Transnational CollectiveBargaining and the Globalization of Work
Most successful companies andbusinesses today operate on a scale larger than their geographicallocale. Globalization of the production and distribution of goods andservices by corporations ultimately calls for the globalization oflabor relations and workers rights to facilitate smooth flow of theiractivities. As more and more companies take the products and servicesacross the globe, this trend creates some unique requirements thatneed to be identified and addressed, for example, transnational laborrelations (Beik, 17).Most organizations have been observed to treat workers as just ameans of production, totally disregarding their labor and evenfundamental human rights in many ways. Although considerable gainshave been made about the rights of workers, more still needs to bedone to uphold the rights of workers in all types of industries.
As trans-nationalization of theproduction and delivery of goods and services becomes the norm,companies now have workers in different nations. Each nation has itsunique set of laws about labor and the rights of workers. As aresult, national labor movements in these companies cannot fullygovern the labor rights of all its workers in one sweep. In eachcountry that a business operates, the context of labor relations isdifferent from the others (Ahlberg,56). In this aspect,transnational labor relations seem to water down the role of stateand regional labor movements and unions.
Transnational labor relationshave created a dilemma as far as governing labor is concerned.Activists and lobby groups constantly juggle with the questionwhether labor providers as a form of capital in a given sector, forexample, manufacturing should be approached as a group of workers ormore generally as a social class. This dilemma puts national andglobal labor relation strategies on a collision course (Rivoli,116). Therefore, aneffective international labor relations strategy is one that willcreate a balance between national and international labor relationsin every country that a country operates, reducing the conflictsbetween these two sets of laws.
When examining the transnationallabor relations situation, the role of international laws forgoverning, labor and labor relations come to light (Beik,73). The set laws governimportant aspects regarding the use of labor. For example, the lawsstipulate the minimum age at which children can legally start to workto prevent child labor that is prevalent in developing countriesespecially economically weak states in Asia and Africa. Such lawshave various benefits when they are well followed and implemented.These benefits include creating a decent working environment forworkers, creating a fair playing field for companies across the globeand providing a global framework for the fair and consistentglobalization of labor and trade.
Apart from child labor, otherareas that workers are exploited include extended working hours,hazardous working conditions and unregulated work. Depending on thetype of contracts or work tenures signed by workers as they startworking for a given organization, the number or working hours varywidely (Beik, 109). Some jobs require workers to be in productiveduties for eight hours, others twelve hours and so on. However, someorganizations make their employs work for longer hours thanstipulated by their terms of employment. One of the key causes ofthis trend is a competition that makes organizations rush constantlyto increase their production capacities. In most cases, workers arenot paid for the extra time they work, making this a directexploitation of labor.
Another challenge related tointernational labor and labor relations is unsafe or workingconditions. If things were working right, workers in any organizationare supposed to work in the safest conditions that do not endangertheir well-being. However, this safety is sacrificed as organizationstry to cut down their operational costs. For example, employeesworking in hazardous jobs such as construction need to haveprotective gear to reduce chances of getting injured as the work.This, however, is not always the case. Some factories even operatewithout fire equipment and emergency exits (Baker, 77). Cases havealso been reported where workers are locked inside a building toprevent them from stealing from their place of work. Such unsafeworking conditions are a crucial matter that international laborrelations need to address.
Another labor relations issuethat pops up is the discrimination at places of work, particularlyagainst women. Studies relating to this matter have shown that womenearn 20% less than men serving in the same job capacities get(Levinson, 74). Apart from remuneration, women have lower chances ofgetting promotions at their jobs. Sexual exploitation cannot beignored either. In some cases, women cannot get jobs, transfers orpromotions without offering sex to the men in charge. The issueshighlighted in the prose above and much more show the need for changein the main areas of international labor and labor relations.
It is not possible to examine theinternational labor and relations without taking a look at the roleof the World Trade Organization (WTO). Inthe current phase of global transnational labor relations, it wasnecessary to form an international organization to govern the trade(Fazio, 107).In this light, the World Trade Organization, initialized as WTO, wasofficially launched on 1stJanuary 1995. Its headquarters is in Geneva, Switzerland. The primaryrationale for its creation was to liberalize international trade. Oneof WTO’s key functions is to create a channel for negotiations onissues of global trade. International labor relations is one thesematters.
The WTOplays an imperative task in the governance of international laborrelations. It does this task mainly through several laws that itenforces in all its member states. One of these laws is theInternational Commercial Law. The International Commercial Law is aset of laws, regulations, and treaties that are used to governinternational trade on a global level. As the body with the greatestcontrol over international trade and business, the WTO is a coreattribute of this law. The WTO’s key functions of facilitating theglobal flow of commerce, liberalization of trade barriers andprovision of mechanisms for dispute resolution are in line with theprovisions of the International Commercial Law. This makes the WTOthe overhead institution as far as the implementation of this law isconcerned.
