Social partners formally consulted at G-8 labour ministers meeting

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Labour ministers from the G-8 leading industrialised countries met in Turin, Italy on 10-11 November 2000 in order to prepare the full G-8 summit which will take place in Genoa in July 2001. For the first time, a formal consultation with international-level social partner representatives on the themes of the conference was held prior to the meeting. The conference ended with agreement on measures such as improvements in working conditions, the development of continuing vocational training and the promotion of "active ageing".

The ministers of labour of the G-8 group of the world's most industrialised large countries (Canada, France, Germany, Italy, Japan, Russia, the UK and the USA) met in Turin, Italy on 10 and 11 November 2000 in order to prepare the full G-8 summit to take place in Genoa in July 2001. The conference was also attended by representatives from the International Labour Organisation (ILO), the Organisation for Economic Cooperation and Development (OECD) and the European Commission.

The economic context of the forthcoming Genoa summit is generally a positive one. The world economy continues to grow. New technology, which some observers had believed could lead to a reduction in labour demand, has had a positive effect in terms of employment. The recent increase in oil prices, which could have triggered inflation, also seems not to have compromised the positive economic trend - the level of inflation across Europe is generally not cause for concern and the economy has slowed down only a little. Growth perspectives are positive in the group of EU Member States that have entered the third stage of Economic and Monetary Union (EMU), and the March 2000 European Council in Lisbon set out the objective of achieving full employment in Europe by 2010 (EU0004241F).

The November Turin conference of labour ministers concentrated mainly on the impact of globalisation on the quality of work and on social cohesion. The conference involved various sessions and discussed the following themes: the knowledge-based economy and labour market policy; the ageing society; social inclusion; and "sharing prosperity in a globalised world".

Trade union proposals

It is an established practice that, on the occasion of G-8 summits, international trade union and employers' leaders meet the head of state of the host country, who in turn reports the outcomes of the meeting to his colleagues. The novelty of the labour ministers' preparatory summit in Turin was that, for the first time, trade union and employers' representatives had the opportunity to participate in formal consultation on the themes of the conference on the day before it formally started, as well as attending the ministers' meeting.

The trade union proposals for the labour ministers' conference were gathered in a document drafted by the Trade Union Advisory Committee (TUAC) to the OECD, in collaboration with the International Confederation of Free Trade Unions (ICFTU), the European Trade Union Confederation (ETUC) and the World Confederation on Labour. The document was discussed in the consultative preparatory meeting on 9 November and presented during the ministers' conference by Sergio Cofferati, the general secretary of Italy's Cgil union confederation, on behalf of TUAC.

The trade union statement to the G-8 labour ministers conference states that the meeting is taking place at a time that is crucial in four respects

1. there is an opportunity to continue to reduce unemployment with the aim of achieving full employment if faster growth can be sustained;

2. the implications of new information and communication technologies (ICT) (which G-8 started to examine at the July 2000 Okinawa summit, with the establishment of a "dot.force") mean that there is a need for a more developed policy response to the labour and social implications and in particular action to ensure that the "digital divide" does not further contribute to the "social divide";

3. there is growing public concern over the detrimental side-effects of an approach to globalisation based on simple deregulation of markets, whilst at the same time extremely little is done to assist the large majority of the world's population who remain trapped in poverty; and

4. there is a need to take stock of the labour market and social implications of the ageing of populations in the industrialised countries and to ensure that action is taken to ensure that equitable access exists to the labour market for older workers.

Employment

The unions believe that a return to full employment is possible for the first time in a generation, given current economic growth levels (though the favourable omarketutlook cannot be taken for granted). The call on the G-8 labour ministers to engage in a dialogue with the social partners on the action needed to remove any supply-side bottlenecks on the labour market. In the EU, the annual Employment Guidelines (EU0010276F) need to be reinforced. Active labour market and training and retraining measures need to be adequately financed and extra financial resources are required. More generally, it is seen as essential that social goals (reducing poverty and achieving greater equity) are integrated with economic strategies for sustaining faster growth. Policies to "make work pay" must be based on "increasing opportunities for decent work through the integration of well-set minimum wages, in-work benefits and policies to set career paths for low-income workers through raising productivity and access to training and retraining". It is essential that investment in adequate childcare and "negotiated adaptable work schedules" is used to ensure general equality and increase job opportunities for women.

