Companies can contribute to the improvement of standards of living by providing secure employment and decent work within its operations.

The MNE Declaration encourages MNEs and national enterprises to actively manage their human resources needs to provide to the greatest extent possible stable employment for their employees. They should observe freely negotiated obligations concerning employment stability and social security. They also should strive to assume a leading role in promoting security of employment, particularly in countries where the discontinuation of operations is likely to accentuate long-term unemployment.

In considering changes in operations which would have major employment effects, MNEs should provide reasonable notice of such changes to the government authorities and representatives of the workers so that implications might be examined jointly in order to mitigate adverse effects to the greatest possible extent. This is particularly important in case of the closure of an entity involving collective lay-offs and dismissals.

Arbitrary dismissal procedures should be avoided. ILO standards on termination of employment seek to find a balance between on the one hand the employer’s right to dismiss workers for valid reasons and on the other ensuring that dismissals are fair, used only as a last resort, and minimize to the greatest extent possible any negative impact on the workers concerned.

Governments, in cooperation with MNEs as well as national enterprises, should provide some form of income protection for workers whose employment has been terminated.

Q&As on Business and security of employment

• Employment relationship
• Termination of employment
• Responsible restructuring
• Short-term contract
• Private placement agencies