Two Faces of Cross-Border Trade Unionism in Europe:
Western and Eastern Unions between Cooperation and Competition
Marta Kahancová*
Central European Labour Studies Institute (CELSI), Bratislava, Slovakia
Central European University (CEU), Dept. of Political Science, Budapest, Hungary
Comments welcome, please do not quote!
ABSTRACT
Cross-border trade unionism is increasingly important in the European Union. Macro
and micro-level developments, such as the EU enlargement, European legal
regulation, increased international competition and cross-border dissemination of
work practices in multinational companies have brought new incentives and possible
tensions in the interaction of trade unions throughout old and new EU member states.
Using original case study evidence, the paper investigates cross-border trade unionism
at sectoral and company level between Western and Central European unions in the
metal sector. Findings indicate two contrasting faces of international unionism: a
cooperative face, observed in interaction of national and sectoral unions; and a
competitive face, applicable to interaction of company unions. The paper argues that
competing interests of company-level trade unions in multinational companies delay
the development of cooperative trade unionism at the European level and contribute to
persistent differences in working standards.
Introduction
Increased capital mobility, international competition, threats of production
relocation, and benchmarking in subsidiaries of multinational companies (MNCs)
have brought a range of incentives and challenges for international trade unionism
(Marginson 1992; Marginson 2000; Arrowsmith/Marginson 2006; Vos 2006;
Greer/Hauptmeier 2008). In the European Union (EU) there are also structural and
institutional preconditions, including the European Monetary Union or Europeanlevel employee representation in form of European Works Councils (EWCs), which
create opportunities for unions to gain additional resources and to improve crossborder cooperation.
Expected results of international unionism in Europe are twofold. First,
institutionalized interaction in form of EWCs or via European-level sectoral
organizations can play a major role in strengthening the position of labour beyond the
national level, facilitate a shift from nationally embedded collective bargaining to the
European level, and play a part in harmonization of differing working conditions
*
Contact details: CELSI, Zvolenská 29, 821 09 Bratislava, Slovakia.
E-mail: [email protected]
1
across EU member states (Waddington 2006; Gollbach/Schulten 2000; Marginson
1992; Levinson 1972). Through internationally negotiated agreements between
unions, employers and EU-level authorities, economically advanced EU members
with costly welfare-state regulations would have fewer reasons to fear social dumping
and the emigration of their industries to low-wage countries (Scharpf 1997: 81).
Moreover, such agreements could account for improved social standards in the poorer
EU member states, including the postsocialist countries in Central and Eastern Europe
(CEE). The second expected result is that international unionism strengthens
bargaining positions of trade unions vis-à-vis employers, including MNCs, at the
company level. This is because of offering additional resources for union action even
when formalized international bargaining structures do not yet emerge at sectoral or
European level (Arrowsmith/Marginson 2006).
Using recent empirical evidence from an electronics company and the metal sector
in Belgium, the Netherlands, Hungary and Poland, this paper explores the extent to
which current unionism in Europe is capable of fulfilling the above expectations. In
other words, the paper studies cross-border capacities that trade unions develop in
face of European integration and intra-firm competition.
Three contributions to existing literature on international trade unionism are made.
First, the paper adopts an actor-oriented perspective to international unionism by
emphasizing strategies of trade unions and works council representatives and crossborder structures they build with implications for future action (Greer/Hauptmeier
2008: 80). Acknowledging that economic and institutional factors play a role in
facilitating or impeding cross-border unionism, the paper argues that strategies of
trade unions are decisive for the extent to which international trade unionism will
fulfil its expected goal. Second, in order to understand the current state of crossborder interaction of unions in the context of recent European developments, the
paper gives attention to international union interaction at two levels: interaction of
sectoral and national-level unions on the one hand; and interaction of company-based
unions in MNCs on the other hand. Both of these dimensions are central in advancing
international unionism; however, the interaction dynamics at sectoral/national level
differ substantially from the company-level unions. Third, the paper is innovative in
its empirical approach covering cross-border interaction between unions in Western
Europe and in postsocialist countries of CEE that joined the EU in 2004. Even before
the EU enlargement, market transactions and capital flows have intensified between
both regions. The EU enlargement has brought an extension of European regulation to
CEE countries, most predominantly the introduction of EWCs. EWCs create
possibilities to extend the platform for union interaction across borders. Despite an
East-West integration in the above dimensions, the political, social, and economic
realities of the CEE member states are still rather different than in earlier EU15 countries
(Ladó 2002: 104). Pronounced differences in working conditions and wages are
possibly another incentive for unions to cooperate across borders with the goal of
harmonizing social standards.
2
The argument developed in the paper is that cross-border unionism in Europe
shows two contrasting faces: a cooperative face, applicable to relations between
national and sectoral-level unions; and a competitive face, observed in the interaction
of company-level unions. It is argued that nationally embedded and competing
interests of company-level trade unions in Western and CEE member states contribute
to persistent national differences in employment standards. Moreover, the competitive
face of international unionism at the company level delays the bottom-up process of
strengthening organized labour’s position and impedes the effort of sectoral, national
and international trade union organizations in strengthening labour’s position at
European level.
The paper begins with an analytical and methodological framework. The
following sections present empirical evidence on interaction of Western European and
CEE trade unions at sector and company levels. Interaction through the EWC is
discussed in a separate section. Next, the paper evaluates the extent to which
international union networks are capable of coordinating their endeavours and thus
becoming influential in bargaining with employers at the European level. The
concluding section argues that two faces of international unionism exist in Europe and
discusses implications of these faces for convergence in working conditions.