Knowledge society

The statement underlines that the knowledge-based economy should guarantee "decent work". It is essential "to end the sterile debate on labour market flexibility and to step beyond the simplistic notion of 'flexibility', where workers are expected to give up social protection, decent wages, or job security whilst corporate executive remuneration rises explosively". In the knowledge economy, competitive advantage will lie with "those countries that have strong social cohesion built on investment in education and training as well as solid industrial relations that give workers an effective voice and the tools to influence change". The G-8 economies must lead the way by encouraging institutions that are "able to balance the market pressures of adaptation and dynamism with social concerns of security and dignity" - such as trade unions.

The risk of a "digital divide" appearing in OECD societies must be countered, say the unions. The "new economy "provides an opportunity to put in place an "agenda of action for the socially acceptable management of change". G-8 labour ministers should begin a serious examination of the workplace and labour dimension of ICT and, in conjunction with the social partners, make commitments to:

• invest in education and training systems appropriate to the needs of a knowledge-based economy;

• ensure that "lifelong learning" is made "a reality and a broad-based entitlement";

• promote agreements between trade unions and employers focusing on the management of change;

• ensure that workers and unions have the right of access to online information and communication networks at the workplace;

• encourage forms of work organisation providing for enlarged job content and enhanced skills;

• ensure, in partnership with unions and employers, affordable access by individuals to the internet;

• guarantee appropriate privacy and protection of personal data; and

• reaffirm the need for labour regulations to protect workers in their relationship with their employer - "new forms of work arrangements must not become a means to deny workers' rights".

Globalisation

The unions call on the G-8 labour ministers to give a clear signal that they will work for "a set of effective social rules to govern globalisation so as to achieve a more broadly-based and equitable distribution of the benefits of growth. Giving workers a voice at work is impossible if basic workers' rights do not exist." Trade and investment rules must be made coherent with wider public policy concerns such as environmental protection and sustainable development, food and product safety and the observance of fundamental labour rights. Developing countries must be better integrated into the World Trade Organisation (WTO) decision-making process and given increased access to industrialised country markets within a framework of adherence to core labour standards. The labour ministers should seek to build the social dimension of globalisation. The 1998 ILO Declaration on Fundamental Principles and Rights at Work should be applied through the international financial institutions (IFI s), OECD and WTO. The WTO and ILO should cooperate to ensure that the multilateral trading system is made consistent with observing core labour rights and environmental protection.

Ministers, according to the statement, should call for renewed action on the idea of a "social code" for the activities of the World Bank and International Monetary Fund (IMF). There must also be a structured arrangement for consultation with the trade union movement at the IFIs and WTO. The ministers should insist on the need to make export-credit support conditional on respect for core labour standards by host countries, along with proven implementation by recipient enterprises of the OECD Guidelines for Multinational Enterprises (EU0009270F). Efforts to relieve poverty should be stepped up, linked with respect for labour and other human rights.

A central part of the social dimension of globalisation must be the effective regulation of the global activities of multinational enterprises to ensure that they observe the core labour rights of their employees. The newly revised OECD Guidelines for Multinational Enterprises have the potential to contribute to the realisation of this goal, and the labour ministers must help ensure that governments and the OECD set up "rapidly transparent and effective implementation mechanisms", in cooperation with trade unions.

Ageing workforce

The statement calls for the industrialised countries to ensure that they maintain and improve social cohesion, living standards and economic dynamism against the background of ageing populations and demographic change. The wholesale replacement of public pension schemes by private schemes or capitalised schemes is not an acceptable response to the increasing costs of pension systems due to ageing of societies, nor is a cutback in pension benefits. The preferred approach, as already taken by some countries, includes efforts to broaden the basis of pension contributions and shift to "multiple pillar" systems, and to reverse the trend towards less time in work and more time in retirement. Strong public systems are more effective in providing wide coverage and portability of pensions, as well as having lower administrative costs and being more equitable.

