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Working Time Briefingpaper

Working Time Briefingpaper

Working and International Competitiveness

KATHERINE HAGEN

Working Time FES Briefing Paper April 2005 Page 2

1 Introduction This paper builds on the themes that were highlighted in the roundtable discussion. It is is at the centre of social and intended to facilitate further dialogue on the economic policy in a globalizing world. It is a issues of working time and international com- key element, along with and working petitiveness. conditions, for economic growth, an inclusive labour market and high rates. It The paper is directed to a review of the ongo- has been, furthermore, an integral element in ing quest for improved national and interna- the pursuit of social , specifically in the tional working time policies and the search for context of international standards defining better coherence among them. These chal- basic workers’ rights. Not only was working lenges are typical of the cross-border prob- time the subject of the very first ILO conven- lems between countries, between ministries, tion in 1919, but it has repeatedly been the and between inter-governmental institutions focus of ILO standard-setting initiatives. The that FES is dedicated to addressing. In seeking most basic of these are the of a bridge-building role, FES supports a dialogue (Industry) Conventions, 1919 (No. 1) and the on ways that the concept of working time can Hours of Work (Commerce and ) Con- be better understood in the context of en- vention, 1930 (No. 30) 1 and 30.1 couraging global and national policy options to respond to increasing international compe- The accumulation of working time standards tition and that are, as a result, more coherent has been an issue of concern to the ILO Gov- across boundaries - but that are also more in erning Body in its review of ILO standards. tune with the needs of both and Recent proposals to update the basic conven- economic well-being in today’s global econ- tions, however, have been entertained, but omy. the Governing Body has not yet agreed to proceed with an actual revision. The Govern- Among the significant features of the current ing Body did decide that they should be re- working time debate are the long-term viewed, and the two main conventions (Nos 1 downward trends in average working time in and 30) are the subject of the 2005 General industrialized countries, the changing mix of Survey for the ILO Conference by the ILO what is meant by full time and part time work, Committee of Experts on the Application of the “flexibilization” of working time and the Conventions and Recommendations. 2 The effect of changes in the organization of work. Committee recommends a consolidation into These are features of the current debate that one new standard. are prevalent in the way that working time is evolving in modern economies. This paper is part of a project being carried out by the Geneva Social Observatory and On the other hand, the emerging integration funded by the Friedrich Ebert Foundation to of developing and transitional countries into a look at current trends and policy challenges globalizing economy has contributed to an- dealing with working time. The project was other set of counteracting trends. Not only are initiated with a preliminary roundtable discus- working time practices in these countries sion in November 2004 to explore diverse per- symptoms of a different level of development; spectives from different parts of the world. they are also creating tensions where these different working time practices are contribut- ing to the competitive advantage of develop- 1 ILO, Hours of Work (Industry) Convention (No. 1, 1919) and Hours of Work (Commerce and ing country economies, particularly in the ex- Offices) Convention (No. 30, 1930), at port sectors of these economies. www.ilo.org. Attention in this paper is directed first to the 2 ILO, Hours of Work: From Fixed to Flexible?, General survey of the reports concerning the situation in developing countries and then to Hours of Work (Industry) Convention (No. 1, the situation in industrialized countries. In 1919) and the Hours of Work Commerce and general, the situation in developing countries Offices) Convention (No. 30, 1930), is affected by -related monitoring of International Labour Conference, 93rd Session working time practices by external groups 2005, Geneva: ILO (2005), at www.ilo.org (hereinafter referred to as Hours of Work who rely on existing international ILO stan- General Survey). dards (essentially revolving around the 48

Working Time FES Briefing Paper April 2005 Page 3 workweek, one day off in seven, and framework as laid out in ILO Conventions No. some form of paid holidays). While most 1 and 30.4 In both cases, the basic starting countries have in place that are consis- point is the description of regular working tent with these standards, there are pressures hours as constituting a maximum of 48 hours related to inadequate enforcement capabilities per .5 The standards varied on other as- and non-compliance in certain export-oriented pects, such as when you could waive the limit sectors. In addition, there is concern about the to make it 56 hours for a regular workweek, limited nature of coverage, particularly in and also as to when one could implement a terms of the extensive informal economy in 10-hour day as opposed to a limit of an 8- most developing countries. These conditions hour day. These variations notwithstanding, have led some to argue that existing interna- the general rule has been to expect develop- tional standards may not be relevant for coun- ing countries in today’s world to strive to tries that are still struggling to develop. A achieve a 48-hour workweek as the estab- prime example is found in some recent publi- lished frame of reference. This is so, even cations and programmes of the , though the typical workweek in industrialized which have called these standards as too re- countries is understood to be no more than a strictive and not conducive to a favourable 40-hour workweek, with many industrialized investment climate in developing countries.3 countries having limits that are even lower (e.g. at 35 hours). The pressures in industrialized countries, on the other hand, are related to the pressures The Origins of the Focus on the 48-hour that are reversing the downward trends in Workweek for Developing Countries working time, as illustrated most recently by the changes in specific bargaining agreements The 48-hour workweek target was not neces- in and in amendments to the 35- sarily articulated as such in any official docu- hour workweek in France. These reversals are ments, but it has been interpreted in numer- largely attributable to the pressures of inter- ous settings to be the accepted norm. The US national competition and signify the increas- took the lead on this by introducing compli- ingly vulnerable nature of domestic policies ance with a set of internationally recognized for reducing working time in order to stimu- labour standards as a precondition for its late creation to the competitive dynamic Generalized System of Preferences (or GSP 6 of productive workers elsewhere being avail- system) in its trade starting in 1984. The able to work longer hours – and at less pay law referred to five categories of workers’ per hour, too, of course. But the reversals are rights – the right to , also part of a larger phenomenon in many the right to , no child la- industrialized countries toward increases in bour, no and “acceptable” working time in certain sectors while de- conditions of work. This last category was creases are occurring in others, thereby in- creasing the working time gap. Then there are 4 ILO Conventions No. 1 (1919) and No. 130 the many ways in which working time ar- (1930), the texts of which are available rangements are being diversified. All of these at: www.ilo.org/ilolex/index.htm. trends are detracting from the relevance of 5 Convention No. 1 states, “The working hours existing workweek and workday standards of persons employed in any public or private and call for an entirely new approach to the industrial undertaking or in any branch thereof, other than an undertaking in which only of working time practices. members of the same family are employed, shall not exceed eight in the day and forty- 2 Trends in developing countries eight in the week…” Convention No. 130 says, “The hours of work of persons to whom this In developing countries, the typical standard Convention applies shall not exceed forty-eight on working time is the original regulatory hours in the week and eight hours in the day, except as hereinafter otherwise provided…” 6 A summary of the US Omnibus Trade and 3 World Bank, International Finance Act of 1984 may be found and . Doing in at: www.dbtrade.com/legal_sources/ 2005: Removing Obstacles to Growth. crs_summary_tt_1984.htm Title V of this Act Washington, DC: The World Bank (2005). addresses the issue of workers’ rights.

