Tuesday, September 27, 2016

Fall Edition - International Employment Committee Newsletter

Dear all

Welcome to the Fall edition of the newsletter. Many thanks as always to our contributors, who have helped to ensure another edition of articles from around the world.

Please let me know if you are interested in submitting an article for future editions.

Helen Colquhoun
Hong Kong

Canada - Where the Rubber Hits the Road, Reflections on Supreme Court Decision in Wilson v Atomic Energy of Canada Ltd

By Theodore Goloff, Robinson Sheppard Shapiro, Montreal


Time was when it was thought that, as slavery had been abolished throughout the British Empire before 1850, therefore, no one could be made to work for another in perpetuity. The corollary was that no employer could be forced to keep another in its employ in perpetuity. Hence, there was a reluctance to enforce mandatory injunctions respecting employment contracts and to order reinstatement, in the event of termination, for to do so would seem to violate these norms.

Within the British Parliamentary tradition followed in Canada, Parliament, being supreme, so long as it respected constitutional norms, could validly adopt legislation that departed from these principles and empower administrative bodies, when they found terminations of certain classes of employees to be unlawful or without just cause to be reinstated. That’s how Division XIV of Part III of the Canada Labour Code, empowering arbitrators duly seized of so-called “Section 240” complaints to determine whether a given contested termination was or was not just, and if the latter was the case, order reinstatement.

It is trite law to posit that provisions set out in labour standards legislation are matters of public order from which no one may contract out. All labour jurisdictions in Canada reject the American doctrine of “employment at will”, and oblige employers who terminate employees without disciplinary or administrative “cause” to provide them with both statutory and common law notice or pay in lieu thereof. In their respective labour standards legislation, three jurisdictions in Canada — the federal jurisdiction, Quebec and Nova Scotia — provide employees satisfying certain threshold seniority levels the ability to contest their termination as being “unjust” and seek, from the appropriate administrative agency, an order of reinstatement and back pay if the employer is unsuccessful in proving “cause” that is “sufficient” to justify termination. What to do if one part of such legislation provides and allows an employer to terminate an employee without “cause”, on condition that it favour the employee with a specified notice or pay in lieu thereof, while another provides the possibility of contestation of the “justness” of the termination? Does the fact that “cause” is not alleged make such termination per se unjust?

At the same time, non-statutory employment law, whether resulting from the common law of nine provinces and three territories of Canada or the civil law of the Province of Quebec, recognizes that an employer could, on providing “reasonable notice” or pay in lieu thereof to an employee, terminate any employment contract that was not for a definite term, at any time, the whole in line with the principles noted above. Indeed, the very provisions of Civil Code of Québec that recognize such reciprocal rights and obligations declare that the right thereto cannot be renounced to by the employee, in advance of its crystallization (Arts. 2091-2092 C.C.Q.).

Because labour and employment law is a combination of both statute law and the general law that results from either the common law or the Civil Code, the question of how to conjugate both in a manner which does not offend one or the other becomes supremely relevant. Put succinctly, if the authority of an administrative body to reinstate an employee lies in its finding that a particular termination challenged before it was without “just and sufficient cause”, is a termination without “cause” but with “reasonable notice”, defined in its widest sense, hence “legal”, per se unjust and therefore amenable to any such compulsory reinstatement order?

The Issue Succinctly Stated

Such was the issue that came before an arbitrator hearing the complaint of one Joseph Wilson, whose employment of four and a half years without discipline of any kind was terminated in November 2009 with what the employer termed “a generous dismissal package that well exceeded the statutory requirements”. Mr. Wilson claimed that his dismissal was unjust via a Section 240 complaint. A labour arbitrator was appointed to hear the complaint. Atomic Energy sought a preliminary ruling on whether a dismissal without cause but with a sizeable severance package was nonetheless “unjust”, or whether given the substantial package, the arbitrator’s jurisdiction or “vires” to rule on the justness or sufficiency of the grounding of the termination was therefore absent or removed. If a termination with a generous package was a) legal and b) not per se unjust, what was there left to litigate? The arbitrator held against Atomic Energy that however generous the severance payments he had jurisdiction to determine whether the dismissal was unjust. As no “cause”, either disciplinary or administrative had been alleged or proven, Mr. Wilson’s complaint was allowed.