Cooperation and competition in international trade unionism
Research on international trade unionism has been gaining prominence since
recent years, especially with the intensification of European integration (Calmfors, et
al. 2001; Martin/Ross 1999) and the increasing importance of MNCs (Bieler 2008;
Greer/Hauptmeier 2008). This paper takes an actor-oriented perspective on
international unionism and concentrates on union strategies and behaviour vis-à-vis
foreign unions. In other words, the paper focuses on a single issue, namely on which
union interests prevail and what strategies do unions deploy in creating resources for
European bargaining at sectoral and company levels. To maintain this focus, I refrain
from discussing diverse national industrial relations systems, which are assumed to
shape union strategies from an institutionalist perspective (Thelen 2001). The
understanding of international unionism in this paper is thus focused on cross-border
interaction of trade unions from different countries, with the purpose to benefit from
joint resources and coordinate bargaining agendas vis-à-vis employers and sectoral
employers’ organizations.
International unionism may range from non-binding declarations of international
solidarity to cross-border coordination of collective bargaining (Bernaciak 2006).
Each form of action on the continuum yields different effectiveness of international
unionism. To evaluate the current state of East-West union interaction in the EU, the
paper distinguishes between two broad tendencies. First, cooperation refers to
interaction between unions on the basis of a congruent set of preferences, driven by or
3
leading to shared values and norms (Kahancová 2007). Despite their differing national
backgrounds, unions’ interests in cooperation go beyond national embeddedness and
seek to develop a real international function. In the ideal case, cooperation fosters the
establishment of geocentric international union structures with a collective identity
and an agenda distinct from national interests of members (Levinson 1972).
Cooperation leading to coordinated union strategies and geocentric unionism has the
highest potential to make unions influential actors in the network of national and
transnational industrial relations (Lecher/Rüb 1999: 20). Of course, cooperation may
evolve also in weaker forms of cross-border networking, i.e. information sharing and
regular contacts with foreign unions without a clear strategy coordination at European
level.
The second considered form of cross-border union interaction is competition,
entailing rivalry between different unions in face of international competition for
investments, (threats of) capital relocation, and against the worsening of working
standards and pay levels in Western European countries. Competing unions are not
committed to moderating their interests in face of foreign unions and only pursue their
own nationally embedded interest. This leads to decreasing trust and less commitment
to mutual agreements, and prevents joint efforts of unions in the pan-European
context. Union interests are in this case polycentric (Levinson 1972), which prevents
the unions to build capacity for international value sharing and promoting crossborder interest representation. Except open rivalry, weaker forms of competition may
be associated i.e. with non-existing contacts and a lack of initiatives in seeking union
partners abroad.
The empirical analysis draws on the above dichotomy in international trade
unionism. A further analytical consideration is a multi-level enquiry comprising
sectoral and company level cross-border union interaction. Company-level
interaction, especially in MNCs, is an equally important dimension of international
unionism as the interaction of sectoral and national union organizations
(Arrowsmith/Marginson 2006; Greer/Hauptmeier 2008; Marginson 1992). Direct
networking between workplace union representatives can strengthen union strategies
at the micro-level. Further, it enables the development of shared values and interests
between Western and Eastern European unionists, and thus strengthens union capacity
to resist unfavourable management practices and working conditions that utilize
differing local working conditions. Company-level unionism is furthermore
encouraged through the Directive 94/45/EC on EWCs. EWCs in MNCs primarily
serve as platforms for information and consultation between management and
employee representatives, however, they are also an effective structure for fostering
cross-border unionism. Although EWC representatives are not necessarily trade union
representatives, in almost all EWCs that have been subject to earlier research trade
union representatives were closely involved (European Foundation for the
Improvement of Living and Working Conditions 2004). Therefore, cross-border union
interaction at sector and company levels is supplemented with interaction through
4
EWCs. Attention is paid to the ‘inner life’ of the EWC (Lecher/Rüb 1999; Marginson
2000): structure, communication, patterns of formal and informal interaction of
representatives, and the general usefulness of the EWC for trade union endeavours.
In analogy to international unionism outside of EWCs, cross-border interaction in
EWCs is evaluated according to the cooperation-competition dichotomy and
Levinson’s (1972) conceptualization of international unionism. First, the EWC is a
meeting point of competing national interests with little or no regular independent
contacts or coordination between members. Such polycentric EWCs lack a capacity
for building international solidarity and promoting European interest representation of
employees at the company level. Second, in ethnocentric EWCs representatives of the
company’s home country dominate the EWC’s functioning and members from foreign
subsidiaries are marginalized. In such circumstances, it is likely that the EWC’s
functioning reflects the dynamics of management-union interaction in the MNC’s
home country. Third, geocentric EWCs develop a real international function in
cooperation between labour representatives, and also in the interaction between trade
unions and MNCs. These conceptualizations of EWCs are independent of the
company sector or national institutional conditions (Marginson 2000; Lecher/Rüb
1999; Stoop/Donders 1998; Levinson 1972).
Given the differences in working conditions and industrial relations systems in
Western and CEE member states, the extension of EWCs to CEE countries has
furthermore facilitated two effects that deserve further empirical inquiry. The
information effect indicates that CEE unions, by being more exposed to interaction
with their Western counterparts, draw on Western resources and are thus better able to
exert pressures on management in collective bargaining in CEE conditions (Meardi
2006). The legitimacy effect allows CEE unions to bypass local managements and to
access company headquarters in order to create a new alliance (ibid.). Uncovering
information and legitimacy effects of EWCs in empirical reality is important in
assessing the real impact of EWCs for strengthening labour’s voice in collective
bargaining and in European coordinated endeavours.
In sum, the framework guiding the analysis of interaction between Western
European and CEE trade unions and EWC representatives distinguishes between
cross-border cooperation and competition and looks at how the interests of involved
actors overcome their polycentric character and national embeddedness at sector and
company levels to strengthen their bargaining position at the international level. The
subsequent analysis uses data from existing literature and original empirical evidence
collected in interviews with trade union representatives at national, sector and
company levels in the Netherlands, Belgium, Poland and Hungary. The author
conducted 114 interviews between 2003 and 2005. These were part of a larger project
on the accommodation of MNCs in national industrial relations systems in Western
and Eastern Europe. The selection of countries relates to the organizational structure
of the MNC, which is used here as a case study for company-level unionism in
5
Europe. It is a Dutch MNC in the electronics sector, referred to by a pseudonym
Multico, and its subsidiaries located in the above countries. Managers of Multico at
headquarter and subsidiary levels were also interviewed in order to learn their
perspectives on the functioning of Multico’s EWC and its effectiveness from the
company’s and labour’s point of view. Trade unions in Multico are part of sectoral
organizations in the metal sector, which determines the focus of the analysis at sector
level. Sectoral unionism is less developed in Poland and Hungary than in Belgium
and the Netherlands; and affiliation of company unions to sectoral organizations is
often unclear1. In such case, international unionism beyond company level is
evaluated according to cross-border interaction of national union organizations.
