19 June, 2011
The Organisation for Economic Cooperation and Development (OECD) has adopted updated Guidelines for Multinational Companies. The new OECD Guidelines were adopted on 25 May at a signing ceremony led by US Secretary of State Hillary Clinton and attended by AFL-CIO and TUAC President Richard Trumka.
The update contains a number of positive elements, including a chapter on Human Rights and the unequivocal application of the Guidelines to suppliers and other business relationships. The Trade Union Advisory Committee to the OECD (TUAC) statement on the update of the guidelines states: “These elements significantly increase the relevance of the Guidelines and their potential to raise the standard of responsible business conduct in a global context. The success of the Update now depends on its prompt and full implementation both by adhering governments and by the OECD.”
The updated Guidelines have particular relevance to Contract and Agency Labour as the coverage extends to those “in an employment relationship with the multinational enterprise.” The commentary to Chapter Five on Employment and Industrial Relations clarifies that the terminology is consistent with that used in the ILO Multinational Enterprises’ Declaration and refers enterprises wishing to understand the scope of their responsibility under Chapter Five to the non-exhaustive list of employment relationship indicators set forth in ILO Recommendation 198 of 2006, paragraphs 13 (a) and (b).
Paragraph 13 of R198 states that the indicators of the existence of an employment relationship might include:
(a) the fact that the work: is carried out according to the instructions and under the control of another party; involves the integration of the worker in the organization of the enterprise; is performed solely or mainly for the benefit of another person; must be carried out personally by the worker; is carried out within specific working hours or at a workplace specified or agreed by the party requesting the work; is of a particular duration and has a certain continuity; requires the worker's availability; or involves the provision of tools, materials and machinery by the party requesting the work;
(b) periodic payment of remuneration to the worker; the fact that such remuneration constitutes the worker's sole or principal source of income; provision of payment in kind, such as food, lodging or transport; recognition of entitlements such as weekly rest and annual holidays; payment by the party requesting the work for travel undertaken by the worker in order to carry out the work; or absence of financial risk for the worker.
The OECD MNE Guidelines are available here.
The TUAC Statement on the updated Guidelines is available here (PDF)