Working Time FES Briefing Paper April 2005 Page 4 specifically meant to include “acceptable” cerned about no and no forced minimum wages, working time and occupa- labour, and many of them also pushed for tional safety and health. non- principles as well. The main point, however, is the “disconnect” be- Although Congress did not further define tween conditions of work standards in con- what it meant by acceptable conditions of -driven codes versus their absence in the work, and thus did not legislatively enact a official identification of core labour standards definition of acceptable working time, the – and the inclusion of the right to association term “acceptable working time” came to be and bargaining in the core standards and their defined as a 48-hour workweek, along with a absence in more voluntary, consumer-driven 24-hour rest period every 7 days, pay codes. for hours in excess of 48 hours, and the pro- hibition of compulsory overtime. This interpre- A study of corporate and other codes of con- tation of the meaning of “acceptable working duct was conducted by the ILO, with updates, time” has been integrated into the interpreta- to evaluate the content and processes for im- tion of US trade law obligations by the US plementing codes of conduct related to inter- State Department in its programme, man- national labour standards.7 Suffice it to say dated by Congress, to review compliance by here that the study showed that there was all countries under the GSP system, with in- extensive inclusion of conditions of work ternationally recognized workers’ rights. standards in these codes, including working time provisions, and the working time provi- Interestingly, the EU did not immediately fol- sions tended to feature a 48-hour workweek low suit, perhaps because the EU itself was and the related provisions for rest, holidays evolving in the 1970’s and 1980’s. The regula- and overtime. This has also become the norm tion of trade at the EU level did not incorpo- in various multistakeholder initiatives, includ- rate international labour standards until the ing the Ethical Trading Initiative8, SA 80009, 1990’s, first with a against child labour and the . 10 The basic only and subsequently with a broader range expectation is that countries should comply of international labour standards, although with at least a 48-hour workweek, plus one not including the category of “acceptable day off every 7 days, no compulsory overtime, conditions of work” as such. It is only in the a premium rate for overtime, and a maximum US trade law that one finds a conditionality of 12 hours of overtime per week – or their associated with this category of labour stan- own if it includes more rigorous dards and thus with a conditionality associ- requirements. ated with a working time standard. More recently, the US Department of Labor However, it is also the case that concerns commissioned a project with the US National about acceptable conditions of work became Academies of Sciences to develop a com- a major issue in consumer movements calling prehensive set of indicators for core labour for compliance with international labour stan- dards. In fact, many of these consumer movements, such as Fair Trade, started with a 7 Urminsky, M. “Self-regulation in the workplace: focus exclusively on conditions of work – call- Codes of conduct, social labeling and socially responsible investment”. Geneva: ILO ing for minimum wages, decent working time Management and Corporate Citizenship practices and basic safety and health protec- Programme Working Paper No. 1, 2001, at: tions – and not on the core labour standards www.ilo.org/public/english/employment/multi/ that came to be enshrined in the ILO Declara- download/wp1mcc.pdf. tion of Fundamental Principles and Rights at 8 A copy of the Ethical Trading Initiative’s “base code” can be downloaded Work in 1998. This eventually changed, of at: www.ethicaltrade.org/Z/lib/base/index.shtml. course, but it is interesting that early con- 9 Documentation relating to Social Accoun- sumer movements were directed at seeking to tability’s 8000 standard appears ensure decent working conditions without any at: www.sa-intl.org/Document%20Center/ particular concern about freedom of associa- Documents.htm. tion and the right to collective bargaining. Of 10 The text of the Fair Labor Association’s course, these movements were also con- Workplace Code of Conduct is at: www.fairlabor.org/all/code/index.html.

