Unionised multinationals reject unions in new plants

A new study of multinational companies operating in Ireland points to ‘a growing trend of union avoidance among unionised companies, where it appears they are establishing new sites on a non-union basis’. The survey underlines an increased struggle within the trade union movement to establish a presence in inward investing companies in more recent years.

A large-scale survey has examined the patterns of trade union recognition in multinational corporations (MNCs) operating in Ireland. The survey’s findings suggest that about 50% of unionised US multinationals in Ireland did not recognise trade unions when opening new sites over the past five years. The findings are part of an unpublished research paper entitled ‘Charting the contours of employment relations in foreign-owned MNCs: Survey evidence from the Republic of Ireland’. The research was conducted by Jonathan Lavelle, Patrick Gunnigle and Anthony McDonnell from the University of Limerick (UL).

Methodology

The researchers compiled a list of 563 foreign and Irish-owned MNCs, from which they identified a sample of 423 companies. They then carried out structured interviews with senior human resource (HR) personnel working for these companies. The authors investigated the hypothesis that a ‘new orthodoxy’ is emerging in the Irish employment relations landscape, which suggests that foreign-owned and Irish-owned companies differ in their approach to the management of employees.

The authors note that employment relations’ researchers have long been interested in the question of whether significant differences exist in employment practices between foreign and domestically-owned MNCs. The traditional view was that foreign subsidiaries in Ireland adopted employment relations policies and practices similar to those pertaining to Irish organisations. However, this thesis has come under greater challenge, as the ‘country of origin effect’ is said to be increasingly overriding host country effects.

Survey findings

The survey found evidence that Irish, UK and other European MNCs are more likely to recognise trade unions, whereas US MNCs are the least likely to recognise unions.

The survey asked all MNCs that recognised trade unions if they had established a new site over the past five years and, if they did, whether they recognised unions in these new sites. It found that 61 out of 162 unionised MNCs, or 38% of them, had established a new site(s) over the past five years. Just over four in 10 of these companies, or 41%, recognised a trade union in each of the new site(s). One quarter of the unionised MNCs did not recognise the union(s) at their new site(s). The findings suggest that a strong anti-union feeling prevails among these MNCs, as they have previously recognised trade unions but decided to avoid unions at their newer sites.

Unionised MNCs from the US were far less likely to recognise a trade union at new sites. Indeed, about 50% of unionised US MNCs did not recognise unions whatsoever at new sites; no unionised US MNC recognised unions at all of its new sites. At the same time, just 30% of the unionised US MNCs recognised unions at most new sites, while 10% recognised unions at some of their new sites. European MNCs demonstrate a more mixed pattern in this respect.

Research conclusions

The Limerick-based research team suggest that the trade union movement has struggled in recent years to establish a presence in inward investing companies. This is particularly evident in the information and communications technology (ICT) and financial services sectors, although the unions could claim a stronger base in existing companies. ‘However, what appears to be happening now is that this strong base is eroding and they are finding it difficult “to hold what they have”,’ the authors conclude. They suggest that US MNCs ‘are the vanguard in this move away from engaging with trade unions’.

The authors point to two explanations as to why this is happening now. Firstly, the role of the state’s promotional agencies in attracting foreign investment into Ireland had an initial impact on trade union recognition among inward investing companies. The latter are now being faced with a choice as they expand to new sites and can easily choose the non-union route. The second explanation relates to the ‘demonstration effect’, whereby many large and well-known MNCs that have successfully established subsidiaries on a non-union basis have continued this policy over a period of time.

Brian Sheehan, IRN Publishing