Cross-Border trade unionism in Europe at national and sectoral level
The existing literature documents a bipolar pattern in international interaction,
with employers generally better organized than trade unions although union
networking is also increasing (Arrowsmith/Marginson 2006: 250). Union networking
has thus far predominantly developed through European trade union structures and
specific sectoral trade unions, i.e. the European Metalworkers’ Federation (EMF)
(Gollbach/Schulten 2000). These organizations act at the European level in promoting
the European social model, influencing European legislation, and conducting
collective framework agreements with employer representatives. Interviewed metal
sector unions in both Western and CEE countries perceive institutional membership in
the EMF as the most important channel of interaction. EMF also plays a crucial role
in mediating bilateral contacts between the Dutch FNV, Belgian ACV Metaal and
ABVV Metaal, Hungarian Vasas, and Polish Solidarność.
The process of CEE unions’ integration into these international structures
reflected the domestic competition and fragmentation of different union organizations.
Ogółnopolskie Porozumienie Związków Zawodowych (OPZZ), the largest union in
Poland, joined international structures later than its competitor Solidarność (Meardi
2002: 87). Today OPZZ is part of several European and international union
organizations. In Hungary, all six national union confederations are ETUC members2.
Beyond institutional contacts, evidence suggests that a vital bilateral union
networking has gradually developed at the level of national and sectoral trade unions.
Unions see the presence of foreign employers, especially MNCs, as an important
incentive to foster an international union orientation and a cross-border exchange of
union resources. The following quote from the Belgian ACV Metaal is illustrative:
In the paper’s context, the lack of clarity in distinguishing sectoral organizations applies
mainly to Polish Solidarność.
2
Many of these memberships were obtained only in the past three years. In 2003 only five
Hungarian confederations were part of the ETUC. Source: ETUC (www.etuc.org).
1
6
“[Due to] the fact that we were a colony of foreign companies, we always had to be in contact with
other unions…So it’s a common goal that we are oriented to other countries and we adapt to their
systems, but we maintain our strength, our ideology and our way of working. …. [Belgian unions, both
ACV and ABVV] put a lot of energy in European trade unionism.”
Western unions maintain closer contacts within unions in other Western European
countries; but after 1989 the landscape of international unionism has been gradually
integrating unions from CEE countries3 (Draus 2001a; Draus 2001b;
Gollbach/Schulten 2000; Kahancová 2003a; Kahancová 2003b). Sectoral and
national-level unions both in the West and East maintain that international interaction
in form of institutional, bilateral or multilateral contacts does have an added value in
increasing information flows to better understand the strategies and goals of foreign
unions, in decreasing the threat of social dumping, developing shared employment
regulation standards, and diffusing them in CEE where employment standards tend to
be lower than in Western Europe (Bohle/Greskovits 2006; Meardi 2006). Using the
words of a Polish representative of Solidarność:
“….[Unions] are aiming at avoiding double standards. I am not talking about wages, but safety rules,
environmental issues, corporate social responsibility. If you have a good company respecting all those
standards in Sweden, why not respect the same standards in Poland? We can be good at fostering these
standards if we have good knowledge on this. If you don’t know what you are striving for, it is a
problem.”
Meardi (2002) documents that trade unions in Poland very closely follow all
European developments and assign an important role to relations with Western
unions. The establishment of the Union Development Unit that promotes unionization
in private enterprises in Poland is an outcome of a joint initiative of Polish, American
and Western European unions4. Another example of East-West union interaction is
the network between the German IG Metall districts of Bayern and
Berlin/Brandenburg-Sachsen with Polish and Czech trade unions, established already
in the early 1990s. Until 1999, the function of this network was to provide material
support to the Polish and Czech metalworkers’ unions in building new plant-level and
collective bargaining structures (Gollbach/Schulten 2000: 167). In 1999 the already
participating unions together with unions from Austria, Hungary, Slovakia and
Slovenia adopted a Memorandum on Interregional Collective Bargaining Policy,
which strengthens cooperation between European unions (Gollbach/Schulten 2000;
Schulten 1999).
The content, process and mechanisms of international union interaction between
Western and Eastern Europe are rarely studied in the literature. Arrowsmith and
Polish Solidarność, Hungarian Vasas, and the Czech OZ Kovo.
The first success of this cooperation was the unionization of workers in six foreign-owned
supermarket chains between 1999 and 2001. Source: Kahancova (2003b), EIRO 2002 Declining trade
union density examined (www.eiro.eurofound.ie).
3
4
7
Marginson (2006) studied cross-border union interaction in MNCs in the metal sector
in Western Europe and found a great diversity of interaction forms, ranging from less
developed links to a well-established dialogue between French and Belgian unions
and collective bargaining networks between German, Dutch and Belgian
metalworkers’ unions (Gollbach/Schulten 2000). The content of East-West union
interaction relates predominantly to benchmarking working conditions Benchmarking
conducted across Western Europe is mainly used by Western unions (in this case, the
Belgian ACV and the Dutch FNV) as a resource in national bargaining.
Benchmarking with CEE or other non-Western countries is necessary for future union
strategies. The loss of manufacturing jobs in Western Europe is the main trade union
concern for the next years. To cope with this concern and develop an appropriate
strategy, unions appreciate information from other countries. Western union leaders
maintain that their encounters with Hungarian, Polish or Brazilian unionists and their
visits in these countries served as an eye-opening experience.