Governingmultinational corporations is not an easy thing. Depending on theirscope, a global corporation may have branches or affiliates in morethan a hundred countries across the globe. This geographicaldistribution of corporations creates governance challenges that makeregulating multinational corporations an uphill task. In each countrythat a multinational company operates, there are different governanceneeds and challenges that need to be considered in the control ofmultinational corporations (Levinson,89).These differences may be political, social, and economic or laborrelated. As a result, in governing such corporations, each contextmust get special consideration to achieve a labor governance strategythat applies to all countries where a multinational company operates.
However,contrary to its mandate, The WTO appears disregard labor and humanrights, instead putting more emphasis on maximizing corporations’profits. It seems to ignore the illegal processes through which somecorporations make their products, such as using child labor andlimited the government’s ability to deal with such violation ofhuman rights. The escalating non-tariff barriers allowed againstdeveloping countries is an oppressive trait. The WTO also contributesin a significant way to environmental degradation (Leonard,102).The WTO views environmental protection laws enacted by member statesas “barriers to trade.” In cases of trade disputes, as Daveystates, the WTO mechanisms of dispute resolution take too long tosolve them.
The European Union has sets oflaws that affect its member states directly and indirectly. One ofthese laws is the labor law that affects how its member states treattheir labor and workers rights. In the European Union, labor laws arecontained in the Social Chapter of the Treaty of Amsterdam. Thischapter has 30 principles that address key areas of labor relations.Some of the areas covered in this chapter include fair payment ofworkers, safety at work and the rights of employees (Beik, 75). Thesole aim of these laws is to improve the conditions of workers in itsmember states by promoting employment, sustainable development, andsocial integration. International contracts are used in cases oftransactions between entities from different nations with the aim ofbalancing costs and controlling risks.
In many countries across theglobe, collective bargaining is used to negotiate matters ofemployment such as remuneration between employers and theiremployees. The key goal of these negotiations is to make agreementsfor regulating the working conditions of workers. In thenegotiations, the employees are represented by representatives fromtheir trade unions. Charles Levinson is credited for initiating thecollective bargaining debate in the 1970s. His biggest argument wasthat it was necessary to develop mechanisms for internationalcollective bargaining to address the challenges created by rapidinternalization of companies.
Formed in 2006 after thedissolution of the InternationalConfederation of Free Trade Unions andthe World Confederation ofLabor, the InternationalTrade Union Confederation is the largest federation of trade unionsin the world. It represents roughly 180 million workers spread over162 countries. The duties of the International Trade UnionConfederation fall in line with its rival, the World Federation ofTrade Unions. The formation of the ITUC brought an end to more 100years of division and diversity on matters of employee and laborrights. The organization created the much-needed channel for theglobalization of trade unions across the globe under one umbrellabody.
The globalization of trade andlabor brought about more migration of workers across the world.People move one country to another in search of better employmentprospects. Many companies that operate in different countries alsotransfer their staff to new countries for various reasons. Thechallenges created by this movement of workers bring to light theinadequacy of international labor laws (Ahlberg, 77). Each countryhas its unique labor and employment laws governing the affairs ofworkers. In the instances where the local labor laws contraveneinternational labor laws, the rights of workers may be violated sincelocal labor are easier to implement and monitor compared tointernational ones.
Over recent times, Middle Eastcountries have been in the spotlight for the exploitation of workersfrom developing countries. Most of the domestic workers in thisregion come from developing countries. Attracted by the high salariesoffered here compared to what they would earn in their homecountries, many workers end up being violated and exploited in manyways. Women are sexually abused by their employers to the extent thatsome even commit suicide. The high temperatures of the regioncombined with other adverse working conditions such as long workinghours make life difficult for foreigners working in the Middle East.Exploitation and violation of the rights of maids and nannies occuracross the globe, not just in the Middle East. Sexual harassment,overworking and underpayment are some of the key challenges theyface.
Globalization, as expected,affects people from all walks of life in different ways. In line withthe globalization of labor relations, most countries have made lawsthat govern the movement of workers to and from their boundaries.Some countries like Canada do not allow their companies to hireforeign workers as a way of protecting their citizens againstunemployment. Other countries, in contrast, allow their companies tohire workers from outside the country. A good example of suchcountries is Australia and the United States.
International Supply Chains
Oneof the direct consequences of the globalization of trade and labor isa constant increase in the supply chains of transnational companies.As companies expand and take their goods and services to markets thatare far away from their home country, an effective internationalsupply chain is paramount to their success (Baker, 69). Companies arein a constant rush to have effective and efficient internationalsupply chains to increase their sales and ultimately their profits(Levinson, 47).However, companies are cautious as they engage in this expansion.They understand that if they do not implement the best practices inthe international supply chains, the consequences can be catastrophicfor their businesses.
