By Paul Weinberg
TORONTO, Oct 2 1996 (IPS)

The labour side agreement of the North American Free Trade Agreement (NAFTA) is actually showing signs of teeth.

Canada and one of its western provinces, Alberta, could be fined for violating the terms of the treaty covering Canada, Mexico, and the United States, says Jeffrey Sack, a Toronto lawyer with expertise in international law disputes.

Alberta’s decision to privatise its labour standards enforcement by next year is soon to be challenged by Canadian and U.S. lawyers before a Tribunal on Labour Standards under NAFTA.

“I know of no other jurisdiction in North America that has done anything similar,” says Sack.

Any country, state, or province that is found through arbitration to be trading unfairly under NAFTA by driving down its regulatory wage labour standards, must pay a financial penalty, based on a percentage of their trade in goods and services with other jurisdictions under the treaty.

The Alberta government will save an estimated 2.7 million CDN dollars (some two million U.S. dollars) by privatising labour standards enforcement, says provincial department of labour spokeswoman, Charlotte Morgan.

Like most state, provincial, and national jurisdictions, Alberta has employment legislation covering minimum standards for terms and conditions of employment in such areas as pay, employment records, hours of work, vacation, and employment of children.

But enforcement and administration of the legislation is being handed over to private companies, including store-front operations, which will receive fees of up to 200 CDN dollars (about 140 U.S. dollars) for each legal case, plus an incentive payment for quick resolution. The collection of outstanding funds owed by employers to former workers will also be handled by private collection agencies.

With only a quarter of Alberta’s workers unionised (the lowest rate in Canada), the province has relied on a few employment standards inspectors, says Winston Gereluk, communications officer with the Alberta Union of Provincial Employees, which is participating in the complaint before NAFTA.

The privatisation of labour standards enforcement is part of a radical process of deregulation the Alberta government has undertaken in the past year following the passage of the Government Organisation Act. The law essentially allows the province to hand over any government service or programme to the private sector.

Aside from labour standards, Alberta has also sold off its liquor stores and car registration operations.

“Settling a dispute over a fired worker or unpaid wages is a far more complicated thing than selling a bottle of booze or even handling car registration renewals,” stated an editorial in the Edmonton Journal, Alberta’s leading newspaper.

The editorial suggests that some functions, such as the enforcement of a person’s legal rights, must be part of a public process and cannot be left to the whims of profit-making activity.

When Canada signed NAFTA, it undertook an obligation to ensure compliance and effective enforcement of labour standards, says Sheila Greckol, Edmonton union lawyer and president of the Canadian Association of Labour Lawyers, which is leading the challenge against Alberta.

Ironically, Alberta is the sole province within Canada’s federal system of split labour law jurisprudence that signed onto the NAFTA agreement.

“The province would be forcing workers who are already under considerable stress to wend their way through a patchwork system of private and public providers, led by agencies that may have no particular interest in obtaining justice for them,” says Greckol.

Employees can still appeal to the province’s director of employment standards, an Alberta Department of Labour employee. But Greckol does not find this reassuring.

“In fact, given recent policy directions dictated by this government, it is conceivable that agencies which try too hard to get justice for workers may quickly find themselves being blackballed by the department,” Greckol says.

So far, no conviction leading to a fine has occurred under areas covered by NAFTA’s labour side agreement arbitration process. Areas not covered by arbitration, particularly the matter of member governments not enforcing their own labour codes, end with ministerial consultation with no penalty available.

Mexico managed to restrict the scope of the labour side agreement of NAFTA during the negotiations for the treaty, says Sack. NAFTA has heard several cases involving Mexican and U.S. workers where multinational corporations fought union organisers with firings and at least one plant closure.

But the bad publicity generated has also had an “intimidating” impact on some employers as well, says Mark Hager, a Washington law professor and a member of International Labour Rights Advocates.

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