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					             Migration and private employment agencies : The challenges ahead

The ILO Private Employment Agencies Convention (No. 181) offers better protection for
temporary migrant workers and an opportunity for employers in the industry to combat
unfair competition and clean its record, undermined by abuses. But will Convention 181
prevail over the liberalising spree in services such as the GATS and the proposed European
Directive (Bolkestein)? Much depends on the ILO staying on course with its decent work
agenda and on ongoing campaign by trade unions.
                                                                                        Luc Demaret
                                                                      Bureau for Workers’ Activities

Trade unions – inspired by the ILO Philadelphia Declaration according to which “Labour is not a
commodity” – have always been suspicious of private employment agencies. Among key
concerns has been the fate of migrant workers recruited by dubious private agencies in the
developing world or exploited by Temporary Work Agencies on their arrival in the industrialised
countries. Facts have proven these concerns to be right on too many occasions. In a report1 tabled
to the 85th session of the International Labour Conference in 1997, the ILO noted that “many of
the private employment agencies do not overstep their legal boundaries and contribute to national
development. However, a disturbing number of them, often not widely known, exploit both
workers and the countries involved, including the host countries”. Later during the same year,
Trade Union World2, the monthly paper published by the International Confederation of Free
Trade Unions (ICFTU) said that “accusations against (these recruitment) agencies are beginning
to accumulate throughout the world”. Entitled “Modern-day slavery for temporary migrants”, the
article detailed abuses such as fictitious job offers, for a fee, the withholding of information, or
false information on the nature of the job and the conditions of employment, the charging of fees
above the legal maximum and even, in the worst of cases, mafia style-trafficking. In one Gulf
country quote in the ICFTU article 300 nationals were at the time suspected of dealing illegally in
work permits. They were accused of recruiting Asian and Arab workers via agents abroad and in
exchange for up to 3,000 dollars per head provide them with visas and promise them jobs. The
promised jobs did not exist and the company that was supposed to employ them was fictitious. In
an Asian country, some 60 local recruitment agencies were involved in smuggling workers
abroad with the complicity of high-ranking officials from the police and the government. Cases
like these have been regularly denounced by trade unions and non-governmental organizations. In
fact, the trade union and ILO concerns for malpractices by unscrupulous employment agencies
probably date back to the ILO’s very inception. As recalled by Eric Gravel (see Eric’s article) the
very first ILO Recommendation adopted in 1919 called on Member States to “take measures to
prohibit the establishment of employment agencies, which charge fees or which carry on their
business for profit”. Until very recently most trade unions would have supported that approach.
In 1980, the Swiss trade unions for instance, called for legislation prohibiting temporary work
agencies, as “trade unions can not accept that workers are placed in employment by
intermediaries seeking profits out of this operation”. More recently, in April 2005, the Secretary-
General of the Malaysian Trades Union Congress, Mr G. Rajasekaran called for “all middlemen
or recruiters to be eliminated”3. He was speaking at a regional workshop on migrant workers
jointly organised in Petaling Jaya by the MTUC and the ILO. According to reports from the
meeting, Mr Rajasekaran quoted many cases of foreign migrant workers being cheating of their
savings by unscrupulous agents who demanded large sums of money to obtain the necessary
papers which were normally forged travel documents.
Abuses were also recently revealed in Dubai where, according to newspapers, security guards
who initially had signed a foreign service agreement with a basic salary of about 225 US dollars
had seen their wage reduced to 185 dollars in the employment contract upon arrival in Dubai and
again lowered to 150 in a revised contract later in the year.
It is in that context of abuses and calls for prohibition of private employment agencies that ILO
Private Employment Agencies Convention (No.181) adopted in 1997 has to be considered. It was
clear in 1997 that prohibition of private employment agencies was leading nowhere. At that time,
it was said, for example, that fee-charging private agencies represented 80 percent of all
movements of labour from Asia to the Arab States. In Europe the growth of jobs provided by
temporary work agencies was estimated at 10 percent a year from 1991 to 1998. The challenge
for trade unions was how to ensure protection for the millions of workers who were calling for
the services of recruitment or temporary work private agencies.
Employers had also an interest in promoting the recognition of private employment agencies.
Convention 96, the Fee-Charging Employment Agencies Convention that dated from 1949
provided for the abolition of such agencies (art. 3). A new Convention would give an opportunity
to adopt a more flexible approach that was actually more in line with reality. It would also
provide an opportunity for the industry to revamp its image and put in place a number of
regulations that would force black sheep out of business.