Applicable Principles of Judicial Review

Decisions of such administrative tribunal are immune from challenge otherwise than by way of judicial review. Therefore a review of the rules of this branch of administrative law is in order to understand the significance of the case.
Back in the day, the prerogative writs of English common law provided a powerful tool to ensure that the “rule of law” and a full and fair application of the rules of “natural justice” were guaranteed before administrative tribunals. With the proliferation of statute law whose application and interpretation was largely given over to such administrative boards and tribunals, deemed to have “specialized knowledge” of the subject matter, coupled with the adoption of privative, preclusive and/or finality clauses in such enabling legislation, the scope of intervention of the common law superior courts were successively and effectively diminished. There developed a conscious and ever prevalent “deference” to the inferior tribunal’s decision provided it was “reasonable” i.e. one which the facts and law could rationally countenance and support. While the Supreme Court in Dunsmuir v. New Brunswick, 2008 SCC 9, had said that the “function of judicial review is […] to ensure the legality, the reasonableness and the fairness of the administrative process and its outcomes” [par 28], it also noted that judicial review “seeks to address an underlying tension between the rule of law and the foundational democratic principle, which finds an expression in the initiatives of Parliament and legislatures to create various administrative bodies” [par 27].

On the other hand, while recognizing that deference should be accorded and a reasonableness test should be applied (1) where the enabling statue contains a privative or preclusive clause, indicating therefore a statutory direction from the legislative authority indicating an inclination against intervention and (2) where a discrete and special administrative regime in which the decision maker has “special expertise” was set up — e.g. for instance in labour union certification where a labour relations board has particular, recognized and discreet expertise, the Court recognized exceptionally that where the issue concerns a question of law that is of central importance to the legal system and lies outside the specialized area of expertise of the administrative decision maker, such an issue would attract a “correctness” standard of review. A substantive error of law, or mixed fact and law, would therefore vitiate the decision. “Correctness” is a go/no go binary standard. A decision is either correct or incorrect, and cannot be halfway valid.

Ostensibly, the “reasonableness” test is concerned with the intelligibility and transparency of the grounds upon which a judgement relies, and its consonance with the myriad of solutions that the facts and the laws might allow. By definition, even conflicting and contradictory positions might qualify as “reasonable”.

Atomic Energy of Canada sought judicial review of the arbitral decision before the Federal Court — Trial Division and the Federal Court of Appeal. It won in both instances, the Trial Division holding that the standard of review was the “reasonableness” of the decision but that the arbitrator’s outcome was itself unreasonable. The Court of Appeal agreed on the merits of the case but, applying the standard of “correctness”, found that the decision of the arbitrator was flawed and inconsistent with a proper interpretation of the law. The Court quashed the decision and ruled that, provided the required level of notice or severance is paid to the employee, such a termination was not in and of itself unjust. Hence, Mr. Wilson’s referral of the case to the Supreme Court of Canada.

The Supreme Court’s Judgment and the Issues it Raises

Applying the “reasonableness” standard means that once a court finds that a decision passes muster, anything else it finds is entirely obiter. From this author’s point of view, if the reviewing court ventures beyond, it begins to deal with the correctness of the decision which is not one strictu sensu before it.

As the Supreme Court minority in Wilson pointed out, Atomic Energy of Canada was in the unenviable position of having come before two arbitrators with the identical issues raised i.e. whether a termination without “cause” but with a package was or was not per se unjust. These cases resulted in two contradictory decisions on the same issue from two different arbitrators involving the same employer.

Apparently, in one case, because the arbitrator ruled that a termination without cause but with a generous package was not “unjust” and was legal, the Section 240 complaint was dismissed. In the other case, precisely the opposite resulted. If both positions are reasonably consonant with the statute what is a conscientious employer to do? Is predictability in the law one facet of the rule of law? If judicial review has as its object the preservation of the rule of law, does this affect the choice of standard of intervention i.e. “reasonableness” or “correctness”? While the Supreme Court opined in Domtar Inc. v. Québec (Commission d’appel en matière de lésions professionnelles), [1993] 2 SCR 756, without deciding the point definitively - that jurisprudential conflict did not constitute an “independent” basis for review - the question could it seemed, be revisited and was indeed by three of the judges.

The Federal Court of Appeal and the minority in the Supreme Court found that because administrative decision makers are not bound by the principle of stare decisis and lack an institutional umbrella under which these issues can be debated openly for a consensus position to emerge where there are conflicting interpretations that go to the heart of the employment law regime i.e. is an employer ever permitted to dismiss a non-unionized employee without cause, finding that some arbitrators say yes and some say no, the minority ruled that:

“The rule of law and the promise of orderly governance suffer as a result. When reasonableness review insulates conflicting interpretations from judicial resolution, the identity of the decision-maker determines the outcome of individual complaints, not the law itself. And when this is the case, we allow the caprice of the administrative state to take precedence over the “general principal normative order”. [par 84]”

