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Will the Transnational Company Agreements (TCA) allow a negotiated approximation of labour standards in multinational corporations in the EU?

An international seminar was held in Gdansk from 25 to 26 February 2021 with the title “Will the Transnational Company Agreements (TCA) allow a negotiated approximation of labour standards in multinational corporations in the EU?” The meeting was organized in hybrid form and gathered 43 representatives of workers’ organisations both on site and online. The working languages were English and Polish. The seminar was organised by KK NSZZ "Solidarność" (Komisja Krajowa NSZZ "Solidarność"), with the support of EZA and of the European Union.

The meeting was started by the moderator Barbara Surdykowska, an expert of the National Commission of NSZZ "Solidarność", who presented the topic and the agenda of the meeting. Then the participants were greeted by Józef Mozolewski - Deputy Chairman of EZA, who thanked for the effort put into organizing this seminar despite the prevailing pandemic. Jerzy Jaworski - Deputy Chairman of the National Commission of NSZZ "S", welcoming the participants, emphasized the importance of the topic in the face of the growing expansion of international corporations and the problem of the difference in working conditions, including wages, depending on the country where the work is performed.

Barbara Surdykowska gave an introductory presentation on TCAs in terms of their types, such as: GFA / IFA (Global or International Framework Agreements) and EFA (European Framework Agreements), potential signatories, i.e. boards of international corporations, global industry federations in relation to IFA and their European equivalents in relation to EFA. The 2nd ones are characterized by a larger group of entities authorized to sign, headed by European Works Councils. Then she moved to a closer characteristic of the TCA, the main feature of which is the lack of binding legal effects of these agreements and emphasizing its soft nature despite the fact that it is the result of bilateral negotiations. At the same time, which is also emphasized by the European Commission, they are considered to be a very important instrument of corporate dialogue defining the framework for information and consultation. At present, the proposal to create an optional legal framework for TCAs seems very unlikely to the extent that it would satisfy trade unions.

Another presentation was given by dr Volker Telljohann (IRES Emilia- Romagna, Bologna) describing the TCA as an instrument of restructuring and citing both unsuccessful attempt to implement the TCA (i.e. Electrolux) as well as giving positive examples of successfully concluded TCA. Bayer (EFA for restructuring) and BNP Paribas (IFA for CSR and change management) as well as Solvay and Engie (GFA for digitization) are examples of successful negotiations culminating in an agreement. However, he stressed that the mere negotiation of a TCA in the lack of a legal framework that would make the provisions take legal effect is insufficient. As he emphasized, a decrease in the number of TCAs is currently observed because some national trade unions are reluctant to TCA, others are losing members, which has weakened the ability and willingness to negotiate TCAs and on the other hand, corporate management boards are also reluctant to address this topic, in particular regarding large restructuring. The actual impact of TCAs on a global scale is indeed low, as their amount in relation to the restructuring efforts is small. In the years 2006-2011 concluded 45 such agreements, and in the years 2012 to 2017 only 21.

The next speaker, representing the Institute of economic and social research IRES from France, Udo Rehfeldt, presented the types, history of TCA and the changing attitudes of trade unions to them, as well as statistics showing the dynamics of their development. In the years 1988-2017, 336 TCAs were concluded (183 IFA and 153 EFA), currently there are 382 of them in total, although it should be emphasized that there is no obligation to report them. European Works Councils (EWCs) play a very important role in initiating and negotiating such agreements and they are still dominant among entities containing EFA, although the number of signatures by European Branch Federations is increasing.

Then there was a discussion concerning ETUC idea of the tripartite framework agreements where it is unclear who, apart from the social partners, would be involved in this process. This appears to be merely a response to the collapse of the optional legal framework for TCA, which has no chance of being realized at this moment.

After the break, prof. Beryl ter Haar – told about gradual “hardening” of TCA due to the fact that it is a contract between 2 parties who voluntarily join it and agree to respect the provisions contained therein. From the point of view of international law, due to the fact that the parties agree to it and know what they expect from each other, it has a normative nature. As she emphasized, this is a quite controversial view, but if the provisions of the agreement are precise and unconditional, they bear legal features.

Then dr Jan Czarzasty from the Warsaw School of Economics presented a project of the National Commission of NSZZ "Solidarność" implemented in 2015-2017 entitled “European Works Councils as a platform for implementation Transnational Company Agreements (TCA)” - its assumptions, goals and results as well as case studies based on the analysis of the existing TCA in companies from 5 EU countries. He emphasized that as a result of the analyzes, the key problem was the implementation of these agreements, which confirms earlier comments on the lack of legal force of these documents. Then a discussion took place whether the TCAs actually did not have any legal effects. It turns out that this issue can be interpreted differently in different legal systems. There is a clear need to create a uniform, optional legal framework, independent of the legal regimes of individual countries. Opel's representative Mariusz Król presented a good practice when representatives of all countries were present on the day of signing the TCA in order to avoid deliberations on where it will be applied and where not.

