The North American Agreement on Labor Cooperation (NAALC) is one of the two side agreements to the NORTH AMERICAN FREE TRADE AGREEMENT of the United States, Canada, and Mexico. The labor agreement affirmed the right of each country to establish its own “high” labor standards and “guiding labor principles” but did not establish common minimum standards. The agreement created a Commission on Labor Cooperation and Secretariat charged to “effectively enforce” labor law. The NAALC Secretariat, headquartered in Dallas, Texas, monitors and reports labor law issues among the NAFTA countries. Under the NAALC, each country is obligated to provide
• access, transparency and DUE PROCESS of law
• public information and awareness
• cooperative activities
• national administrative office (NAO) reviews, consultations, and evaluations
Complaints about labor practices are submitted to national administrative offices (NAOs) established by each country as part of the agreement. The first complaint filed by UNIONs with the U.S. NAO alleged that U.S. subsidiaries (Honeywell and General Electric) had fired Mexican workers for union-organizing activities. The NAO found no evidence of failure to enforce Mexican labor law. Later the Telephone Workers Union of Mexico filed a complaint with the Mexican NAO regarding worker dismissals and a plant closing at a Sprint subsidiary in San Francisco. The complaint, upheld by the Mexican NAO, alleged Sprint had thwarted unionization. The complaint led to consultation between the two countries. Under the NAALC, if a complaint is not resolved by ministerial consultations, the next option is to establish a three-person Evaluation Committee of Experts (ECE). The ECE reports to the Labor Council of Ministers, part of the Commission on Labor Cooperation. Depending on the nature of the labor issue being evaluated by the ECE, different dispute resolution mechanisms are utilized. The ECE examines labor legal matters including laws on
• occupational safety and health
• equal pay for men and women
• forced labor
• EMPLOYMENT standards
• child labor minimum wages
• employment discrimination
• migrant workers
If, after consideration of a final ECE report, a country believes that there is still a persistent pattern of failure by another country to effectively enforce labor laws, it may request further consultation and, eventually, the establishment of an independent arbitral panel. After considering the matter, the arbitral panel may issue a ruling, as a result of which the parties agree on an “action plan.” If the action plan is not implemented, the panel may impose a monetary enforcement assessment, the fine to be used to improve labor law enforcement by the offending party. Generally the labor side agreement of NAFTA is much more limited in scope and remedial authority than the environmental side agreement (BORDER ENVIRONMENTAL COOPERATION COMMISSION).