Working Time FES Briefing Paper April 2005 Page 5 standards and acceptable conditions of work. and more importantly implementation of the The two-year study culminated in a series of laws with regard to overtime and premium publications on specific issues and seminars pay for overtime. and a major report defining what is meant by One should note that the matter of the legal core labour standards and acceptable condi- framework on overtime has been studied, tions of work standards and proposing a set along with the development of appropriate of indicators for measuring compliance with indicators for measuring compliance with these standards – classified into four catego- overtime standards, in a project that has been ries – that is, legal framework, governmental implemented by Hagen Resources Inter- performance, outcomes and associated fac- national called “The Tripartite Development of tors. The project also produced a comprehen- Indicators for Conditions of Work,” also sive data base, called WebMILS with defini- funded by the US Department of Labor. As a tions of all proposed indicators and reference follow-on to the NAS project, this initiative materials for every country with regard to has singled out conditions of work standards sources of data to populate these indicators.11 as necessarily being developmental in thrust, The Monitoring of International Labor Stan- even in the way that they have been articu- dards Committee (MILS) reviewed the legisla- lated as international labour standards. The tive history regarding acceptable conditions of ILO standards relating to conditions of work, work, including working time, and opted to that is to say, the standards relating to mini- endorse a variation of the definition of ac- mum wages, working time and occupational ceptable working time used by the US State safety and health, all include a developmental Department. That is, they agreed that the component that acknowledges the right of definition should refer to the objective of a countries to implement the standards accord- 48-hour workweek or less, based on ILO con- ing to their level of development. This is dif- ventions, one full day of rest every 7 days, and ferent from the core labour standards, which a specific number of paid holidays, again are deemed to be universally applicable re- based on ILO conventions which provide for gardless of the level of development. Thus, up to 3 of paid holidays per year.12 the HRI project has singled out the conditions of work standards as requiring a different The Issue of Overtime in Developing form of measurement for compliance than the Countries core labour standards.13 The question of overtime appears to be one of The HRI project, furthermore, was premised the most significant issues in relation to prob- on the priority given to domestic tripartite lems with compliance with working time participation in articulating the developmental standards that arise in the monitoring pro- objectives and priorities and therefore of de- grammes of these voluntary codes. This is so veloping indicators for measuring compliance even though the national policies of most with conditions of work standards that reflect countries are fully consistent with the basic set these developmental priorities. It was also ar- of conditions regarding regular working hours, gued that each country’s developmental pri- overtime limits, days of rest and paid holidays. orities should be influenced by their own The issue is not the legal framework on work- measurement of progress regarding compli- ing time but the implementation of the laws,

11 US Department of Labor (2005), WebMILS : 13 HRI made a presentation emphasizing this Monitoring International Labor Standards, at distinction to the NAS Committee in October http://www.dol.gov/ilab/webmils/. 2002 and subsequently prepared a study which included an assessment of the current state of

international standards on working time. See K. 12 National Academy of Science, Monitoring Hagen, The Tripartite Development of International Labor Standards: Techniques and Indicators for Conditions of Work : An sources of information, Report of the Assessment of the Issues, prepared for the HRI Committee on Monitoring International Labor Agreement with the US Standards, Washington, D.C.: The National Department of Labor No. E-9-K-2-0089, Academies’ Press (2004), p. 238. Geneva : HRI(March 2003), available at www.hrigeneva.com.

Working Time FES Briefing Paper April 2005 Page 6 ance with and improvement in compliance ment apparently refused to consider a waiver with international standards on acceptable of its 40-hour workweek.15 conditions of work. The project has produced The HRI project is also showing that the avail- some interesting results, especially with regard able data on compliance with working time to working time. laws in these eight countries do not show any The project has been implemented with serious problems. The averages, where they studies of eight countries, four in the Car- are available, show patterns that are well be- ibbean (Barbados, Guyana, Jamaica and low the 48-hour workweek objective, even Trinidad and Tobago) and four in Southern including data on overtime. This flow of in- Africa (Botswana, Lesotho, Namibia and formation, however, is not consistent with the ).14 In most of these countries, information that is being gathered, albeit in it appears that the basic workweek stan- different countries, with regard to excessive dard is LESS than a 48-hour workweek! In overtime and non-payment of premiums for several countries, including Jamaica, the overtime, in various monitoring projects. legally defined normal workweek is actually 40 hours. What is more, in South Africa, Abuses of Overtime where the legally defined normal work- Comprehensive reports have been prepared week is 45 hours, the government is sup- for the covered by the Fair Labor As- porting sectoral bargaining (which plays a sociation (FLA), for one. The reports show that significant role in setting conditions of payments are often below the legal re- work policies in that country) where the quirements for overtime pay, plus they show parties are agreeing to working time ar- repeated instances of inadequate record- rangements well below the 45-hour work- keeping of overtime. The FLA notes that these week and more in line with working time kinds of problems are associated with pres- policies in industrial countries. sure to achieve high production quotas, along Another interesting development regarding with inflexible and short production dead- 16 working time is illustrated by the effect of lines. Similar observations have been made progressive working time policies on a by the Ethical Trading Initiative (ETI) and Verité. country like Jamaica, with its 40-hour stan- Both Verité and ETI have specifically men- 17 dard. Jamaica experienced a very dramatic tioned chronic problems in , and the increase in foreign direct investment and domestic in the apparel-for-export sec- tor in the 1990s, only to see much of it flee 15 One can speculate about why the Jamaicans did not agree to a waiver. In part, it may be to countries with less stringent laws, in- because the investors were mostly Asians with cluding a 48-hour or more workweek. The weak political connections to the government, influx of investments and jobs had oc- but it is also the case that Jamaica has a strong curred because of the lure of cheap labour evangelical Christian movement that has blocked other types of changes in the working and proximity to the US market, but the time laws of Jamaica having to do with more sudden outflow occurred, it seems, be- flexible hours and working on Sundays. This cause other nearby countries had longer strong resistance to modifications of working working time rules to start with or even time laws on religious grounds may well have increased their workweek to attract the played a role in the decision not to agree to a waiver to the apparel manufacturers. investments, whereas the Jamaican govern- 16 The text of the Fair Labor Association’s Annual Report for 2004 may be found at: www.fairlabor.org/2004report/. The 2003 Report is at: www.fairlabor.org/all/ 14 These studies have been integrated into the transparency/charts_2002/Public%20Report%2 forthcoming publications on Conference 0Y1.pdf. Proceedings for the Tripartite Development of 17 See ETI’s Key challenges in : Indicators for Conditions of Work, based on Report on the ETI Biennial Conference 2003 at: meetings that were held for the four Caribbean www.ethicaltrade.org/Z/lib/2003/12/eticonf/page07 countries in Port of , Trinidad and Tobago .shtml and Verité’s 2004 publication, “Excessive on 4-5 November 2004 and for the four Overtime in Chinese Supplier Factories: Causes, Southern African countries in Cape Town, Impacts and Recommendations for Action” South Africa on 20-21 January 2005. at: www.verite.org/news/Excessiveovertime.

