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North American Agreement on Labor Cooperation: A Guide

U.S. National Administrative Office
Bureau of International Labor Affairs
U.S. Department of Labor
Washington, D.C.

October 2005


Table of Contents

North American Agreement on Labor Cooperation

Structure
Coverage
Obligations
Cooperation and Consultation
Oversight of Labor Law Enforcement
Dispute Resolution

National Administrative Office

Submissions Process
Cooperative Activities
Information Available to the Public - Reading Room

Appendix 1 - NAALC Process

Appendix 2 - NAO Submissions Timeline


NORTH AMERICAN AGREEMENT ON LABOR COOPERATION

The North American Agreement on Labor Cooperation (NAALC) is a historic document. Signed on behalf of the United States by President Bill Clinton, of Mexico by President Carlos Salinas de Gortari, and of Canada by Prime Minister Kim Campbell in September 1993, it represents the first instance in which the United States has negotiated an agreement dealing with labor standards to supplement an international trade agreement.

The main objective of the NAALC is to improve working conditions and living standards in the United States, Mexico, and Canada as the North American Free Trade Agreement (NAFTA) promotes more trade and closer economic ties among the three countries. The preferred approach of the Agreement to reach this objective is through cooperation--exchanges of information, technical assistance, consultations--a concept that is explicitly recognized in the very title of the instrument. The Agreement also provides some oversight mechanisms to ensure that labor laws are being enforced in all three countries. These oversight mechanisms are aimed at promoting a better understanding by the public of labor laws and at enhancing transparency of enforcement. The Agreement does provide the ability to invoke trade sanctions as a last resort for non-enforcement of labor law by a Party.

Structure

The Agreement creates both international and domestic institutions. The international institution is the Commission for Labor Cooperation, consisting of a Council supported by a Secretariat. The domestic institutions are the National Administrative Offices (NAOs), located in each of the countries, and national or governmental advisory committees.

The Council, which is composed of the three Cabinet-level labor officials, is the governing body of the Commission.

It has a broad mandate to work cooperatively on labor issues, including occupational safety and health, child labor, benefits for workers, minimum wages, industrial relations, legislation on the formation of unions and the resolution of labor disputes.

An independent Secretariat, which is headed by an Executive Director appointed by consensus of the three Parties for a fixed term, provides technical support to the Council.

Among the functions of the Secretariat are to report periodically to the Council on a wide range of labor issues, including labor law and administrative procedures, trends and administrative strategies related to enforcement of labor law, labor market conditions, and human resource development issues.

National Administrative Offices were created by each country to implement the Agreement and to serve as points of contact between Commission entities and national governments.

NAOs can consult with each other and exchange information on labor matters.

Each country has a right to determine the functions and powers of its own NAO and how it will be staffed.

The Agreement also allows for each country to establish national and governmental advisory committees to their NAOs.

The National Advisory Committee for the North American Agreement on Labor Cooperation was established in 1995 to provide advice to the U.S. NAO on issues arising under the NAALC, and other matters as they arise in the course of administering the Agreement. The committee is comprised of 12 members, four representing the labor community, four representing the business community, two representing academia and two representing the public at large.

Coverage

Labor law is defined broadly in the Agreement, to include laws and regulations, or provisions thereof, directly related to:

  • freedom of association and protection of the right to organize;
  • the right to bargain collectively;
  • the right to strike;
  • prohibition of forced labor;
  • labor protections for children and young persons;
  • minimum employment standards, such as minimum wages and overtime pay, covering wage earners, including those not covered by collective agreements;
  • elimination of employment discrimination on the basis of race, religion, age, sex, or other grounds as determined by each country's domestic laws;
  • equal pay for men and women;
  • prevention of occupational injuries and illnesses;
  • compensation in cases of occupational injuries and illnesses; and
  • protection of migrant workers.

