A strategic approach to labour inspection

In a report released in 2006, the ILO highlighted the difficulties of labour inspection in its member States and advocated a number of measures to strengthen its effectiveness. The author argues that inspectorates must go beyond calls for more inspectors by adopting a clear strategic framework for reacting to incoming complaints and targeting programmed investigations in order to maximize effectiveness in the use of their overstretched resources. To do so, he proposes, their work must be guided by the principles of prioritization, deterrence, sustainability and achieving systemic effects. The article concludes with an outline of the requirements of a coherent regulatory strategy. he problem facing national governments in regulating conditions in the T workplace is daunting. Public policies on health and safety, discrimination and basic labour conditions often cover millions of workers, located in hundreds of thousands of workplaces across dispersed geographic settings. Conditions within those workplaces vary enormously – even within a single industry – and employers often have an incentive to make those conditions as opaque as possible. Trade unions, which have been the traditional allies of government regulators in targeting and conducting inspections, are in sharp decline in many developed and developing countries. And, most challenging of all, government labour inspectorates face diminishing budgets, shrinking staff, and a more complicated and difficult regulatory environment. Recently, the International Labour Organization acknowledged the crisis in labour inspection nationally and internationally. In late 2006, the ILO called upon its member States to adopt a series of policies to strengthen and modernize labour inspectorates as a means of assuring implementation of fundamental workplace policies. In pursuing its broad “Decent Work Agenda” the ILO’s Governing Body Committee on Employment and Social Policy noted: * Boston University. Email: [email protected]. The author is grateful for the helpful comments and suggestions of a number of people with whom he discussed ideas in this article during his sabbatical, including: Janice Fine, MinWoong Ji, Tom Kochan, Rick Locke, Paul Osterman, Michael Piore, Amanda Pyles and Andrew Schrank, and seminar participants at MIT, Rutgers, and Stanford. Responsibility for opinions expressed in signed articles rests solely with their authors and publication does not constitute an endoresement by the ILO. Copyright © The author 2008. Journal compilation © International Labour Organization 2008. 350 International Labour Review The main overarching strategic issue is that the quality of governance of the labour market is a major factor in distinguishing whether countries are successful or not in finding a development trajectory that leads to a sustainable reduction in poverty. Improved labour inspections and safe work management, as well as underpinning social protection at work, lead to a better quality product, higher productivity, a decline in the number of accidents and an increase in the motivation of the labour force (ILO, 2006, p. 3). The challenges facing labour inspectorates, however, transcend the number of inspectors available to enforce laws. Changes in the workplace, from the growth of the informal sector and the fissuring of the traditional employment relationship to the decline of trade unions and emergence of new forms of workplace risk make the task facing labour inspectors far more complicated. In addition, expectations and demands on the public sector and their consequent effects on how government agencies are overseen and managed have created intensified pressure and scrutiny. Along with calling for additional resources, the ILO approach stresses the need for improved training for labour inspectors, better regulatory infrastructure to support inspectorates in their activities, and reforms to ensure that labour inspectors are protected from the vagaries of the political process. As will be argued below, while these steps are necessary, they are not sufficient. What is required is a more strategic approach to labour inspection, measured against a different set of criteria from those by which workplace agencies are normally judged. In order to explore this approach, I begin by discussing the factors that have made the workplace a more difficult place to regulate in many countries. Indeed, the changing workplace environment presents a major challenge, in response to which I go on to discuss four principles that labour inspectorates need to integrate in framing their policies for the complex regulatory environment they face. I then apply these principles to the evaluation of interventions in the primary domains of enforcement, namely, responding to worker complaints and conducting programmatic investigations. Worker-initiated inspections can lead regulators to where major problems may reside, but relying entirely on complaints does not ensure that inspections are conducted where the most prevalent problems occur. This is because the incidence of complaints is only imperfectly related to underlying workplace conditions. For this reason, programmatic investigations – i.e. those conducted at the initiative of labour inspectorates – represent precious resources that must be guided by careful strategic choices. While arguing that inspectorates often fail to meet this requirement, I also offer examples demonstrating how this can be done more effectively. The article concludes by outlining the key features of a coherent enforcement strategy. The challenge facing labour inspectorates The fundamental problem facing labour inspectorates arises from resource limitations. In its 2006 report on labour inspection, the ILO’s Governing Body ComA strategic approach to labour inspection 351 mittee on Employment and Social Policy stated that “[t]here is widespread concern that labour inspection services in many countries are not able to carry out their roles and functions. They are often understaffed, underequipped, under-trained and underpaid” (ILO, 2006, p. 4). National-level comparisons illustrate the extent to which this number is dwarfed by the global working population. The ILO benchmarks, set on the basis of stage of economic development, are one inspector per 10,000 workers in developed market economies, one inspector per 20,000 in transition economies, and one inspector per 40,000 in less developed countries (ILO, 2006, p. 4). In most countries, the number of workers per inspector exceed these benchmarks (see figure 1). For example, Viet Nam’s ratio is one inspector for about 140,000 workers (more than three times its benchmark level of 40,000), while the Philippines’ ratio is one inspector for over 180,000 workers. Among the developed countries, the United States is far off the 10,000 benchmark, with one inspector for 75,000 workers. In the United States and many other countries, such ratios arise from the stagnation of funding for labour inspectorates throughout much of the past decade, coupled with the continued growth of the workforce and number of employers over the same period. In the United States, real spending on enforcement by major federal workplace agencies has remained virtually unchanged for 25 years, despite the fact that the number of workplaces has grown by 112 per cent and the number of workers by 55 per cent over the same period (Bernhardt and McGrath, 2005; Weil, 2007).1 The ratios shown in figure 1 – and, perhaps even more strikingly, the absolute numbers of inspectors indicated for each country at the bottom of the figure – provide a stark illustration of the resource problem facing labour inspectorates. Yet they also mask complexities that make the limited number of inspectors even more troubling. Indeed, changes in external conditions surrounding the workplace have made the basic structure of employment relationships more complicated for a number of reasons. First, the growth of subcontracting and independent contracting, the use of temporary employment agencies, the rise in the developing world of the “informal sector” and in general the fissuring of the basic employment relationship that formed the basis of many workplace regulations (Ruckelshaus, 2008). Second, the secular decline of trade union representation has reduced the presence of a workplace agent that plays important roles in implementing workplace policies (see Weil, 1991 and 2005a).2 Declining union membership has 1 For example, real spending on enforcement by the Occupational Safety and Health Administration and the Mine Safety and Health Administration (MSHA) – the United States’ main health and safety agencies – actually declined from US$182 million in 1983 to US$172.6 million in 2007 (calculations by the author in 1982–84 dollars based on data reported in the Budget of the United States Government). 2 For example, between 1995 and 2004, private-sector union density declined from 10.4 to 7.9 per cent in the United States; from 22.2 to 18.0 per cent in Canada; from 21.6 to 17.2 per cent in the United Kingdom; from 45 to 28.2 per cent (2003) in Ireland; from 25.1 to 16.8 per cent in Australia; and from 19.8 (1996) to 12 per cent in New Zealand (see Boxall, Haynes and Freeman, 2007, pp. 208–209).