Indeed, abuses by unscrupulous private agencies either recruitment and employment agencies or
temporary work agencies had cast opprobrium on the whole sector. Like trade unions, employers
had also to adopt a new approach. For many years, they had resisted attempts by governments to
regulate the profession. For example, in 1995, one month after the Migrant Workers and
Overseas Filipinos Act was adopted in the Philippines, the Philippine Association of Service
Exporters, Inc. (PASEI) filed a petition to nullify the law. The laws had been passed after abuses
of Philippines maids in the foreign countries made headlines, including the Flor Contemplación
case. A 42-year-old Filipino maid, Flor Contemplación was convicted by a Singaporean court of
killing another Filipino maid, Delia Maga and Nicholas Huang, the three-year-old Singaporean
son of her employer on May 4th 1991. She had originally confessed to the murders. It was,
however, later claimed that she made the confession under duress. She was hanged before dawn
on Friday 17th March 1995.
PASEI had sought self-regulation in the overseas placement industry. According to a recent
editorial published in the Manila Times “It wanted private initiatives to promote the welfare of
migrant workers and to contribute to the country’s socio-economic development”4. When the
Manila Regional Trial Court declared certain provisions of the Act unconstitutional in early 2005,
PASEI saw this as a victory for free enterprise while the government announced it would appeal
the decision. Much as prohibition of private employment agencies did not work, self-regulation
of the industry did not prevent abuses that damage the entire sector. In 1999, in the General
Survey on the ILO Migrant Workers Conventions (Nos. 97 and 143), the ILO Committee of
Experts on the Applications on Conventions and Recommendations noted not a single
government nor an employer or a worker organisation had provided information that would
enable it to determine whether self-regulation was indeed a widespread means of regulating the
Convention 181 offered a solution both for trade unions seeking to protect workers employed
through recruitment or temporary work agencies and for employers seeking to project an
improved image and lay out a number of basic rules to be applied by all.
Not surprisingly, one of the key provisions of Convention 181 applies to migrant workers. Article
8 of the Convention says “Members should seek adequate protection for and prevent abuses of
migrant workers recruited or placed in its territory by private employment agencies. These shall
include laws or regulations which provide for penalties, including prohibition of those private
employment agencies that engage in fraudulent practices and abuses.”
As the Convention recalls its in preamble the provisions of the Forced Labour Convention, 1930,
the Freedom of Association and the Protection of the Right to Organise Convention, 1948, the
Right to Organise and Collective Bargaining Convention, 1949, the Discrimination (Employment
and Occupation) Convention, 1958, the Employment Policy Convention, 1964, the Minimum
Age Convention, 1973, the Employment Promotion and Protection against Unemployment
Convention, 1988, and the provisions relating to recruitment and placement in the Migration for
Employment Convention (Revised), 1949, and the Migrant Workers (Supplementary Provisions)
Convention, 1975, it can be assumed that “protection for and prevent abuses of migrant workers”
would cover the human rights of all migrant workers and equal treatment and opportunity
(Convention 143) as well as the rights for migrant workers contracted by agencies to form trade
unions and bargain collectively.
Beyond those basic rights for migrant workers, or actually any worker employed through a
private agency, Convention 181 contains a number of important features. A number of provisions
require consultation with the most representative organizations of employers and workers and/or
conformity with national law and practice. It is assumed that the consultation process envisaged
in the Convention refer to employers and workers organization in the country where the actual
employment is taking place, not the recruitment country if the workers has been recruited abroad.
Similarly reference to national legislation and practice is meant to suggest legislation and practice
in the country of employment.
Hence after having considered the respective role of private and public employment agencies for
decades (Convention No. 34 on fee-charging employment agencies dates back to 1933). The ILO
tripartite partners have agreed to a Convention the purpose of which “is to allow the operation of
private employment agencies as well as the protection of the workers using their services”
(Convention 181 Art 2). Workers had to overcome their initial opposition to any kind of private
employment agencies and employers had to accept that recognition of the contribution of private
employment agencies could not be obtained without some regulations being put in place. This
includes a system of licensing and certification, the prohibition of private agencies to charge any
fees or cost to workers and the establishment of respective responsibilities of the employment
agencies and of the user enterprise in a number of key areas such as collective bargaining,
minimum wage, working time, etc.