Obligations

The Agreement obligates each Party to:

  • ensure that its labor laws and regulations provide for high labor standards and to continue to strive to improve those standards;
  • promote compliance with and effectively enforce its labor law through appropriate government action;
  • ensure that persons with a legally recognized interest have appropriate access to administrative, quasi-judicial, judicial, or labor tribunals for enforcement of its labor law and that proceedings for the enforcement of its labor law are fair, equitable and transparent;
  • ensure that its labor laws, regulations, procedures, and administrative rulings of general application are promptly published or otherwise made available to the public and promote public awareness of its labor law.

Cooperation and Consultation

A goal of the Agreement is to resolve issues in a cooperative manner; thus, it provides numerous opportunities for formal and informal cooperative consultations. The Agreement provides a mechanism for initial consultations to take place between the NAOs of the three Parties. Additionally, any matter within the scope of the Agreement may also be subject to consultations at the ministerial level.

Oversight of Labor Law Enforcement

Evaluations

At the request of any Party, an Evaluation Committee of Experts (ECEs), composed of independent experts, may be convened if a matter has not been resolved after ministerial consultations.

  • ECEs examine patterns of practice in the enforcement of technical labor standards by each Party. These standards include: prohibition of forced labor; labor protections for children and young persons; minimum employment standards, such as minimum wages and overtime pay; elimination of employment discrimination; equal pay for men and women; prevention of occupational injuries and illnesses; compensation in cases of occupational injuries and illnesses; and protection of migrant workers.
  • ECEs will undertake a comparative study and make recommendations on the matter as it is treated in each of the member countries.
  • ECE reports and recommendations shall be considered at a regular session of the Council.

Dispute Resolution

Following consideration by the Council of an ECE report and consultations among the Parties, if a Party believes that another Party is demonstrating a persistent pattern of failure to effectively enforce its occupational safety and health, child labor or minimum wage technical standards, an arbitral panel may be established.

  • The ultimate outcome of the dispute settlement process may be a monetary assessment backed by a suspension of trade benefits.

NATIONAL ADMINISTRATIVE OFFICE

The NAALC calls for the establishment of a National Administrative Office (NAO) in each of the three NAFTA Parties. Each country opened its NAO on January 1, 1994. The function of the NAOs is to serve as points of contact with governmental agencies within a Party, other NAOs and the Secretariat. NAOs are required to provide information regarding the NAALC and labor law matters in the three countries to the Secretariat, other NAOs or ECEs, and the public at large.

The work of the NAO is divided into three basic areas:

  1. receiving and reviewing of public submissions;
  2. coordinating tripartite cooperative activities; and
  3. providing information to the public.

Submissions Process

The North American Agreement on Labor Cooperation (NAALC) requires that the NAOs provide for the receipt and review of submissions on labor law matters in the other two countries. The NAALC further delineates the types of issues that may be considered at the various resolution stages of the Agreement. The framers of the Agreement intended that disputes be addressed and settled through dialogue and cooperative consultations, initially at the NAO level and later at the ministerial level. At the NAO and ministerial level, there is a broad range of issues that may be considered for review. The jurisdictional authority is narrowed with respect to the subject matter that may be raised at subsequent levels of review, namely before ECE panels and in Arbitral panels.

The U.S. NAO, in consultation with other government agencies and the public at large, promulgated procedural guidelines for the review of submissions. Those guidelines require, among other things:

  • the NAO Secretary to accept or decline review of a submission within 60 days of its receipt;
  • the decision to accept or deny review of a submission must be published in the Federal Register;
  • if a submission is accepted for review a public report must be issued within l20 days after acceptance, unless the NAO Secretary deems it appropriate to extend the time period 60 days; and
  • during the review process, a public hearing may be held and notice of such a hearing must be published 30 days in advance in the Federal Register.

(Appendix 2 is a diagram of the submissions process).

