Part Five: Summary and Issues for Future Consideration

In each country party to the North American Agreement on Labor Cooperation (NAALC), labor authorities enforce laws to protect workers against interference with freedom of association and the right to organize, including when such interference involves the use of plant closings or threats of closing. However, results vary with the structure and administration of labor law among the countries.

Outright, sudden, total plant closing to forestall union organization is not a common occurrence. Most employers faced with a union organizing drive do not respond by totally closing the workplace. Some employers respond to a union organizing effort with partial closings through product line relocation, subcontracting or "outsourcing," partial layoffs, and the like. These too are exceptional cases.

Most plants or other work facilities involve investment, trained workers, existing supplier and customer links, and other features that complicate an immediate shutdown in response to a unionization drive. At the same time, new technology and new forms of work organization make it increasingly easy to close plants, in contrast to earlier decades when massive capital investments in huge facilities made closings more difficult.

More common than total or partial closings is the use of threats of closing to resist unionization. With new forms of capital mobility, information systems, communications technology, and similar developments in the economy, there is more frequent dislocation of work and workers. This makes threats of plant closing all the more convincing. The findings of this report suggest that plant closings and threats of plant closing can have adverse effects on workers’ freedom of association and right to organize in the NAALC countries.

In the United States, labor law authorities effectively enforce the law with respect to determining violations and ordering remedies, including orders to reopen closed facilities and rehire affected workers. The General Counsel and the regional directors of the National Labor Relations Board (NLRB) actively prosecute plant closing and threat cases with a high level of success before the NLRB and the courts. However, while NLRB enforcement is effective in the cases it takes to a conclusion, many instances of plant closings or threats of closing that continue to occur never reach the stage of a final decision. Taking such cases to a litigated conclusion involves a lengthy, multi-stage process subject to numerous appeals that is often foregone by potential complainants.

In Canada, federal and provincial labor laws on union organizing have established rapid procedures for holding union elections where elections are held. A majority of provinces permit a "card-check" certification, without the need for an election. This minimizes the "campaign" aspects of union organizing where plant closings or threats of closing tend to arise.

Most unfair labor practice cases are heard relatively quickly in a single-stage proceeding by the relevant labor board or commissioner. Moreover, labor board decisions in Canada normally are not appealable to the civil courts and are generally accepted by all sides as final. In general, legal doctrines, administrative procedures and effective enforcement appear to have a significant effect on the phenomenon of anti-union plant closings and threats of closing in Canada.

In Mexico, the labor law system and the union organizing system are fundamentally different from those of the United States and Canada. Several features of Mexican labor law prevent issues of plant closings or threats of closing from arising under Mexican law as they arise in Canadian and U.S. law.

The certification process of union formation, accompanied by a campaign that gives rise to plant closings or threats of plant closing to influence an election, does not exist in Mexico. Unions are normally formed without elections or election campaigns. Employers in the formal sector tend to accept the existence of unions as an inevitable component of Mexico’s labor relations system. Generally speaking, most workplaces likely to be unionized—medium and large firms in the formal sector—are already unionized, so new organizing efforts are limited in number. Most organizing that occurs is what is called "raiding" or "poaching" in the United States and Canada, where one union seeks to displace another as the collective bargaining agent at an already-unionized workplace.

While there are many plant closings in Mexico, discriminatory anti-union closings are not discernible in records of cases where the collective conflict legal procedure for plant closings is used. Virtually no cases arise in which a union challenges a plant closing by alleging anti-union motivation. In contrast, many cases arise in which the union grants mutual consent to the closing to obtain the best possible severance terms. Moreover, threats that are susceptible to an unfair labor practice charge and a test of proof in litigation in the United States or Canada are not unlawful in themselves in Mexico. Therefore, plant closing threats are not susceptible to research through review of administrative and judicial records.

Nonetheless, two very significant findings emerged in the review of Mexican administrative data. The first was that the legal process created to deal with plant closings and to test the employer’s motivation for closing the plant—which would enable unions to challenge the closing—is virtually never used by Mexican companies and unions.

The second finding was closely related to the first. A great number of workplace closings in Mexico follow an alternative legal route wherein the union consents to the closing. Using the "mutual consent" clause of the Federal Labor Law obviates a "collective conflict of an economic nature" and the legal process meant to resolve it. Both of these findings, and the fact that they would not typically be expected in Canada or the United States, illustrate the extent of legal differences in the Mexican labor relations system.

Issues for Future Consideration

1. Improving Information on the Administration of Labor Laws

Governments could seek to improve the quality and accessibility of administrative data in the three NAALC countries, which is essential for examination of the effectiveness of labor laws.

The information compiled for this report presents a partial picture, demonstrating the need for more empirical information about labor law administration in NAALC countries. For example, enhanced methods for capturing standardized information on the disposition of cases from decentralized labor law authorities—the NLRB regional offices in the United States, the State CABs and State labor departments in Mexico, the provincial labor boards and labor ministries in Canada—could develop a sharper national picture of labor law administration. Analysis would also require careful disaggregation of data to adjust for population differences, industrial sector differences, union density differences, and other related information. Each country’s federal and subfederal labor agencies are best capable of designing administrative data systems in each of their jurisdictions, but with a national and trinational coordination, a high level of comparability of the effectiveness of labor law enforcement might be achieved.

Subjects for consideration by labor researchers in the three NAALC countries for further treatment of matters raised in this report include the following:

• review of the records of more or all of the remaining 31 regional offices of the NLRB to see if the pattern perceived in the sample of two offices is reflected in other offices;

• in-depth examination of cases in which labor boards in Canada and the United States ordered remedies to be imposed, in order to study their effectiveness;

• a survey of Canadian and Mexican unions for comparison with U.S. survey data used in this study;

• further study of Federal and State CAB records in Mexico to see whether the procedure for voluntary termination of the employment relationship (which appears to be a common avenue for plant closings) coincides with other procedures, such as those for disputes over title to collective agreements, or correlates to better severance arrangements, or has other effects, which may shed more light on possible effects of closings on the freedom of association;

• examination of alternative routes for dealing with plant closings in Mexico, such as strike declarations or individual claims of unjustified dismissal, that would indicate whether unions have developed strategies for using these procedures to obtain favorable severance terms; and

• more analysis of the implications of the current labor market environment and the restructured "new economy" for labor laws that protect the freedom of association and the right to organize.

Consideration can be given as to whether this report can serve as a bridge to other national and international initiatives in the labor relations field, through special meetings, conferences, studies, and so on, to promote awareness of the issues involved in the report and to relate them to current concerns in each country.

For example, the issues in this report could be considered in light of the "New Labor Culture" agreement recently developed in Mexico, which contains Principles of Ethics in Labor Relations. The principles establish a code of conduct between unions and employers based on "strict adherence to ethical and juridical principles in the exercise of legal representation."

In Canada, the theme of this report could be examined in relation to major labor law reforms initiated by various jurisdictions over the past several years, including the current federal reform of Part 1 of the Canada Labour Code.

The United States has seen much attention devoted to the development of Model Business Principles proposed by the Clinton administration, and other national or international codes of conduct developed by companies, by labor-management groups, and by non-governmental organizations, which could be related to the issues in this report.

All three NAALC countries are members of the Organization for Economic Cooperation and Development (OECD), which has adopted, with the concurrence of employer and trade union advisory committees, the OECD Guidelines for Multinational Enterprises,¹⁰⁸ and of the International Labor Organization (ILO), which has adopted the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy.¹⁰⁹ Both these instruments deal with issues raised in this report, and could enhance trinational, tripartite discussions in the NAALC context.