1. World Bank Port Reform Toolkit Module 7 : Labor Reform and Related Social Issues

2. World Bank Port Reform Toolkit Module 72 Labor Reform and Related Social Issues Context for Labor Reform Key labor issues to be addressed Organizing to address labor reform : a task force approach The institutional framework for port reform Developing the work force rationalization plan International support for labor adjustment Post-reform labor-management relations

3. World Bank Port Reform Toolkit Module 73 Port Labor Environment Overstaffing Outdated and inefficient work rules Inflated Pay scales Unreliability Limited skills Port Labor Development in Logistics and Transportation National Economic and Trade Policies Change in markets and services Technological advances Union discipline Poor training, limited resources Government policies to maintain or create employment Out-dated management practices

4. World Bank Port Reform Toolkit Module 74 Factors Prompting Port Labor Reform Within the port or from other ports -Manufacturers -Exporters -Importers -Carriers -Government support -Need to reduce government subsidies

5. World Bank Port Reform Toolkit Module 75 Labor Reform and Related Social Issues Context for Labor Reform Organizing to address labor reform : a task force approach The institutional framework for port reform Developing the work force rationalization plan International support for labor adjustment Post reform labor-management relations Key labor issues to be addressed

6. World Bank Port Reform Toolkit Module 76 Aspects of Port Labor Potentially Affected by Reform Restrictions on which entities can offer services in the port Reducing overstaffing Rigid and outdated job descriptions and duties Limitations on working hours and days Inefficient overtime allocation at excessive wage rates Hiring of port labor exclusively through the unions Restrictions on output Unsettled and combative workplace culture Insufficient training and retraining opportunities Lack of clear and meaningful productivity objectives Inadequate occupational health and safety procedures

7. World Bank Port Reform Toolkit Module 77 Securing Constructive Involvement of Labor in Port Reform (1/3) Principal areas of interest for port labor : Stable and fulfilling employment Reasonable incomes Decent working conditions Social security and pension provisions Education and vocational training Health, safety and the environment Workplace democracy Freedom from discrimination, corruption and coercion

8. World Bank Port Reform Toolkit Module 78 Involving labor in port reform allows to… Securing Constructive Involvement of Labor in Port Reform (2/3) avoid mistrust stemming from the recurring conflicts between capital-labor trade-offs avoid inadequate and untimely preparation of port reform proposals find solutions to problems thanks to a trained personnel, with practical experience in port operations tap a source of ideas to add value to services to customers

9. World Bank Port Reform Toolkit Module 79 Securing Constructive Involvement of Labor in Port Reform (3/3) Main Challenges : Commitment from trade union leadership Ability to unify workers’ short- and long-term interests Need to improve expertise within the union Introduction of new trade union structures Finding solutions to social problems caused by privatization Acceptance of privatization Dealing with the new culture of competition Understanding the need for new labor relations

10. World Bank Port Reform Toolkit Module 710 Labor Reform and Related Social Issues Context for Labor Reform The institutional framework for port reform Developing the work force rationalization plan International support for labor adjustment Post reform labor-management relations Key labor issues to be addressed Organizing to address labor reform : a task force approach

11. World Bank Port Reform Toolkit Module 711 Composition of the Task Force Ministries of transport, labor, finance, economics, planning Port Authorities Main port customers and users Private investors, terminal operators, cargo-handling companies and stevedoring companies Port labor The task force should include representatives of…

12. World Bank Port Reform Toolkit Module 712 Scope of Work of the Task Force Undertaking or commissioning studies Organizing seminars or workshops Informing the community and consumers Fostering the creation of joint committees between unions and private terminal operators Defining government’s role with respect to ports Developing a workforce rationalization plan

13. World Bank Port Reform Toolkit Module 713 Labor Reform and Related Social Issues Context for Labor Reform Developing the work force rationalization plan International support for labor adjustment Post reform labor-management relations Key labor issues to be addressed Organizing to address labor reform : a task force approach The institutional framework for port reform

14. World Bank Port Reform Toolkit Module 714 The Institutional Framework for Port Reform (1/3) -Economic regulatory reform -Decentralization - Job education and experience requirements - Training courses ObjectivesLabor’s Participation Meeting Commercial Needs Defining the Relationship between Governments, Ports and Labor ObjectivesLabor’s Participation -No involvement of governments in port-labor relations collective negotiations informal dispute resolution - Negotiation - Suggestion of measures to improve productivity - Facilitate the work and reduce costs - Share decision authority

15. World Bank Port Reform Toolkit Module 715 The Institutional Framework for Port Reform (2/3) Fostering Competition Objectives -Application of antimonopoly law Labor’s Participation - Ensure fair use of market mechanisms and no abuse of port operators’ market power Redefining the concept of social equity Objectives - Commercial opportunity-oriented approach - Training programs - Occupational health and safety - Collaborative process to select and introduce a new equipment Labor’s Participation