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FLA has actually initiated an “Hours of Work proved but only gradually in industrialized in China” project to determine why excessive countries and that applying similar or higher hours persist and to better define the underly- standards at earlier stages of development or ing causes.18 enforcement capacity creates problems. In particular, they argue, the system creates a ETI has sought to address the of protected elite – the “rentseekers” versus eve- chronic exploitation of working time with a ryone else. They argue that these programme that was featured in their 2003 benefit only a few and that they reinforce the conference on how to develop “win-win” tendency to widespread informality in the strategies to reduce working time. As ETI ob- economies of developing countries. And what served, there is a continuing cycle of low pay is worse, they claim, the data on the regula- that encourages workers to work longer hours tion of working conditions and wages show in order to earn as much as possible and of that the less regulated countries are doing lowered because of the long better than the more regulated ones.20 They hours. Where employers are shown that re- specifically object to the practice of requiring duced working hours actually increases pro- overtime premium pay and recommend that ductivity to the point that more value is added US approach, where there is no federal re- with shorter working hours, the inclination to quirement for premium pay for overtime, in push for long hours can be dramatically re- contrast to the situation that they cite in sev- duced. However, this does not take care of eral developing countries where the overtime those situations where there are short dead- pay is required to be at least twice the regular lines and competition to bid for the work. wage. And finally, they argue, the presence of In general, then, these multistakeholder standards that are too high simply contributes groups are working with individual suppliers to a record of poor compliance with the stan- and with their industrialized country buyers, dards. to develop better monitoring for compliance, The WDR 2005 also cites with favour a project better incentives for reduced working time, sponsored by the World Bank called “World and more reasonable deadlines and bidding Bank Doing Business in 2004 » and com- practices by buyers in the apparel industry. mends its methodology for indicators on Similar practices are also being addressed in working time. Checking the Website for this similar ways in other consumer-related indus- project, one finds a “rigidity of hours” index tries, such as toys and electronics. that asks the following questions: A contrasting view of working time and · Is night work restricted? development · Is weekend work allowed? In contrast, the World Bank has taken a sig- nificantly different approach. In the World · Is workweek 5 and one half days or more? Development Report (WDR) 2005 on “a better · Can workday extend to 12 hours or more, investment climate for everyone,” for example, including OT? the authors of the report suggest that labour regulation in developing countries, including · Annual paid vacation of 21 days or less the regulation of working time, exceeds or Depending on the answers to these questions, mimics the level of the regulations in devel- one either gets a positive or a negative rank- oped countries – and that this is a bad thing.19 ing on this “rigidity” index. Promoting re- They argue that working conditions have im- duced working time in developing countries Countering this point of view, one finds ex- 18 As described in the Fair Labor Association’s tensive documentation of the benefits that “Update” newsletter of 7 December 2004. See: accrue to reducing what one might call “ex- www.fairlabor.org/all/news/updates/20041201. cessive” working hours, although it is less pdf. clear that these benefits continue with simi- 19 World Bank, World Development Report 2005: A Better Investment Climate for Everyone, Washington, D.C.: World Bank, 2005. 20 Ibid, p. 145 (Fig. 7.5).

Working Time FES Briefing Paper April 2005 Page 8 larly positive effect further down the line. that even in China this may no longer be so In a report on working time and safety and clearcut.23 health, Anne Spurgeon has shown that there Any survey of overtime and long working was extensive evidence showing how re- hours in developing countries should also take duced hours increased productivity as one into account the impact of supply chain com- moved from 70 or more hours per week to petition and overtime requirements to meet 55 hours and down to 48 hours, as oc- deadlines. One needs to include the consid- curred throughout the nineteenth century eration of a strategy directed to buyers to and into the early years of the twentieth manage supply requirements differently and a century among workers.21 It is con- campaign among consumers to create expec- ceivable that the same rationale worked in tations for and a willingness to support com- bringing the normal workweek down to 40 pliance with acceptable conditions of work hours in the 1930s and 1940s. Not only did standards. One should be asking what are productivity improve because workers pro- legitimate limits on working time and espe- duced more per hour than they had done cially on overtime? What is the appropriate with longer working hours, but the fre- scope set down by legislative process? And quency of work-related accidents and what should be the participatory process in down-time of trained workers was also re- setting these thresholds? duced. One should also note that the thrust of moni- The safety and health argument against toring activity has been in the apparel industry long working hours continues to be a le- and to a lesser extent in the toy and electron- gitimate argument, both in developing and ics industry. What is to happen with the industrialized countries. And, as Spurgeon changing composition of outsourcing patterns, has reported, problems may actually be especially as they grow in the services sector, increasing today because a significant and as opposed to the industrial sector, and in growing percentage of workers are work- activities where the skill levels are relatively ing over 60 hours a week.22 high? With comparable or higher skill levels In any case, the issue in developing coun- among the workers in developing countries tries is mostly related to the dilemma of who are available to fill these kinds of jobs, long hours being necessary to meet basic what will happen to the traditional compara- needs because of low pay. There is even tive advantage of skilled labour in industrial- the argument that workers themselves ized countries? want to work long hours in order to save Finally, there is the importance of a function- the money and use it for future invest- ing labour inspectorate. Waivers of legal re- ments at home. That is, they are drawn to quirements are one thing. Overly idealistic the urban factory setting where they work limits are another. But an important element long hours and live in company-owned in the overall equation is the capacity of de- dormitories for a couple of years in order veloping countries to actually enforce their to accumulate a nest egg and then return own high standards. Although some of the home to start up their own small enterprise. inadequate enforcement could be attributed On the other hand, this only works when to the unwillingness to enforce unrealistically the wage differential between the home high standards (and standards that are recog- area and the urban factory setting is great nized as being too high but without any po- enough to accept the tradeoff of long working hours. There are some indications 23 BBC Monitoring , « Labour shortage in China’s south due to workers migrating east, » 02 March 2005. This article notes that the disparities between rural and urban wages has been diminishing in China, making it more 21 A. Spurgeon, Working Time : Its impact on difficult than in the past to fill the many safety and health, Geneva, : unskilled factory jobs in the expanding International Labour Organization, 2003, p. 23. industrial centers like Shanghai. 22 Id., p. 25.

