International Labor Standards in the Global Economy

Over the years, trade unions have been exercising pressure on multinationals to sign international framework agreements (IFAs), which are negotiated between a global union’s federation and a corporation to apply to the company’s global operations, often including their supply chain. For trade unions, IFAs are a way of promoting recognition of their organization and worker rights at a global level.

The question arises, can an IFA or code of conduct be enforced in a court of law? And what law would the court apply? If a country has ratified an International Labor Organization (ILO) convention, it must make sure that its national law conforms to the terms of that convention. But a court could decide that a reference to an ILO convention or specific international labor standard (ILS) is so unambiguous and clear that it has become part of the IFA and must be considered a contractual obligation of the company.

It may be true that IFAs and some other corporate instruments are not designed to be legally enforceable, but multinationals should be aware what commitments they enter into when signing one. They should carefully consider what the consequences are, or might be, of references to ILO conventions, ILS, the ILO Fundamental Principles at Work, and other similar
bodies of rules.

It might also be worthwhile to verify that the IFA or any such instrument does not conflict with the national law of the country or countries in which it is doing business.