International Labor Standards and their Impact on Business

INTERNATIONAL BUSINESS ISSUES AND POLICIES
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International
Business Issues
And Policies
2019

INTERNATIONAL BUSINESS ISSUES AND POLICIES
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International labor organization (ILO) is the United Nations Agency with 185 member stated and
was started in the year 1919, which deals with the labor related problems and issues (Hughes &
Haworth, 2013). It sets international labor standards, inspires employment opportunities, and
endorses rights at work. ILO records complaints against any person who disturbs international
standards or rules, but do not execute any approvals on governments.
International Labor Standards refer to the legal instruments, which are drawn by the components
of ILO such as employers, workers and government who sets the basic rights and principles at
work. They are officially binding international treaties that are sanctioned by the members of
ILO or the references, which serves as the non-binding guiding principles. Many times, an
agreement lays down the basic ethics or rules to be executed by approving countries, while a
related reference can be independent (not related to the agreements) (Thomann, 2011).
International labor standards are accepted at the International Labor Conferences (ILC). ILC is
also known as parliament of labor which held in Geneva every year in the month of June. It
makes decision on the general policies of ILO and the representative of the conference presents
the voting session. It is necessary for the member states to submit them to their experienced
authority for approval. In case of the conventions, these approvals refer to ratification
(Organization, 2019).
By the end of June 2018, the ILO has adopted nearly 200 conventions, 6 protocols and 205
recommendations casing a wide range of work disputes (Gött, 2018). If these conventions are
signed and agreed by governments they can become action whereas ratification can create legal
compulsions for the governments in order to apply to its provisions.
International labor standards are labeled to the governments. Nonetheless, when the countries
have their own labor standards International Labor Organization Standards were needed by
the business for the following reasons:
 ILS affects the business through national legislation. When conventions are ratified by
the country, this appliance sets the agenda for national practice and law on a particular
subject. If the prevailing practice or law does not meet the convention then it can result
in new labor laws, new implementation advices and changes in the existing laws

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(Berliner et al., 2015). Thus, the consequences can lead to changes in the labor
practices, which can include the important administrative cost and measures.
 International labor standards can be an appropriate source of supervision for business in
the areas, which are not enclosed by the collective settlements or national laws. Many
companies who operate internationally consider ILS, or the declaration of international
labor organization in 1998 for the growth of their code of conduct or other occupational
conduct enterprises (Maupain, 2013). Global enterprises for controlled business
meeting, such as UN Global Compact, rely on these sources while following the labor
principles whereas the global compact business shareholders involve to work towards
their understanding in their day-to-day activities of business plans.
 Even if the national law does not adopt international labor standards (ILS), it may inspire
the content of the collective agreements.
In addition to the disagreements about the applicable manner of execution of the International
Labor Standards, there are uncooperative options regarding the legitimacy of their presence. The
four most common disagreements elevated in contrast to international labor standards are:
o Undermine international competitiveness:
The analysis of international labor standards traditionally lift up by the economists of
Right-of-Centre is that they prevent the income and employment and thus, change the
market forces. According to economists, Countries were approved by the global free
trade in order to get specialize in the activities, which include the comparative advantage
and who gather the mutual gains with the help of exchange (Popova & Özel, 2018).
The international competitiveness of the countries have huge amount of untrained labor
that are highly based on the ability of providing the low cost workforces. Therefore, raise
in the cost of labor can lead to the damage in the comparative advantage by the
international labor standards. According to a traditional dispute, ILS left evolving the
nations with the decreasing frugality of export.
The economists recommended that higher international standards could not damage the
competitiveness. The evidence provided by Berik and Rodgers (2006) proposes that
advanced labor standards can easily be balanced by incentives reassuring exports and
foreign direct investments. This dispute shows that advanced labor standards not only