Next panel moderated by Sławomir Adamczyk with members of the EWCs from companies: Pfleiderer (Eugeneniusz Formajster), Volkswagen (Piotr Olbryś), Opel (Mariusz Król), Airbus (Rafał Chojecki) concerned the convergence of working conditions, including wages and actual role of TCAs already implemented in their companies. The panelists emphasized the problem of marginalization of trade unions, the reluctance of the employer to conclude contracts and the need to establish a joint TCA agenda on the trade union side. When it comes to working conditions and work stability, TCAs has fulfilled its role. There were no forced layoffs, the restructuring took place not at the expense of the employees, but by seeking profitability in other fields, although the wage convergence resulting from their implementation was not noticed. They also pointed to bad practice during a merger or change of owner, where the old contracts are not in force and the TCA arrangements from the old company are not transferred to the new company. Thanks to TCA, collective redundancies were avoided and a voluntary redundancy program was agreed with high severance payments. Then, Rafał Chojecki from Airbus Group emphasized that participation in the work of EWCs is certainly beneficial for the Polish branch of the company and is the most important platform for concluding agreements at the transnational level. He gave positive examples of agreements: regarding the success share and mobility of workers from all over Europe, while maintaining working and pay conditions covering the entire group. He pointed again the lack of a legal framework for TCA at the European level as a barrier. Piotr Olbryś from the Volkswagen group, where there is both a European works council and a world works council covering over 120 factories, emphasized the difficulty of wage negotiations common to all countries in a given region due to different wage structures. However, he pointed out that the agreements do not have to concern wages but i.e. vocational training, health and safety, co-decision, hired workers, etc. If employees are strong and there is dialogue in the company, the legal framework is not that important, but where there is no culture of dialogue, a legal framework would certainly be needed.  

After hearing the employees' representatives, Prof. Michał Raczkowski from the University of Warsaw, pointed out that sometimes the provisions of the agreements are too general, but it results, among others, from lack of a common trade union policy and a common approach. The employer's reluctance to this kind of agreements results from the fact that he cannot withdraw one-sided from it in the event of economic changes. It is important that social dialogue be present at all and at different levels: national, European and corporate.

The second day of the seminar was opened by Sławomir Adamczyk, an expert of the National Commission of NSZZ "Solidarność", summarizing day 1 of a practical nature and presenting the program of day 2 devoted more to legal aspects.

First presentation on that day was given by prof. Łukasz Pisarczyk from University of Warsaw on the legal aspects of the conclusion and operation of TCA. He pointed out that only about 10% of employees are covered by collective labor agreements, and most of the work standards and conditions are determined individually and that the TCA can fill this gap. He pointed to the problem of the legal framework - a reasonable creation and then registration and possible appeal instruments would be very desirable. Collective bargaining needs support for example through TCA, because the weakness of social dialogue and the lack of a legal framework is very dangerous for industrial relations as a whole.

Another speech by prof. Auriane Lamine from UC Louvain concerned the identification of 3 alternative legal paths for sanctioning the TCA, i.e. 1. international arbitration, 2. mechanism for reporting complaints and grievances at 3 levels (local, national and then global - example EDF in 2018), 3. EU consumer law.

Then Katarzyna Wieczorek from the University of Warsaw presented the issue of TCA enforcement in the context of collective disputes. The sheer scale of the number of disputes is not known because both parties do not want to share such information. It is difficult to clearly define whether in a situation of non-compliance with the TCA, you have the right to strike, because it is different in individual countries. Article 28 of the Charter of Fundamental Rights, which deals with the right to strike, gives some legal basis for the TCA, but only within the limits set by national law and should always be considered as an ultima ratio. The freedom to resolve disputes, most often locally, was emphasized, strike or group disputes under national law as alternative dispute resolution methods.

Next, Anna Boguska from the University of Warsaw presented the issue of pursuing claims against TCA under national law. This possibility is problematic and requires checking that the parties have provided for it in the agreement itself. It is assumed in the literature that TCA may be subject to private international law, which entitles the parties to independently identify the legal regime affecting TCA, although this is rarely the case. For example, in France, TCAs are concluded as collective labor agreements and are subject to the national legal regime, but, for example, in Poland, this is no longer the case. Thus, such an agreement concluded under French law will not constitute a law in the Polish legal system.

After a short discussion, a lecture on the implementation and monitoring of TCA was presented by prof. Reingard Zimmer, in which he presented specific examples of IFA provisions, among others in the clothing industry in Indonesia.

The last lecture before the panel discussion was delivered by dr hab. Marcin Wujczyk from the Jagiellonian University in Krakow entitled "New areas of collective bargaining and the right to privacy." He presented areas limiting privacy and guaranteeing privacy, i.e. the elimination of pay gap, the right to disconnect, reconcile work life balance and the role of collective bargaining in the protection of privacy.

The concluding discussion panel was attended by scientists: prof. Łukasz Pisarczyk, dr. Błażej Mądrzycki and trade union practitioners: Mirosław Miara and Monika Sobiech, who discussed the importance of collective bargaining at various levels in the future. According to Mirosław Miara, the main reason for the low number of agreements is the lack of representative employer organizations at the sectoral level and lack of will to conclude them as well as the public law doesn’t force them to do so. On the other hand, trade unions also fail, and the problem is the structure of the union and the lack of this type of priority. According to Monika Sobiech, it is not an instrument sufficiently promoted and presented as an instrument that brings mutual benefits. The seminar was concluded by Bogdan Kubiak - Deputy Chairman of the National Commission, who emphasized that NSZZ "S" will always uphold social standards, supports the postulate of the equal pay for the equal work and the creation of a legal framework for TCAs.