Transnational Agreements

Marie-Noëlle Lopez , Planet Labor

 

For the European Commission, a transnational company agreement is a text “comprising reciprocal commitments the scope of which extends to the territory of several States and which has been concluded by one or more representatives of a company or a group of companies on the one hand, and one or more workers’ organizations on the other hand, and which covers working and employment conditions and/or relations between employers and workers or their representatives.”

Background

Transnational bargaining already dates back to a few dozen years but has been rapidly growing over the past few years.  In this respect, one can consider the 2000s as a turn in the development of this level of collective bargaining.  The development of collective bargaining is the result of the simultaneous occurrence of two different phenomena: 1/ the diversification of CSR policies, transnational agreements being perceived as an additional tool, 2/ the emergence of a supranational level of industrial relations, slightly more spread than global councils, namely EWCs.

One can easily understand why this phenomenon is attractive: it provides a solution for the gap between the increasingly transnational character of businesses’ actions and strategies and the purely national scope of labor regulations and industrial relations schemes.  In this respect, transnational framework agreements are a form of social regulation that steps in where (national) laws, by essence, cannot take action.

A few figures on transnational bargaining

About 220 texts re included in the European Commission’s definition:

• More than 50% are “European” – their scope or priority is restricted to Europe.
• A little under 100 signatory businesses.
• Over 80% of signatory businesses have their headquarters in the European Economic Area.  France and Germany are almost equally leaders in the list of countries appealing to transnational bargaining.  Other countries represented were the Nordic countries Belgium, Luxembourg, the Netherlands and Italy.
• The metal industry is still the sector where most of these agreements are signed, even though the practice is spreading.
• Concerning the signatories, there are different schemes: EWCs, international and European trade union organizations, national unions and works councils, with variable combinations.  EWCs are the key signatory parties of European agreements.  In more than 50% of cases, they are the only signatories.  International and European trade union organizations are signatories in 50% of cases, oftentimes with EWCs or national unions.  National unions from the country where the company’s head office is located often sign European agreements (notably in businesses where the headquarters were in France, in Italy or in Nordic countries), generally together with European or international unions or EWCs, although sometimes alone.
• Transnational agreements with a global scope almost always focus on fundamental rights or CSR aspects.  In European agreements, key themes cover specific subjects including health and safety at work, equal treatment in terms of employment and data protection, restructurings, work organization, training and mobility, as well as HR and CSR principles.

The European Commission’s political agenda

In 2005, the European Commission announced that it planned to “adopt a proposal designed to make it possible for the social partners to formalize the nature and results of collective bargaining in an optimal way.  The existence of this resource is essential but its use will remain optional and will depend entirely on the will of the social partners.”  European employers and trade union organizations gave a cool welcome to this initiative, the Commission decided to go slowly.  For the next step, launched in 2008, the Commission announced that it planned to help develop these practices of transnational bargaining and that it wanted, to that end, to offer useful tools to those who wish to negotiate agreements at that level.  It believed that a certain form of European legal framework for transnational company agreement could support the bargaining and implementation process and increase their efficiency.  The point was mostly to solve certain legal voids.  It plans to publish a communication on the subject in the fall of 2011.

What issues do transnational agreements raise?

Three main questions need to be answered in order to define regulations on transnational framework agreements:

1. Who are the “legitimate” players to negotiate such agreements going to be?
2. How are transnational agreements going to be linked with other collective agreements signed at lower level?
3. How to give them a binding character to ensure their effectiveness?

-       Quality of the signatories.  When looking at current practice, one can be surprised by the extreme diversity in the players involved with these negotiations, and the diversity of combinations.  In addition to this diversity, two trends are clearly shaped: 1/ EWCs often play a crucial part in transnational bargaining; 2/ European trade union federations have an increasingly predominant role.  Thus, defining the players means defining the respective roles of European trade union organizations, EWCs, as well as other players (national unions or staff representation structures).

• Content.  Practice itself offers solutions.
• Legal impact.  The idea is to give a binding character to the provisions to which the signatories want to give this quality.  Methods envisioned for that purpose include recognizing the same value for transnational collective agreements and national collective agreements.
• Other questions.  Dispute settlement systems, fate of the agreement when the perimeter or structure of the group changes.

Current atmosphere.

Even though “mindsets” have changed over the past five years, union organizations (the only ones to give an opinion on the subject) are still extremely reluctant to the idea of an optional framework.  To the questions of systems to create to guarantee the implementation or of possible disputes, the players answer that they are trying to make progress within the partners’ relations.

The combination of these players is the result of the will to combine different forms of representativeness on order to have the most representative signatories possible.

In addition to such diversity, two trends are now clearly taking shape: 1/ EWCs often play a crucial part in transnational bargaining, 2/ the development of transnational collective bargaining also shows the major role European trade union organizations have, since they are involved with the negotiation and signature of a great deal of agreements (stake).

• Content.  Practice itself offers solutions.
• Impact.  Thinking that transnational agreements are free of all legal impact would be delusional.  Legal impact is uncertain and will depend on the interpretation national courts are going to make compared with their national legal systems.  There have been a few rulings, which are not enough to foretell possible future developments, acknowledging that these agreements directly create rights for the workers.

The idea is to give a binding value to the provisions to which the signatories want to give this quality.  Lawyers say nothing is simpler: all there is to do is to give these agreements the same legal value as national collective agreements in the countries where they are applied, meaning that the agreements would get the same value as the value – in theory – granted to national collective agreements.  Some lawyers even suggest giving these agreements erga omnes effects in their application.

• Other questions.  Dispute settlement systems, fate of the agreement when the perimeter or structure of the group changes.

I would add the fact that the Commission is undertaking this task of gathering the agreements sign and making them available to the public with the obvious prospect of promoting this practice, which has caused several criticisms, notably from European trade union organizations, at least some of them, which think that the public powers ‘hijacking’ – to some extent – the subject was inappropriate.  This criticism is actually concealing uneasiness from some European trade unions regarding the issue.  When looking from the other side, one realizes that the reality of transnational bargaining is acknowledged by all, including employers’ organizations which, although they are skeptical, understood that there was a point, after neglecting these practices for years and years.

Currently, the issue of which systems to create to guarantee the implementation, and of possible disputes, these players answer that they are trying to make progress within the partners’ relations.