In the minority’s view (Justices Côté, Brown and Moldaver), among the foundational principles of the rule of law are that (a) there is one law for all, whether prince or pauper and (b) what the law requires must be intelligible at the outset, not only after the game has been played. Indeed, the minority held that “the cardinal values of certainty and predictability — which are themselves core principles of the rule of law […] — are also compromised” [par 86]. Unless the Supreme Court determines the issue on the basis of correctness, federally regulated employers unpredictably determine when and how they can dismiss their employees so long as conflicting adjudicative jurisprudence could only be challenged on the basis of reasonableness. Indeed, the minority opinion held such a situation “creates the risk that the very same federally regulated employer might be subjected to conflicting legal interpretations, such that it may be told in one case that it can dismiss an employee without cause, while being told in another case that it cannot” [par 87]. Those judges pointed out that this was not mere conjecture — it had already happened to Atomic Energy of Canada. Finally, the minority reasoned that it makes little sense to defer to the interpretation of one decision maker when it is clear that other similarly situated decision makers whose decisions are equally entitled to deference have reached different results. Put differently “as long as there is one conflicting but reasonable decision, its very existence undermines the rule of law” [par 89].

On the merits, the minority found that a dismissal without cause but with adequate notice and/or severance was not per se unjust. Other circumstances would have to be examined to sustain a Section 240 claim.

The Majority Opinion

But what of the majority composed of the six remaining judges? Justice Abella, in obiter, first suggested a revision of the standard of review jurisprudence, something none of her colleagues would buy into. Justices Cromwell, Karakatsanis, Wagner, Gascon and Chief Justice McLachlin asserted that since the standard of reasonableness was appropriate and the arbitrator’s decision met that standard, Mr. Wilson’s appeal should be allowed with costs.
While three separate majority opinions might have settled the litigation particular to the two litigants before the Court, in this author’s most respectful view, the more general question is not quite so settled: does termination with a package but without disciplinary or administrative cause, attract a Section 240 challenge ? Which school of thought should be preferred?

To be sure, Madam Justice Abella put forward the position to the effect that “the foundational premise of the common law scheme — that there is a right to dismiss on reasonable notice without cause or reasons — has been completely replaced under the [Canada Labour] Code by a regime requiring reasons for dismissal“ [par 63] and the Chief Justice and Justices Karakatsanis, Wagner and Gascon together agreed “with her disposition of the appeal on the merits and with her analysis of the two conflicting interpretations of the Unjust Dismissal provisions of the Canada Labour Code […] proposed to the Court” [par 70]. Mr. Justice Cromwell, on the other hand, made no such endorsement of what is, at least in this author’s point of view, entirely obiter.

A Critique Thereof

Parenthetically, when a court comes to the conclusion that a decision of an inferior tribunal is reasonable, and therefore immune from judicial review, does its analysis of competing and conflicting points of view amount to doing indirectly what a correctness standard would require? It is not without a good deal of circumspection that I am of the view that this is what in essence happened.

With the greatest of respect for my betters, I ask the simple question as to whether having decided that (a) the standard of review was reasonableness and (b) that the arbitrator’s decision has passed muster, the analysis of the “two conflicting interpretations of the Unjust Dismissal provisions of the Canada Labour Code” [par 70] is tantamount to an end run, an attempt in effect to adjudge which of the two conflicting points of view is more reasonable. Mindful always of the great respect that the aforementioned judges are due, both personally and as respects their high office, their statements made with respect to Justice Abella’s efforts to stimulate a discussion on “how to clarify or simplify our standard of review jurisprudence to better promote certainty and predictability” [par 70] with respect to the “reasonableness standard” and to the effect that “it is unnecessary to do so in order to resolve this case” [Ibid] is equally apt and equally applicable to the analysis made by her of the two conflicting interpretations above mentioned.

Having determined that the arbitrator’s decision in the case at Bar was reasonable, discussion should have ended at that point! It has always been understood that no court should decide more than required to dispose of the matter before it. Reasonableness, like a rose by any other name, smells as sweet. Declaring that an arbitrator’s decision is reasonable is not tantamount to deciding that another point of view is any less reasonable. Indeed, for a court, any court, eminent judges of the Supreme Court included, to so decide is to, most respectfully, cross the line into the standard of “correctness”.

If there are two standards that determine judicial review — “reasonableness” on the one hand and “correctness” on the other — preferring one competing, contradictory but reasonable analysis over another competing, contradictory but no less reasonable analysis is to violate the rule that one cannot be just a wee bit pregnant.