Another noteworthy aspect of East-West union interaction is the training that
Western unions offer to CEE counterparts. Building on the availability of extensive
institutional facilities, Belgian unions are especially active in offering workshops and
training to unions from CEE and candidate countries. Western unions maintain that
informal encounters during training sessions are a good basis for developing trust and
future union interaction, but also for rediscovering international solidarity and issues
of collective interest. Polish and Hungarian unions appreciate training mainly because
it improves their bargaining skills and power relations in local interaction with MNCs,
and also helps to ‘civilize’ some employers, especially small foreign companies. In
this respect, the above evidence supports Meardi’s (2002) argument that the
availability of Western union resources helps CEE unions to strengthen their domestic
bargaining position (information effect) and leads to a creation of East-West alliances
between socio-economic actors (legitimacy effect).
The effect of interaction is however not equal and reciprocal for Western and CEE
trade unions. Although admitting benefits from Western union resources, CEE unions
point to lacking willingness of Western unions to learn from the values, strategies and
behaviour of Eastern unions. CEE unions feel ‘colonized’ by Western practices
without reciprocity in interaction. Both Solidarność and Vasas are convinced that
some of their practices should be a value for Western unions, i.e. their more extensive
workplace presence and greater business awareness when compared to Western
unions.
Several other issues complicate European trade unionism. One of them is the
difference in rhetoric and actual behaviour of Western unions. In general, Western
unions claim that international union ideology is their priority. However, when it
comes to concrete initiatives unions are less eager to involve in international actions.
In such cases, the reference point is national differences and a lacking tradition to
foster international union contacts. Western unions turn to the rhetoric of nationally
8
embedded industrial relations and a nationally-based constituency – factors which do
not give enough encouragement to take action in the European or international
dimension. Limited knowledge of foreign languages, a high union plurality and
fragmentation in CEE also complicate the future of European unionism. This creates
difficulties for Dutch and Belgian unions in finding cooperation partners with similar
interests and ideology in CEE countries. Moreover, the straightforward alliance
seeking among foreign union partners is paralleled by some unusual alliances between
Eastern trade unions and Western employers (MNC headquarters) who share an
interest in East-West harmonization of employment practices (Meardi 2002). Western
unions found alliance with Eastern employers in order to defend the existing status
quo in working conditions, particularly wages (Meardi 2002: 94).
To conclude, East-West trade union interaction at the sectoral and national level
yields emerging patterns of international union cooperation. Although we cannot yet
speak about a European trade union agenda and coordinated behaviour, cooperation
facilitates a joint interest in harmonizing working conditions in different countries.
The flow of information, necessary to build up shared values and a joint interest, is
channelled more through European trade union structures than through bilateral union
contacts. In bilateral contacts, some unions went further than others in taking concrete
actions to strengthen East-West cooperation. Deriving from the above evidence,
current European unionism is best described as an early stage of cooperation between
different unions. Barriers that to some extent impede cooperation among unions
include tensions derived from differing working conditions and an unbalanced
exchange of union resources between Western and Eastern Europe, as well as
structural obstacles and limited language abilities of unionists.
Company-level trade unionism
The dynamics of cross-border union interaction at sectoral and national levels
differs significantly from company-level unionism, which is more exposed to intrafirm competition between production sites in MNCs. According to some authors
(Calmfors, et al. 2001: 129), a competitive organizational structure yields incentives
for local unions in different countries to coordinate their bargaining in order to defend
themselves. Thus, prospects for transnational bargaining coordination among local
unions within MNCs shall be considerably greater than among national sectoral
unions or national union confederations in different countries (ibid.).
In contrast to this expectation, international unionism in MNCs differs from firm
to firm and is largely influence by the interaction of labour and management in the
context of the firm’s organizational structure (Greer/Hauptmeier 2008: 91). In
general, gradual convergence towards international cooperation of sectoral and
national unions is less pronounced in the interaction of company-level unions in the
metal sector.
9
Earlier evidence documents that unions in some motor manufacturing companies
indeed exert strong, locally based influence and were able to develop transnationally
viable institutions that regulate competition between production sites of MNCs
(Anner, et al. 2006: 17). In contrast, in other companies an increased parochialism of
company unions in the face of possible production transfers can be observed
(Arrowsmith/Marginson 2006: 252). A good example is the recent case of the Finnish
Nokia company. After the management announced relocation of a German Nokia
plant to Romania, Finnish unions supported relocation. Their action had disappointed
the German unions expecting more international solidarity and support of
metalworkers’ unions from abroad5.
Going beyond short evidence from various cases, below I offer a systematic
insight into company-level unionism in the case study of the Dutch MNC Multico.
Multico produces electronic devices across Western and Eastern European countries.
Belgian, Polish and Hungarian subsidiaries produce similar products and are thus
exposed to similar market pressures and the possibility of production relocation
among these production sites.
The case of Multico
In all Multico sites unions are firmly established and enjoy bargaining powers
drawing on formal and informal resources. Union density is relatively high compared
to local standards, which is surprising especially in CEE countries with generally low
unionization levels (see Table 1). Despite unions’ presence and voice in Multico’s
sites, international networking between Western and CEE company-level unions are
limited. Initial cross-border contacts of unionists were based on the curiosity of
Western union leaders about the functioning of Multico’s factories and working
conditions in CEE, but these did not transform into a stable and continuous
interaction. None of the interviewed union representatives in Multico’s subsidiaries
maintains regular contacts or e-mail exchange with foreign counterparts. In Western
European Multico sites, unionists are not motivated to foster cross-border cooperation
with CEE trade unions and tend to view their CEE counterparts as competitors. Their
current attitude is related to several substantial factory reorganizations in the past
twenty years, which forced them to concentrate on local concerns about the future of
existing factories. CEE unions initially expected more cooperation with Western
unions and were disappointed by the lack of interest from their Western union
colleagues; however, they understand that there are ‘no sentiments in union business’,
especially when MNC subsidiaries face internal competition.
