European Commission seminar on trans-national agreements – 17 May 2006

European Commission seminar on trans-national agreements - 17 May 2006

The context of social dialogue

The European Commission has presented the idea of an optional European framework for trans-national collective bargaining. This would complement existing national industrial relations systems, allowing a more systematic approach to trans-national negotiations across the EU and resulting in cross-border agreements at company level.

State of play of trans-national texts concluded at company level

At the moment, international framework agreements cover a variety of issues such as:

• health and safety
• corporate social responsibility and fundamental rights
• training
• data protection.

Usually, these are the result of discussion and don't have the legal force of a national or sectoral collective agreement. Very few UK-based companies have been involved in such discussions (compared to French, German and Nordic companies). Half the agreements are European in scope, while one third have a more global scope. The metallurgic sector has seen the highest number of such texts, followed by food, chemical and wood sectors. The private security and financial sectors don't seem to have engaged in trans-national agreements, despite the presence of the biggest multi-national companies in these areas. The working document singles out international trade unions organisations (two thirds) as the main signatories of these agreements, but also national trade union centres (one quarter) and European work councils (one third) - sometimes with an overlap. On the employers' side, it is usually the industrial group/company that takes part. Most texts include follow-up provisions and a dispute settlement mechanism.

One weakness of trans-national agreements is that they are non-binding, so there is a lack of follow-up and uncertainty over enforcement. The issue of representation (negotiating mandate, signatory power, non-regression clause) is a determining factor for the legal status of the outcome of discussions.

Another problem is that UNICE, the European private employers' federation, sees European work councils (EWC) as bodies to consult and provide information rather than negotiating partners; and equally, does not want to see these agreements made legally binding.

Arcelor - case study

Arcelor, a steel company, negotiated a series of agreements and joint policies with its European work council. These agreements seek to extend the practices of social dialogue world-wide and include corporate social responsibility via an international framework agreement and measures to accompany restructuring via a European level framework agreement; and a health and safety European policy to cover sub-contractors.

Parties to the agreement were the EWC, the European (EMF) as well as the International Metalworkers Federations (IMF), the national trade unions and the employers. They established a joint committee for monitoring and implementing the commitments. The deep involvement of the European unions (through a EMF coordinator) was crucial to overcoming the logic of plant competition and limited national views of the issues at stake. From a legal point of view, there are deficiencies in international law - which binds only states and not multi-national companies, the latter being liable only to different national laws.

Issues raised by trans-national negotiation at company level

Professor Ales presented the final report, which looked at the past and present of trans-national collective bargaining. The report identifies obstacles and suggests actions to overcome these:

• Some weaknesses arise because trans-national collective bargaining usually stems from EWC and European Company directives which create workers' representative bodies only for the purpose of informing and consulting employees. This limits the scope of negotiations to a specific range of subjects.

• Another obstacle is represented by the highly differentiated composition of EWCs and the lack of a formal recognition of the role of trade unions therein.

• The system is voluntary - according to the report, a compulsory system would violate freedom of association and social partners' autonomy.

• Most important, the report concludes that there is a need for a framework to clarify procedures, negotiating agents and conditions for the binding effect of the agreements concluded. Current legal instruments do not settle the issue of whether this kind of agreement is legally binding. The report suggests that trans-national collective bargaining could help prevent competition on the basis of working conditions rather than the quality of the product.

During the debate, employers from various countries disagreed with the conclusions of the report: they disagreed with the need for a European optional framework (which would tend to centralise collective bargaining), and the possibility of the outcome being made legally binding.

Experience in the food sector

Here international framework agreements (IFAs) are global in their scope and negotiated by global union federations (GUFs) and multi-national companies. Such agreements encourage the implementation of ILO conventions on a company basis worldwide and trade unions often use IFAs as an organising tool, especially when dealing with 'friendly' employers. However, they do not solve the issue of how to deal with 'bad' employers, where organising and negotiating are extremely difficult. A drawback of IFAs is that they are often generic and do not deal with accountability (not all trade union representatives are involved as it would be too costly for the GUFs). Equally, implementation is sometimes a problem for unions because of organisational obstacles.

Another seminar is planned, to look in detail at the obstacles to a trans-national framework. Despite the mixed experience so far, the Commission believes that such a framework would be useful. Further proposals will be subject to consultation.