As expected, internationalsupply chains have a far-reaching impact on the dependent nations. Ifwell thought out and implemented, international supply chains can bebeneficial, both for the company and the dependent country involved(Baldwin, 89).Over recent times, the face of international supply chains has beenconstantly changing. Market liberalization, technologicaladvancements, and improved transport logistics have made it possiblefor multinational companies to delocalize some of the productionprocesses to the dependent countries (Bookbinder,99).
By default, international supplychains are formed by transnational companies a strategy for expandingtheir markets. However, the benefits and drawbacks of these chainsare bound to trickle down to the dependent countries. On a positivenote, the delocalization of production by multinational companies asmentioned above can be beneficial to the dependent countries. Whengoods are produced using materials and labor acquired locally in thedependent nations, the benefits are numerous (Snyder,234). Apart from therevenue that local governments and authorities get regarding taxes,licenses and permits, international supply chains offer otherbenefits such as employment opportunities and transfer of skills andknowledge transfer to the locals. On the flip side, negative impactssuch as environmental pollution, exploitation of local workers andtax evasion are a common occurrence in international supply chains.
Apart from goods and services,other things also move within the international supply chain. One ofthese things is the movement of well-protected workers. As companiesexpand into new localities, they need well-trained workers to get thenew branch or affiliates operating like the others (Stevis,& Terry, 100). Themost common approach to achieving this goal is by moving a fewworkers from an already established branch to the newly opened one.Since this occurs in international companies, it means that theseworkers will have to move to a new country and locality, with adifferent way of doing things compared to where they are coming from.Some of these differences such as labor laws can pose a potentialthreat to the business. For instance, if the rights of workers arenot well protected in the new country of operations, themultinational company needs to come up with ways to ensure that therights of the workers it moves are protected. To streamline workingconditions and make global citizenship a reality, laws have beenformulated and enforced to ensure that workers’ labor rights arenot violated.
Changes Associated withInternational Supply Chains
Global supply chains are formedwith the sole goals of increasing a multinational corporation’ssales and profits. Due to the big geographical scope they cover and alarge number of components involved, international supply chainsbring about some changes whenever they are used by a multinationalcompany. Right from the start of the supply in the home country tothe consumer of the good or service in a dependent country at theother end of the chain, several changes take place when a companythat did not use this model of business before start using it. Thereason for this scenario is that the global supply chain comes with anew set of advantages and drawbacks that need to be considered by thepeople involved in the chain. The key parties involved in such supplychains are the head offices, contractors, and subcontractors.
Starting from the head offices,several things are bound to change when a multinational companyembraces the international supply path. The head offices of mostcorporations are located in their home countries. However, as suchcompanies expand their international supply chain some changesrelated to their head offices take place (Gereffi& Joonkoo, 27) Forexample, a company may open regional head offices in each continentit operates. This will prove effective in managing the company’sactivities there as compared to having one head office managing allcompany affairs across the globe. Each head office, whether global,regional or local has the mandate to keep the company activities inits jurisdiction running optimally for the good of the business.
For any company or institution,it is not possible to do all things using the company’s staff andresources alone. For reasons such as specialization and lowering thecost of the production or distribution of goods or services,international corporations at times have to outsource companies whowill make and distribute goods and service on their behalf (Kersten,165). In managing an international supply chain, good selection ofthe contract to hire for a certain task is a vital component of thebusiness’s success. As companies globalize and take up the use ofinternational supply chains, their selection of contractors also hasto change. In most cases, local contractors in new countries ormarkets are preferred (Jha, 123). This is because they source theirresources and carry their tasks locally, therefore cutting down thecost of production for the companies hiring them by cutting expensessuch as customs duty and import taxes.
Depending on the nature of amultinational company’s scope of operation and components of itsinternational supply chain, at times the tasks given to a particularcontractor may be too much for one organization or individual tohandle effectively. In such a situation, the hired contractor maydecide to hire another contractor to perform the task required ofthem. This situation is known as subcontracting. The party hired bythe contractor is referred to as the subcontractor. The subcontractordoes not have a direct affiliation with the corporation that theywork for. They fall under the jurisdiction of the contractor who washired by the company and later hired them. As a result, thecontractor has the duty managing and supervising the task given tothe subcontractor. The contractor is held accountable for anymistakes originating from subcontractor since the parent company doesnot deal with the subcontractor at any point during the contractperiod.