5
On the ongoing debates in the Nokia case, see current German press, i.e. Welt Online
(www.welt.de): Nokia kündigt 2000 Beschäftigten in Bochum (15.1.2008), Spiegel Online
(www.spiegel.de): Massenentlassungen in Bochum. Gewerkschaft wirft Nokia blanke Profitgier vor
(15.1.2008), Rheinische Post Online (www.rp-online.de): Gewerkschafter im Interview “Bochum
schlägt Rumänien“ (7.2.2008), World Socialist Web Site (www.wsws.org): Nokia kündigt Schließung
des Werks in Bochum an (19.1.2008), World Socialist Web Site (www.wsws.org): Gewerkschaftern
stellen sich offen auf die Seite der Konzernleitung (2.2.2008).
10
A closer look at interaction between Western and CEE union leaders in Multico
reveals several reasons for limited contacts and hostility towards international
unionism. These range from local union strategies coupled to Multico’s decentralized
organizational structure to fears of reorganizations and (threats of) production
relocation from Western to Eastern Europe.
Table 1 Trade union density in Multico’s subsidiaries
Host country
Union density – Multico
Net union density – country
subsidiary
(blue-collar workers only b)
(blue-collar workers only)a)
Belgium
95%
56,3%
Poland
35%
17,4%
Hungary
50%
10,5%
a) Source: self-reported data collected in interviews with subsidiary trade union representatives, 2004-2005
b) Source: Schnabel, C. and Wagner, J. (2007: 8). Net union density is calculated as union membership among employed
individuals. Micro data from the European Social Survey, 2002-2003.
In contrast to Calmfors’ (2001) prediction on cross-border cooperation of unions
in a competitive firm environment, Multico’s traditionally decentralized organization
gives few direct incentives for unions to organize across borders. International
initiatives did start to take a concrete shape as early as in 1967, when unions affiliated
to the EMF proposed that Multico holds informative discussions with company
unions at the European level. Four meetings have been held until 1975. As soon as the
unions requested formalization of working conditions in European-level agreements,
Multico argued that the company was neither able nor prepared to conclude such
agreements because of the existing autonomy of its subsidiaries. Multico maintained
that the composition of employment practices depends upon national, regional and
local preferences, and Europeanizing ‘a few plums from the total package’ would be
illogical and contradictory to the local orientation of daily management and union
issues (Dronkers 1975: 168). Thus, the decentralized organization of the MNC is the
first, although indirect, obstacle to international unionism at company level. In the
unions’ point of view, Multico continues not to support cross-border union
networking because its possible negative impact on the MNC’s restructuring plans.
Except the above view of decentralized organization as an obstacle to crosscountry union interaction, unions admit that a lack of encouragement from the
company also does give incentives to fight harder for a joint international union
strategy. Within overall international networking efforts, Belgian unions have been
most active in bringing together Multico union representatives from different
countries, for example in the 2005 Visegrad training for representatives from CEE
countries. These efforts were successful in facilitating a small number of personal
encounters; however, did not produce more regular contacts.
11
Next, obstacles to cross-border interaction originate in union attitudes and
strategies. These play a more important role than the MNC’s decentralized
organization. A broad difficulty is the unions’ unwillingness to search for
international partners, because of an enduring conviction of the local relevance of
union activity. The EMF efforts in late 1960s failed to defeat workplace unionism in
Multico’s Western European sites not only because of the firm’s opposition, but also
because of lack of attention from involved unions. Union representatives consider that
having more information on other factories could possibly influence union members’
perceptions of foreign Multico’s sites especially in CEE. To obtain such information,
unions admit that the fundamental image of foreign workers and unions as
competitors, and the local focus of union actions, would need to be overcome.
Even in cases when Western unions did succeed in finding cooperation partners
among CEE unions at Multico sites, it was not clear which union organization shall
coordinate international endeavours. Western and Eastern unions agree that the Dutch
unions should take the lead in organizing cross-border unionism because Multico is a
company of Dutch origin with headquarters based in the Netherlands. When exploring
the standpoint of Dutch unions in greater detail, several crucial obstacles to
international union interaction become obvious. In their defence, the Dutch unions
argue that the main problem is that national, international or global cooperation is not
the priority of Dutch unions and their constituency. The tradition that each Multico
factory in the Netherlands had its own specialization for many years has shaped union
orientation to such an extent that union powers are firmly related to the local level and
oriented on cooperation with local managers. Employment conditions of Multico’s
blue-collar workers remain locally determined and untouched by headquarters.
Coordination and centralization beyond the subsidiary level applies only to strategic
decisions and employment conditions of highly qualified managers and white-collar
employees. Union responses to current strategic challenges would necessitate a
response beyond the local level, but in a lacking tradition of coordinated unionism this
remains problematic. Similar to the Dutch evidence, Belgian union representatives
report tensions between higher-level union organizations and company
representatives. Despite a highly coordinated trade union movement in Belgium,
company-level unionist at Multico’s Belgian sites are predominantly concerned with
local issues and view Eastern European unions as competitors facilitating relocation
of jobs. In consequence, international unionism at Multico suffers a lack of trust
between company-level unions on both sides of the former iron curtain.
For reasons of production relocation from Western to CEE sites, hostility in
company-level unionism is more extensive on the side of Western unions vis-à-vis
CEE unions than vice versa. Polish and Hungarian unions expected a more intensive
cooperation to develop and were disappointed that the Western union counterparts did
not foster regular contacts, exchange of information and coordinated union agendas.
In consequence, hostility to cross-border unionism has also infiltrated the attitudes of
Poles and Hungarians vis-à-vis Western unions. CEE unions were increasingly
12
convinced that the best strategy is to prove to Western unions that Multico can indeed
achieve better productivity and profits in its CEE sites because of motivated workers,
cooperative unions, and generally better conditions for mass production than in
Western countries.
The prevalence of polycentric interests is visible not only between Western and
CEE company-level unions, but also in the interaction of Dutch and Belgian unions.
Belgians claim to have supported many union actions in the Netherlands, but their
actions lacking reciprocity from the Dutch side. The main problem is the growing
individualism among union constituency and difficulties in finding issues of
collective interests.
