Enforcing the Global Living Wage at international and national levels against states and business

It is vital with enforcement mechanisms to ensure that countries work towards a global living wage. One option is to establish tribunals on two levels – international and national. An international tribunal would allow parties representing workers to bring claims against states if they fail to enforce a living minimum wage. National tribunals on the other hand, would have the power to hear disputes between interested parties and corporations. It is suggested that the International Labour Organisation (ILO) could have an orchestrating role for both of the tribunals.

History has taught us that we cannot rely on voluntary measures led by companies themselves to improve the lives of vulnerable workers in their supply chains. It is time we hold corporations accountable for their actions through enforcing a global living wage.

Once we agree that countries should implement living wages, we need a way to enforce these living wages. My strategy proposes both international and national tribunals. The former would allow for trade unions and other working organisations representing working citizens to bring claims against states, at an international level, when they fail to enforce minimum living wage laws.

The interested party representing the workers would be awarded an amount on top of any recovered funds, which could provide a major source of revenue. This is likely to encourage worker organisations to protect the most vulnerable workers today that typically are not covered by current labour regulation, by monitoring and organising the informal work sector.

The primary remedy would be unpaid remuneration for the workers, which states, if found guilty, would be ordered to pay to workers that have not been paid a living minimum wage.

There is also an anti-corruption component to this mechanism, as the tribunal could order states to pay a higher fine if there is sufficient evidence of corruption, such as labour inspectors taking bribes. It is hoped that this will gather transnational political support for lawsuits outside of the labour rights movement.

The tribunals at the national level would be established by every country that ratify the Global Living Wage Instrument as adjuncts to existing institutions, such as labour relations tribunals. This way they can build specialist knowledge about work occurring in supply chains.

The National Supply Chain Tribunals would have the power to hear and remedy disputes over unpaid living wages due to supply chain dynamics, either between workers and corporations, or between corporations themselves.

States would also have the opportunity to recover funds they have been made liable to pay in the international tribunal from the responsible parties in the supply chain. Claims could be brought against employers, retailers, brands, financiers and others with power in supply chains.

To do this, the states would have to actively inspect, collect evidence and in turn prosecute those supply chain actors whose business practices result in below living wages. The amount paid by each party would be determined based on their contribution to the problem

The ability to bring claims against parties in the supply chains that do not directly employ the workers, including contractors, buyers, financiers, parent companies makes these tribunals different from normal labour relations institutions.

This would help remove the downwards pressure to reduce production costs often leading to unliveable wages and incentivise actors to work together to achieve a living wage.

If the tribunal find that a supply chain party has hampered with the payment of a living wage, the offended party would be made liable to pay. The tribunals would also have the power to compel parties to change business practices that lead to unliveable wages, breaches of labour law and unsafe work practice.

What’s more, the accused party does not have to be located within the country of the tribunal, as long as there is sufficient evidence that their business practices lead to poor pay conditions for one or more workers within the national jurisdiction.

In practice, this would mean that a group of subcontractors in different countries could organise a claim against a clothing brand, saying that the business practices of the clothing brand are what made it impossible for the subcontractors to pay their workers a living wage in their respective countries.

A big barrier, however, is that many large companies tend to either account for such penalties in their budgets or refuse to pay them. This then highlights the need for ratcheting enforcement mechanisms if the offended party refuse to pay the amounts ordered by the tribunal, or if the company is founds to be a serial offender.

Such mechanisms may include well known strategies including the use of embargos or suspension of import and export licences, or new and creative ones such as the suspension of intellectual property.

It is proposed that the latter would be the sanction at the top of the enforcement pyramid, as it would be especially damning for enterprises that rely on their trademark, patents and so on for their business. If Nike, for example, lost its trademark on the “swoosh” for a fixed period, that would be very damaging for its brand. The fear of this happening, would, hopefully, increase the compliance with other types of orders by the National Supply Chain Tribunal.

The role of ILO

For these two enforcement mechanisms to come to fruition, there is a need for a strong role for international organisations, in particular the International Labour Organization (ILO). It is suggested that the ILO would have an orchestrating role by overseeing the establishment and running of the international tribunals and help set up domestic tribunals and train national tribunal members.

Lastly, they would be responsible for organising forums on how the international tribunal work for relevant stakeholders, including trade unions, national government bodies and other interested parties.

Once we agree that countries should implement living wages, we need a way to enforce these living wages. My strategy proposes both international and national tribunals. The former would allow for trade unions and other working organisations representing working citizens to bring claims against states, at an international level, when they fail to enforce minimum living wage laws.