Multinational companies and collective bargaining
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Introduction
As employers with a distinctive structure, behaviour and impact, multinational companies (MNCs) have attracted growing interest in industrial relations. Worldwide, this is reflected in debates on corporate social responsibility and global labour standards, as well as in policy responses – such as the Global Compact of the United Nations (UN) and the revision of the Organisation for Economic Co-operation and Development (OECD) Guidelines for multinational enterprises. In Europe, the EU’s forums on restructuring and mobility also respond to the impact of MNCs. The significance of MNCs as employers within Europe’s different national economies, their international organisation and management structures, along with their capacity to move production, jobs and workers across borders have important implications for the structures, agenda and outcomes of collective bargaining. These implications centre on three issues, as follows.
- Firstly, as leading employers within national contexts, MNCs have been prominent in pressing for changes in national collective bargaining systems – this includes the call for greater scope for negotiation at company level and for bringing considerations of competitiveness to the fore in the bargaining agenda (TN0503102S).
- Secondly, because the scope of the MNCs’ operations does not correspond with the boundaries of national collective bargaining, the agenda and outcomes of local negotiations can be influenced by cross-border comparisons of costs, performance and ‘best practice’ working and employment practices within MNCs.
- Thirdly, increased flows of foreign direct investment (FDI) between countries with different labour costs and conditions have led to growing concerns about relocations, actual or threatened (TN0511101S). Cross-national restructuring has become an increasingly prominent focus for negotiations.
This report provides a summary and evaluation of this three-fold impact of MNCs on collective bargaining. As a key group of employers, the practices of MNCs, the strategic choices they make and the changes they press for, set against the responses of trade unions, are crucial for understanding the evolution of Europe’s varied systems of collective bargaining.
The focus of the report is the operations of the larger MNCs, which tend to influence developments in industrial relations, more generally, and collective bargaining in particular. In practical terms, ‘larger MNCs’ are defined as those companies which are covered by the EU’s Directive on European Works Councils – in other words, companies that employ at least 1,000 employees in the European Economic Area (EEA) and that have operations employing at least 150 workers in no fewer than two EEA countries. The scope of the study includes both the operations of foreign-owned MNCs and those of ‘home-owned’ MNCs – that is, MNCs which have their headquarters in any given country.
Collective bargaining is broadly defined to include not only negotiations between trade unions and employer organisations or individual companies, but also company-level negotiations with works councils or similar representative bodies. A key distinction in private sector collective bargaining arrangements across the EEA can be drawn between those countries where multi-employer bargaining arrangements prevail, involving negotiations between employer organisations and trade unions, and those characterised by single-employer bargaining arrangements, involving negotiations between individual companies and trade unions. In a few countries, the typical situation differs between the manufacturing and services sectors.
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