Working Time FES Briefing Paper April 2005 Page 9 litical will to lower them), one should also take One interesting study, drawing on data over a into account the importance of assisting de- 130-year time span, shows that average hours veloping countries with the improvement of worked in advanced industrial countries de- their capacity to enforce their own laws. Thus, creased by 47% in the market sector, meas- a well functioning labour inspectorate should ured as average hours worked in relation to be one of the priorities for advancing an over- the population aged 15 or older.24 The author all package of policy coherence. A realistic shows that the most significant determinant enforcement programme is an integral ele- of this decrease in hours worked was a reduc- ment in ensuring legitimacy and credibility of tion in supervisory activity due to technologi- respect for international labour standards. cal progress, that is to say, a decline in the number of supervisory workers in relation to 3 Trends in industrialized countries the number of production workers. The effect There is an extensive literature on the chang- is deemed to explain anywhere from 46 to ing characteristics of working time in industri- 80% of the decrease in hours worked in the alized countries. Reference will be made here 15 countries in the study, or a population to some of the trends that have been identi- weighted average of a 41% decrease in hours fied, not only in the quantitative aspects but worked. Another interesting aspect of this also the qualitative aspects of working time. study is that the author found no clear pattern Our focus will be on the ways in which work- in terms of the employment rate, which ing time is being affected by global competi- she/he found to be influenced by tax policy tion, but we will also take a look at the dy- but not by any decline in hours worked. On namics of the relationship between the the whole, however, in the same period, she concepts of part-time and full-time work as found that there had been an aggregate de- well as the “return of overtime”. cline of 8% in the employment rate. This phenomenon connects to the changing Moving beyond the 48-hour workweek – nature of work organization in these countries. and the 40-hour workweek Not only for technological reasons, but also The first and most basic trend has been the for changes in the philosophy of work organi- steady decrease in the amount of time de- zation, there is less hierarchy and supervisory fined by law as normal or regular working control of work and more emphasis on decen- time and the resulting decrease in average tralized decision-making, team work and a gen- hours worked. At the beginning of the twen- eral restructuring of what Harvey calls “the tieth century, the industrializing countries of temporalities” of work.25 As she reports, there Europe and North America moved to the 48- are variations in the way that work has been hour workweek, and then in the 1930s and reorganized from country to country, but the 1940s, to the 40-hour workweek. Safety and general pattern is that the system of work health reasons converged with productivity organization and the nature of the employ- improvements to justify these changes. In the ment relationship have changed. And along last several decades of the twentieth century, with these changes have come changes in many advanced industrial countries supple- working time arrangements – not so much a mented these reasons with an interest in a change in the amount of working time but better work/life balance. The demand for more a matter of a change in the scheduling more family and time led to the accep- tance of even shorter working hours, as did the demand for reducing . 24 Alexander Ueberfeldt, “Working Time over the 20th Century”, University of Minnesota Job Regulations also came into play with regard to Market Paper, Minneapolis, MN: Federal restricting “unsocial” hours. These phenom- Reserve Bank, 2005, at: ena had more effect on working time policies http://center.uvt.nl/macro/workingtime.pdf. in European economies than they did in either 25 M. Harvey, “Economics of time: a framework the North American or Japanese economies, for analyzing the restructuring of employment but there, too, one saw a decrease in average relationships,” in A. Felstead and N. Jewson, Eds., Global Trends in Flexible Labour, hours worked. Blokingstoke: Macmillan, 1999, pp. 22-23.

