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After long struggles, some unions have been able to include contract workers in collective bargaining arrangements while others have successfully demanded that employers’ reduce or eliminate the use of contract labor.
Various countries have passed legislation to eliminate the use of employment agencies or grant full rights to contract workers.

China

China passed a new Labor Contract Law in December 2007 that mandated non-fixed-term contracts for long-time employees and reinforced existing wage and hour laws, including overtime regulations. In October 2007, the Chinese Ministry of Labor and Social Security issued Regulations on Employment Services and Employment Management that sought, among other things, to rein in abuses by sub-contracted labor recruitment companies. Chile, Namibia, and Ecuador have moved legislation to this effect. Enforcement of these laws will be the biggest challenge.

Colombia

Colombia has a notoriously precarious workforce. The government has passed decrees to limit labor "cooperatives" but in practice, such measures are not enforced and other forms of contract labor persist. Click here to read case studies of flower and sugar workers.
Tell Congress to hold off on the US-Colombia Free Trade Agreement until the Colombian government puts an end to contract labor and trade union violence!

Cambodia

Cambodia is considering moving legislation in a negative direction regarding short-term contracts. Cambodia has made modest progress in promoting worker rights over the last ten years and such a move would be major step in the wrong direction. Progress is now being severely undermined by the garment industry’s wholesale shift to use of temporary work contracts – and, most recently, by a manufacturer-backed attempt to remove all limitations on such arrangements through amendment to the country’s labor code. Click here to read how the ILRF is working with the Worker Rights Consortium to curb this labor law change.

Mexico
Contract labor is one of the top issues that will be discussed in the coming (and imminent) reform to the Mexican labor law. The country’s Secretary of Labor has great interest in giving more attributions to the employment agencies, so they hire and dismiss workers without legal responsibility. Such a move would exemplify the failures of the North American Free Trade Agreement model in strengthening labor protections in trading partner countries.See below for more on Mexico, contract labor and trade.

Using International Institutions

The International Labor Organization (ILO) has recognized the problems with subcontracting agencies that serve to undermine workers' right to organize. The Private Employment Agencies Convention (No. 181) can serve as a tool to ensure agency workers' rights to unionize.

As part of the campaign to create permanent jobs for subcontracted temporary workers at Unilever Lipton tea factories in Pakistan, the International Union of Food Workers (IUF) filed a complaint with the Organization for Economic Cooperation and Development (OECD). The complaint has had some success in holding Unilever accountable for denying basic rights to the majority of its workers. The OECD Guidelines for Multinational Enterprises require overseas subsidiaries of transnational companies to conform to international standards of trade union and human rights, including adherence to ILO Conventions on the right of workers to organize trade unions and bargain collectively with employers. Unilever's policy of preventing workers from exercising their right to collective bargaining through subcontracting qualified as a violation.
While the Khanewal Lipton struggle constinues, the Rahim Yar Khan settlement with Unilever to make temporary workers permanent, constitutes an important union victory in the fight against disposable jobs.

Contract Labor and Trade Policy
Most U.S. trade policy, in Free Trade Agreements, bilateral and multilateral agreements and the Generalized System of Preferences trade preference program, include some labor rights clause or side agreement stipulating that trading partners must enforce labor laws and rights to freedom of association and collective bargaining. Unfortunately, enforcement of these clauses have been extremely weak given the lack of sanctioning power in most agreements. The issue of violence and intimidation against union members has attracted a great deal of attention which has allowed civil society groups to pressure foreign governments and multinationals through trade related complaints. As free trade arguably attracts investors who are looking for cheap labor and lax labor law enforcement, employers abroad have taken up a new strategy of evading the labor conditions in trade by outsourcing their workforce through contract labor. Civil society is now testing out how the problems of contract labor and precarious work can be addressed through trade.

The North America Free Trade Agreement which has been in place for over a decade demonstrates how the current free trade model has failed to protect worker rights in developing countries. In the Mexican electronics industry, for example, outsourcing has become a widespread practice. Supply and demand change rapidly in the electronics market, causing the use of temporary workers to grow, thus providing industry with the flexibility it needs. Sometimes, up to 60% of the workers are on a temporary contract, missing out on social benefits etc.

Addressing Contract Labor through Voluntary Initiatives
Civil society stresses that labor agencies should be included in supply chain audits. Codes of conduct must not just apply to the next tier of ‘component suppliers’ but also to the next tier of ‘people suppliers’. There is a need to have quantitative data on factory level on the percentage of workers recruited and hired by labour agencies and to link this to audit results and data on code compliance. This information could be used for a cost-benefit analysis of employing regular workers versus hiring contract workers, in which costs such as training of temporary workers should be included. Such an analysis could be the basis for developing better practices.