Any person may file a submission with the U.S. NAO regarding labor law matters arising in the territory of another Party. The procedural guidelines require verification of minimum standards in order to begin the review process. The submission shall address and explain, to the fullest extent possible, whether:

  1. the matters complained of appear to demonstrate action inconsistent with another Party's obligations under Part II of the Agreement;
  2. there has been harm to the submitter or other persons, and, if so, to what extent;
  3. the matters complained of appear to demonstrate a pattern of non-enforcement of labor law by another Party;
  4. relief has been sought under the domestic laws of another Party, and, if so, the status of any legal proceedings; and
  5. the matters complained of are pending before an international body.

If the submission does not meet these minimum standards, notice may be given to the submitter that the submission is defective and the submitter may be given an opportunity to cure the defect.

In general, the Secretary shall accept a submission for review if it raises issues relevant to labor law matters in the territory of another Party and if a review would further the objectives of the Agreement.

The NAO also considers other factors in deciding whether to accept or deny a submission. The NAO may decline to accept all or part of a submission if:

  1. the submission does not identify clearly the person filing the submission, is not signed and dated, or is not sufficiently specific to determine the nature of the request and permit an appropriate review;
  2. the statements contained in the submission, even if substantiated, would not constitute a failure of another Party to comply with its obligations under Part II of the Agreement;
  3. the statements contained in the submission or available information demonstrate that appropriate relief has not been sought under the domestic laws of another Party, or that the matter or a related matter is pending before an international body; or
  4. the submission is substantially similar to a recent submission and significant, new information has not been made available.

The holding of a public hearing is presumed by the guidelines, unless the NAO deems that a hearing is not a suitable method to gather information. It is important to note that:

  • a hearing is only one of several methods used by the NAO to gather information;
  • a hearing is not a judicial proceeding;
  • examination of witnesses is not permitted;
  • the Secretary of the NAO or his or her designee is the presiding officer and is the only person that elicits information from the witnesses;
  • generally the rules of evidence are not in effect; and
  • persons wishing to present testimony must give notice to the NAO in writing along with a statement of the testimony to be presented.

After the NAO has gathered all the necessary information, including information received as a result of consultations with the other NAOs, the submitter, companies, private consultants and testimony received at the hearing, it will issue a public report. The focus of the inquiry for purposes of the public report is to determine whether the information presented substantiates allegations that the Party in question is failing to enforce its own labor laws.

Cooperative Activities

Under the NAALC, the preferred approach in reaching its objectives is through cooperation--exchanges of information, technical assistance, and consultations. The Agreement recognizes this approach by its title and addresses it throughout the document. Thus, much of the tripartite activity focuses on cooperative activities on labor issues, principally developed and coordinated by the respective NAOs.

Article 11 of the NAALC calls for the ministerial council to promote cooperative activities between the Parties, as appropriate, regarding:

  1. occupational safety and health;
  2. child labor;
  3. migrant workers of the Parties;
  4. human resource development;
  5. labor statistics;
  6. work benefits;
  7. social programs for workers and their families;
  8. programs, methodologies and experiences regarding productivity improvements;
  9. labor-management relations and collective bargaining procedures;
  10. employment standards and their implementation;
  11. compensation for work-related injury or illness;
  12. legislation relating to the formation and operation of unions, collective bargaining and the resolution of labor disputes, and its implementation;
  13. the equality of women and men in the workplace;
  14. forms of cooperation among workers, management and government;
  15. the provision of technical assistance, at the request of a Party, for the development of its labor standards; and
  16. such other matters as the Parties may agree.

The Parties have focused cooperative activities on labor issues that were viewed as meriting particular concern by all three countries and on those issues raised in the submissions filed with the NAOs. The intended goals of the activities are to provide specific technical training and expertise, to create mediums for exchange of best practices and information that will facilitate better understanding of each country's labor laws, policies and practices, and to promote awareness of current labor issues in the three countries.

Following are examples of cooperative activities programs undertaken by the countries.

  • Industrial Relations and Worker Rights Initiatives
    Cooperative activities in this area initially focused on providing fora for government officials, employers, workers, and academics in the three countries to better understand the operation of the labor relations systems of the three NAALC signatories, as well as to exchange views on the effectiveness of those systems. The workshops promoted useful exchanges on building constructive labor-management relations.