In sum, evidence suggests an ongoing tension in cross-border interaction at
different levels of unionism, with sectoral and national unions encouraging
international contacts and company unions being more protectionist and thus locally
oriented. Company level unionism is underdeveloped not only because of the
decentralized MNC structure, but mainly due to unions’ locally embedded strategies
and lack of interest in strengthening international union resources to a greater extent.
The precondition to overcoming the local orientation of unions is a greater
coordination of their action in international as well as national dimensions
(particularly in the Netherlands). Unions in other MNCs, i.e. General Motors and
Ford, were more successful in mastering international contacts; however, the structure
of these firms and the management-union relations helped trade unions to find
common interests across borders (Greer/Hauptmeier 2008).
Institutionalized interaction: the European Works Council
The fact that company-level unions failed to build international unionism inspires
to explore the extent to which a more formalized institution – the EWC – is capable of
developing an effective international function. Existing literature sees EWCs as an
institutional framework for European unionism, with the potential to underpin crossborder
bargaining
and
coordinate
industrial
relations
in
MNCs
(Arrowsmith/Marginson 2006; Meardi 2006; Lecher/Rüb 1999; Meardi 2004). At the
same time, a more sceptical perspective on EWCs suggests that national union
representatives use EWCs to defend and extend national interests (Hancké 2000;
Streeck 1997; Marginson 2000); and MNCs use EWCs to advance corporate power
(Lecher/Rüb 1999; Streeck/Vitols 1993).
Since the introduction of EWC Directive, EWCs in metal sector firms have gone
furthest in developing at least some influence over national and local collective
bargaining (Arrowsmith/Marginson 2006; Waddington 2006). After the 2004 EU
enlargement, EWCs were extended to the new member states from CEE. Some MNCs
successfully included CEE representatives in their EWCs even earlier than 2004 (i.e.
13
Volkswagen, Electrolux, Audi, Opel, Nokia)6; but other firms hesitated with the
inclusion over several years or experienced difficulties and diverging interests
between Western and CEE representatives (i.e. FIAT, Danone, Renault)7.
In Multico, the EWC is the only institutionalized channel that facilitates regular
cross-border interaction between employee representatives across Europe. The EWC
functions since 1996 with 26 representatives from 16 EU member states. The
allocation of seats is based on the number of Multico’s employees in a particular
country. The EWC meets twice a year; and an elected committee of employee
representatives and a management appointee carries out activities between the two
annual meetings.
Interviewed Multico’s managers (at headquarters as well as in the host countries)
claim that the EWC benefits employee representatives by giving them access to
information on the state of Multico’s business. In other words, the revealed role of the
EWC is to channel information to employee representatives, increase their business
awareness, and ‘sell’ them Multico’s arguments concerning restructuring in Western
Europe. Managers do not see a further potential of the EWC and maintain that
interaction with local and national trade unions is more important than the EWC.
Input from employee representatives in the EWC is not extensively welcome; Multico
assumes that encouraging a coordinated input from employee representatives would
indirectly strengthen their cross-border cooperation. This is against Multico’s locally
oriented strategy and could threaten the continuity of decentralized industrial relations
between Multico and local trade unions.
Western trade unions admit the usefulness of EWC’s existence, but at the same
time claim that the EWC does not yet play a significant role in bridging local
differences in structure and power of employee representatives. Unions are fully
aware of Multico’s reasoning and opinions on the EWC’s role; and the current oneway management dominated diffusion of business information in the EWC is the
main reason of their dissatisfaction with the EWC’s organization and functioning.
Moreover, employee representatives are not satisfied with the EWC’s name
‘Euroforum’ and fought unsuccessfully for the official name ‘Multico EWC’; arguing
that the current name does not capture the EWC’s real role and legitimizes this
institution to be only a ‘chat forum’. With English being the only official language in
EWC meetings, representatives also face a language problem. Belgian unions are
unhappy with English being the only language in the EWC meetings and criticized the
Dutch unions’ quick agreement with the management on the single language without
considering the interests other countries’ representatives. These are the main reasons
why representatives do not see a great value in the EWC’s current functioning and do
6
7
Interviews with trade union representatives in Poland and Hungary.
Meardi (2004).
14
not consider the information channelled through the EWC to be relevant for countryspecific trade union and works council activities.
CEE representatives do not yet have enough experience to evaluate the EWC’s
functioning. After an arduous process of their final inclusion in the EWC in 2004,
Poles and Hungarians continued to maintain their reservations towards this institution.
CEE union representatives felt offended that Multico did not include Eastern
representatives prior to 2004, whereas a number of other MNCs invited CEE
representatives to join their EWCs by granting them at least an observer status.
Multico’s management and Polish unions share the view on postponement reasons;
namely, on the inability and unwillingness of Western trade unions to fight for the
inclusion of CEE representatives.
Building on experience with inclusion in the EWC, informal interaction between
Western and CEE EWC representatives is competitive rather than cooperative. The
Polish representative of Solidarność claimed to have been verbally attacked and
personally offended by Western EWC representatives, which discouraged his efforts
to join the EWC. Despite demonstrating disappointment and anger, he could not
understand the objections of Western EWC members to integrating the representative
of 10,000 Polish Multico employees into the EWC circle. It is unclear whether it was
a misunderstanding due to language problems, but this incident continued to shape the
informal behaviour of representatives, especially the Poles, even after their official
inclusion in the EWC.
In short, the divide in Western and Eastern European company-level union
interests also infiltrated the EWC. Together with Multico’s strategy of
decentralization, trade unions’ locally embedded interests are an obstacle in
developing the EWC into an institution bridging national labour interests. A further
complication is the competitive relationship between trade unions and the EWC.
Dutch and Belgian trade unions maintain that EWCs pose a challenge for national
trade union power and are therefore reluctant to integrate the cross-border networking
of trade unions with networking within the EWC. In the opinion of unions, EWC
meetings generate new questions that would otherwise not have been a concern to
local unions. This creates new union demands and divides between unions, because
some unions are willing to accept more than others. In the end, the power of national
unions and their solidarity decline. Therefore, Western union representatives opt for
building parallel channels of international trade unionism distinct from the EWC.