Either the standard is the “reasonableness” of the decision or it is the “correctness” of the decision. While recognizing that those judges may have sought to indirectly settle matters, I fear they may have provided grist for a new debate about the legitimacy of so doing, at least in the eyes of the legal “purist” that I might be accused of being.
For this author then, the question of which point of view will ultimately triumph is yet to be decided. While a challenger of Madam Justice Abella’s analysis may have a tough row to hoe, in strict law it is still open to he or she who is brave and stout enough, at heart, to do so. A bit like pushing water uphill, perhaps, but doable – even necessary! Difficult maybe, but certainly not a Don Quijote situation!

And if my views above differ with those of my betters then, most respectfully, I differ with deference.

Canada - Electronic Travel Authorization ('eTA') Ushers New Passenger Screening Era

By Sergio R. Karas, B.A., J.D.

A new era of airline passenger prescreening has begun in Canada following on the footsteps of the United States. Canada now requires that airline passengers provide personal and background information prior to travel, in an effort to minimize the number of visitors who may be inadmissible when appearing at a Port of Entry.

Although authorities made electron travel authorizations (eTAs) available as of March 15, 2016, and visa-exempt foreign nationals who fly to or transit through Canada were expected to obtain them, the requirement was only made mandatory as of September 29, 2016, after a leniency period expired. Individuals who are not otherwise exempt from obtaining an eTA will face considerable difficulty when attempting to board a flight to Canada.

Pursuant to Section 11 (1.01) of the Immigration and Refugee Protection Act (IRPA) the Federal government has created the requirement for visa-exempt foreign nationals to apply for an eTA. The section establishes the means by which that application must be made (i.e., through the electronic system).

Section 7.1(1) of the Immigration and Refugee Protection Regulations (IRPR) creates the requirement for visa-exempt foreign nationals to obtain an eTA before entering Canada, unless they are otherwise exempt by the regulations.

The eTA is a new entry requirement for visa-exempt, non-U.S. foreign nationals travelling to Canada by air. Travelers entering Canada by land, sea, and rail are not required to obtain an eTA. The purpose of the eTA program is to pre-screen travelers to ensure that they are admissible to Canada. The list of countries whose citizens require an eTA is found in Section 190 of the Immigration and Refugee Protection Regulations . Citizens of the United States and certain other small groups are exempt from obtaining an eTA. Specifically, Subsections 7.1(2) and 7.1(3) of the Immigration and Refugee Protection Regulations describe the individuals that are exempt from the eTA requirement.

Individuals who are required to obtain a Temporary Resident Visa (TRV) by reason of their country of citizenship do not need to obtain an eTA, as they are prescreened at a visa post outside of Canada.

To apply for an eTA, foreign nationals must submit an application online using the eTA form at www.Canada.ca/eTA.
Applicants will need to provide the following information on their application form:

• Passport details
• Personal details
• Occupation and previous travel
• Responses to background questions (to assess for health, criminality and immigration-related concerns)
• Contact information
• A filing fee of CDN $7.00

There is also a text area at the end of the application form which allows the applicant to briefly indicate if there are additional details that must be considered. The applicant may express an urgent need to travel to Canada, or to provide other relevant information in that area.

No documents can be uploaded or added to the eTA application. If any additional documents are required, the applicant will be notified by email. That can delay the application process significantly.

Once the applicant has successfully submitted the eTA application, he or she will receive an automated email confirming receipt by Immigration, Refugees, and Citizenship Canada (IRCC). This email will contain the application number, as well as a link to allow the applicant to check the status of their eTA application at any time.

Section 12.05 of the Immigration and Refugee Protection Regulations stipulates that an eTA is valid for five years or until the applicant’s passport expires, whichever occurs sooner.

An eTA can be cancelled by a designated officer pursuant to Section 12.06 of the Regulations.

After the application is received by the system, it will create a “prospective” application and will then perform an identity search to determine if the applicant already exists in the databases, and will associate the application to any existing UCI (unique client identifier) where possible. If no adverse information is found, the system will automatically notify the applicant by email that the eTA has been approved.

Occasionally, applications cannot be automatically approved. In that case, they are referred by the system for manual review in IRCC Operations Support Centre (OSC), where officers can request additional documents or a security screening, or both. If documents are required from the applicant, he or she will be directed to create a MyCIC account, to which they will link their eTA application. MyCIC offers a secure environment in which the applicant may communicate with IRCC and vice versa.

When a decision cannot be made due to the need for an interview or other factors, the application will be referred to a visa office. Other circumstances will require assessment in an overseas mission, including applications that result in the need for a Permanent Resident Determination, a Temporary Resident Permit, etc.

Cases referred to overseas missions will be processed in the same way that Temporary Resident Visa applications are currently processed. Officers may request an interview with the applicant if required.

