Working Conditions and Local Unions at Work: Understanding Union Responses to Flexibility Strategies in Multinationals in Germany and Belgium

This paper draws on a cross-national comparison of trade union responses to employers’ flexibility strategies leading to dualisation and fragmentation in working conditions. Findings are based on a comparison of matched subsidiaries within multinationals in the manufacturing and chemical sectors in Germany and Belgium. We argue that to understand the extent and the nature of protection of the workforce’s working conditions, it is crucial to focus on workplace-level arrangements that potentially create the circumstances for such protection. Those arrangements vary depending on local unions’ capacity to complement institutional (national- and sector-level) regulation and local (organizational) power resources as essential preconditions to protect the jobs and working conditions of different groups of workers.

We compare four workplaces of two high-tech multinationals with similar skill levels of the workforce (medium-high) in the German and Belgian metal and chemical industries. The four case studies are based on 26 semi-structured interviews, extensive site visits and observations, as well as documentary analyses of collective bargaining agreements. Empirical findings illustrate distinctive ‘within country’ sectoral patterns regarding the local unions’ strategic responses to management’s flexibility requests. These differences are explained by the interaction between national labour market institutions and changes in sectoral industrial relations and local power relations. These variables were mediated by the unions’ capacity to use local resources. In particular, the capacity of the union to retain traditional existing encompassing bargaining structures was a crucial asset.

We explain the case study findings by referring to theoretical approaches on union power resources in accordance to which “union power and influence [are] secured in different ways in different national systems” (Frege and Kelly, 2004: 40). Belgian local unions were more successful in articulating – while complementing – between encompassing sector-level agreements (institutional-level resources) and process of internal democracy (organizational resources) within workplaces compared to the German local unions. This has allowed them to more easily turn their strategies in ‘real’ opportunities for worker security. However, the extent to which German unions can be successful in this relied on their capacity to re-compact fragmentation in local negotiations over working conditions. This suggests the importance of union capability to act upon existing bargaining institutions and adapt them to new circumstances.

In Belgium, encompassing collective bargaining institutions are well established at sector- and inter-sector level, hence they provide limited opportunities for employers to exit agreements or decentralize bargaining. Moreover, trade unions in Belgium are able to rely on different sources of organizational power, particularly in traditional industries, such as high membership rates and recourse to strike to put pressure on employers. Conversely, in Germany unions have not only experienced bargaining decentralization and disorganization but they also face declining membership in key sectors, and particularly outside the core workforce. These factors contribute to inhibiting the unions, relatively more in Germany than in Belgium, from protecting the working conditions of the overall workforce. The result has been growing intra-plant segmentation, with more challenging implications for unions’ work and for social solidarity.