committee that the proposed Convention was flexible, in that it provided extensive scope for Governments to determine the criteria to be established to ascertain dependency or subordination. The definition should also be viewed as satisfactory since it ensured that workers could not be denied employment status based on criteria that could be easily manipulated, even where such manipulation was in conformity with the law. As an example, he described the situation of a worker forced to buy equipment (such as sewing machines in the garment industry), who is then treated as being self-employed. He also maintained that the definition did not create a new type of worker but only identified an existing group in need of protection.

94. In response to a request from the Government member of the United States and to the concerns raised by a number of other Committee members, the representative of the Secretary-General recalled the situations that the proposed instruments sought to cover. He clarified that contract labour was understood as covering all situations in which a worker performs work for an enterprise with which the worker does not have a contract of employment, but whose relationship with the enterprise is characterized by conditions of dependency or subordination, similar to the conditions existing in a relationship between the enterprise and its employees. The worker may be self-employed working under a commercial contract, or may be made available by another enterprise which may or may not be his or her employer. He explained that this broad definition covered both bilateral and triangular relationships. He recalled that the tests for determining dependency and subordination are similar, but not necessarily identical, to those applied in determining the existence of an employment relationship, the difference being in the range of tests to be applied. He acknowledged, therefore, that the proposed instruments could lead to the recognition of a new category of worker, between employees and self-employed workers. However, this would not result in the weakening of the position of workers already protected as employees. On the contrary, he explained, the proposed instrument would provide some protection to workers who are not now receiving adequate protection or any protection at all because they work for an enterprise under a contractual arrangement regarded as a commercial relationship under current law and practice. He emphasized that the proposed instruments were not aimed at carving off a group of "employees" to create a new category of worker, but rather to draw some of the workers in self-employment towards the status of employees, without totally identifying them with employees.

95. Recalling the earlier discussions in the Committee, the representative of the Secretary-General went on to note that a large number of countries prefer to deal with the protection of these workers in the grey zone by classifying them clearly as an employee or a self-employed worker. However, the fact remains that many workers are still deprived of adequate protection where they are not defined as employees under current national law and practice. He commented that many countries had already recognized the need to deal with this category of workers in a special manner. In this context, he described the Canadian approach, based on the concept of a "dependent contractor", and endowing these workers with employee status for specific purposes, including collective bargaining rights. He noted that special treatment of a particular category of worker was not limited to contract labour; in many countries a number of atypical categories of workers, for example part-time and temporary workers, are treated specially with respect to some labour law protections. The Employer Vice-Chairperson said that his statement confirmed many of the concerns held by his group, and asked for it to be provided in writing to the Committee.

96. The Employer Vice-Chairperson contended that the general discussion on the definition had led the Committee no closer to reaching consensus. In the view of the Employer members, an instrument based on the proposed definition would not satisfy a sufficient number of Governments for any resulting instrument to have any real and practical effect. In their view, it would be an instrument that would in fact have negative effects. He noted that the linguistic problems concerning the French and Spanish versions of the text had not been solved. Recalling the concerns raised by the Government member of Argentina regarding individual contracts, he asserted that individual contracts are a fact of life, and in many countries they provide a wholly legitimate alternative to collective contracts, which many workers prefer. As to the Canadian approach of establishing a category of "dependent contractors", the Employer Vice-Chairperson characterized this as a unique approach, illustrating the range of approaches that have evolved in this area, which would be impossible to capture in one instrument. The Employer members found the characterization offered by the Government member of Cyprus that the instrument applies to people who are "more or less employees", to be problematic. The Government member of Chile had suggested that contract labour always involved triangular relationships, and the Government member of Peru had commented on the prevailing confusion as to the scope. The Employer Vice-Chairperson pointed out that pursuant to the proposed definition, both bilateral and triangular arrangements are encompassed. He then referred to the previous comments of the Government member of Spain and to the concerns expressed by the Government member of Guatemala, illustrating how difficult it would be to achieve precision in a definition. As to the earlier remarks of the Government member of South Africa, the Employer members believed that the reliance on some form of dependency or subordination would give rise to uncertainty. She had also referred to transport drivers and pointed out that homeworkers did not perform work on the premises of the enterprise for whom they worked. The Employer members did not regard homeworkers as contract workers, and believed that many transport workers actively sought independence and wished to be entrepreneurs.