Applicants whose eTAs are refused will be notified by email of the reasons for the decision.

eTAs are enforced using Canada Border Services Agency (CBSA) Interactive Advance Passenger Information (IAPI) system. Unlike a Temporary Resident Visa, no counterfoil will be provided to an applicant upon approval of an eTA. Therefore, there is no official physical proof of the presence or validity of an eTA. Air carriers will use the CBSA’s IAPI system to confirm that an IRCC authorization to travel (either a visa or eTA) is linked to the traveler’s passport subject to the exceptions noted above. IAPI is an enhancement of the previous Advanced Passenger Information (API) program. It automates a previously manual process and requires air carriers to submit traveler API earlier (at check-in instead of takeoff). Air carriers will conduct their usual check-in procedures, which will now initiate an automated query in IAPI using the traveler’s passport number and country of issuance. Before a boarding pass can be printed, IAPI must provide an “ok to board” message to the air carrier.

Travelers must be careful to determine whether they require an eTA and, if they do, apply for it well in advance of their anticipated travel date to avoid any difficulties.

The advent of eTAs raise several concerns. It is unclear whether there is sufficient legislative authority to make a determination that a traveler who is visa-exempt is inadmissible to Canada prior to appearing at a post of entry for a full examination, or if such determination runs afoul of basic principles of fairness. Yet, a traveler who requires an eTA and does not obtain it will be prevented from boarding a flight bound for Canada. Further, the eTA system implicitly deputizes airline personnel to enforce immigration legislation by denying boarding to a traveler who has been unable to obtain an eTA. These questions will no doubt be litigated in the future.

France - Recent Legal Developments

By Roselyn S. Sands, EY Société d’Avocats, Paris, France

Final adoption of the draft law (the “El Khomri” law) relating to “labor, improvement of social dialogue and safeguard of professional careers”

The law on “labor, improvement of social dialogue and safeguard of professional careers” was passed by the French Parliament on July 21, 2016. The law is applicable since August 10, 2016, except for provisions requiring that specific decrees of application be published by the government. This law is the result of a tumultuous parliamentary process, which began in May 2016 and was marked by country wide strikes and demonstrations that continue today even after its passage into law.

The law contains provisions that are aimed at clarifying the general principles of French employment law, strengthening collective bargaining in France, increasing flexibility by modifying rules on working time and leave and clarifying rules on economic redundancies.

I. Rewriting the French Labor Code and its general principles

The new law profoundly reworks the general principles of the French Labor Code and modifies its general architecture. Indeed, under the new law company-level collective bargaining may result in greater flexibility for employers regarding working time, unless specified otherwise by law. This is a considerable philosophical change in French labor and employment law, where the historical hierarchy of norms principle ensured that company-level CBAs could further enhance employee rights but could not provide less protection.

The general structure of the French Labor Code is henceforth as follows:

i). Rules that must be enforced as they stand, now divided into three segments with no flexibility through company-level bargaining agreement
ii). Rules that may be modified by a company-level bargaining agreement if agreed to by at least 50% of the representative unions, or 30% of the representative unions and 50% of the employees
iii). Limits to which the rules in ii) can be modified

Overtime is a good example of how the new architecture of the French Labor Code is designed. The new Labor Code provides that:

i). Additional overtime pay must necessarily be paid to employees. This rule must be enforced as it stands
ii). Today, overtime is paid at 25% extra for the first 8 hours, however, by a company-level bargaining agreement overtime can be paid less or more than the 25% provided by law
iii). Yet, a company-level bargaining agreement cannot provide that overtime be paid at less than 10% more

Whereas the detailed application of this architecture will take a couple of years to fine tune, by exception, this architecture is immediately applicable for issues relating to working time and employee leave.

II. Flexibility through collective bargaining

The law strengthens the legally binding effect of company-level CBAs, and enables companies to achieve flexibility through collective bargaining.

Under the new law, the validity of company-level CBAs will depend on a “two-tier” system, starting September 1, 2019. Company-level CBAs will be valid if the majority unions, who have gathered more than 50% of the employee votes during the most recent election, sign or if the signatories have gathered more than 30% of the employee votes during the most recent election and the agreement has been approved by the employees through referendum.

In addition, the law provides for the following rules with respect to the company-level CBAs:

- The limitation of their duration to 5 years, unless stated otherwise in the agreement (e.g. indefinite term)
- Change of the rules pertaining to the review, modification and the termination of the agreements
- Publication on a national online database of all company-level CBAs with provisions of anonymization
- Possibility for companies with less than 50 employees to apply a special agreement provided by the national CBA.

III. Working time

The new law includes a series of measures impacting working time in order to increase employer flexibility and freedom in organizing the company, while safeguarding employee rights, in particular with regard to work life balance and health and safety at work.

