1. Transnational collective agreements: the role of trade unions and employers’ associations Prof. Dr. Edoardo Ales University of Cassino and Southern Lazio WU Wien LUISS G. Carli Rome ECE – Labour Law

2. Outline 1.
Transnational as ‘supranational’ or ‘multinational’ (cross-border) 2.
Freedom of association and workers’ involvement in ‘transnational as supranational’ 3.
A sound legal basis for the regulation of TCAs: Social Policy or Economic and Social Cohesion? 4.
An Optional Legal Framework for Transnational as Supranational? 5.
The specificity of TCAs and their relationship with national collective bargaining systems. A conclusion

3. Background information
283 identified Transnational Collective Agreements signed by Multi-national Companies
Contents: e.g. CSR, health and safety, equal treatment
Uncertain how much TCAs have influenced national collective bargaining systems
Signatory parties from the workers’ side: National and European Trade Union Federations, European Works Councils

4. The definition of transnational as something more than ‘beyond national’
The supranational or the multinational (cross-border) perspective of TCAs
Supranational is a prescriptive notion: the establishment of a legal order partly substitutive of and partly additional to the national ones at stake. Where additional, it constitutes a combined jurisdiction based on the principles of competence, subsidiarity and proportionality.
Multinational is a descriptive notion: a physical or juridical person operates in and is subjected to two or more national jurisdictions that, in our case, are, at turn, part of the EU.

5. Embeddedness of Collective Labour Law
recognition by a pre-existing national jurisdiction of the right to collective self-regulation of the employment conditions by workers’ representatives and employers as individuals or through their organizations
Kind and extent of the recognition:
key element for the establishment, consolidation as well as quantitative and qualitative development of Collective Labour Law
decisive for the consideration of Collective Labour Law itself as a jurisdiction
Collective Labour Law should be regarded as a distinct jurisdiction embedded in the one recognising it

6. Double embeddedness of TCAs at supranational level
In order to understand TCAs as supranational tools, one should have a combined legislation on the collective dimension of Labour Law needs to be in place
At EU level, Collective Labour Law exists to the extent that it is considered as a vertically and horizontally combined (national and supranational) embedded jurisdiction, thus admitting a double embeddedness within the national and the supranational jurisdictions at stake

7. In this sense also Article 153 TFEU
Freedom of association vs. workers’ involvement: EWCs and the double channel dilemma
EWC Directive → combined legislation on the collective dimension of Labour Law
EWCs not entitled to bargaining collectively, being an expression of workers’ involvement, not of freedom of association?
In some Member States, workers involvement and freedom of association are looked at as two separate issues: the former is referred, at least formally, to works councils, the latter to trade unions only
In this sense also Article 153 TFEU
Typical of the double channel approach to: - workers representation - the way in which employers and employees interact in terms of cooperation (works councils) or conflict (trade unions only → freedom of association / coalition)

8. No right to collective bargaining for EWCs: Is it in line with EU Law
Collective bargaining (and collective action) are an exclusive prerogative of trade unions
EWCs play the role of mere facilitators of the negotiating process
It presupposes to look at EWCs only through the lens of the double channel approach
A conclusion that at EU Level it is contradictory in itself
Consequences of the double channel approach

9. No right to collective bargaining for EWCs: Is it in line with EU Law
“workers and employers or their respective organisations”
The Article 28 CFREU argument
EU Law does not exclude the possibility that EWCs could be the direct expression of trade unions in Member States having single channel model/approach
The EWC Directive does not explicitly deny EWCs “the right to negotiate and conclude collective agreements”
The EWC Directive argument
MNCs look at EWCs as reliable negotiating partners, as confirmed by the rather high number of transnational documents signed
The empirical argument

10. A sound legal basis for the regulation of TCAs: The Social Policy Title (1)
Counterproductive consequences of attaching collective bargaining exclusively to freedom of association and denying any link with workers involvement
A juridical basis for the regulation of transnational collective bargaining (hereinafter TCB) at supranational level hard to find within the Social Policy Title of the TFEU
Article 153(5) TFEU excludes freedom of association (from EU concurrent competence

11. A sound legal basis for the regulation of TCAs: The Social Policy Title (2)
Collective bargaining also linked to workers involvement → regulation of TCB at supranational level with a sound juridical basis in Article 153(2)(f) TFEU
Trade unions not excluded from potential actors of TCB regulated at supranational level: as they represent and collectively defend the interests of workers, as prescribed by Article 153(2)(f)
Synergy between EWCs and ETUF as bargaining agents → a continuum ‘information, consultation, participation and negotiation’ as envisaged by EU Law (e.g. Article 2 Council Directive 98/59/EC)

12. A sound legal basis for the regulation of TCAs: The Social Cohesion Title (1)
The Economic, Social and Territorial Cohesion Title (XVIII TFEU) as the alternative juridical basis on which a regulation of TCAs at supranational level
Article 174 TFEU: “in order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic and social cohesion.”
Article 175(3) TFEU: “If specific actions prove necessary outside the [Structural] Funds and without prejudice to the measures decided upon within the framework of the other Union policies, such actions may be adopted by the Council acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions.”