97. The Employer member of India presented some observations on the particular situation in India, noting that while there was considerable recourse to contract labour in that country, not all of those workers were exploited. He contended that inflexibilities in the labour market had given rise to the widespread need for contract labour. He also reminded the Committee that India had adopted the most stringent law on contract labour, providing for its abolition in certain industries. Yet he remarked that despite the existence of the law, problems remained with its application, indicating the limits of a legal approach such as that sought through the proposed Convention. The Employer member of India concluded by asserting the need for extensive labour law reform in his country, where, in his opinion, there was too much freedom of association. Following up on the comments of the Employer member of India, the Employer Vice-Chairperson addressed the apparent contradiction between the prohibition on contract labour in Indian law and the Government member of India's remark that there were millions of contract workers in India needing the protection of an ILO instrument on the subject. He concluded that this pointed to a problem in enforcement of the law which the Government needed to address, and which would not be resolved by the adoption of an international instrument. If on the other hand the Government considered further legislation to be necessary, it was its responsibility to ensure that it was enacted.

98. The Employer Vice-Chairperson went on to call attention to the concern raised by the Government member of Japan regarding the creation of a third category of worker, as well as the lack of a common concept of the term "employee". He then responded to a number of the comments made previously by the Worker Vice-Chairperson. Regarding the example of the workers being forced to buy their own sewing machines and then work as contractors, for instance, he remarked that the real question was whether they were in fact contract workers or employees under the specific circumstances. He reiterated the view of the Employer members that seeking to cut across a commercial relationship where two enterprises are involved is an area of major difficulty for his group. He proceeded, in response to the Worker members' concern about carpenters being told they are companies, by stating that many carpenters prefer to be employed under commercial contracts, and no element of exploitation enters into the equation. Concerning technology programmers, he observed that in many cases these workers are paid more, not less, than employees due to their special skills. As for self-employed taxi drivers who did not own their own vehicles, he noted that vehicle ownership was only one test for determining their status. Regarding migrant workers being denied employment protection, he suggested that this was a very specific matter which should be dealt with separately, and not within the context of the proposed Convention. With regard to the example of the unfortunate death of a construction worker, he said that his group agreed that it was always important to be able to establish the identity of the employer. However, the proposed instrument was not necessary in that respect.

99. In summing up his comments, the Employer Vice-Chairperson asserted that enormous confusion remained on linguistic, conceptual and definitional matters, particularly since the vast diversity of national law and practice made achieving a common definition extremely difficult. He also repeated the concerns raised by various Government members about the creation of a third category of worker, the lack of a common understanding regarding the terms "dependency" and "subordination", and the linguistic problems in the French and Spanish texts. Given the host of concerns raised, he concluded that it would be a disaster for the Committee to adopt a definition in the proposed form, since it would result in an instrument that was incapable of ratification or application. He did, however, acknowledge once again his group's belief in the need to deal with the specific issue of disguised employment, and referred to the amendment proposed by the Employer members on that issue. He noted that the definitional matters in this amendment were dealt with by a process of exclusion rather than inclusion, and along with other proposed amendments provided the basis of the proposal of the Employers' group for a Recommendation on the subject. He concluded by cautioning that the adoption of a definition along the lines of that proposed would result in confusion, an inability to ratify and implement the instrument, unnecessary regulation and discouragement of contract work, diminished job opportunities, a loss of labour market flexibility, and an interference in commercial contracts and arrangements. So rather than elect such a route, the Employer members raised the alternative of a further discussion on contract labour in the future, and advised that they would be submitting a resolution to that effect.

100. In response to the remarks of the Employer Vice-Chairperson, the Worker Vice-Chairperson reasserted his group's position that the definition in Article 1 would cover many workers in need of protection. He underscored the point that the ILO existed to protect workers, and the Workers' group would not allow its purpose to be restricted to protecting employees. He noted that a growing number of dependent workers were unable to enjoy basic worker rights because their employer determined either that they were not employees, but rather independent contractors, or that they were the employee of another employer. The effect in both cases is that the employer, or perhaps the user enterprise, denies responsibility for the worker, a responsibility that must be met for the worker to be protected. Furthermore, in a triangular relationship, being the recognized employee of another enterprise is not sufficient, as acknowledged explicitly in the Private Employment Agencies Convention, 1997 (No. 181). He observed that many workers who are considered independent contractors actually work under conditions of dependency or subordination to the user enterprise which are similar, or sometimes even the same, as employees: they have no other employer, they have no freedom to decide the content of the work they do or how and when to perform it. He pointed out that, while some of these workers would be found to be employees if they challenged the arrangement in court, in reality few workers could exercise this option since the outcome may not be clear at the outset, and many workers would fear being dismissed as a result. In the case of workers who meet some, but not all, of the criteria for being considered an employee, the Worker Vice-Chairperson observed that many countries have extended the scope of the employment relationship to offer protection to these workers. He noted that others have addressed this problem through the creation of new legal categories: he then cited the examples found in Canada, Germany and Japan.