The key to addressing demographic change, for the unions, is increasing activity rates by reducing unemployment amongst the population of working age as a whole, and in particular in the population over 50. There should be a smooth path for a flexible transition from work to retirement. Retirement should be a decision based on individual choice rather than economic compulsion. The trend towards early retirement is often a "second best" response to unemployment and company restructuring. The unions are prepared to play a major role in joint efforts to "reharness the extensive experience of older workers and reduce discrimination against them". Work organisation and workplace design must take account of the needs of older workers. Efforts must also be made to reduce the causes of work-related stress and ill health. This requires not only that possibilities for retraining and lifelong learning are made available to older workers, but also that the extension of working life is a voluntary decision by employees.

Labour ministers' conclusions

The conference of the Labour Ministers produced a set of conclusions and a G-8 Turin Charter: Towards active ageing. The main points of the conclusions are as follows.

• The current good macroeconomic performance is a necessary, but not sufficient, condition to address unemployment. The benefits of integrated employment strategies should be fully reaped, including the need to maximise the contribution of economic, social and environmental policies to employment growth. Employment and GDP growth prospects are likely to remain favourable over the medium term, and in order to consolidate them, it is of utmost importance to maintain a stable and growth-oriented framework. Appropriate macroeconomic tools available to government include an efficient and effective tax system and a balanced approach to monetary and fiscal policy. The social partners are invited to undertake "all the necessary steps" to support such a growth- and stability-oriented framework, while the labour ministers commit themselves further to address labour and skill shortages.

• "Full employment in a knowledge-based society" is the ministers' "overarching goal". They thus stress the need for continued structural reforms, including labour market reform, to improve the conditions for strong, lasting and non-inflationary growth. In the knowledge society,lifelong learning has become a crucial element of employment policy. Investing in people's knowledge and learning capabilities and promoting equal access of women and men to skill acquisition is extremely important to reap fully the benefits of the new technologies and to avoid skill shortages. To avoid marginalising groups such as lone parents, people with disabilities, ageing workers and the long-term unemployed, lifelong learning policies should stress the need to ensure equal access for all.

• The knowledge-based economy requires adaptability. Education and training systems have to support processes aiming at maintaining and enriching the skills of workers, putting a particular emphasis on the need to requalify older workers. The social partners should be invited to play an active role in further strengthening such policies. "New forms of work arrangements" may enable businesses to adapt and become more competitive and workers to adapt to change. They can also enable employees to balance the demands of family and working life. However, these new arrangements may, in some cases, increase risks of insecurity, weaken labour protection and increase inequality. Where appropriate, government, trade unions and employers need to ensure through dialogue at all levels that more flexible work arrangements are combined with security and with equal access to training and career development for employees, and with attention to issues such as" family-friendly" policies and the "work-life balance". Social security systems may need to be reviewed in order to adapt eligibility rule and strengthen proper economic incentives, while maintaining their financial viability.

• While the knowledge society creates enormous opportunities, there is also a risk of eroding social cohesion as well as the conditions for sustainable social and economic development. Access to opportunities must be provided for increasingly diverse labour forces, and prosperity must be widely shared. Enabling individuals to obtain and maintain productive, valued employment is key to enhancing social inclusion, and a "proactive approach to welfare" can promote social inclusion while increasing effective labour supply. Further steps have to be undertaken in implementing active labour market policies and removing barriers to labour market participation, such as: measures that facilitate the matching process between job-seekers and firms; literacy and training programmes; policies and programmes which promote equality, including gender equality, and the elimination of discrimination in the labour market; and policies that make work pay for workers with a relatively low earning capacity. Efficient measures to improve in-work income should be supported as "an instrument to prevent the phenomenon of working poor". A comprehensive and clear approach is required in order to tackle poverty, including both social measures and work incentives and actions.

• To avoid the risk of local and regional"high-unemployment traps", a comprehensive approach is required in which labour market and developmental policies interact. This involves integrating, where necessary, standard social and labour market policies with appropriate measures aiming at improving infrastructures and general economic conditions. Where necessary, measures have to be differentiated at the local or regional level, though remaining consistent with national objectives and equity concerns.