As mentioned above, the new structure of the French Labor Code is currently applicable to working time related issues. Indeed, working time related issues such as the number of hours to be worked to trigger night work compensation, the maximum weekly time duration or the weekly and daily minimum rest period can now be set through collective bargaining, based on the above mentioned structure.

In addition, the law provides for a right “to disconnect, in particular from electronic devices, after working hours. This measure aims to ensure a proper balance between workload and private life with the regulation of the use of digital tools. The specific implementation of this right will be decided on a company by company basis with the union representatives during the annual negotiation on “work life balance”.

IV. Greater flexibility in the justification for collective redundancies

The law provides for new rules regarding collective redundancies, clarifying some of the reasons that can be used to justify a collective redundancy caused by economic difficulties. Indeed, the law provides that in addition to the already existing reasons (i.e. the company’s closure, or the safeguard of the company’s competitiveness, or considerable technological changes) two new reasons could be used, including a drop in the company’s turnover for a period of time depending on the size of the company (e.g. 4 consecutive quarters for companies with more than 300 employees).

Together with the procedural changes from 2013, the combination of these modifications facilitates the collective redundancy process in France.

V. Conclusion

French labor and employment law continues its path to creating a more employer friendly environment in order to fuel investment into France.

Kingdom of Saudia Arabia - Vision 2030's Impact on Employment

By Sara Khoja, Clyde & Co, Dubai

In late April 2015, Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman, announced an ambitious and ground breaking programme to develop the Kingdom’s economy and society over the next fifteen years. How the programme will be implemented together with the immediate five year plan set out in the National Transformation Plan 2020 will be of key interest to businesses operating in the Kingdom. In this article, we examine the main likely employment implications of Vision 2030 and the introduction of ‘weighted Nitiqat.’


With the Ministry of Labour estimating that each year 250,000 new graduates enter the job market in KSA, the creation of employment opportunities is a social and economic imperative. Vision 2030 seeks to reduce the overall unemployment rate from 11.6 % to 7%, overhaul the education system and increase the female participation rate from 22% of the workforce to 30%. Remittances by foreign workers is also high with a plan to increase in country spending by the resident population from 2.9% to 6%. The National Transformation Plan aims to create 450,000 new jobs by 2020.

Developing the local workforce will be a task spread across a number of Government authorities, including the National Labour Gateway (TAQAT) which will seek to establish sector councils to examine each socio-economic sector’s skills and knowledge requirements to promote vocational training and entrepreneurship. Apprenticeships will be promoted through the establishment of a centralised student database from which large private sector companies.
Other stated goals are the increase of foreign direct investment from 3.8% to 5.7% and the proportion of GDP from the private sector from 40% to 65%.

Defence and Security

KSA is currently the third largest global spender on military equipment. Under Vision 2030, the goal is to localise military spending and establish a local manufacturing capability (including the production of complex equipment such as military aircraft). There are currently seven local defence companies and two research centres in the Kingdom. Increasing capacity will require the development of a specialist and skilled Saudi Arabian workforce.


In 2015, the number of religious tourists to the Kingdom reached a high of eight million. By 2030, the goal is to have increased this to 30 million. The nurturing of a domestic tourist industry is also a stated aim with several historical and cultural sites (including the Red Sea coast) earmarked for development with a desire to double the Kingdom’s UNESCO registered sites which now include Jeddah’s old city; Al Balad. This expansion will create jobs but also challenges in training staff to a proper level to perform effectively in a service industry.


Vision 2030 envisages an annual growth rate of 10% in retail, the workforce for which amounts to 1.5 million works, only 0.3 of which are KSA nationals. By 2020, the aim is to have 1 million more Saudi nationals working in retail by 2020.
Civil Service and collaboration between the public and private sectors.

By 2020, the Government aims to have trained 500,000 government employees and to create HR centres of excellent to promote best practices and provide training within every government agency. The King Salman Program for Human Capital Development will also be launched with a comprehensive programme to examine efficiency within the civil service and the development of strategic partnerships.


As well as the headline announcement of a plan to publicly list 5% of Saudi Aramco, over the next five years, the Government plans to privatise eleven airports, and over the next fifteen years to privatise almost three hundred hospitals and over 2,200 health centres.

USA - Department of Labor Accepts First Labor Petition Under US-Colombia Trade Promotion Agreement

By Tequila J. Brooks

On July 15, 2016, the U.S. Department of Labor accepted the first petition to be filed under Chapter 17 (Labor) of the U.S.-Colombia Trade Promotion Agreement (TPA). The petition was filed by the AFL-CIO and five major Colombian labor federations including the Central Unitaria de Trabajadores (Central United Workers – CUT), the Confederación de Trabajadores de Colombia (Workers Confederation of Colombia – CTC), the Corporación Colombiana para la Justicia y el Trabajo (Colombian Corporation for Justice and Work – COLJUSTICIA), the Sindicato Nacional de Trabajadores de la Industria Agropecuaria (National Union of Workers in Agroindustry – SINTRAINAGRO) and Unión Sindical Obrera (Workers Sindicated Union – USO).