16. World Bank Port Reform Toolkit Module 716 Timeframe for Port Labor reform The Institutional Framework for Port Reform (3/3) -Within the term of a single public administration -Before concessions/investments are marketed and requests for bids tendered

17. World Bank Port Reform Toolkit Module 717 Labor Reform and Related Social Issues Context for Labor Reform International support for labor adjustment Post reform labor-management relations Key labor issues to be addressed Organizing to address labor reform : a task force approach The institutional framework for port reform Developing the work force rationalization plan

18. World Bank Port Reform Toolkit Module 718 Gathering the Information needed to Draw Up the Plan (1/2) Port master plans and strategic goals for the short, medium and long terms Estimates of required activity levels Demographic information about the current port workforce Current staffing levels Estimates of minimum staffing levels National and local laws about labor rationalization Collective bargaining and employment agreements

19. World Bank Port Reform Toolkit Module 719 Training needs and skills of workers who will be seeking alternative employment Existing government and private sector organizations capable of assisting with training, retraining and job searches General information about the overall national and regional macroeconomic situation, existing employment patterns, labor absorption capacity, skills and experience of the workforce Gathering the Information needed to Draw Up the Plan (2/2)

20. World Bank Port Reform Toolkit Module 720 Alternatives to dismissals Normal attrition of the workforce : retirements, deaths, resignations Part-time employment, flexible working hours, reduction in working hours, variable workweeks, job sharing, overtime restrictions General or job category-specific hiring freezes Sharing of reductions in hours of work and pay Work rotation among other government departments

21. World Bank Port Reform Toolkit Module 721 Elements of a Staff Retrenchment Program Compensation, with incentives, for early retirement and voluntary separation Compensation for involuntary separation Provision of training and demand-driven retraining Guidance and assistance in job searching and outplacement

22. World Bank Port Reform Toolkit Module 722 Pitfalls in Designing and Implementing Severance Packages Paying too much Adverse selection : the best employees leave, the worst remain Revolving door : re-hiring of employees after the reform

23. World Bank Port Reform Toolkit Module 723 Applying rules of thumb to identify overstaffing or insufficient productivity areas Reversing the sequence : (1)Identify the services to be cut ; (2) identifying the specific overstaffed jobs and chasing away “ghost” workers, and (3) offering a severance package to those targeted to leave Develop alternatives to the standard severance package, to keep the best employees Ways to Shrink Smartly

24. World Bank Port Reform Toolkit Module 724 Rationalizing the Workforce (1/2) Pre-reform/privatization Advantages -“cleaner” business decision presented to potential concessionaires and investors, reduction of their uncertainty -the government pays for its previous decisions (overstaffing, rigid work rules…) -less disruption to port operations Drawbacks -Too little cut from the workforce, because of political pressure -Under-optimized cutbacks, severance packages and lack of incentives to retain the best personnel

25. World Bank Port Reform Toolkit Module 725 Rationalizing the Workforce (2/2) Post-reform/privatization Advantages - Decisions are efficiency-minded and profit-oriented Drawbacks - Uncertainty and risk for investors => lower concession or selling price - More likely pursuance of industrial actions by port labor - Give the operator the freedom to determine the firm’s required number of staff and skill mix A piece of advice…

26. World Bank Port Reform Toolkit Module 726 Who should pay for Offsetting Dislocation Expenses ? Governments, as former employers The private sector, as new employers Port customers, as beneficiaries

27. World Bank Port Reform Toolkit Module 727 Labor Reform and Related Social Issues Context for Labor Reform Post reform labor-management relations Key labor issues to be addressed Organizing to address labor reform : a task force approach The institutional framework for port reform Developing the work force rationalization plan International support for labor adjustment

28. World Bank Port Reform Toolkit Module 728 Main Programs and Funding Sources World Bank support : Technical assistance Conditional direct financing for severance payment Poverty alleviation programs Training support from International Labor Office PDP ( Port worker Development Program ) or from UNCTAD ( United Nations Conference on Trade And Development ): General education, broad industry-focused vocational training Specific job instruction Communication and social skills courses Health, safety and environmental training

29. World Bank Port Reform Toolkit Module 729 Labor Reform and Related Social Issues Context for Labor Reform Key labor issues to be addressed Organizing to address labor reform : a task force approach The institutional framework for port reform Developing the work force rationalization plan International support for labor adjustment Post reform labor-management relations

30. World Bank Port Reform Toolkit Module 730 Post-reform labor-management relations Cooperation and communication of labor and management (joint committees, participation of workers in workplace decisions) Balance of commercial goals of employers with social goals of their employees Agreement of all stakeholders about the proposed changes in labor regimes, collective agreements and work practices