  • Occupational Safety and Health Initiatives
    Seminars and training programs have emphasized the development and maintenance of effective programs to eliminate safety and health hazards in all three countries through strengthening safety and health standards; enhancing inspection programs; heightening awareness among workers and employers on issues in high hazard industries; creating links between experts in government, industry, and labor across North America on safety and health issues of mutual interest; and identifying and collecting statistical data to evaluate the impact of worker safety and health conditions on economic activity.

  • Employment Training Initiatives
    The objective of the employment and training initiatives have focused on fostering awareness of key employment and job training issues and promoting knowledge of effective programs within the three countries. The idea has been to bring government, employer, and labor representatives together to share their expertise on matters such as developing worker skills, improving access to training, promoting fairness in employment, and ensuring security for displaced workers. Workshops have concentrated on income security programs, equality issues in the workplace, and responding to the growth of non-standard work and changing work time patterns and practices.

  • Child Labor and Gender Initiatives
    Cooperation in this area has resulted in conferences that focused on information exchange, best practices, and education. The conferences examined inappropriate participation of children and youth in the workforce and explored ways to improve conditions and safety for children and youth legally in the workplace. Initiatives have also explored the status of women in the workplace.

Attendees at these events come from government, business, organized labor, academic and non-government organizations.

Information Available to the Public - Reading Room

The official notice which established the U.S. NAO, published in the Federal Register on April 7, 1994, requires the following:

  • The NAO Secretary shall maintain a reading room where submissions, public files, transcripts of hearings, Federal Register notices, reports, advisory committee information, copies of submissions, and other public information shall be available for inspection during normal business hours.
  • Information submitted by a person to the Office in confidence shall be treated as exempt from public inspection if the information meets the requirements of 5 U.S.C. 552 (b). Each person requesting such treatment shall clearly mark "submitted in confidence" on each page or portion of a page so submitted and furnish an explanation as to the need for exemption from public inspection. If the material is not accepted in confidence, it will be returned promptly to the submitter with an explanation for the action taken.
  • The Office shall be sensitive to the needs of individuals' confidentiality and shall make every effort to protect such interests.

In addition, the Library of the Reading Room has various reports and resource materials pertaining to activities in which the three signatories to the NAALC are involved. These materials include: labor law documents from the United States, Canada and Mexico; proceedings of the various cooperative activities described above; studies and reports published by the Labor Secretariat; non-confidential documents relating to submissions, including public reports; and various other materials related to Mexico, Canada, the NAFTA and labor law.

Copies of public information can be obtained by contacting the Office of Trade Agreement Implementation at TAATC@dol.gov or by telephone at (202) 693-4900.

To receive copies of any of these materials via mail, please call the NAO at (202) 693-4900 or write to:

U.S. National Administrative Office
U.S. Department of Labor
200 Constitution Avenue N.W.
Room S-5205
Washington, D.C. 20210


Appendix 1

NAALC Process

Once a submission is filed with NAO (full scope), the NAO has consultations with other NAO's (full scope). Then, the NAO issues its Public Report. Unresolved matters go forward to Minister to Minister Consultations (full scope). After such consultations, unresolved, trade related, mutually recognized matters (health and safety, technical labor standards) may go before an Evaluation Committee of Experts (ECE), who will issue a report to the Ministerial Council, and further Minister to Minister Consultations may result. If the matter still is unresolved, a Ministerial Council Special Session may occur. If not resolved, the matter (health and safety, child labor, minimum wage) may progress to dispute resolution. If still not resolved, sanctions may occur.

During this process, the role of the Secretariat is to write publications/reports and to provide staff/technical assistance to the Ministerial Council.


Appendix 2

NAO Submissions Timeline

Once a submission is received by the NAO, the NAO Secretary has 60 days to accept or to decline a submission for review. If accepted, the NAO has 120 days with a possible extension of 60 days to issue the report. During the review process, the NAO may consult with other NAO's, may consult with NAO Interagency Group, and may hold a hearing.