The petition, filed on May 16, 2016, alleged that the Government of Colombia violated a number of its labor-related commitments under U.S.-Colombia TPA Chapter 17 in a manner directly affecting trade and investment. These labor-related commitments include: (1) failure to effectively enforce labor laws; (2) waiver or derogation of existing labor statutes and regulations to incentivize trade; (3) failure to adopt or maintain statutes and regulations consistent with the 1998 ILO Declaration on Fundamental Principles and Rights at Work; (4) failure to ensure that dispute resolution proceedings in labor, administrative and judicial tribunals are transparent and without unwarranted delays; and (5) failure to ensure that final decisions in labor-related adjudications are made available without unnecessary delay. Among the allegations made by the AFL-CIO and its Colombian counterparts was that the Government of Colombia had failed to meet its commitments under the Colombian Action Plan Related to Labor Rights (LAP) of April 7, 2011.

The U.S.-Colombia TPA went into force on May 15, 2012 only after U.S. authorities felt that the Government of Colombia had made significant progress in meeting the requirements outlined in the April 2011 LAP. These requirements included reforms to both the labor and criminal justice systems as well as substantive changes to various Colombian labor laws. The LAP required Colombia’s Labor Ministry to hire and train 100 new labor inspectors in 2011 and total of 480 over a 4-year period – and for the Finance Ministry to approve a budget allocation to pay for the new labor inspectors. The Colombian Labor Ministry was also required to improve complaint and dispute resolution mechanisms and to conduct outreach to the public, employers and workers.

To address concerns expressed by the U.S. Congress, trade unions and human rights advocates, the 2011 LAP negotiated between the U.S. and Colombia required specific reforms to Colombia’s Criminal Code to address two main issues: (1) employers’ use of intermediaries to avoid labor law compliance and (2) the need for investigation and punishment of threats and violence against trade unionists. Colombia has been described as the most dangerous country in the world for trade unionists. Over 2,500 trade unionists have been murdered in Colombia since the 1980s. Under the LAP, the President of Colombia committed to issuing a directive to the National Police assigning 95 full-time judicial police and prosecutors to investigate criminal cases involving union members and labor activists. The LAP also required Colombia’s Ministry of Interior and Justice to issue a Ministerial Resolution expanding the scope of persons entitled to special protection to include labor activists, persons engaged in active efforts to form a union and former trade unionists. The LAP specifically requires that a budget be allocated for special protection of trade unionists and labor activists from threats and violence.

The substantive changes required by the LAP to Colombia’s labor laws centered on employers’ use of cooperatives, temporary agencies and collective pacts to avoid compliance with fundamental labor rights. The essence of these legal reforms was that employers may not utilize third parties as intermediaries with employees performing “permanent core functions” of their operation. Export sectors of particular concern in Colombia include the palm oil, sugar, mines, ports and flower sectors.

In their May 15.2016 labor petition under Chapter 17 of the U.S.-Colombia TPA, Colombian and U.S. trade unions point out that Colombia’s conformity with its 2011 LAP commitments has been superficial and incomplete – and that the U.S. government did not require effective implementation of LAP commitments before the TPA entered into force. Petitioners observe that while the Government of Colombia agreed to establish and fund a 95-person police force dedicated to investigating and punish threats against trade unionists, cases are still not meaningfully investigated and prosecuted. Over 1,466 threats and acts of violence against trade unionists have taken place since the TPA went into force, including 99 assassinations, 6 kidnappings and 955 death threats – with an 87% rate of impunity for murder of trade unionists. The National Protection Unit has been accused of diverting funds intended for protection of at risk individuals. Although Colombian trade unions have filed 1,146 criminal complaints since 2012, no employer has been convicted under the new labor and criminal regimes. In addition, while additional labor inspectors were indeed hired by Colombia’s Ministry of Labor, they were hired on a temporary basis.

On the topic of new legislation banning employer use of work cooperatives as an intermediary to avoid unionization of workers and compliance with other labor and social security requirements, petitioners observe that while the use of “work cooperatives” has declined, use of a new form of labor intermediation called contratos sindicales (syndical contracts or employer-friendly unions) has arisen. These contratos sindicales do not reflect collective bargaining. Their number has increased form 50 in 2010 to 1,925 in 2014. Petitioners cite research studies from 2015 and 2016 (including a January 2016 OECD report) for the proposition that 73% of the workforce in Colombia is informally employed with no access to social security.