101. The Worker Vice-Chairperson went on to enumerate some of the benefits of the proposed Convention, both in extending basic worker rights to dependent and subordinate workers and in granting countries the flexibility to choose an appropriate solution. He noted that it should be possible for any dependent worker to have easy access to legal procedures to clarify his or her employment status; however, until the status is established, the worker would need the protection of an international instrument. Where a country chooses to broaden the scope of the employment relationship beyond the traditional scope in order to encompass dependent workers, then once the employment relationship is established, these workers would not need the protection of the Convention. He noted further that a country might choose to create special legal categories to afford these workers basic protection, which would be inspired by the protection mandated in the proposed Convention. He confirmed that, regarding the category of bilateral dependent relationships dealt with in Article 1, the matter was not limited to disguised employment relationships. The Convention sought to afford dependent workers basic protections, until either a clear employment relationship was established, or some other way, left up to national law and practice, was found to protect these workers. He referred again to Convention No. 181, noting that it confirms the appropriateness of regulating triangular relationships, particularly with regard to matters such as health and safety, the payment of taxes and social security contributions, and shared responsibility for the payment of wages. He maintained that the proposed Convention should regulate the same matters vis-à-vis enterprises other than private employment agencies. Furthermore, he noted that disguised employment relationships did exist in triangular situations as well. In addition, the Worker members were of the view that the proposed Convention should provide workers in a triangular relationship with basic protection, regardless of what their legal status was determined to be and whose employee they were deemed to be. In conclusion, he noted that, despite the differences inherent among various legal systems, the problem of contract labour could be defined and tackled so that dependent workers would not become victims of the legal concept of the employment relationship which had initially been developed to protect them.

102. Speaking on behalf of the Governments of the Member States of the European Union, the Government member of the United Kingdom stressed the need to protect unprotected or inadequately protected workers. The purpose of this standard-setting exercise, in their view, was to address situations that are similar to employment situations, and to combat disguised employment. In the latter case, workers should be reclassified and treated as employees. While the eventual aim should be to ensure equal treatment for all categories of workers, in the meantime there was a need to lay down minimum standards. He drew the Committee's attention to the fact that the definition in Article 1 was derived from wording suggested by the Governments of Member States of the European Union during the first discussion on contract labour. They believed that the definition was broadly usable and flexible enough to cover those in need of protection; thus it continued to be a satisfactory basis for the future work of the Committee.

103. Having completed the general discussion on the definition under Article 1, the Committee went on to consider the amendments that had been proposed thereto. The Government members of Argentina, Brazil, Chile, Guatemala and Mexico withdrew their proposed amendment to delete Article 1. The Government member of Chile explained that those who had proposed the amendment believed that, in the light of the discussion that had taken place on the definitional concerns, the Committee had significantly advanced in its work. It had become clear that the proposed instrument was aimed at helping to protect workers. She expressed her Government's hope that, given that a common level of understanding had been reached, at least as to the objective, the Committee would then be able to reach an agreement on the text. The Government member of Argentina endorsed the position of the Government member of Chile, and restated his Government's concern about the use in Spanish of the term "subcontratación" and the need to ensure that any instrument does not create a category of second-class workers. The Worker Vice-Chairperson expressed his group's appreciation for the good faith gesture in withdrawing the amendment, and their desire to work with the members of the Committee to find an appropriate solution to meeting the common objective.

104. Before introducing their proposed amendment, the Employer Vice-Chairperson commented further on the statement that had been made earlier by the representative of the Secretary-General, which in the view of his group was highly significant. He stated that it gave cause for serious reflection and confirmed some of the reservations they had expressed about the implications of the proposed text, particularly the potential for interference with commercial/contractual arrangements. The Employer Vice-Chairperson then turned to the issue of his group's proposed amendment to delete the entire text of Article 1 of the proposed Convention and replace it by a new text. He noted that the Employer members had proposed amendments to Article 1 which were framed on the assumption that a decision would already have been taken regarding the form of the instrument, and that this discussion had been postponed. The amendment at hand was the logical companion to a number of other amendments that the Employer members had submitted to change the title of the instrument and also the reference to it throughout the Preamble from Convention to Recommendation. If the Committee had decided in favour of a Convention, they would have withdrawn their proposed amendment. He therefore proposed that the Committee should suspend discussion of this amendment and one they had submitted to delete the word "Convention" and replace it by "Recommendation", and move on to discuss the other proposed amendments which dealt with the substantive text of Article 1. They could then return to a discussion of the Preamble and if the Committee decided to proceed on the basis of a Convention they would withdraw the two amendments.