The question for today and for tomorrow is to what extent the provisions of the Convention and
the promotion of its ratification can be reconciled with efforts at regional and global levels to
liberalise services.
The “Bolkestein Directive”
Today, 18 countries have ratified Convention 181. This includes … countries in the European
Union (Belgium, the Czech Republic, Finland, Hungary, Italy, Netherlands, Portugal and Spain).
What would be their situation if the proposal for a European Directive on “services in the internal
market”, also known as the “Bolkestein Directive” were to be adopted?
On 13 January 2004, the then Internal Market Commissioner, Frits Bolkestein, a Dutch official,
submitted a draft Directive which is, according to the European Commission, aimed at creating a
real internal market in services by requiring European Union members states to cut administrative
burdens and ‘excessive red tape’ which are seen as preventing businesses from offering their
services across borders or from opening premises in other member states. This might be seen as a
positive step that can unleash energies and create wealth as well as jobs in the European Union.
However, trade unions and non-governmental organizations have sounded the alarm as to the
contents of the draft directive. A number of governments, including Belgium and France, have
follow suit. So what is wrong with Mr Bolkestein initial proposal?
First, the liberalisation proposal would apply to temporary employment agencies with, according
to trade unions, a potential risk for social dumping. This is because of the “the country of origin
principle”, according to which once a service provider (such as for instance a temporary work
agency) is operating legally in one Member State, it can market its services in other without
having to comply with further rules in these ‘host’ member state. In other words, countries that
would have put in place legislation to regulate employment agencies in line with the obligations
of Convention 181 may have “to eliminate from their legislation a number of requirements listed
in the Directive that hamper access to and the exercise of service activities” according to the
authors of the draft Directive.
The system of certification which is provided for in the Convention does not fit with the Draft
Bolkestein Directive. In fact once a temporary work agency complies with establishment
requirements in one European Union member country (for instance one that has not ratified the
ILO Convention) it would be free to move to another EU country without further obligations.
That would clash with obligations under Convention 181 if the country of destination has ratified
this instrument. Only if EU member states would harmonize their legislation, in line with the
provisions of Convention 181, would such a clash be avoided. But the Draft Directive does not
contemplate harmonization.
The fears of trade unions is therefore that the country of origin principle comes down to a legal
incentive for companies to move to countries with the least strict legislation on social, fiscal and
environment issues, and the creation of letter box companies offering services at low prices,
which will be able to operate from their registered offices across the whole territory of the Union.
Even if the temporary work agency has to pay the legal minimum wage in the country where it
sends its workers, it could still chose for headquarters a country where taxes, social contributions
and other cost are lower. The anti-Bolkesteiners have been accused of scare mongering. Yet some
recent developments may give us a taste of what is in the can for the future should the draft
Directive be adopted (which seems now unlikely because of growing opposition, including from
a number of EU governments themselves).
In Belgium, for instance, an ice-cream company, Frisa, has told its work council that it will
recruit Polish workers through a German temporary work agency to meet demand in the peak
season5. The Poles are paid by piece. Another temporary work agency, Eurostar 25, based in the
Netherlands, is also recruiting Polish workers for the Belgian market. In fact, it recruits Poles
who have the double nationality (German-Pole), which enables them to work in Belgium. The
difference is their salary: they work for 6,40 euros an hours while salaries in Belgium should be
closer to 8 euros. “Some people are using the liberalisation of the market to impose unacceptable
working conditions in our country”, Greta D’hondt, a member of Parliament, said. The Labour
Minister Freya Van den Bossche said an inquiry has been launched into the activities of the
temporary work agencies concerned. She reminded that temporary work agencies should have an
authorisation to provide services in Belgium and violation of this rule can be used to sanction
them. What will happen if the draft Directive, which would eliminate such a requirement, were to
be adopted?
On 19 April 2005, the rapporteur of the European Parliament, Evelyne Gebhardt, presented the
first part of her report on the `Bolkestein Directive’. According to a press release from the
European Trade Union Confederation, Ms Gebhardt “tries to get it right and excludes, from the
outset, labour relations and services of general interest from the scope of the directive”. The
ETUC said it was waiting for the second part of the report. It added: “It is important to make the
directive watertight against social dumping, and totally to exclude labour and employment law
from the scope of an internal market directive”6.
It warned, however, that there were still some unconditional supporters of the initial Bolkestein
draft who continue to stress the importance of the country of origin principle - which Ms
Gebhardt has deleted and replaced with mutual recognition.
