International Framework Agreement
According to the 2009 Eurofound report European and international framework agreements: Practical experiences and strategic approaches (1.3Mb PDF), transnational collective agreements (TCAs) are ‘new instruments for industrial relations that encourage the recognition of social partnership across national borders and yield entirely new forms of social regulation’.
They can be subdivided into International Framework Agreements (IFAs) and European Framework Agreements (EFAs).
IFAs are signed by Global Union Federations (GUFs) and have a global scope of application. EFAs have a regional (European) scope of application and are signed by European industry federations (EIFs), European Works Councils (EWCs) and/or national unions and central management.
While IFAs are a global instrument with the main purpose of ensuring international labour standards are maintained in all of the target company’s locations, EFAs are limited to the European context and cover a broader range of topics. In general, EFAs also contain more concrete and focused arrangements.
In 1995, the International Confederation of Free Trade Unions (ICFTU) and what were then International Trade Secretariats (ITSs) set up a joint working committee. In 1998 the committee proposed a Code of Labour Practices considered by the ICFTU to be a guide for unions on the rules of conduct of any transnational enterprise (TNE). The ICFTU/ITS Code specifies that companies must undertake to respect the fundamental labour rights defined in the 1998 ILO Tripartite Declaration. The same obligation has to be imposed on their subcontractors. The ICFTU/ITS Code was used by the ITSs as a reference for negotiating IFAs.
In 2002, the ITSs were transformed into GUFs. Several GUFs have their own model framework agreements. The International Metalworkers’ Federation (IMF), for example, has the IMF Model Framework Agreement (89Kb PDF).
By 2002, the term International Framework Agreement had been adopted as a means of clearly distinguishing the negotiated agreements from the type of voluntary codes of conduct that corporations were increasingly adopting unilaterally to ostensibly demonstrate their commitment to corporate social responsibility (CSR). While codes of conduct represent unilateral initiatives, the negotiation of IFAs could be seen as the start of collective bargaining at transnational company level. Furthermore, most IFAs provide procedures whereby the signatories may jointly develop implementation and monitoring procedures while corporate codes of conduct are implemented and monitored only by the companies themselves.
For TNEs, IFAs represent a means to foster industrial peace through the deepening of dialogue with their employees and trade unions. Furthermore, TNEs sign IFAs in order to promote a positive public image aimed at avoiding potentially economically damaging public campaigns, gaining access to capital and product markets, and building up good relations with political and economic decision-makers. The GUFs view IFAs as an opportunity to engage TNEs’ operations in a process of private standard-setting in order to improve the conditions of workers and trade unions worldwide.
Although there are variations in the contents of IFAs, all of the agreements are based on ILO Core Labour Standards. The majority of the IFAs refer to United Nations Conventions No. 87 on the freedom of association and No. 98 on the right to collective bargaining.
A number of IFAs also refer to Convention No. 135 on the non-discrimination of labour representatives. Most of the IFAs explicitly recognise the ILO conventions No. 29 and No.105 on the abolition of forced labour, No. 100 and No. 111 on the prevention of discrimination in employment and equal pay for work of equal value, as well as No. 138 and No. 182 on the elimination of child labour. Various agreements go beyond the recognition of the ILO Core Labour Standards in ensuring also decent wages and working conditions as well as a safe and hygienic environment. In certain cases, IFAs are used as a tool to extend labour policies and cooperative industrial relations to the company’s locations outside the home country.
By the end of 2012, 113 IFAs had been signed. The majority of the agreements came into being after 2000. In most cases, the request to negotiate IFAs came from the home country trade unions and EWCs. The Commission has set up a database of transnational company agreements – both IFAs and EFAs – containing details on every company and agreement.
Provisions for the implementation of an IFA and for effective monitoring seem to be important if the agreement is to have any real impact. Experiences with the implementation of existing IFAs vary considerably. In some instances, employees have merely been informed about the existence of an IFA, in others, concrete steps have been taken to build international union networks and to develop action plans to make fullest use of the IFAs to ensure that complaints are acted on.
In various instances, at least one annual meeting is devoted to the monitoring of the application of the agreement. These meetings often coincide with meetings of the EWC or World Works Council (WWC). Sometimes the monitoring is supported by non-governmental organisations (NGOs).
It has to be recognised that no legal enforcement mechanisms exist at the global level. This means that any enforcement of IFA provisions relies on the readiness of management to cooperate or on the capacity of trade unions to compel companies to resolve complaints.
To date, there have been relatively few examples of instances where complaints have been raised under an IFA. Where complaints have been heard, they often relate to breaches of the IFA provisions on freedom of association and the right to collectively bargain. Although IFAs are designed to be useful in countries where labour legislation is insufficient or poorly enforced, case study research shows that IFAs find application also in old and new EU Member States.
The Eurofound report draws the following conclusions on IFAs:
IFAs serve to promote key features of the respective national models of social partnership and cooperative industrial relations. This implies that IFAs are clearly present in TNEs whose headquarters are located in social market economies characterised by collective interest representation as the basis for the regulation of work and the labour market, while there are only a few examples of IFAs in liberal market economies.
The spread of IFAs, particularly among TNEs from outside continental Europe, has so far remained quite limited and it is probably unlikely that the situation will change in the near future given the evolution of the strategies of the social partners at global level. In that event, the existing IFAs might just remain a significant but restricted number of positive cases.