105. A member of the secretariat recalled that the Committee had previously decided to defer discussion of the Preamble until it had fully considered Article 1. It was then agreed by the Committee that two of the Employer members' proposed amendments would be taken up at the end of the discussion of the other amendments proposed to Article 1.

106. The Employer Vice-Chairperson then introduced an amendment to replace the word "or" by the word "and" in the fourth line of the Article, so that the work performed by the contract worker would need to be performed "under actual conditions of dependency on and subordination to", rather than "under actual conditions of dependency on or subordination to" the user enterprise. He explained that the effect of the amendment would be to clarify the operation of the proposed criteria for dependency and subordination. The Employer members were concerned that the existing wording would allow for too broad an application of the definition. In their view, it was necessary to have a tighter test for determining whether a person would fall under the definition, thus both dependency and subordination should be required. He noted that in the written statement of the representative of the Secretary-General, the same phrase, "dependency and subordination", appeared repeatedly. The statement had also alluded to the so-called control tests contained in Paragraph 2 of the proposed Recommendation, which could be used to determine whether "dependency", involving mainly economic aspects, and "subordination", involving mainly organizational aspects, of the contract labour relationship exist. The Employer members felt strongly that there was a need to link the test of dependency with that of subordination, otherwise the Committee would run the risk of making a nonsense out of its exercise. To illustrate the consequences of only having to satisfy one criterion, either dependency or subordination, he described the case of an electrician or a plumber who entered into a commercial contract with an enterprise to carry out an installation. The worker might carry out work for three to six months exclusively for that enterprise. According to a test of dependency in Paragraph 2, subparagraph (g), of the proposed Recommendation, namely whether the worker works for a single enterprise, the worker would fall within the scope of the definition. He also gave the example of an independent contractor who was working under an arrangement to be paid periodically and according to pre-established criteria, in accordance with the criteria in subparagraph (b) of that same Paragraph; he felt that such an independent worker would also fall under the definition. He insisted that the definition must be sensible, practical and workable, and should not draw workers within the scope of the instrument who really should not be included. He acknowledged that, while their proposed amendment was not their preferred alternative, it was at least an attempt to make an unsatisfactory definition a little more satisfactory.

107. The Worker Vice-Chairperson opposed the amendment, stating that it would reduce flexibility in national law and practice and could be used to exclude workers from coverage unnecessarily. Member States should have the right to choose which criteria they wanted to adopt. He saw no reason for the Committee to begin limiting the coverage of the instrument before it had determined the rights that should be granted to such workers. He ended by pointing out that the effect of the Employer members' amendment would be to make the instrument less likely to be ratified.

108. The Government member of the United Kingdom, speaking on behalf of the Governments of the Member States of the European Union, opposed the proposed amendment since it narrowed the scope of the definition. The Government member of South Africa also opposed it for the same reason. The Government member of Japan explained that in his country an element of subordination, which he referred to as the commissioning of work, was an essential factor in determining the employment relationship. He was, therefore, in favour of using the word "and" instead of "or", as set out in the proposed amendment.

109. The Employer Vice-Chairperson restated his group's view as to the need for a tighter definition. He gave a further example of a situation where a person was renovating a house and had entered into commercial contracts with persons who were clearly independent, self-employed workers. They could perhaps work for a period of several months under an arrangement that they would be paid certain amounts at certain times. If the notion of dependency alone applied, those independent workers would come within the definition, when, in the view of the Employer members, they clearly should not. The Government members of Mexico and China indicated that their Governments would support the amendment. The Government member of Chile indicated that she would have to abstain since her Government believed that the definition still needed to be refined, and in her country both criteria were used together. The Government member of Argentina observed that the question of dependency and subordination was only part of the definitional issue since there were other criteria to be considered as well. He stated that his Government was in favour of greater flexibility for the worker, and the use of the word "or" would provide this. His Government thus opposed the amendment. The Employer Vice-Chairperson warned that the proposed definition was putting the rights of contract workers above those of self-employed workers and individuals and companies entering into commercial arrangements. He reiterated that the proposed amendment was intended to produce a proper and effective test before a worker would be included within the scope of the definition. In response to the point raised by the Government member of Argentina, the representative of the Secretary-General confirmed that the proposed definition which uses "or" would indeed provide more flexibility and give broader coverage to contract workers. The Government member of Trinidad and Tobago stated that, on the basis of what the representative of the Secretary-General had said, her Government opposed the proposed amendment. The Government member of Chile noted that, in the light of the explanation given, her Government would oppose the amendment, because if both subordination and dependency were present, the scope of the Artic