Conference Agenda

Unlawful underpayment of employees is a persistent and urgent problem both in Australia and internationally. It harms underpaid workers, undermines compliant employers, depletes payroll revenue and threatens the integrity of labour laws. Nation states seeking to curb underpayment face an enormous challenge given limited resources of labour inspectorates and increasing complexity of labour markets. Traditional top-down state enforcement has had limited success, with government agencies struggling to increase compliance motivations and reshape institutional efficacy.

Australia’s labour inspectorate, the Office of the Fair Work Ombudsman (FWO) recently initiated an innovative approach to tackling the enforcement challenge by collaborating with business and worker representatives via a tripartite model.

Tripartism is supported by theories of regulatory best practice, such as by Elinor Ostrom, which suggest that harnessing the unique resources of influential non-state actors in public-private partnerships is superior to markets or state regulation alone. Enrolling the distinctive resources of industrial actors, and other third parties, can supplant and/or supplement state efforts to motivate and maintain compliance with laws.

However, to realise these benefits, collaborative compliance and enforcement activities must overcome a set of risks and challenges, particularly in tripartite initiatives, when the state is seeking consensus among multiple actors. These challenges include: conflicting interests, adversarial histories, low trust, power asymmetries, and regulatory capture. In this context, the state’s convening and facilitative role is key to parties achieving sufficient alignment for collective action at three levels – the enterprise, the sector, and the system as a whole.

Introducing and advancing tripartite forums is a form of ‘institutional work’ in which parties shape the institutions within which they reside. Viewed through this lens, parties have agency to shape the ‘rules of the game.’ Our research builds on the tripartism literature and offers empirical analysis of the FWO’s initiative, focusing on the extent and conditions in which tripartism can effectively foster a culture of increased compliance with labour laws.

In addressing this topic, we present data from over 45 interviews, field observation of tripartite meetings, and results from a national stakeholder mapping survey of parties directly involved in the tripartite initiative.

The Philippines ratified ILO Convention 81 (C81) or the Convention Concerning Labour Inspection in Industry and Commerce in 2024 and is designing a national labor inspection law that aligns and is consistent with the international regulatory standards stipulated in ILO C81. This paper seeks to contribute to the formulation of legislative content and coverage of the national labor inspection law by examining the deficiencies of the current labor inspectorate system and recommending policy reforms. The study conducts Focus Group Discussions and key informant interviews with the Department of Labor and Employment (DOLE) directors and labor inspectors, the labor and employer groups, the Philippine Economic Zone Authority, and informal sector associations to draw insights on the challenges in enforcing labor, social security and Occupational Safety and Health (OSH) standards. Initial results show that the current Philippine labor inspection system is beset with the following challenges: (a) weak enforcement capacity with only 8.4% of total establishments in 2021 inspected by DOLE labor inspectors (Patinio, 2021); (b) misclassification of labor inspectors as contractual workers rather than Department of Labor and Employment employees, and given additional tasks not related to labor inspection; c) the lack of significant impact of the Labor Law Compliance System (LLCS) that encourages self-regulation and voluntary compliance through a joint tripartite-based assessment amidst high risk of regulatory capture, low union membership that comprise less than 9% of Filipino salaried workers or 5% of the total Filipino workforce; (d) The large majority of employees in non-organized establishments are less likely to report OSH and labor standard violations for fear of reprisal and retaliation from their employers; (e) Sanctions for violations against labor and OSH standards were deemed to be too low to effectively dissuade and deter employers from non-compliance, particularly for medium-sized and large enterprises that may perceive the cost of full compliance to be much higher than the penalty for regulatory infringement; and (f) the absence of practical labor inspection mechanism for micro and small enterprises which comprise the majority of Philippine enterprises and whose workers are the more likely to suffer from exploitation and discrimination, low wages, and poor working conditions and who stand to gain the most from effective enforcement of labor laws.

The transformations of work and the weakening of trade unions call for a rethink of labour market regulation. In response to these challenges, labour inspections have experimented with different enforcement strategies through internal services restructuring, the diversification and combination of approaches to workplace monitoring, and the cooperation with partners such as trade unions.

Co-enforcement with unions and workers is a key strategy for enhancing the effectiveness of labour inspection by leveraging their expertise and direct knowledge of workplace conditions. This takes various forms, such as joint inspections involving inspectors, unions, and workers, or “inspector-delegates” elected by workers that can carry out enforcement functions. These models empower workers to participate actively in monitoring their working conditions and encourage controls through complaints filed by workers, enhancing trust and the willingness to denounce employer abuses.

The Joint Company Inspection (IPE) in Geneva is a significant example of “union-initiated co-enforcement”. The IPE is composed of an equal number of inspectors from unions and employer associations and its delegates have prerogatives similar to those of state inspectors. Why and how did this form of co-enforcement emerge in the Swiss context, known for its fragmented labour inspection system and historically limited union participation in labour market control? What are the advantages and limitations of IPE for labour market regulation?

Based on semi-structured interviews with IPE managers and key informants across the Swiss labour inspection system, as well on an analysis of grey literature, this paper explores the socio-economic and political conditions that enabled the emergence of this form of co-enforcement of labour standards. We first examine the global challenges of labour inspection and introduce co-enforcement, emphasising the role unions can play in it. It then analyses the fragmented Swiss labour inspection system, before exploring the creation of IPE and discussing its interaction with other enforcement bodies in the promotion of labour standards. By examining the dynamics between unions, employer associations, and inspection, the study contributes to academic and political discussions on the innovative forms of labour market regulation.