To summarize, there are several reasons why Multico’s EWC is a weak actor in
the international unionism. First, the Euroforum is an extended hand of Multico’s
management that supplies selective information to employee representatives. Second,
the representatives are unable to overcome management domination because of their
own competitive relations that mirror hostility in cross-border interaction of companylevel unions. Finally, competition between union interaction and interaction through
15
the EWC – two alternative representation channels at the European level – also
complicate the position of employee representatives. I argue that the EWC institution
did neither yet develop its information and legitimacy roles, nor an extensive capacity
to influence Multico’s management strategies at a European level. The information
role of a EWC would imply employee representatives to draw on international
resources, benefit from EWC agreements in their local work, and be able to influence
work standards in the subsidiaries. Evidence from Multico does not support this
function of the EWC. The legitimacy role grants EWC representatives access to
headquarters by bypassing local management. At Multico, this kind of interaction is
not at place due to the predominance of local interests both on the side of employee
representatives and management. EWC representatives lack encouragement to look
for alliances with headquarters in order to influence Multico’s subsidiary
managements. Instead, all parties stress the relevance of local conditions where their
social interaction evolved and that is a resource for local trade unions’ position vis-àvis the MNC.
Two faces of international unionism
To systematize the presented evidence, this section offers a basic game-theoretical
interpretation of findings on international trade unionism at sectoral/national and
company levels. Interaction patterns are presented as payoff matrices. These represent
power constellations of unions in Western Europe and CEE; and payoffs they assign
to and obtain from certain interaction relatively to the other party’s behaviour and to
the institutional environment in which interaction takes place. I distinguish between
cooperative and competitive strategies that unions can opt for.
Payoffs that unions in Western and Eastern Europe assign to their strategy options
in their long-term international interaction range from 3 (highest) to 0 (lowest).
Building on local interests8, Western unions assign the overall highest payoff (3) to
competition with CEE unions (see Figure 1). At the same time, Western unions see
added value in cooperation with CEE counterparts and therefore assign a high payoff
also to cooperation (2). Motivation behind cooperation is the development of crossborder shared values, international solidarity and union resources, and more
European-level strength to drive the harmonization of employment conditions in the
EU.
CEE unions assign the highest payoff (3) to cooperation with Western unions.
Expected benefits include learning from more experienced Western unions,
improvement in working standards and a harmonization of working standards in
Europe. Western European unions tend to do the first move in interaction and thus
influence the overall interaction pattern. Thus, cooperation would develop when
8
This reasoning relates to earlier production relocations from Western countries to CEE,
existing differences in working conditions and wages, fears of future relocations, and protection of
existing Western working standards.
16
unions from both West and CEE would prefer cooperation and ‘export’ of Western
union strategies to CEE. However, when Western unions maintain a hostile attitude to
CEE unions, CEE unions also assign a high payoff to competition (2). Due to the fact
that the direction of production shifts favours CEE unions, CEE unions benefit from
competition vis-à-vis Western unions.
Based on the above logic, I identify two sustainable equilibriums and thus argue
for two faces of international trade unionism: a cooperative face applicable to national
and sectoral unions and a competitive face that characterizes unionism at company
level.
Figure 1 International trade unionism between cooperation and competition
CEE unions
COOP
Western
3
unions
2
0
COMPETE
1
COMPETE
COOP1
0
2
3
In the first, cooperative face, Western and CEE unions prefer to cooperate with
each other with the purpose of future coordination of bargaining strategies, in order to
lobby for international regulation of working conditions or at least for coordinating
national regulation (top left box in Figure 1). This outcome characterizes interaction
of national and sectoral trade unions. Although value-based cooperation and
bargaining coordination between Western and CEE unions is not yet extensive due to
the lack of interaction before the fall of socialism in 1989, the interest of national
union organizations suggest that international trade union interaction does have a
potential of further development in developing a geocentric identity in European trade
unionism.
The second, competitive, face of interaction implies that Western and CEE unions
did not develop cooperation. Instead, they benefit from a competitive relationship that
helps unions in defending local standards and promoting advantages of national
variation in working conditions and industrial relations (bottom right box of Figure 1).
Cross-border unionism at company level is in line with this interaction pattern.
Interaction between unions is dominated by competition; and trade unions in
Multico’s Western sites view Polish and Hungarian unions as a threat for employment
stability in the West. Unions in Multico’s CEE subsidiaries would prefer more
extensive cooperation with Dutch and Belgian unions, but knowing the Western
unions’ attitudes they also opted for a promotion of local interests.
Payoffs assigned to competitive unionism also apply to Multico’s EWC
representatives. Being mutually aware of each others’ strategies, Western and CEE
17
employee representatives assign a higher payoff to a competitive instead of a
cooperative interaction. In result, the EWC is best characterized as a polycentric
institution, in which representatives obey their national and local interests. Delegates
were not yet able to develop a geocentric EWC in terms of a new collective identity
and an agenda distinct from their national interests. Consequently, Multico’s EWC
does not yet have the potential to play an important role at the international level.
The sustainability of these interaction patterns depends on several factors. First
and the most important is the strategy of Western unions that has a greater impact on
international unionism than the strategy of CEE unions. As long as local union
representatives maintain their reservations towards international contacts in protection
of local standards, the competitive interaction of Multico’s union representatives will
remain stable. The second factor is the MNC’s organization, strategy and power
relations between the firm and local unions. Multico has maintained its decentralized
strategy and locally developed employment practices over decades. Trade unions
were not willing and able to change this strategy in order to drive the process of crossborder harmonization in working standards. MNCs are more powerful than unions,
especially when unions lack a coherent international strategy and a solid cross-border
network of resources. Therefore, if MNCs continue to relocate their manufacturing
operations according to unilateral management decisions, Western unions do not have
an extensive motivation to develop a closer cooperation with CEE unions. Third, there
are institutional and structural conditions influencing the sustainability of the two
faces of international unionism. In a top-down influence, the EU institutions as well
as the EMU do create conditions for greater international union cooperation. Unions
at the national level recognize this enabling factor to shape their strategies; and as
long as the interests and the institutional conditions remain stable, we can expect
international unionism to strengthen. At the same time, local institutions – especially
differing labour market rules and national industrial relations – influence the
strategies of company unions in preventing international contacts and thus contribute
to the sustainability of the other – competitive – face of European trade unionism.
