Paul Marginson

Multinational Companies and the Future of Collective Bargaining: A Review of the Research Issues

Growing European economic integration has encouraged restructuring within multinational companies (MNCs), involving the development of organization-based employment systems, changing forms of management control and a shift in bargaining power. These developments are promoting the decentralization of collective bargaining and challenging established structures of multi-employer bargaining. How far MNCs withdraw from multi-employer bargaining will however be shaped by the different national industrial relations systems. Future research should examine the involvement of MNCs in national systems of multi-employer bargaining and the organizational, procedural and substantive aspects of their industrial relations activities at European level. Such a programme of cross-national research raises important issues of funding and collaborative organization.

Transnational Management Influence over Changing Employment Practice: A Case from the Food Industry

The means by which multinational companies (MNCs) develop and diffuse transnational industrial relations practices are the focus of this article. It elaborates different channels through which international management exercises influence over local practice in operations across different countries. Drawing on survey findings, it identifies the kinds of MNC in which the exercise of such transnational influence is most prevalent. The processes involved are investigated through an in-depth study of a European food MNC. This highlights the importance of ‘unobtrusive’ channels of transnational influence operating within a structure which promotes both cooperation and competition between local units.

The Survey Tradition in British Industrial Relations Research: an Assessment of the Contribution of Large‐Scale Workplace and Enterprise Surveys

The paper assesses the contribution to industrial relations research of the large-scale workplace and enterprise-based surveys of industrial relations in Britain, paying particular attention to the Workplace Industrial Relations Survey (WIRS) series. It takes issue with recent criticism of survey-based analysis in the field, arguing that industrial relations researchers have developed a distinctive and valuable survey tradition. The use of surveys in industrial relations contrasts markedly with that in labour economics, stemming from differing methodological preferences in the two fields. Some limitations of the WIRS series to date are reviewed, before considering future directions that survey research might take in order to capture the changing canvass of industrial relations in Britain.

Working Time Patterns: Confirming the Significance of the Sector

Along with wages, working time is a defining feature of the employment relationship and needs little justification for special attention — ‘Time is at the heart of industrial relations’ suggests the European Commission (2000: 66). As previous chapters have pointed out, the two main dimensions of working time — duration and flexibility — have been significant factors in the development of the EU’s multi-level system of industrial relations. They have been one of the main vehicles of bargaining decentralization within national systems (Traxler et al., 2001: 128–9) — notable examples include the 1984 settlement reducing the working week below 40 hours in German metalworking and the French Aubry legislation of 1998 and 1999 implementing the 35-hour week. They have also constituted a major focus for Community-level activity. Substantively, the duration of working time figures prominently in the 1993 EU Working Time Directive under its provisions for a 48-hour average weekly maximum and four weeks paid holiday entitlement. The flexibility of working time is seen as making a major contribution to the modernization of work organization, being vital to each of the main objectives of the EU’s employment strategy, i.e. full employment; quality of work (better jobs) and productivity or competitiveness; and cohesion and an inclusive labour market providing for greater access (European Commission, 2003b).

Introduction: Contested Terrain

In recent years, the term ‘European social model’ has acquired widespread currency. Although few have been prepared to spell out what they mean by the term, most would probably agree with Visser and Hemerijck (1997: 13–14), that it is predicated upon upholding fundamental principles in three particular policy domains. These are the right to work, including commitments to full employment and active employment policies; the right to social protection, involving encompassing basic social security cover for the non-working population; and the right to civilized standards in the workplace, covering issues of employment governance or regulation. Kittel (2002: 3), citing Ferrera et al. (2000: 13), adds two further common traits: a relatively egalitarian wage and income distribution, which relates to all three domains, and a high degree of interest organization on the part of employers and workers together with coordinated wage bargaining, which relates to the third. In each case, the above rights exist not just for the benefit of workers — they are the ‘rules of the game, and like all such rules, they constrain in order to enable’ (Marsden, 1999: 5).

