Value chain fragmentation and working conditions

Jan DrahokoupilSenior ResearcherEuropean Trade Union Institute, Brussels

Jobs in Global Value ChainsWTO Public Forum, Geneva, 2 Oct 2015

value chain fragmentation and working conditions2 jan drahokoupil © etui (2015)

Available at www.etui.org

1. A bird-eye picture on outsourcing/offshoring in Europe

2. Impact on working conditions• WORKS project order-processing in

logistics and food, customer service in public services, IT departments in health)

• Call centres in telecoms• Public services• Construction, meat processing, ship

building (posted work)

3. Establishing worker voice mechanism in fragmented value chains

• Telecoms• Parcel delivery• Construction (posted work)• Automotive (agency work)• Metal (bargaining in MNCs)

value chain fragmentation and working conditions3

Outsourcing, offshoring, and global value chains

jan drahokoupil © etui (2015)

Source: Drahokoupil (2015, Table 1), adapted from Sako (2005) and Olsen (2006)

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Outsourcing/offshoring and working conditions: Key mechanisms undermining job quality and pay

● Impact on existing worker representation structures and collective bargaining institutions

● Moving jobs outside of the scope of existing firm-level institutions (domestic outsourcing)

● A shift to different regulatory regimes (offshoring)● Concession bargaining● Employing migrant workers in fact similar avoidance effects to

offshoring (labour-market intermediaries)● Institutions may mediate outcomes, but little Q evidence

● Encompassing LM institutions (equal pay/conditions etc.), collective bargaining, and ability to mobilize across production network key

● Targeted TU campains, sectoral bargaining● International worker voice institutions (EWCs, EFAs)

jan drahokoupil © etui (2015)

5

Outcomes country-specific: Crucial role of domestic institutions in shaping also decisions

Source: Kirschner (2015, Figure 1) in Drahokoupil (2015)

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Outsourcing/offshoring and working conditions: Key mechanisms 2

● Restructuring of the labour process to allow decoupling a major factor (negatively) influencing job quality both in sending companies and in outsourcing destinations

jan drahokoupil © etui (2015)

Source: Drahokoupil (2015, Table 2), adapted from Gospel and Sako (2010)

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Conclusion

● Crucial not to focus just on employment, but also on working conditions and job quality

● Effective worker involvement key precondition for satisfactory outcomes for workers; also crucial for the success from the business perspective

● Worker voice can also prevent abuse of the Single Market institutions (e.g. posted work), but institutions to cover firm and national boundaries lacking

● EU level: tools to address these issues (e.g. agency work directive, transfer of undertakings, I&C), but implementation poor in many countries, yet make a difference in some (e.g. ToU in the UK)

● Some sectors call for entirely new institutions: e.g. Danaj & Sippola, 2015: a European construction workers union

jan drahokoupil © etui (2015)