By: Yonah Wasik; Senior Staffer

In over 100 years of international arbitration, courts have settled only one labor arbitration case. In April 2013, the Rana Plaza Factory in Dhaka, Bangladesh, collapsed and killed over 1,100 workers in the garment industry, injuring many more. By 2018, the Permanent Court of Arbitration (PCA) oversaw and settled the first international labor arbitration regarding the collapse between two global unions and a private entity.  The lack of arbitration comes not from the lack of international agreements on labor standards, as evidenced by the numerous declarations from the International Labour Organization (ILO).  The lack of international cases is more likely because no mechanism can adequately hold multinational corporations accountable to the international standards set by the ILO.  Currently, the ILO can hear 25 cases against state parties each year through the Committee on the Application of Standards (CAN). However, that mechanism lacks enforceability and can only see a limited number of cases. Other options include numerous international courts of arbitration, such as the PCA or the International Chamber of Commerce (ICC), but these options are costly and more specialized in investor-state relations than international labor law. Therefore, an arbitral mechanism at the ILO could better effectuate justice for workers.

The CAN is a standing body of representatives from states, employers, and workers that reviews a report from a committee of experts at the International Labor Conference each year. The CAN is the closest thing to an enforcement body at the ILO and focuses on 25 or fewer cases in which states are non-compliant.  It then presents non-compliant states with recommendations and support. For example, in 2023, they evaluated Afghanistan’s poor treatment of women and children in almost every industry and sector. The CAN and all its members acknowledge the extreme decline in protections and rights of women and children in labor since the Taliban took control in 2021 but did no more than “condemn” the Taliban’s actions and “urge them to stop their discriminatory and violent practices.” The CAN uses “naming and shaming” to encourage states to apply ILO conventions. Experts widely regard this as ineffective in securing rights and protections for the world’s laborers for various reasons.  First, the CAN may only hear a limited selection of cases. Also, the CAN may only hear cases against states, and cannot hear complaints from individuals, classes, or unions.  Lastly, there is no guarantee that a state will take CAN recommendations or comply with ILO conventions.  Maybe most concerning is that the CAN does not have the capacity or ability to hear individual cases or respond to non-party states. If the CAN could apply its “naming and shaming” powers to individual cases, it could coerce some states into providing remedial measures to those individuals. Under the current structure, individuals are unlikely to receive aid even if a state follows the CAN’s legislative and administrative recommendations.

International courts of arbitration have issues that differ from that of the CAN  Courts such as the PCA, London Court of Arbitration, and the International Chamber of Commerce provide a venue for arbitration and mediation for individuals, states, and corporations.  In the past couple of decades, global unions have pushed for global collective bargaining with multinational corporations using Global Framework Agreements (GFAs). This kind of organization allowed for the Rana Plaza case at PCA and could conceivably make courts of arbitration a viable option for protecting the rights of workers.  However, there are two major problems with this strategy. First, these courts tend to be expensive, costing roughly one million USD for each case.  This represents a significant cost for a growing global union. It is more problematic that most large states and their corporations want no interaction with GFAs. Because corporations from states such as the U.S. and China avoid signing GFAs, individuals often lack the opportunity even to bring their cases before a court of arbitration.  This results in a patchwork of courts that are nowhere near as accessible to protect the rights of workers around the globe.

The ILO could use its standard-setting power to encourage more states to enforce the use of GFAs and access to global unions.  This would likely slowly expand the reach of global unions and increase the accessibility of arbitral courts. 

Yonah Waskik

An arbitral mechanism at the ILO could fix some of the problems posed by the currently available mechanism by combining the enforcement power of arbitral courts alongside the political power of the ILO.  The ILO could use its standard-setting power to encourage more states to enforce the use of GFAs and access to global unions.  This would likely slowly expand the reach of global unions and increase the accessibility of arbitral courts.  An arbitral mechanism hosted by the ILO would then be able to hear a wide range of cases from individuals, states, and corporations in a forum specialized to handle labor disputes.  A mechanism at the ILO would likely be less costly and more effective due to its specialty.  Scholars recognize governments should initially focus on expanding GFAs and domestic legislation to increase the power of global unions, but access to a less expensive and specialized mechanism could best utilize this change to effectuate justice for workers around the globe.