• Particular attention should be paid to the challenges presented by the ageing population, and a comprehensive approach has to be adopted that provides for opportunities and incentives for the active economic and social involvement of all generations. A policy of "active ageing" would also strengthen the financial sustainability of pension systems and other social security programmes. The ministers agreed the "G-8 Turin Charter: Towards active ageing", and submitted it for consideration to the G-8 leaders at the Genoa summit in 2001. The charter supports a "systematic approach" and proposes policies oriented "towards facilitating and supporting the participation of older people in economic and social life". To this end, the individual countries are urged to strengthen the financial sustainability of public pension systems and of other welfare provisions.

• On sharing prosperity in a globalised world, the ministers support policies designed to: encourage investments in social sectors such as health and education; enhance respect for core labour standards; and help bridge the "digital divide" both within the G-8 countries and between the developing and developed countries. Core labour standards should be respected worldwide through: promoting the ILO's 1998 Declaration on Fundamental Principles and Rights at Work and the 1999 Convention No. 182 on the worst forms of child labour; increasing cooperation between the ILO and the IFIs in promoting adequate social protection and core labour standards; urging the IFIs to incorporate these standards into their policy dialogue with member countries; stressing the importance of effective cooperation between the WTO and ILO on the social dimension of globalisation and trade liberalisation; and encouraging enterprises to implement the OECD Guidelines for Multinational Enterprises.

• The exchange of information on different national experiences will be encouraged, with a view to learning from each other and identifying best practices. The ministers support the efforts of the G-8 partners to deepen their comparative analysis of employment and social polices and encourage the OECD and the ILO to continue their work on employment and related social issues and to share their knowledge and expertise.

Reactions

Sergio Cofferati, the general secretary of Cgil, stressed the importance of the formal consultation held with the social partners during the Turin conference and added: "now we would like to take a step forward and discuss our proposals with all the heads of state".

Savino Pezzotta, the general secretary of the Cisl union confederation, speaking on behalf of the three main Italian trade confederations (Cgil, Cisl and Uil) said that the governments had agreed on the possible future involvement of trade unions: "now we have paved the way for the development of international concertation."

Cesare Salvi, the Italian minister of labour, said that the Turin meeting was very important, due to the impact it will have on the 2001 G-8 summit in Genoa: "the fact of having addressed subjects linked to globalisation such as employment, labour quality and social cohesion from the point of view of the labour ministers will deeply influence the next summit."

The ILO director general, Juan Somavia, said of the meeting: "we discussed the strategies to create more and better jobs - decent jobs able to meet individuals' ambitions not only in terms of remuneration but also in terms of personal and family security, without discrimination or oppression, with equal opportunities for both men and women".

Commentary

The November conference of G-8 labour ministers had two points of particular interest.

The first is political, in that the conference saw for the first time formal consultation among labour ministers, international trade union organisations and international employers' representatives. If this consultation also occurs in the preparation of the 2002 G-8 summit in Canada, it will represent an undoubted success for the social partners, which will acquire an important role in drafting the agenda.

The second concerns the importance attached to the issue of "active ageing" in Western societies and in particular in Europe. This phenomenon is creating profound social changes. The increasing numbers of immigrants who fill the gaps in the labour markets of the industrialised countries challenges consolidated traditions, ideas and cultures. The crisis of the welfare system and the pensions system in many countries increases uncertainty about the future. The obsolescence of older workers' skills creates the risk of social exclusion, which also applies to those young people who are not able to acquire the necessary skills to enter the labour market. The growth of new forms of flexible and "atypical" labour could produce a whole generation of young people in a precarious situation.

The traditional systems of industrial relations and tripartite concertation at national level do not seem able to produce successful solutions to these problems. The coordination of the actions of the social partners and of the governments at international level, and above all at European level, becomes a must. If the Turin conference is able to awake such awareness it will be remembered as a turning point in industrial relations. (Domenico Paparella, Cesos)