Working Time FES Briefing Paper April 2005 Page 10 of that working time. Flexible within observation of the OECD study is that high a range of hours per day is the most obvious productivity countries as a group have higher example. Other changes, brought about by employment rates but lower hours per the demand for a “24-hour” economy, in- worker.27 It should be noted that the OECD clude more widespread use of weekend hours, study has used annualized comparisons, a night shifts, alternating night and day shifts, method which works well to take into ac- compressed weeks, and even hours averaging count the range of and other (over a period of time up to a year in some variations to the normal workweek. The study instances) and on-call time. shows that the total number of hours worked in the US is much higher than in Europe. Another phenomenon has been the increase Europe has more paid holidays, reduced full- in the amount of part-time work. The greater time hours and more part-time workers than proportion of women in the active labour the US. However, the study also shows that market has meant an increase in dual-earner other countries have also experienced an in- households, as well as an increase in house- crease in average working hours, countries holds headed by a woman. Most of the em- like the UK and in particular. The ployment of women has been in part-time OECD rankings actually show that Australia employment, reflecting the continued pre- has the second longest working hours in the sumption that women have more family re- OECD after .28 sponsibilities than men and the further pre- sumption that they are not the primary The changing mix of full-time and part- breadwinners in their households. However, time work and overtime these presumptions are changing in some countries, where one sees an increasingly While there is more flexibility in working time, mixed pattern of male and female employ- especially with regard to part-time work, in ment in part-time work, as has happened in many countries the total amount of working the . This mixed pattern, at least time has actually gone up. This has been in the case of the Netherlands, has been a known for some time to be the case in the result of government policies encouraging , and the gap between the US part-time work. Similar policies have influ- and Europe generally increased steadily in the enced the mix of part-time and full-time work 1990s. What the OECD report points out is in the Scandinavian countries. What this that the increased productivity performance of means for working time patterns is connected the US versus Europe in the 1990s is attribut- to the proportion of the working age popula- able to the increased working time in the US, tion that is actually employed but with a de- along with differences in which categories of creasing average hours per person working, workers are working longer and how long even as the average hours per person might rather than a higher output per hours worked. not have changed or may even have gone up. This implies that Europeans are choosing to forego for more leisure, whereas In fact, in a major study published by the Americans are choosing to earn more and OECD in 2004, called “Clocking in and clock- forego leisure. ing out,” the authors have observed that, in general, the maintenance of quality of life in Reinforcing this study, the ILO survey on Con- industrialized countries requires more people ventions 1 and 30, which has been prepared 26 working longer years. Another interesting diplay.asp?lang=EN&sf1=identifiers&st1=81200 4121p1. 26 OECD, Clocking in and clocking out: Recent trends in Working Hours, OECD Policy Brief, 27 OECD Employment Outlook 2004, p. 29. October 2004. Paris: OECD Publications (2004) 28 As Sharan Burrows, the head of the Australian at: www..org/dataoecd/42/49/33821328.pdf Council of Trade Unions and the newly elected and OECD, « Recent Labour Market Develop- President of the ICFTU, observed in the GSO ments and Prospects : Clocking in (and out) : roundtable on working time in November 2004, several facts of working time, » in OECD this increase in working hours is proving Employment Outlook 2004, Paris : OECD detrimental to worker health, productivity, Publications (2004) at occupational safety and family relations. http://www.oecdbookshop.org/oecd/

Working Time FES Briefing Paper April 2005 Page 11 for the Committee on the Application of vidual workers).30 In 2003, the Directive was Standards at the 2005 Conference, reports modified to allow averaging over a 12 month that hours actually worked have increased in period rather than 4 month period and to Australia, , , , Panama modify the opt-out option, specifically in rela- and .29 The report does not list the US tion to the calculation of time while people, in this category, although the data from the such as physicians, are not actually working US in their charts would suggest that the av- but are “on call.” 31 erage has gone up in the US as well, which is As the ILO study notes, some of this overtime consistent with other studies about the US. In is probably voluntary. Men – and women – contrast to these countries, however, the re- are working in high-pressured professional port does show a progressive reduction of jobs where advancement is dependent on normal hours of work almost everywhere else. long hours on the job. In many countries, as in Another aspect of working time trends that the , managerial and profess- should be addressed is the approach taken in ional workers are exempt from working time another ILO study of working time in industri- restrictions on overtime, aren’t paid on an alized countries, which points out the prob- hourly basis and therefore earn no more than lems of working time “surpluses and deficits.” otherwise for the extra time on the job. But it In terms of a “surplus” in working time, this is actually not seen as “extra time.” Rather, it study shows that much of the increase in is considered normal for such workers to work hours worked in countries like the US and 50 or 60 or more hours per week. Many of Australia is attributable to an increase in over- them even boast about how well they are time hours, even as the normal hours have treated by their employers and fellow workers stayed the same or gone down. Because over- who make sure that dinner is brought in, that time hours are measured only as hours in ex- the fitness center is always open and even cess of normal full-time hours, and because that child-care arrangements are flexible more men than women are employed full- enough to keep them on the job. Everyone is time in these countries, the phenomenon of part of the team, and everyone needs to be excessive overtime, working more than 50 there to complete the legal pleadings or the hours a week, falls most heavily on men. advertising copy or the investment portfolio or the marketing plan. There appears to be no Actual limits on overtime plus regular working suggestion that working time should be any hours are quite varied. In South Korea, the different. maximum is 56 hours; in Switzerland, it is 60 hours; in the US, there are no federal limits. In other situations, however, the overtime is Even in the EU, there has been pressure to connected to actual overtime benefits. And ease up the restrictions on working time. The the ILO study shows that much of this is hap- EU Working Time Directive, adopted in 1993, pening, in the sector in par- has been considered the most restrictive ticular, mostly in countries where national working time policy in the world, limiting regulation of working time is relatively weak work to an average of 48 hours per week cal- or where collective bargaining is highly decen- culated over a period of no more than 4 tralized or non-existent – the US, the UK and months, with very limited opt-outs (except Australia – but also in . In these situa- that the UK applied a general opt-out for indi- tions, the competitive pressure of getting the

30 EU Council Directive 93/104/EC of 23 November 1993 regarding certain aspects of the organisation of working time, Official 29 International Labour . “Hours of Work: Journal of the EU, 1993 (L307). From Fixed to Flexible?” Report III (Part 1B): General Survey of the reports concerning the 31 EU Directive 2003/88/EC of the European Hours of Work (Industry) Convention, 1919 (No. Parliament and of the Council regarding certain 1), and the Hours of Work (Commerce and aspects of the organisation of working time, Offices) Convention, 1930 (No. 30). Geneva: Official Journal of the EU, 2003 (L299/9), ILO, 2005, p. 24, at www.europa.eu.int/eur-lex/pri/en/oj/dat/ at: www.ilo.org/public/english/standards/relm/ 2003/1_299/1_29920031118en00090019.pdf. ilc/ilc93/pdf/rep-iii-1b.pdf.