The Starting Point: Three Key Dimensions

The opening chapter made some crucial assumptions about the three key dimensions of the EU — the economic, political and social — as well as taking for granted the wider context. These assumptions need to be substantiated and in the process the context filled in. The first assumption is that ‘Europeanization’ rather than ‘globalization’ is the key reference point — that ‘Europeanization’, in other words, is not just a cipher for ‘globalization’. The second is that it is meaningful to characterize the EU polity as a ‘multi-level system of governance’ with a capability to exercise a significant influence on industrial relations developments. The third is that it is possible to identify the main contours of a ‘European industrial relations model’ as a constituent element of the European social model, even though the EU framework is skeletal and there are many points of difference between the systems of the member countries.

Multi-Level Governance in the Making: Introducing the Key Processes

The multi-level system that European integration is prompting involves both formal and informal processes. Significant developments are taking place in these processes, and in the balance between them, which are integral to the system’s dynamics. This chapter seeks to clarify what is involved. The initial focus is on collective bargaining, which, together with legal enactment, represent the two traditional methods of industrial relations regulation. Despite multiple challenges, collective bar-gaining appears to be not only surviving, but also gaining ground (Spyropoulos, 2002: 395). As well as assuming some of the functions traditionally performed by legal enactment, it appears to be taking on fresh roles. These developments are not restricted to the supranational level, but also feature within national systems, irrespective of different legal traditions. In the process a distinct shift from ‘hard’ to ‘soft’ forms of regulation is apparent.

The Euro-Company: Focal Point for the Europeanization of Industrial Relations?

Singling out European-scale multinational companies for particular attention needs little justification in the light of previous chapters. MNCs have been key proponents of economic integration, championing the creation of the single European market and subsequent monetary union (Nollert, 2000). MNCs are also central protagonists driving forward the process of market integration. As Chapter 2 underlined, large companies have responded to EMU by seeking to extend their reach from particular national markets across the entire single market, and to reorganize production and market servicing on a continent-wide basis. In the process the number of companies within the EU which are multinational in scope has grown as has the geographical reach of established MNCs (Edwards, 1999). Chapter 2 went on to establish that the ‘Euro-company’ is a meaningful concept, distinct from the ‘global’ corporation and amounting to more than an umbrella term for a set of nationally differentiated MNCs. Legal accommodation to the scale and significance of these developments has come with the eventual adoption, in 2001, of the European Company Statute.

National Sector Agreements: The Foundations under Threat?

Recent years have seen significant changes in national systems of industrial relations which, Chapter 5 emphasized, are contributing to the development of a multi-level system. As well as strengthening of the national level through the negotiation of social pacts, there has also been the rise of company bargaining — examined in this and the following chapter. Seemingly contradictory — the one involving centralization, the other decentralization — they represent complementary responses to the twin problems posed by the ‘regime competition’ that European integration is promoting and the greater adaptability required to handle the widespread restructuring that it has set in train. These twin developments are both a response to the deficiencies, and a challenge to the long-term viability, of the sector multi-employer bargaining that has been the cornerstone of most national systems. The development of social pacts recognizes that national systems are operating within a single market and also that, with the growth of the service economy, sector bargaining no longer has the coverage that it did. The rise of company bargaining reflects the inability of the ‘one-size-fits-all’ regulation associated with sector agreements to deal with the increasingly diverse business circumstances faced by companies within a sector. Seemingly, a combination of national, cross-sectoral and company bargaining questions the need for sector arrangements — the former can set the overall framework and the latter fill in the details.

Wage Developments in a Multi-Level System: A Case of ‘Convergence Without Coordination’?

Our focus in this chapter and the next shifts to the impact of European integration on the outcomes of industrial relations. Singling out wages for special attention needs little justification. The levels of wages, and the wages structures they are embedded in, lie at the heart of the employment relationship and the negotiations that surround its governance. Following Brown and Walsh (1994: 437), being quantifiable, and thus generalizable across all manner of jobs and employees, wages are the common focus and language of policy makers and negotiators alike, albeit their interests may differ. For policy makers, as Chapters 4 and 5 have shown, wages are a key element in the macroeconomic policy mix, with links to employment, social security and taxation; changes in the levels of wages are fundamentally important in maintaining price stability. The wage structure shapes the distribution of employment between skills, employers and regions. For negotiators, the interests of their constituents are paramount. For workers, the level of wages is both the means to livelihood and a measure of self-esteem, explaining the focus on both real wages and relative wage levels or differentials. For employers, the levels of wages (both absolute and relative) are not only a key component of costs, but also instruments of motivation, performance and productivity.