13. A sound legal basis for the regulation of TCAs: The Social Cohesion Title (2)
Renewed Lisbon Strategy 2005: mobilisation of all Union resources, including the Cohesion Policy
Shift towards the integration of Broad Economic Guidelines (Article 121 TFEU) and Employment Guidelines (Article 145 TFEU) into the Growth and Jobs Strategy (now Europe 2020 and the European Semester)
Establishment of a direct link between that Strategy and the cohesion policy (e.g. Regulation 1309/2013 on the European Globalisation Adjustment Fund (EGF), adopted on the juridical basis of Article 175 TFEU
Cohesion policy, strongly linked to the Europe 2020 Strategy, creates a favourable environment for the adoption of actions supporting the development of transnational (in the sense of supranational) social dialogue
Cohesion Policy may represent a suitable background for an intervention adopted under the scope of Article 175(3) TFEU

14. An Optional Legal Framework for ‘Transnational as Supranational’: The ETUF/ETUC Proposal
Reference made by Article 175(3) TFEU to the “ordinary legislative procedure” as regulated by Article 289 ff. TFEU, opens up to the widest range of EU instruments, i.e. “regulations, directives, decisions, recommendations”
Interesting foothold for the Proposal made by the ETUF/ETUC on an Optional Legal Framework for TCA that envisages the decision as legal instrument to be used
The ETUF/ETUC Proposal of a Decision on an Optional Legal Framework, formulated in 2016, (hereinafter the Proposal)
The proposal reacts to the issues raised in the conclusions of the Expert Group on Transnational Collective Agreements set up by the European Commission in 2009

15. According to the Expert Group:
The conclusions of the Expert Group on Transnational Collective Agreements set up by the European Commission in 2009
According to the Expert Group:
Legal risks are associated with the conclusion of TCAs, particularly for company management
There is no direct correspondence between the parties’ intentions as to the effects of the TCAs they conclude and the actual legal effects produced, which remain therefore largely uncontrolled by the parties
There is no coherence across Member States as to the present legal effects of a given TCAs
Interference may occur in the legal effects of national, local or company-based collective agreements by the absence of links between TCAs and other levels of agreement

16. “Concept Example of a Possible European Optional Legal Framework for Transnational Company Agreements” (1)
Substantiation & Effects
The Proposal is substantiated within the “Concept Example of a Possible European Optional Legal Framework for Transnational Company Agreements”.
Effects of TCAs on the single employment relationship: → combination of the ‘Opting-in clause’, the ‘Disclosure of mandate’, the ‘Non-regression clause’ and the ‘Non-interference clause’, → the ‘Non-regression clause’ also as ‘Opening clause’; → the ‘Non-interference clause’: “In case of conflict between the provisions of a TCA and any other applicable national agreement, the provision more favorable for the employee shall apply.”

17. “Concept Example of a Possible European Optional Legal Framework for Transnational Company Agreements” (2)
Effects
Link among the ‘Disclosure of mandate’, the ‘Non-regression clause’ in its traditional meaning, on the one hand, and the ‘Non-interference clause’, on the other
The ‘Disclosure of mandate’ clearly aims at defining the personal scope of TCAs in the perspective of aggregating within the bargaining unit national trade unions whose signature can guarantee the application of the TCA at national level, as it were a national collective agreement
‘Non-regression clause’, in its traditional meaning, and the ‘Non-interference clause’, both aimed at ‘protecting’ national (sectoral) collective bargaining from the negative effects of the TCA, if any

18. “Concept Example of a Possible European Optional Legal Framework for Transnational Company Agreements” (3)
Broader effects
The non-interference principle as a clear feature of transnational as multinational (cross-border).
Transnational is seen as an extension of the national collective bargaining system, subordinated to the (national) branch level as far as its effects are concerned
To look at the relationship between the transnational and the national level in terms of interference, means not to recognise the autonomy of the bargaining unit at transnational level, even if made out of national trade unions
The risk is to deny the specificity of the transnational company level, which remains subordinated to the national branch one

19. The specificity of TCAs and their relationship with national collective bargaining systems (1)
A reflection on the specificity of TCAs and on their relationship with the national collective bargaining systems entails a clarification of the role that (European) Social Partners are playing and may play for the future of transnational industrial relations
The specific needs of the MNCs in respect of the general priorities that are regulated by national collective bargaining at branch level
MNCs, just because they operate within several jurisdictions, inevitably adopts a global approach to the employment relationship

20. The specificity of TCAs and their relationship with national collective bargaining systems (2)
Are (national or European) branch trade unions on their own able to appreciate the global dimension of MNCs, without putting into question the transnational solidarity among workers employed within its different subsidiaries?
Global: in regulating the employment relationship, a balance should be struck between homogeneity, required by MNCs need to carry on unitary company policies (the global dimension), and the local conditions of labour markets in which each subsidiary is operating

21. The position of BusinessEurope
Excludes the need for any supranational intervention, even in terms of Optional Legal Framework
In its Position Paper of 2012, has however made the point of specificity of the employment relationship within MNCs
Puts the specific needs of MNCs at the center stage of its reflection, emphasising, on the other hand, the relevance of the “different national industrial relations systems in which the company operates”
Position towards has changed since 2006, passing from a ‘denying’ to an ‘accompanying’ one
Has focused on the fact that MNCs may need support in their choice to enter a negotiation procedure not yet cleared as for its effects
Cooperation between ITC-ILO and BusinessEurope on how TCAs can support CSR and Human Rights at work

22. A conclusion: Specificity of TCAs and ‘Transnational as supranational’
The way in which the regulation of TCAs is approached: supranational or multinational (cross-border) perspective?
The supranational perspective only is able to ensure an appropriate consideration of the specificity that characterises employment relationships within MNCs.
To this end, however, European Social Partners should value properly the role EWC‘s, the transnational bodies par excellence, could play as bargaining partners within the negotiation process of TCAs.
EWCs perfectly embody and voice the global dimension of the employment relationship typical of MNCs
The problems that such a solution may raise for national legal and industrial relations systems with a double channel approach should not be ignored
The joint presence and signature of national branch trade unions will be, of course, imperative