EurWORK European Observatory of Working Life

Commission launches consultation on transnational company agreements

About

Country: 
EU Level
Author: 
Frédéric Turlan
Institution: 
IR Share

On 10 September 2012, the European Commission launched a multi-stakeholder consultation on transnational company agreements (TCAs). It invited all interested parties to share their views, in particular on ways to support those involved in TCAs to achieve more legal certainty in the way such agreements are applied. Improvements in implementing TCAs and finding better ways to forge links with other levels of social dialogue were also an important part of the consultation.

Voluntary European framework

A European Commission consultation document (84Kb PDF) has highlighted the fact that transnational company agreements (TCAs) began to be concluded in significant numbers from 2000. By the start of 2012, about 144 companies had concluded at least one European Framework Agreement (EFA) or International Framework Agreement (IFA), covering a total of 10 million employees.

In 2008, the Commission published a staff working document on the role of TCAs, suggesting the creation of a voluntary European framework developing clear rules for such issues as negotiation procedures and legal certainty. A group of experts came together to examine this issue further. The group had met six times by 2011, and produced a report (584Kb PDF) that was published at the beginning of 2012.

In addition, a conference on restructuring was organised in Lyon in 2008 under the French Council Presidency, and two studies were produced. The first study (85Kb PDF) clarified to what extent TCAs were governed by rules of private international law and how such rules would apply to these agreements. The second study (88Kb PDF) focused on the legal implications of these agreements.

The Commission also set up in 2011 a database on transnational company agreements.

In its communication Towards a job-rich recovery (120Kb PDF), published in April 2012, the Commission said it intended to ‘develop further action to disseminate good practice and promote debate with respect to TCAs’, stressing its view that their role needed to be better recognised and supported.

On 10 September 2012, the Commission launched a multi-stakeholder consultation asking interested parties to share their views on TCAs. It is hoped there can be more legal certainty over the application of TCAs and improvements in their implementation. The Commission is also hoping to find better ways of linking up with other levels of social dialogue.

Lack of consensus

Although the Commission felt the need to act on the issue, it was aware of the absence of a consensus around some central issues among experts and stakeholders. In response to these differing views, the Commission asked in the consultation document whether it was justified in providing support at EU level for the development of TCAs.

Employers believe that no legislative initiative is necessary, despite some difficulties encountered during the development of TCAs. They argue that the difficulties encountered had not hampered the development of TCAs.

Experts close to the trade unions have defended the principle of a framework. They feel it would reaffirm the role of the trade unions in the negotiation of agreements and ensure a harmonised implementation of TCAs in all EU Member States. This type of harmony is difficult at present because of the diverse nature of national industrial relations.

In its consultation document, the Commission highlights specific questions that regularly emerge during the negotiation of TCAs, such as:

  • who can legitimately sign them;
  • what the legal implications are of these agreements;
  • whether it is necessary to implement the contents of an agreement in each country while respecting national processes of collective bargaining.

The text also identifies what needs to be done to help the development of TCAs, such as:

  • the issuing of guidance and promotion of good practice;
  • maintaining the database of TCAs and improving information about them;
  • establishing references or frameworks for use in the planning or negotiation of TCAs;
  • developing a mechanism to clarify the legal effects of TCAs.

Specific issues to be addressed

To make progress in the discussion and hopefully close the gaps between the two sides, the Commission has asked for their views on the following specific issues.

  • Do stakeholders share the analysis of challenges and opportunities offered by TCAs? Are there other important aspects that have not been taken up so far?
  • Which options should be chosen to support those involved in TCAs?
  • How can awareness of data protection issues be raised, particularly about the transfer of personal data to non-EU countries?
  • How can more transparency about TCAs be achieved?
  • How can the implementation of TCAs be improved and their interrelation with other levels of social dialogue be better addressed?
  • How can more legal certainty in the application of TCAs be achieved? Should the development of a mechanism to clarify the legal effects of such agreements go ahead?
  • Should action be taken to support the prevention of disputes and out-of-court settlements? If so, what action(s)?
  • Should an optional framework be developed that addresses the abovementioned issues, for example in the form of guidelines? What should the main elements of such a framework be?
  • Who should be the main actors, and which role should be given in particular to social partners, and at what level?

The consultation is open until 31 December 2012.

Commentary

This is clearly an important and topical issue that deserves consideration at European level. The Commission does not spell out, however, the type of instrument that might be appropriate, preferring to talk instead about guidelines rather than a legal voluntary framework.

However, the diverse nature of the answers that the Commission is likely to receive in response to its consultation will probably make it difficult to come up with a definitive position. It looks as if, therefore, this consultation may mark a first step towards the abandonment of any legal initiative.

Frédéric Turlan, IR Share