An emerging transnational industrial relations? Exploring the prospects for cross‐border labour bargaining

DOIhttp://doi.org/10.1111/ilr.12078
Date01 December 2017
Published date01 December 2017
Special feature i
New directions in industrial relations?
International Labour Review, Vol. 156 (2017), No. 3–4
Copyright © The authors 2017
Journal compilation © International Labour Organization 2017
* Graduate Institute of International and Development Studies (IHEID), Geneva,
email: urs.luterbacher@graduateinstitute.ch; ** United Nations Interregional Crime and Justice
Research Institute (UNICRI), Geneva, email: andrew.prosser@graduateinstitute.ch; *** ILO,
Geneva, email: papadaki@ilo.org. Earlier versions of this article were presented at the International
Institute for Labour Studies (IILS) Workshop on “Cross-Border Social Dialogue and Agreements:
An Emerging Global Industrial Relations Framework?”, held at the ILO, Geneva, on 15–16 De-
cember 2006 , and at the annual convention of the International Studies Association (ISA), held in
Toronto on 26–29 March 2014. The authors are grateful to Woori Lee for assistance in revising the
article and to the anonymous reviewers of the International Labour Review, and to Ray Dacey and
participants in the IILS and ISA conferences for their helpful comments on earlier versions. They
also wish to thank the representatives of global union federations and multinational enterprises
who granted interviews and provided their perspectives at various stages. Last but not least, the
authors would like to express their appreciation to Gerry Rodgers, the former Director of IILS, for
supporting the early stages of the research on which this article draws. The views expressed in this
article do not necessarily reect those of the United Nations, the ILO or any afliated institution.
Responsibility for opinions expressed in signed articles rests solely with their authors, and
publication does not constitute an endorsement by the ILO.
An emerging transnational industrial
relations? Exploring the prospects
for cross-border labour bargaining
Urs LUTERBACHER,* Andrew PROSSER**
and Konstantinos PAPADAKIS***
Abstract. Global union federations (GUFs) and multinational enterprises (MNEs)
have been concluding “international framework agreements” (IFAs) to protect
their interests amidst the globalizing economic landscape. By modelling the under-
lying bargaining processes, the authors show that IFAs can be expected when
both sides exhibit risk aversion, although the agreement will favour the less risk-
averse side. Since globalization has created fewer vulnerabilities for MNEs than
for GUFs, IFAs have so far typically delivered only minimal benets for labour.
But this should change in the future if strengthened transnational union capacities
and abilities to threaten MNEs with reputational costs bring greater equalization
of attitudes towards risk.
Changes in the global economic landscape over the past few decades have
had profound effects. Far-reaching developments such as the reduction
of trade and investment barriers, the growing signicance of multinational
rms and global value chains, and advances in communications technologies
have been frequently studied – and at times intensely debated – in terms of
International Labour Review310
their various social, political and welfare implications. Since the 1970s, unions
and rms have increasingly adapted their approaches to protect their inter-
ests in the face of worldwide economic shifts. In the context of the rapid trans-
nationalization of corporate operations and concerns about ensuring global
respect for fundamental labour rights, unions and employers have responded
by augmenting their cross-border collaborative activities, including through the
signing of international framework agreements (IFAs) between global union
federations (GUFs) and multinational enterprises (MNEs). IFAs are voluntary
instruments and therefore the subject of debate with respect to the nature of
the commitments they embody, but they differ from corporate codes of con-
duct because they are concluded with the participation of union representa-
tives thus conferring, inter alia, company recognition of the union federation
at the global level.1 This pattern of transnational labour relations has gained
ground lately, as evidenced by the increasing number of IFAs being concluded
since the turn of the twenty-rst century.2
This article seeks to explore whether and how these transnational labour
arrangements are likely to evolve in the future. To shed light on IFAs, it pro-
poses a formal model rooted in game and bargaining theory. While previous
studies have applied game and bargaining theory to labour relations, few have
examined the emergence of extra-national labour activities from this perspec-
tive.3 To the best of our knowledge, no past study has developed a game-theory
model of bargaining over IFAs.
Importantly, we attempt to show the crucial inuence of attitudes to-
ward risk on IFA outcomes. In particular, agreements can be expected when
both sides exhibit risk-aversion, but the content of the agreement will favour
the less risk-averse side.4 In practice, globalization has challenged both labour
and multinational rms with evolving vulnerabilities. Yet we argue that unions
and GUFs have suffered relatively more disadvantages and have been more
risk-averse. As a result, they have been the most determined to pursue trans-
national labour arrangements in order to reinforce their position, even though
IFAs have typically embodied only minimal labour benets beyond those al-
ready written into existing multilateral conventions and unilateral company
initiatives. However, this trend is likely to change in the future if strengthened
transnational union coordination and increased capacity to put pressure on
1 For a more comprehensive description of various characteristics of IFAs, see, for ex-
ample, Papadakis (2011).
2 At the time of writing (September 2017), there existed 127 IFAs (based on the authors’
own research and the ILO/European Union (EU) Database on Transnational Company Agree-
ments (TCAs)).
3 Cooke (2005) focuses on the notion of the “prisoner’s dilemma” in regard to transnational
labour relations. However, he does not construct a formal game-theory model.
4 Following Kahneman and Tversky (1984), “risk aversion” denotes a preference for a sure
outcome over a gamble that has higher or equal expected value. In contrast, risk-seeking (or risk-
preferring) behaviour indicates the rejection of a sure thing in favour of a gamble of higher or
equal expected value.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT