The Globalization of Industrial Relations

Christian SchneiderWharton School

Madrid, 23 October 2008

Globalization and Industrial Relations

• The globalization of economic activity has also provided industrial relations with a global dimension

• Initially, labor/industrial relations were a local matter (shop floor, company/national level)

• Today, the handling of a multinational company’s IR issues requires thorough global awareness

Institutional Arrangements of Global Industrial Relations

• OECD (Organization for Economic Cooperation & Development)-- TUAC (Trade Union Advisory Committee)– BIAC (Business & Industry Advisory Committee

• ILO (International Labor Organization)– IOE (International Organization of Employers)– ITUC (International Trade Union Confederation)

• EU (European Union)– BusinessEurope (EU Employers; formerly UNICE)– CEEP (Confederation of EU Employers in the Public

Sector)– ETUC (European Trade Union Confederation)

The New ITUC

• In November 2006, the International Confederation of Free Trade Unions (ICFTU) and the World Confederation of Labor (WCL) merged to form the International Trade Union Confederation (ITUC); headquartered in Brussels

• This creates, for the first time, a unified global trade union confederation

The ITUC represents168 million workers

organized in307 national affiliates from

154 countries and territories

ITUC regional organizations

ITUC Regional Organization for Africa (ITUC-Africa)

Nairobi, Kenya

ITUC Regional Organization for Asia-Pacific (ITUC-AP)

Singapore

ITUC Regional Organization for the Americas (TUCA)

Sao Paulo, Brazil

PERC: A new European regional organization

• ITUC, in March 2007, established its first ever European regional organization, the Pan-European Regional Council (PERC)

• It will promote ITUC’s strategies, priorities, and policies in Europe

• PERC consists of 87 ITUC unions representing some 85 million members

• PERC General Secretary is John Monks, who is also General Secretary of the European Trade Union Confederation (ETUC); PERC’s President is Mikhail Shmakov, who is the President of FNPR, the Russion trade union federation

• PERC will “cooperate closely” with ETUC to “promote social dialogue and the European social model across the entire continent” (Focus: Russia, Eastern Europe)

ITUC Affiliated Organizations10 Global Union Federations

(formerly known as International Trade Secretariats)

EI Education International

ICEM International Federation of Chemical, Energy, Mine and General Workers’ Unions

IFBWW International Federation of Building and Wood Workers

IFJ International Federation of Journalists

IMF International Metal Workers’ Federation

ITGLWF International Textile, Garment and Leather Workers’ Federation

ITF International Transport Workers’ Federation

IUF International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations

PSI Public Services International

UNI Union Network International

The Work of GUFs

• The Global Union Federations (GUFs) are the closest international structures to the day-to-day union work of representing the industrial interests of workers

• A number of recent mergers has reduced their number to the current ten

• Some unions are affiliated to more than one GUF because they represent workers in several sectors

Key Functions of GUFs• The key functions of GUFs include, among

others:

-- International solidarity actions

-- Research into global/regional industrial developments

-- International coordination of responses to transnational corporations

-- Representation at international events

-- Campaigns on key issues in sector/industry

GUFs and Joint Campaigns

• GUFs are increasingly launching joint campaigns on specific issues with NGOs and social movements, including environmentalists and human rights organizations (e.g. with Amnesty International on the rights of refugees, Greenpeace on the illegal fishing industry, and Global Witness on Liberia, etc.)

Example of GUF cooperation• GUFs work closely with each other on

issues/employers which cover more than one sector. For example, the ITF works with:

-- ICEM on transport to the offshore oil industry and disputes involving chemicals and oil transports

-- PSI on issues related to public services and privatization including relations with the World Bank

-- IFBWW on issues such as transport of wood and relations with furniture companies

-- IMF on the scrapping and building of ships

-- IUF on tourism workers and aviation catering

-- UNI on tourism, security companies and aviation, and the growing logistic business

The new Council of Global Unions• In January 2007, ITUC, GUFs, and the Trade

Union Advisory Committee (TUAC) at the OECD established the Council of Global Unions – headed by James Baker (USA); located in Brussels

• It is viewed as a “key platform for coordinated global solidarity, mobilization, campaigning and advocacy”

• Part of ITUC efforts to become a more effective global player vis-à-vis multinational organizations

New model of globalization

• According to the ITUC, the existing national and international frameworks for the regulation of business activity are inadequate

• A new model of globalization is needed

• It has to focus on the “effective national and international regulation of business”

• This includes, among others, the push for a fundamental reform of international institutions, e.g. the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO)

• ITUC wants these institutions to include in their programs social, labor (ILO), environmental, and gender considerations

• All WTO agreements should include an ILO-based workers’ rights clause

Creating a “true” global union

• Increasingly, international union officials see a need for a “true” global union as their members often work for the same global employer

• They believe that such a union would have more effective bargaining power by using, for example, the collective force of cross-border industrial action

“Workers Uniting”: A new transatlantic union

• In early 2007, Unite of the UK (2 million members) and the United Steelworkers of the US (representing 850,000 members in the US, Canada, and Caribbean in steel, aluminum, paper, tire and rubber, and health care, among other industries) signed an agreement to “explore” a transatlantic merger

• Workers Uniting was officially created on July 2, 2008 at the US Steelworkers Convention in Las Vegas

• Workers Uniting will be headed by an executive director who will oversee a budget of “several million dollars”

• The staff will include research, international affairs, and communication specialists

• There will be a steering committee with equal membership from each union

• Initially, officials will meet once a month by video conference and four times a year in person

• Workers Uniting staff will plan joint organizing campaigns and coordinate bargaining with multinational companies

• However, each union will continue to pursue country-specific policies and operate with some autonomy

• Workers Uniting also plans to set up a “global labor rights network” with staff based in Central America, Eastern Europe, the Middle East, Africa, and other regions

• It is not yet known how unions will coordinate dues, bargaining and political strikes, given differing labor laws and wage/benefit practices in different countries

• The merger is to be completed in stages over a 10-year period

• Other unions will be invited to join Workers Uniting in the future

• The Australian Workers Union has already entered into mergers talks with Workers Uniting

• Union officials see their transatlantic merger as “the first step in a major reorientation of the labor movement, to actually make it global”

Going beyond ITUC and GUFs

• A “true” global union – such as Workers Uniting – is not to be confused with the existing international unions/GUFs (e.g. ITUC, IMF, ICEM, IUF, etc.)

• They are “just” federations: ITUC is a federation of national union centers; GUFs are federations of national sector-based unions

• They engage in solidarity and leaflet actions, share information and ideas

• Officials of Workers Uniting say that this is not enough

• A true global union should not “be a social event,” but rather “an activist organization”

• Because “only truly global unions – armed with the credible threat of global strikes…” would be able to “deal with multinational companies on equal footing”

Making the merger work will not be easy

• At this point, no one is sure how the merger will work in practice

• The new union’s effectiveness will depend on how well it can mobilize financial and other resources for organizing and bargaining with common employers

• Global unions need the ability to negotiate with global employers

• For this purpose they need the support of national unions

• National unions that support negotiating global agreements will need to be bound by the terms of these agreements as there is no incentive for a company to settle globally if the agreement does not lead to improved labor relations

• A national union is inclined to fear that it will lose control of the union and of its autonomy if it agrees to cede authority to a global union

• Supporters of global unions, such as Andy Stern, president of US-based SEIU, argue differently: national unions are increasingly powerless vis-à-vis global corporations

• Belonging to a global union will increase their power to win in their home country

The design of a “true” global union

• Promoters of global unions say that they do not have to literally cover the globe

• Instead, workers that do the same work for the same global companies could be organized, for example, in forty “key global cities”

• In these cities, workers and their unions should seek the support of community and religious leaders

• As unions grow larger and stronger in these key global cities, they will have a greater ability to push for legislation for global union recognition

• These global unions “must be capable of coordinating, directing, and transferring power and resources to counter the power of global corporations”

• Today’s global union structures are neither designed nor able to accomplish this

• Promoters of true global unions will have to “sort things out” with ITUC and its GUFs

