Flexibility, Security and Workplace Inequality in Multinationals: The Case for Extending European Framework Agreements
Internationalisation of multinationals leads to new challenges regarding local, national and transnational employment regulation. Research on transnational trade unionism has attempted to capture the evolving forms or models of transnational unions (Hyman, 2005) as unions building capacity to influencing other actors, such as the state and employers. More specifically it meant to understand the forms of action linking national trade unions and international or global union federations or confederations as well as to examine the establishment of cross-border alliances through existing cross-national structures for the representation of employees within multinationals such as EWCs (Pulignano, 2011; Greer and Hautpmeier, 2010). There is widespread acknowledgment that structures are necessary but not sufficient to entail unions exercising power within a global context characterised by increasing deterritorialisation, fragmentation and inequality (Fairbrother et al, 2013). Trade unions need ‘associational power’ in order to be able to act upon the power of multinationals. It means that they need resources and capacities (Levesque and Murray, 2010). These capacities have the potential to reduce the risk of unions being entrapped into multinational strategies of profit maximalisation and shareholder value. This is often the case when unions are confronted with the company’s request to make concessions on flexibility in return for job security at the workplace.
The paper presents lessons from comparative research on the collective bargaining of flexibility (i.e. working time, task adaptability, job mobility, wage, type of contract) and security (i.e. training, life-long learning and career programmes, job guarantees) in multinationals’ subsidiaries in Europe. Research evidence illustrates the conditions (structural- and power-based) under which trade unions’ negotiations over flexibility and security at the cross-national level of multinational subsidiaries may produce different outcomes in terms of reducing inequalities over wages and working conditions for the overall workforce. The comparative analysis illustrates that the level and types of labour market flexibility and security that are prevalent in a national case are to an important extent influenced by external market factors as well as firm-level features. The interaction of these factors within distinctive institutional settings concurs to shape local union bargaining (associational) power over flexibility and security. In other words, the paper illustrates how unions strategically engage in reducing inequality at the workplace-level. Furthermore, it emphasizes that negotiating flexibility and security within subsidiaries depends very much on the extent to which trade unions engage in transnational bargaining via EFAs. Cases show that support from the ETUFs to develop coordination and cross-national networking not only helps in establishing contacts among employee representatives and local unions across borders but also provides the basis for bargaining collectively on a transnational level while reinforcing local trade union power.
Empirical evidence is based on fieldwork in two French- and two US-based manufacturing multinationals’ subsidiaries in Germany, Belgium, Italy and the UK, conducted in 2011-2012. The empirical data stem from 96 semi-structured interviews (90-120 minutes long) and documentary analysis. Follow-up interviews were conducted in 2013. These interviews were carried out with European strategic management (European Vice-President, European Director or Head of European HR) as well as with local HR management and employee representatives at plant- and sector-level.
Findings illustrate that co-operation and co-ordination across different unions and works councils has contributed to generating a process of internal negotiation which influenced actors’ configuration and bargaining with local management, particularly on employment security. Research illustrates that in those MNCs where trade unions have become negotiation partners for agreements at the European level on aspects of security, these agreements became strategic resources for the local unions during economic difficulty. They strengthened the union capacity to proactively use the local discretion to convert flexibility into long-term security programmes for all the employees. Such agreements contributed to avoiding higher inequality because they attempted to balance the flexibility given by the workers with employment security in return. Thus, the crucial question is not what is “the second best option” for unions when disadvantageous environments constraint their ability to guarantee job security (“making concessions”) but it is how unions and (European) works councils can create capacity to negotiate long-term security for the employees when needed. Findings illustrate that EFAs are the tools trade unions need when confronted with management challenging employment insecurity. The negotiation of EFAs is more likely in those MNCs that are characterised by favourable structural contexts and firm- and market-related conditions. These conditions open up space for local discretion that would conversely be difficult to develop in MNCs facing disadvantageous environments. However, we see that MNCs operating in such contexts paradoxically are in a better condition to offer to unions the capacity to influence trans-nationally. For example, a union can better press for cross-country comparisons exactly in those MNCs where workers within different affiliates share similar working environments because of the standardized nature of the product, and identify with a common employing organization. Thereby, the crucial aspect is the willingness of different local unions to bridge the borders and operate in coordination and solidarity. Extending the content of EFAs to the different local affiliates means empowering the local unions within multinationals to spread the positive gains of local negotiations where they are relatively strong and successful to other local subsidiaries where they struggle to bargain on employment protection. Hence, the European trade unions’ capacity to enhance their influence in negotiations on employment protection depends not only on their national and local power but also on the extent to which they will engage in networking and coordination across-borders for bargaining purposes in MNCs.
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Pulignano V. (2011) “European Works Councils and Trade Union Networking: A new Space for Regulation and Workers’ Solidarity in Europe”, in Blackett A. and Levesque C. (eds) Social Regionalism in the Global Economy, London: Routledge