Working Time FES Briefing Paper April 2005 Page 12 product out is subject to sudden schedule focus as effectively on stimulating employ- changes, plus the practice of overtime is often ment within the country through reducing preferred to the extra cost of hiring additional working time. Rather, the emphasis has workers. While it is also the case that many shifted to retaining jobs in the face of threat- workers like the extra pay they get from work- ened relocation of the work to other countries, ing overtime, the problem is how to protect especially other Central European countries against involuntary overtime practices. where skilled workers are prepared to work for less pay and longer hours. This has hap- Some would argue that it has to be restricted pened especially in the heavy industrial sectors, across the board and that this is in fact a pre- metal and engineering, with recent agree- ferred outcome for everyone. Barbara Byers, ments to increase working hours without rais- of the Canadian Labour Congress, described a ing wages in Daimler-Chrysler, Siemens, Kar- “Get a life” programme that had been imple- stadt-Quelle and Volkswagen. In an ironic mented by a British Columbian pulp mill. To twist of logic, Klaus Zimmerman, the President minimise overtime and accomplish community of the German Institute for Economic Re- ends like youth employment, this firm search, has argued that extending working out virtually all overtime. The ILO time without raising wages can lead to more study cited above points out that the working demand for labour, more employment and time “deficit” is especially hard on women higher output.32 and youth. Although the issue is not only inadequately short hours but also an issue of Another irony of the German situation is the many of these workers preferring full-time way in which unemployment and under- work to part-time work, the overall benefit of employment concerns were initially addressed providing for part-time work where the work by negotiating steadily lower working time for would otherwise be done through overtime is full-time workers. Although some efforts were illustrated by this programme. also made to introduce more part-time work, this has been less successful in Germany than Germany and reversals in working time in neighboring countries like the Netherlands, trends where the option of part-time work has been Finally, one should take a special look at what very popular. Because Germany has a is happening in Germany, where there has programme based on employer/employee been a concerted “social ” approach contributions and related to duration of em- to reducing working time. In the forefront of ployment, part-time workers have not been industrial productivity, Germany has pursued guaranteed sufficient participation in a pen- working time policies that combine an interest sion programme as they have been in the in improving the work/life balance for full- Netherlands, and therefore the part-time op- time workers and an interest in stimulating tion has not been widely used. It shows how employment within the country. However, a important family-friendly benefits policies that parallel trend has been to decentralize and cover both full-time and part-time workers open up the potential for enterprise-based can influence the popularity of the part-time variations. The traditional ways of bargaining option. for binding minimum standards for employ- The current pressures in Germany relate to the ment and working conditions at the national phenomenon of full-time hours of work being level have given way to the increasing use of as low as 28 hours per week for some highly “derogation clauses.” The growing impor- skilled workers, as well as relatively low aver- tance of flexible working time arrangements has also shifted the negotiating authority to local works councils in place of the national 32 Klaus Zimmermann, « Employment for All ! Perspectives for a new Economic Policy,” trade unions. Lecture at the Free University of Berlin, 14 July Then, in this highly decentralized setting, 2004 at http://www.diw.de/english/dasinstitut/info/ there has come the pressure to support a 20040715_kfz_ringvorlesung.html Professor Zim- general increase in working time for competi- mermann is the President of the German tive reasons. No longer can the works councils Institute for Economic Research and has written extensively on labour issues.

Working Time FES Briefing Paper April 2005 Page 13 ages in major industrial sectors, such as the was a structure oriented to reinforcing a na- transport equipment sector, where averages tional regulatory or bargaining process that tend to be around 35 hours per week. These seemed a bit unrealistic even then. Thus, the hours may be too low when compared with Employer experts were highly skeptical of the working time in other nearby economies. prospects for revised standard-setting where Companies can play off one plant against an- diversity and flexibility were - and are increas- other, especially as they control factories in ingly prevalent in practice. several similarly situated countries regarding Again, in 1996, the Employers in the ILO productivity. stated that it was not the right time to adopt new standards even though they recognized 4 Looking to the future that the old standards were out of date and This brief look at working time trends in de- no longer relevant. 33 On that occasion, a veloping countries and industrialized countries Working Party on Policy regarding the Revi- leads one to suggest that global competitive sion of Standards had just started its work and pressures are working to force working time had identified the working time conventions upwards while also leading to a widening as an area where revisions should be consid- menu of working time structures. The idea ered. The Workers were, of course, in favour that a fixed number of hours per day or per of a general discussion at a future ILO Confer- week in a five-day workweek with weekends ence with a view to a possible standard- off can be the basic framework for the regula- setting exercise, and it was the US Govern- tion of working time is no longer feasible. The ment representative who proposed the con- array of ILO standards – 16 conventions and ducting of the General Survey on Conventions 11 recommendations, according to the latest 1 and 30 as an interim solution to this im- ILO report – are very scattered and inadequate. passe.34 This proposal was accepted by the So, in spite of the fact that working time Working Party, and ultimately the Governing regulation was the first item on the ILO’s Body in its November 2001 session instructed agenda when it was created in 1919, and in the Committee of Experts to carry out the spite of the fact that there has been wide- general survey in 2004, for review at the ILO spread interest in regulating working time Conference in 2005.35 country by country, the actual standards Today, with the recent history of considerable adopted by the ILO have had very poor ratifi- decentralization and flexibilization of working cation rates. It is timely that the ILO Commit- time, the fixed timeframes that are prescribed tee of Experts has conducted a General Survey in Conventions 1 and 30 do not suit the cur- of the basic standards – and has taken a rent needs for basic protections in a more di- broader look at ILO standards on working versified working time environment. The time in the context of this General Survey. demographic changes in the workforce, too, Prior to the request for a General Survey on suggest a different approach. With a greater this subject, the focus of ILO deliberations had proportion of , a been on revising the standards but with greater proportion of dual-earner households, strong resistance from the Employers. In 1993, the ILO convened an Expert Working Group on Working Time to consider the merits of 33 ILO, Report of the Working Party on Policy revising Conventions 1 and 30. Although the regarding the Revision of Standards, Part II, experts nominated by the Governments and Conventions in need of revision, GB 267/ KUKS/4/2(Rev.), para. 28 (November 1996). the Workers supported revision, the experts 34 Id., paras. 27 and 31. nominated by the Employers did not. At that 35 GB282/205, para. 44. It might also be noted , many of the upward trends in working here that the Office has proposed anew that time practices were not yet evident, and even working time be put on the agenda of a future the extent of abusive working time practices ILO Conference, putting it forward last connected to the export trade in developing November as one of the options for the 2007 Conference. The Governing Body chose other countries had not taken hold in people’s options instead, but one can anticipate that this minds. The proposed structure for revision of will continue to be on lists for possible these conventions back in 1993, however, standard-setting activity.