The proposed Bolkestein Directive should not be looked at in isolation nor should it be
considered accidental. The political will to liberalize services exists at global level. And there is a
concern among trade union organizations and NGO for the existence and preservation of public
services and social security which may become victims of the prevailing trade agenda. In that
context, a parallel can be drawn between the proposed EU Directive and the General Agreement
on Trade in Services (GATS). The GATS agreement was negotiated during the Uruguay Round
and entered into force in the beginning of 1995 when the World Trade Organisation replaced the
GATT secretariat. According to the GATS Agreement, “trades in services” is defined as
the supply of a service:
1. from the territory of one member into the territory of any other member (selling goods or
products by post or over the internet for instance, insurance, eproducts etc.)
2. in the territory of one member to the service consumer of any other member (tourism for
3. by a service supplier of one member, through commercial presence in the
territory of any other member (establishing a company or a subsidiary and investment)
4. by a service supplier of one member, through presence of natural persons of a member in the
territory of another member (labour migration)
These modes of supply are usually called modes 1, 2, 3 and 4.
For the purpose of this article our attention will be brought to the latter. GATS mode 4 indeed
covers a very particular form of migration. It has three essential features:
a. It is temporary;
b. It is decided and its purpose is controlled by the service supplier
c. It neither defines nor protect the rights of the employees concerned.
Labour migration under GATS mode 4 is temporary migration at the initiative of the employer
for the provision of a service. It has therefore nothing to do with freedom of movement for
workers. Clearly there is a risk that mode 4 migration will lead to a situation where
labour under WTO rules becomes a commodity. Although Mode 4 is about people,
human rights, workers’ rights and working conditions are not mentioned in the GATS
Agreement. This may be corrected if requests, offers and commitments by members do include
reference to those rights. However, this is far from certain.

To be fair, the WTO does not seem afraid of debating the issues. On its website it tries to explain
the various aspects of these negotiations and their potential impact. It recognizes that “Recently,
however, the negotiations and the GATS itself have become the subject of ill-informed and
hostile criticism”. And adds that “Scare stories are invented and unquestioningly repeated,
however implausible. It is claimed for example that the right to maintain public services and the
power to enforce health and safety standards are under threat, though both are explicitly
safeguarded under the GATS. How have serious people come to believe what is, on the face of it,
out of the question? Why should any Government, let alone 140 Governments, agree to allow
themselves to be forced, or force each other, to surrender or compromise powers which are
important to them, and to all of us?” This is all reassuring. But remember the Multinational
Agreement on Investments, the famous MAI negotiations in the OECD which collapsed in 1998.
The aim of the agreement was to extend deregulation by giving multinational investors a
guarantee that their foreign direct investment would not suffer from measures a national
government may take to protect their national interests, its enterprises or its citizens. Designed to
facilitate and expand international investment by preventing discrimination between national and
foreign investors, the MAI was to be applied to emerging and developing economies. Trade
unions had fought to include in the treaty an obligation to respect labour standards by means of a
binding clause which would allow for steps to be taken against any government seeking to attract
foreign investors by lowering its labour standards or violating internationally recognised workers’
rights. Proponents of the MAI said it was inevitable. Yet the failure to enlist public support,
despite very reassuring language, brought to MAI to a death.
This parenthesis brings us back to what will be the key challenges in ensuring that private
employment agencies involved in migration contribute positively to the economic development
of countries of origin and countries of destination by promoting decent work. This means that a
fine line will have to be drawn between the needs of labour markets and the human and rights at
work of migrants workers including equal treatment and respect for labour legislation in the
countries of destination. This is what ILO Convention 181 is about. The question is: will it
prevail over the present liberal trade agenda?


  ILO : Migrant Workers, report III (Part 1B), 87th International Labour Conference, June 1999.
  ICFTU : “Modern-day slavery for temporary migrants”, in Trade Union World No. 3/97 November 1997, Brussels
  Reported in New Strait Times, 20 April 2005.
  Manila Times, 18 January 2005.
  This was reported in Belgium’s Flemish Weekly “Trends” dated 10 March 2005. Subsequently the question was
raised in Parliament and Labour Minister Freya Van den Bossche confirmed that an investigation was underway.
  ETUC : “Ms Gebhardt’s report on services is a step in the right direction”, ETUC press release, Brussels, 20 April

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