Petitioners outline specific cases in the oil and sugar sectors to show how the Government of Colombia has failed to meet its commitments under the 2011 LAP and Chapter 17 of the U.S.-Colombia TPA. In one of these cases, 1,100 oil workers began to unionize with the support of Unión Sindical Obrera (USO) at the Canadian-owned Pacific Rubiales Energy Montajes site in February 2011. Their grievances included excessive use of labor intermediaries, excessive hours, health and safety problems and failure to provide adequate equipment and food. A member of the Colombian National Police was part of the employer’s negotiating team. On July 18, 2011, 4,000 workers held an assembly at the Montajes site. 150 police entered labor camps using rubber bullets and percussion bombs and spraying tear gas into tents. Petitioners observed coordination between the Colombian Army and Police to inhibit communication between trade unionists and physical attacks against workers.

In September 2011, 1,000 of 3,493 workers who joined the union were fired and replaced by other workers. After the Colombian Labor Ministry pressed the employer to engage in collective bargaining with USO, the employer signed a Labor Normalization Agreement with an organization called the National Union of Energy Workers (UTEN) which had no relationship with the workers. Five years later, UTEN has still not negotiated a collective bargaining agreement on behalf of the workers. A database was established to exclude USO members from the work site and a check point was put in place at the work site to make sure they did not enter.

In February 2012, USO filed an administrative complaint with Colombia’s Ministry of Labor about the employer’s actions (including mass firings and blacklists) at the Montajes site. In April 2013 - over a year and 3 months later - the complaint was dismissed, as were subsequent motions to reconsider and appeals. The reason given for dismissal was the lack of a direct employment relationship with the employer since workers were employed by a number of intermediaries. The Government of Colombia did not initiate criminal action against the employer for failing to comply with new labor and criminal provisions. In fact, arrest orders were issued against two USO trade union members who testified against the company.

Petitioners’ arguments challenge both the substance and application of Colombian labor laws and the new criminal regime established to protect trade unions. They point out that the ILO’s Committee on Freedom of Association (CFA) issued a report observing failure on the part of the Government of Colombia to protect freedom of association and the right to collective bargaining. One of the arguments made by petitioners is that the Government of Colombia failed to effectively enforce Article 63 of its labor intermediation law which makes it unlawful to utilize intermediaries to contract workers performing core permanent functions of a company. Petitioners note that excessive focus by Colombian labor authorities on the particular legal form “work cooperative” has allowed the similar forms of the same phenomenon to arise with different names and legal forms.

The primary innovation in the May 2016 petition is the argument made by U.S. and Colombian unions that the Government of Colombia has not complied with Chapter 17 of the U.S.-Colombia TPA because it failed to effectively enforce certain provisions of its Criminal Code. In particular, petitioners argue that Articles 200 and 347 of Colombia’s Criminal Code – which impose both fines and jail time as penalties for violations for labor laws and threatening or intimidating trade unionists – are labor laws within the meaning of Chapter 17 of the U.S.-Colombia TPA. Article 200 is directly related to the internationally recognized right of freedom of association and Article 347 was specifically adopted to bring Colombia into compliance with the 1998 ILO Declaration.

While U.S. DOL has declined in the past to consider criminal matters (including threats against and murder of trade unionists and worker rights advocates) to be within the scope of the NAFTA labor side agreement (NAALC) in Mexico and Chapter 16 (Labor) of the CAFTA-DR in Guatemala, petitioners’ argument under the U.S.-Colombia TPA is likely to be accepted in this case since a good portion of the 2011 U.S.-Colombia LAP requires specific changes to Colombia’s Criminal Code and practice to better protect trade unionists from threats and violence. A similar basis was arguably not present under the NAALC or CAFTA-DR Chapter 16. A successful outcome under the U.S.-Colombia TPA may set a precedent for stronger protection of trade unions and worker rights advocates from violence by U.S. authorities in future cases, however.

Under regulations governing petitions under FTA labor provisions, U.S. DOL is required to issue a report in response to the May 15, 2016 petition by January 15, 2017 unless it determines that more time is required.

Petitioners have laid the groundwork for this case to go to international arbitration under Chapter 21 (Dispute Resolution) of the U.S.-Colombia TPA by arguing that failure by the Government of Colombia to effectively enforce labor laws in the oil and sugar sectors directly affects trade between the two countries. Thus far, the only case to go to the international arbitration phase under U.S. FTA labor provisions is the 2008 Guatemala case under the CAFTA-DR. After several delays, the arbitration decision in that case is scheduled to be released in early September 2016.