Discussion
What do the two faces mean for the future of European trade unionism? Recalling
from the introduction, institutionalized cooperation, i.e. through the EWC, can
facilitate cross-border collective bargaining and eventually a harmonization of
working conditions in different countries. Alternatively, international unionism could
strengthen bargaining positions of trade unions vis-à-vis MNCs in national or local
settings even if a formalized international bargaining structure does not yet emerge.
This paper shows that cooperative interaction of national and sectoral unions
could, despite some current obstacles, eventually evolve towards international
coordination, with a formal bargaining climate at the international level and an
increasing role for union organizations at national and sectoral levels (Meer, et al.
18
2004: 127). Moreover, cooperative international unionism has a potential to develop
into a strong bargaining partner of MNCs because enabling local unions to draw on
international union resources.
It would be nevertheless implausible to conclude that cooperation of sectoral and
national unions facilitates union capacity to influence MNC behaviour in local
conditions. National and sectoral trade unions, especially in Western Europe, are too
far from company-level politics and thus have little influence on management
behaviour and working conditions in MNC workplaces. This is true especially in
MNCs like Multico that have traditionally focused on workplace interaction with
unions. The channel through which European resources of national and sectoral
unions could influence managerial behaviour is through vertical union structures and
cooperation between company and sectoral and national unions. However, this
influence is unlikely due to the current divide in union behaviour. Therefore, under
current settings, it is the company-level international unionism that has the highest
potential to influence working conditions in MNC.
Whether company-level unionism eventually develops this function depends on
cooperation of trade unions from different establishments in various countries of a
particular MNC, and on consensual industrial relations within the corporation (Meer,
et al. 2004). As documented in this paper, trade unions have deeply national roots
even after years of European integration (Calmfors, et al. 2001). Thus, instead of
developing ‘international company unions’ (Meer, et al. 2004), current competitive
relations and lack of international company union networking fuels an existing power
asymmetry between MNCs and trade unions. In consequence, MNCs have at their
disposal greater possibilities for decentralized industrial relations and a local
responsiveness in employment practices – with or without involvement of local
unions. In other words, the fact that unions themselves stress the predominance of
local interests and lack international solidarity gives MNCs a larger room to
manoeuvre without external pressures on European harmonization of working
conditions or Europeanization of collective bargaining.
Conclusions
This paper examined the current state of interaction between trade unions and
employee representatives in Western and Eastern Europe at sectoral, company, and
EWC levels; and asked whether current union relations facilitate or constrain a
strengthened bargaining position at the European level that could yield harmonization
of employment conditions in these countries.
The findings reveal two contrasting faces of cross-border trade unionism: a
cooperative one among national and sectoral union organizations in Western Europe
and CEE countries, and a competitive one that prevails between company unions and
EWC representatives in the studied MNC. At the level of national and sectoral trade
19
unions in the metal sector, European trade unionism is indeed emerging; and unions
are eager to foster international contacts and value-based cooperation in order to
strengthen their role for MNC strategies and employment standards in the old and
new EU member states. This process is however not evident at the company level.
Company unions are much embedded in their local conditions and not motivated to
cooperate with foreign partners. Regular international contacts among company
unions are limited and unions in Western MNC subsidiaries view their CEE
counterparts as competitors. In consequence, company-level trade unionism is
dominated by competition, which yields local management-union interaction in MNC
subsidiaries more important for shaping local working conditions.
What do the two faces of union interaction mean for the harmonization of
employment conditions and employment practices across European workplaces in
MNCs? Calmfors et al. (2001: 131) argued that if international collective bargaining
shall develop, it is likely to occur within MNCs. International company-level
bargaining should then improve prospects for cross-border union coordination also at
higher levels. Thus, building international union networks and bargaining is more
likely in a bottom-up than a top-down process.
This paper shows a scenario that significantly differs from the forecast of
Calmfors et al. (2001). Because of the weakness of international company-level trade
unionism and the distance of sectoral cross-border unionism from individual MNCs, a
bottom-up process of building cross-border unionism and European-level company
bargaining is unlikely. Rather, sectoral organizations are more active in maintain and
further developing cross-border union networks. Thus, if other obstacles concerning
union organization and interaction between national, sectoral and company unions in
different countries are overcome, this paper argues that instead of a bottom-up
process, a top-down process of building cross-border unionism in Europe is more
likely.
The two faces of union interaction do not currently pose major challenges to
MNCs and working conditions in their subsidiaries. As already mentioned, national
and sectoral level unions are far from company politics, as a number of MNCs opted
out of sectoral agreements. Company-level unions with locally embedded and
competing interests across Western and Eastern European host countries, as well as
the studied MNC’s EWC, lack the capacity to exert pressures on management in
harmonizing employment practices across Western and Eastern subsidiaries. This
yields the MNC to have greatest influence on harmonization of working conditions
across Western and Eastern Europe, due to lacking trade union pressures and demands
at the international or European level. In other words, international company-level
trade union networking dominated by competing interests, combined with
institutional diversity across Western Europe and CEE and with a decentralized
company organization, are the most important factors facilitating local embeddedness
of working conditions and bargaining over these conditions.
20
Although the paper has attempted to utilize evidence from a range of available
studies in the metal sector, the above conclusions draw predominantly on a case study
of a single MNC. For systematic scenarios concerning the future of European trade
unionism at sectoral and company levels, inquiry into cross-border union interaction
in other sectors and firms is necessary.
References
to be included
21