Transnational bargaining? Legal enforceability?

Citation

Gennard, P.J. (2007), "Transnational bargaining? Legal enforceability?", Employee Relations, Vol. 29 No. 2. https://doi.org/10.1108/er.2007.01929baa.001

Transnational bargaining? Legal enforceability?

Collective bargaining requires at least four conditions. First, bargaining parties which require organisation on the part of the employers and employees. Second, there needs to be a procedure (which may be formal or ad hoc) as to how the bargaining parties will relate to each other. Third, there requires to be an outcome from the behaviour of the parties to the bargain. The outcome can take many forms, for example a collective agreement, a joint declaration, joint text etc. Fourth, a collective bargaining system requires the ability of each party to impose industrial sanctions – strikes, for example, in the case of employees and lock outs in the case of employers – against each other. These sanctions result in economic pressures on the parties which can lead to them changing their positions (attitudes) towards each other. It is the threat of the imposition of industrial sanctions, rather than their actual imposition that is important.

If we bear this fourfold criteria in mind then it is possible to argue that transnational bargaining is very much alive in the European Union. At the multi-sector level the social partners – the ETUC (on behalf of employees) and UNICE (on behalf of private sector employers) and CEEP (on behalf of public sector employers) can a negotiated framework agreement to regulate employment and social matters across all member states of the European Union. These framework agreements can be enforced by either the Council of Ministers transposing them into a directive which then has to be transposed within a certain time period, usually two years, into national law or by the social partner organisations in the different member states in their voluntary collective bargaining activities. In multi-sector bargaining at the EU the equivalent of industrial sanctions is that if the parties fail to reach a voluntary framework agreement than the Council of Ministers will impose its EU devised a Directive on the issue involved. If this happens then the social partners will have had little influence over the content of the Directive. Negotiating a framework agreement has the incentive that the bargaining parties can exercise some influence on the terms of an ensuring Directive.

The process outlined above, which is known as the Social Dialogue process, also exists at the sector level. The EU wide employer and employee representative bodies can agree jointly to establish a Sectoral Social Dialogue Committee. There are more than 300 such Committees although none exist for the metal working trades and the graphical industry. These Sector Social Dialogue Committees have mainly produced jointly agreed texts, declarations etc. but framework agreements have been bargained to restrict working hours in air, rail and sea transport. The sanctions relating to collective bargaining at the transnational sector level are the same as those for multi sectoral bargaining.

In the EU transnational bargaining also takes place at the company level with the management of mulitnational companies and representatives of their employees from each EU country in which they have productive capacity, negotiating European Works Council Agreements. The European Works Council Directives of 1994 and 1997 sets down how the parties relate to each other when undertaking this activity and the outcome is an agreement outlining the European Works Council Arrangements. The equivalent of industrial sanctions exist in that of the parties fail to negotiate EWC arrangements or the employer refuses to negotiate the Directive allows for default provisions (which the employer has no control) to be imposed on the multi-national company. At company level, transnational negotiations at European Level have led to the conclusion of some 900 agreements establishing EWCs.

Against this context of the development of transnational bargaining in the EU its EU Commission has been exploring the idea of establishing a “optional European framework for transnational collective bargaining”. It is envisaged that such a framework could provide a channel for negotiating transnational collective agreements with legally binding effect at European sector level or with multi-national companies. This possible development stems from a EU Commission funded legal study from a group of labour law academics co-ordinated by Professor Edoardo Ales of the University of Cassino in Italy, published earlier this year. The report proposes a Directive setting out “the optional framework” for a EU transnational collective bargaining system (EU-TCB). To make an EU-TCB system both effective and “acceptable” to the social parties the legal study group suggest any Directive should ensure any transnational bargaining system is complementary to national collective bargaining systems. It is envisaged as acting as an additional level of bargaining that should neither interfere with existing national levels nor diminish the current function of existing transnational agreements and joint text agreed at company and sector level. Further, they propose that the “bargaining parties” can have access to, and activate, the optional framework shall be directly specified by any Directive.

The ETUC and the Union of Industrial and Employers’ Confederation of Europe (UNICE) were consulted by the legal study group. The ETUC stressed the necessity of giving consideration in any Directive to the questions of: the parties who can negotiate a transnational collective agreement; the relationship between agreements made at different levels; the degree of representatives required for the employee side to sign an agreement, for example, requiring a quorum calculated on the basis of the total workforce covered by the agreement, or requiring all the unions in the countries concerned to give their consent.

UNICE is opposed to any legal framework for transnational bargaining, even an optional one. It considers there is no need for an additional lawyer of EU collective bargaining on top of the existing ones and views the existing system of European Social Dialogue as sufficient and functioning in an acceptable manner. For UNICE if there is any need for an extension of negotiations the social parties will develop new forms themselves and there is no need for intervention by the European Union Commission. It has to be left to the social partners to develop the social dialogue process in a way they prefer. UNICE is stressing the autonomy of the social partners and the completely voluntary basis of any commitments they make across industry, sector and company level. It strongly opposes giving legal effect to agreements at European sector or company level.

Professor Ales report is not that of an official expert report and is not, therefore, an official Commissions report. The Commission itself has collected and analysed transnational texts agreed at the company level. These and other studies will provide the groundwork for an “open debate” with the interested parties on the merits and demerits of having legal framework so that transnational collective agreements can be made legally binding on the parties. The debate continues but given the above differences of view between the ETUC and UNICE the Commission is unlikely to act quickly in attempting to provide a framework for giving legally binding effect to European sector level or multinational company transnational collective agreements.

Professor John Gennard