World Company Councils
The formation of the WorldCompany Councils is not a new concept. The idea goes way back to1950s when the first wave of company Councils was formed, mostly inthe United States (Ehlers & Ulrich, 240).. Following the onset ofglobal business transactions and globalization of trade and laborrelations, it was a necessary intervention to create an environmentin which businesses make profits but not at the cost of the violatingworkers and other people affected by their existence and operations(Davidov& Brian, 55). As commerce and labor relations became global,national system of governing trade and labor relations were slowlylosing their relevance and effectiveness. It is with a backgroundthat global strategies such as the World Company Council were formedto address the challenges that came as a result of the globalizationof trade and labor.
Right from their inception, WorldCompany councils have had a fair share of successes and challenges.For the most part, they succeeded in building international bodiesthat facilitated global cooperation between companies (Hepple, 66).The interactions of companies under a given Council are governed bythe World Company Council, creating a channel for decision making andconflict resolution. Several challenges have hampered theachievements of World Company Councils. Political, economic and legaldifferences among member companies and countries have played a largerole in derailing the gains made by different councils.
Most of the World CompanyCouncils that are formed bring together companies that deal with acommon product or service. For example, the World Gold Council isformed by the leading companies in the gold mining business acrossthe globe. Apart from representing the business interests of thecompanies in a given council, company councils also perform othertasks such as employee and stakeholder representation (McCallum, 70).Employee representation enables companies dealing in related goods orservices to formulate and implement labor and labor relationstrategies that suit the precise needs of their companies dependingon the nature of their businesses.
As earlier mentioned, the biggestfactor that leads to violation of employees rights is the rushtowards increasing profitability and productivity. Many organizationsprioritize maximizing their returns at the expense of theiremployees. In human treatments such as locking workers in factorypremises where they cannot escape in case of emergencies like fireand not providing workers with hazardous jobs with the necessaryprotective gear are some of the acts by corporations that violatebasic workers rights. In most of these scenarios, workers are justtreated as a means of production. Corporations are only concernedwith making profits, and they view their staff as just a channel forachieving this goal. With this background in mind, it is necessaryfor workers unions and labor rights movements to advocate the neededchanges to ensure that this trend stops in the nearest future.Organizations such as the World Trade Organization are on the frontline of this campaign. It is, however, necessary for other partiessuch as the World Company Council to join this struggle to boost itschances of success. Governments and private sector stakeholdersshould also play an active role in promoting humane treatment ofworkers at the workplace.
Ahlberg, Kerstin. TransnationalLabour Regulation: A Case Study of Temporary Agency Work.Brussels: P. Lang, 2008. Print.
Baker, Peter. "Anexploratory framework of the role of inventory and warehousing ininternational supply chains." TheInternational Journal of Logistics Management18.1 (2007): 64-80.
Baldwin, Richard E. "Globalsupply chains: Why they emerged, why they matter, and where they aregoing." (2012).
Beik, Mildred A. LaborRelations. Westport,Conn: Greenwood Press, 2005. Print.
Bookbinder, James H. Handbookof Global Logistics: Transportation in International Supply Chains.New York: Springer, 2013. Print.
Davidov, Guy, and Brian Langille.The Idea of Labour Law.Oxford: Oxford University Press, 2011. Print.
Ehlers, Dirk, and Ulrich Becker.European FundamentalRights and Freedoms.Berlin: De Gruyter Recht, 2007. Print.
Fazio, Silvia. TheHarmonization of International Commercial Law.Alphen aan den Rijn, the Netherlands: Kluwer Law International, 2007.Print.
Gereffi, Gary, and Joonkoo Lee."Why the world suddenly cares about global supply chains."Journal of supply chainmanagement 48.3(2012): 24-32.
Hepple, B A. LabourLaws and Global Trade.Oxford: Hart, 2005. Print.
Jha, Kumar N. ConstructionProject Management: Theory and Practice.New Delhi: Dorling Kindersley, 2011.
Kersten, Wolfgang. InternationalSupply Chain Management and Collaboration Practices.Lohmar Eul, 2011. Print.
Leonard, H. Jeffrey. Pollutionand the struggle for the world product: Multinational corporations,environment, and international comparative advantage.Cambridge University Press, 2006.
Levinson, Charles. Capital,Inflation and the Multinationals.Routledge, 2013.
Levinson, Charles.International TradeUnionism. Taylor&Francis, 2013.
McCallum, Jamie K. GlobalUnions, Local Power: The New Spirit of Transnational LaborOrganizing. , 2013.
Moore, Geoff. Fairnessin International Trade.Dordrecht: Springer, 2010. Internet resource.
Rivoli, Pietra. TheTravels of a T-Shirt in the Global Economy: An Economist Examines theMarkets, Power, and Politics of World Trade., 2009.
Snyder, Francis G. TheEu, the Wto and China: Legal Pluralism and International TradeRegulation. Oxford:Hart Pub, 2010. Print.
Stevis, Dimitris, and TerryBoswell. Globalizationand Labor: Democratizing Global Governance.Lanham, Md. Rowman & Littlefield, 2008. Print.