Working Time FES Briefing Paper April 2005 Page 14 and an increase in part-time, flex-time, time working time arrangements, including a tax banking, averaging over long periods of time and benefits structure that does not favor one and other variations, the approach of focusing kind of working time arrangement (one full- exclusively on defining a “normal full-time time worker per household) over the others workweek” does not take care of these kinds (such as two part-workers per household). of situations. The Committee of Experts in its In conclusion, fear of international compe- General Survey of Conventions 1 and 30 has tition has, from the very beginning, hampered come to the conclusion that there should be a the acceptance of these standards, and that single instrument taking into account the fear has re-emerged as the main explanation flexible working time arrangements of today. for the reversals in the downward trends in The Committee actually looked beyond these working time that most people would like to two conventions to note that the widely scat- see. The 24-hour economy, along with new tered nature of the conventions and recom- methods of flexible production and flexible mendations dealing the relationship of work- organization of work have exacerbated this ing time to non-working time (hours and days competitive stimulus. Of course, the impact of of rest, holidays, etc) should also be reviewed. information and communications technologies The Committee has recommended that there cannot be ignored, either, but the main impe- should be one single, new instrument that tus appears to be a renewed and ever- deals with the questions of hours, weekly rest growing fear of international competition. and annual paid leave - all together in one The working time standards of the twentieth instrument.36 The Committee lists a number of century are among the standards that are up elements that should be included, should the for intense scrutiny and revision in the twenty- ILO’s constituents decide to proceed with such first century. Perhaps one should not even an instrument – ensuring the protection of the suggest that these standards can be revised; health and safety of workers, ensuring a “fair perhaps the time is ripe for looking at alterna- balance” between working and family time, tives to standard-setting processes at the in- no reduction in existing protections, and set- ternational level. Perhaps the time is ripe for ting out certain maximum working hours and looking at less onerous and more cooperative minimum rest periods, while also incorporat- ways to develop a framework for managing ing greater flexibility and accommodation of working time arrangements that are in the the modern variety of working time arrange- best interests of workers, families, communi- ments. Others would suggest that any such ties and nations, while recognizing that the instrument should simply set out a procedure pressures of international competition are for adapting working time practices to each pressures that should be harnessed for the individual situation, with a flexible framework better management of working conditions. at the national level and a consultative process The GSO is not suggesting any particular solu- at the enterprise level.37 The OECD, for exam- tion but does believe that the parties to this ple, has recommended that negotiations on debate should open it up to a broadened working time should be highly decentralized range of possibilities of defining an appropri- but with certain minimums set out for health ate policy or standards-based solution. and safety. 38 Governments, furthermore, should play an active role in ensuring the in- The debate is indeed open for different points tegration of family friendly possibilities into of view. Dramatic changes on how to define the very essence of appropriate standard- setting are being directed to the deliberations 36 ILO, Hours of Work General Survey, para. 333, p. on the very central issue of how much time a 107. person should be expected to devote to in- 37 Conversations between the author and labour come remuneration as opposed to all the in both developed and developing countries in recent months would suggest that other aspects of a person’s role in a family, the essential ingredient in any new standard is community and society. The diversity of prac- flexibility to accommodate the working time tices and the blurring of distinctions between needs of a 24-hour, service-oriented, know- remunerated and unremunerated working ledge-based global economy. time are only the visible parts of this very large 38 OECD, OECD Employment Outlook 2004, p. 48.

Working Time FES Briefing Paper April 2005 Page 15 iceberg that is challenging the ship of interna- Experts and the deliberations of ILO constitu- tional labour standards. It is to be hoped that ents at the ILO Conference of 2005 - and that a constructive debate on an open-ended it can be translated into innovative solutions in range of options for defining reasonable stan- other formal settings in the very near future. dards or policies on working time can be stimulated by the work of the Committee of

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On the author: Katherine A. Hagen is the Managing Director of the Geneva Social Observatory, which is a relatively new Swiss association (established in 2004) to promote a neutral forum for global dialogue and an in- formation exchange on contentious social issues. Dr. Hagen served from 1994 to 2000 as the Deputy Director-General for External Relations and Director for Social Dialogue at the International Labour Organization. Prior to her ILO service, she held high-level positions at AT&T in labour and em- ployee benefits law and also served as a White House Fellow specializing in personnel management. Earlier in her , she was a university professor of international and Asian studies, a social activist and a state senator (elected for three terms to the North Carolina Senate). Educated in law (UNC Chapel Hill) and international relations (BA from Oberlin College and MA and PhD from the American University), Katherine has also been providing consulting services on social responsibility, labour law, labour relations, international labour and standards, and social sustainability since 2001.

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