• The latter do not appreciate being classified as “social events” organizations

• In the meantime, and until true global unions have become the norm, multinational corporations are likely to be confronted by increasingly globally focused unions in pursuit of more cross-border links and global corporate networks

“T Union:” A transatlantic organization

• UNI Global Union affiliates CWA (US) and Verdi (Germany) have jointly launched T Union, the “first ever union to represent workers on both sides of the Atlantic”

• T Union will support T-Mobile (Deutsche Telekom) workers who want a union voice and bargaining rights in the US, and German union members working for T-Mobile in the US

Instruments for International Action

Networks of Unions from Multinational Companies: a permanent mechanism for the exchange of information and experience on collective bargaining, hours of work, working conditions, salaries, information on corporate strategies etc. This instrument is focused on promoting international union action and mobilization

Instruments for International Action

Global Campaigns: forms of mobilization and pressure on multinational companies to respect social and environmental rights. These actions (increasingly in form of cyber campaigns) are developed in partnerships with other players (consumers, NGOs) and aim to attain the company image, making stockholders aware of what is going on and forcing alterations in corporate conduct

Instruments for International Action

International Framework Agreements (IFAs): supplement national legislation and collective bargaining. Instruments through which multinational companies commit to respect minimum standards of social and union rights in all the countries where they operate. Negotiated and monitored by trade unions

International Framework Agreements

• IFAs are a relatively recent tool

• Global Union Federations (GUFs) are now using them widely “to lay down the rules of conduct for globally active corporations”

• To unions, IFAs are an ideal instrument for dealing with the issues raised by globalization

Codes of Conduct versus International Framework Agreements

A Trade Union View

Codes of Conduct

1. Unilateral initiatives

2. Do not necessarily recognize all core labor standards

3. Rarely cover suppliers

4. Monitoring, if any, controlled by management

5. Limited, or no, dialogue with unions

IFAs1. Negotiated between

labor and corporate management

2. Recognize all core labor standards

3. Usually cover suppliers

4. Unions involved in implementation

5. Further dialogue between trade unions and management

More IFAs to come…

• Today, some 60 IFAs have been signed and more are currently under negotiation

• Negotiators for labor, in addition to local unions and the Global Union Federations, are European Works Councils and European Industry Federations – i.e. local/European labor representatives negotiating international agreements = globalization/IR

World Congress on IFAs

• In November 2006, the IMF held the first ever World Congress on International Framework Agreements (at IG Metall headquarters in Frankfurt)

• US delegates pointed out that almost all IFAs are with European employers; delegates agreed to make stronger efforts to engage North American and Japanese multinationals in IFA negotiations

• Some delegates (Luc Triangle, Belgium) argued against the use of EWCs in negotiating IFAs

Cyber Unionism

• Increasingly, unions are taking advantage of information communication technologies (ICTs)

• For example, UNI Global Union introduced Union Island on May Day 2008

• Union Island is to become “a home for UNI unions and activists in the virtual world of Second Life”

• UNI plans to use Second Life (a virtual world of 13 million residents and 1 million users every month) to create a virtual community for affiliates, allowing trade unionists from around the world to meet and work together on shared issues

• UNI also wants to use Union Island as a tool for organizing campaigns and virtual strikes leading participants to company islands (cf. also IBM/Italy in 2007)

ITUC/ETUC and China

• Since 2004, ITUC/ETUC and their affiliates are pursuing a closer relationship with the All Chinese Federation of Trade Unions (ACFTU)

• Western unions want to “accelerate activities in multinational companies in China”

• As part of this approach, ITUC and ETUC held a three-day seminar in 2008 on European Works Councils and China

• Delegates were told that EWC members should “start asking questions if companies are investing in China” and that they should take on watchdog functions and question companies on their activities in Chinese subsidiaries and suppliers

IR situation in the EU

• The EU Commission > Social Commissioner Spidla deals with “EU Social Partners” =

• BusinessEurope > representing private employers

• European Trade Union Confederation (ETUC)

ETUC = Voice of organized labor at EU level

• The ETUC is a very active lobbyist vis-à-vis all EU institutions

• It consists of 81 national trade union centers from 36 countries with a total membership of 60 million

• Affiliated to the ETUC are 12 European Industry Federations (EFIs) – among them:

• EMF: European Metal Workers’ Federation

• EMCEF: European Mine, Chemical and Energy Workers’ Federation

• ETF: European Transport Workers’ Fed.

