Contract Labor and Precarious Work

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Click here for a printable document on contract labor and precarious work.

Emelita, 49, started to work at a Dole Philippines pineapple processing facility in 1979. After 11 years, she was compelled to voluntarily “resign” from the plant. Regular workers were being replaced by “contractuals”. The company was busting the workers’ union. More than 3,000 workers resigned. Today, her husband, Romeo, still works at the processing plant and one of their five children labors as a harvester. Dole provided jobs, yes, but she asks, does the family have a future?

WHAT IS PRECARIOUS WORK?

Labor rights protections are being undermined worldwide as workers are seeing permanent, regular jobs being replaced by contract labor and temporary, unstable work. This phenomenon has become known as "precarious work" by the international labor community. In the US, its easiest to describe as temporary workers. A current outlook of the situation is described in an October 2009 American Prospect article.

Jobs in all sectors are being outsourced or subcontracted from employment agencies or labor “cooperatives” and short-term contracts have become more common. Many jobs have become temporary and workers have been wrongly classified as independent contractors. These workers are subject to unstable employment, lower wages and more dangerous working conditions. They rarely receive social benefits and are often denied the right to join a union. Even when they have the right to unionize, workers are scared to organize if they know they are easily replaceable. Unionized workers also suffer because with fewer members, they have less power at the bargaining table and less ability to grow. Click here to read the IUF report, "Outsourcing and Casualization in the Food and Beverage Industry"

CORPORATE CONNECTION

Dole Philippines, Coca-Cola, and countless other corporations have used contract labor as a systematic tactic to undermine unions and avoid taking responsibility for their workers. Read ILRF's report on the 5 worst companies for union organizing for more case studies.

Dole Philippines
The Dole Philippines union has also been undermined as nearly 77% of Dole Philippines' workers at their unionized pineapple processing plant are outsourced, many through labor "cooperatives". Read ILRF's report,"The Sour Taste of Pineapple" for more information. Click here to read ILRF testimony to the USTR regarding Dole's request for trade benefits on pineapple juice. ILRF demonstrated that Dole Philippines undermined decent work and sustainable development by overusing contract labor. Note that Del Monte's practices are even worse as it buys nearly 100% of its pineapples from contract farms in the Philippines.

Coca Cola
A July 2008 ILO mission to investigate labor relations and working conditions at several Coca-Cola bottling plants found a clear difference between the employers’ relationship and treatment of directly employed workers as compared to outsourced workers. In one Bogota plant, 70% of the operating staff, and 85% of the distribution staff is now outsourced, contracted through associated work cooperatives or employment agencies. A large number of these workers were formerly direct employees but the company forced them to change their status.

These outsourced workers do not have the right to unionize and thus, the unions in the many of the bottling plants are slowly disappearing. The ILO recommends that the company limit the number of contract workers and to assure that current contract workers are provided the same rights and benefits as regular workers. The union in one plant has been able to limit the number of contract workers at their facility through collective bargaining.

Drummond Coal

16 workers producing for Alabama-based Drummond Coal in Colombia have died on the job, including 3 deaths in 2009. Drummond has used subcontracting to evade responsibility for these workers' deaths.Read more on Drummond here.

COLOMBIA

Colombia has seen a dramatic rise in the number of subcontracted jobs in various forms. The anti-union Uribe administration has done little to prevent employers in Colombia from systematically using agencies such as labor "cooperatives" and subcontractors. The pending US-Colombia free trade agreement has put pressure on the Colombian government to curb indirect contracting but legal measures have not been enforced.

Sugar Cane Cutters
10,000 Colombian Sugar Cane Cutters staged a 56 day strike in the fall of 2008 in protest of horrendous working conditions. Like other Colombian agricultural workers, cane cutters are predominantly hired by subcontracting agencies and labor cooperatives. After striking, they won a better wage system and other benefits, but will still be denied the right to permanent employment and a direct contract with their employer. Read more here.

Cut-Flower Workers
Flower workers in Colombia are also increasingly pushed into company constructed labor cooperatives without understanding their rights or employment relations. A 2008 survey done by Corporacion Cactus showed that 35% percent of flower workers were not employed directly. Some farms employ all workers from employment agencies or work cooperatives. The overuse of subcontracting has severely undermined women workers' rights in the cut flower industry, though organizing has helped women workers maintain their rights.

EMPLOYER STRATEGY

The use of contract labor and "precarious work" is part of the a global business strategy to undermine decent work and cut labor costs through labor market “flexibilization” or casualization. To understand what is at the core of this employer strategy, it is important to understand that the entire framework of labor law, including international labor law, is based on the permanent employer/employee relationship. "Precarious work" is not a mere short-term tactic to reduce costs or to defeat a union organizing drive, but a long-term strategy for shedding all obligations to workers and eliminating all employee rights based on the existence of an employment relationship.

From a historical perspective, employers discovered over time that slave labor was not economically efficient and that legally "free" workers could be contracted without the cost of providing them housing and food. Workers struck back by organizing unions and winning the right to bargain collectively as employees. Now employers are trying to turn the clock back by ridding themselves of permanent employees as such. Many employers have created a world of work where there is no longer a need to bust unions or use violence against union leaders when they can just take away the potential members.

THE GLOBAL ECONOMIC CRISIS

In the midst of a global economic crisis, market instability will fall hard on those millions of workers with insecure jobs. Contract, temporary or casual workers without union representation have no bargaining power to negotiate for severance pay or other safeguards when layoffs occur. Companies will likely use the excuse of the international recession to further erode labor rights and reduce regular permanent jobs, contrary to the notion that stable jobs are the key to building the middle class needed for a sustainable economy in the future.

SUBCONTRACTING IN THE U.S.

Companies are undermining worker rights through subcontracting schemes in the U.S., as well.
Hundreds of unionized truck drivers in Washington State went on strike in the fall of 2008 after their company, Oak Harbor, refused to bargain in good faith with members. They were replaced with temporary workers from an employment agency who may become long-term subcontracted workers.Read ILRF's report here

CAMPAIGNS TO END PRECARIOUS WORK

More and more international unions are coordinating campaigns to end "precarious work" and "labor flexibilization".
Click here to learn more about the Global Union Federation campaign.

The International Metal Workers (IMF) found that 90% of its affiliates have seen an increase in “precarious work,” or some form of unstable or contract labor, in the last year.

If you read Spanish, check out the Central American Regional Campaign Against Labor Flexibility