• UNI-EUROPA: Union Network International (European regional branch)

• ETUF-TLC: European Trade Union Federation – Textiles, Clothing, Leather

• EFFAT: European Federation of Food, Agriculture and Tourism Trade Unions

• The ETUC is recognized by the EU and the Council of Europe as “sole representative cross-sectoral trade union organization at European Council level”

• The ETUC is a well-financed and sophisticated organization (with its own research institutions = ETUI & ETUCO) that participates with BusinessEurope in the European Social Dialogue (whose negotiated results can become EU law)

The 2007 ETUC Congress

• At its 2007 Congress in Lisbon, the ETUC announced the launch of a campaign at EU level for “common standards on minimum pay and income, and for collective bargaining strategies”

• EU union strategies should have a stronger global dimension (increased solidarity action with global union federations)

• Membership/financing issues are forcing ETUC affiliates to pursue structural changes, including the possible merger of the EMF with EMCEF and ETUC-TLC resulting in a single European Trade Union Federation for Industry (this is currently under discussion)

• A similar move is being contemplated at international level between IMF, ICEM, and ITGLWF (textiles, garment, leather workers)

• According to union officials, any potential merger “shall be about better and more effective use of existing resources to more effectively represent the interest of European workers in industrial sectors”

EU-wide minimum wages

• Pressure is growing for a EU-wide minimum wage policy

• This would not involve a single, statutory EU-wide minimum rate expressed in monetary terms, but rather a framework measure requiring individual EU states to establish national minima

Summary: Global trade union agenda

• Become a more effective counter-power to MNCs

• Deepen/improve global union solidarity

• More union restructuring (incl. mergers)

• Continue with global issue campaigns (e.g. hours of work, living wage, equality, migrant workers, precarious work etc.)

Example of precarious work campaign

• A current (October 2008) IUF campaign is targeting the “systematic, programmed destruction of permanent work” at Nestle and Unilever

• The IUF claims that the two companies are playing a leading role in replacing “decent, permanent work” with precarious work

• According to the IUF, permanent work at these two companies has been “increasingly replaced by an abusive system of outsourcing, casualization, and ‘temporary’ hiring”

• To highlight this “abusive system” and help its members “in fighting back,” the IUF has launched two new websites: Nestlewatch and Unileverwatch (they are interactive sites with translation toolbars for multi-language use)

• Improved Internet utilization (e.g. electronic picketing; virtual union activity, including “second life” activities)

• Possible outsourcing of strikes to low-wage countries (particularly in global transport/logistics sectors)

• Increased efforts concerning the negotiation of International Framework Agreements

• Pursue global bargaining with global employers on global issues through “true” global unions

• Cooperate with employers on finding pragmatic solutions to global outsourcing activities

• Become more involved in China and India and improve cooperation with trade unions there

• Promote industrial and economic democracy at global level based on the EU’s social dialogue/social policy model

• Provide EWCs with a global dimension

• The pressure on business to play a more decisive role in social, ethical, and environmental issues will continue to grow = CSR (ISO 26000 and Global Compact)

• Trade unions, at the global political level, will try to increase their influence vis-à-vis the major inter-governmental organizations (e.g. OECD, World Bank, International Monetary Fund , and World Trade Organization = labor clauses)

• In view of the current financial crisis, ITUC/GUFs will campaign for greater regulation of the global financial system

• ITUC/GUFs want national governments to mandate the IMF to develop appropriate international regulatory frameworks of the financial sector and coordinate national regulatory reforms

• This process should include consultations of ITUC/GUFs and ETUC

• Union officials are warning against giving the private financial sector, “which put the world economy into the current mess,” too much influence over the design of new regulations

QUESTIONS?