The challenge of employee involvement within constantly changing multinational enterprises - instruments for social partners and actors at company level


Multinational enterprises are increasingly engaged in transformation:

they change sectoral and geographical perimeter; revise their supply chain management, often breaking down production, transforming, retail, logistics; in order to cut costs, they undertake relocation, outsourcing, subcontracting with the result to dismantle social dialogue; are constantly urged to meet digitalisation and adapt business processes accordingly (industry 4.0 – smart working); independently of their core business, they expand financial activities; have a more and more complex organisational structure; briefly, they make decisions at central level which impact the whole work organisation and the employment at local level.

The global competition and the economic crisis have led to a huge hike of the corporate restructuring processes. The restructuring management has become, unfortunately, the most common topic of social dialogue; therefore we need to rethink the role of the social partners and the instruments to tackle such new situation, also within the EWC (European Works Council).

The directives of the European Union allowed to manage any transformation within a homogeneous legal framework Europe-wide. Particularly, the information and consultation procedures allowed to anticipate the change and facilitate the management of the most diffucult situations in a responsible and contractual way, so as to allow to the trade union to move (and anticipate) the dialogue with the top management to the central level.

Furthemore, the use of Transnational Company Agreements (TCAs) – still to be implemented – allowed to share some guidelines for managing restructuring processes, with a view to ensuring the same treatment in all the establishments forming part of the company or the group of companies. That is a practice which may concern not only the core business, but also the supply chains (production, distribution and after-sales).

In such a context, the TRANSFORMERS project developed a dynamic analysis to check the trends and anticipate any future change, in order to provide the social partners and the governments with the knowledge to take the most appropriate action to prevent any risks and any negative consequences as well as foster a sustainable cross-border value chain.

The analysis is focused on multinational enterprises which belong to different sectors (at least two per sector), analyses the corporate supply chain strategies, adopted with a view to maximising any profit and reduce any cost; the impact on employment, social dialogue and industrial relations; the role of the EWCs and the TCAs to push for a corporate social responsibility including all the value chain entities (subsidiaries, suppliers, third parties, franchisees, licensees and other business partners) in accordance with the OECD Guidelines for multinational companies and the UN Guiding Principles on Human Rights, the ILO Declaration on multinationals; the UN Sustainable Development Goals

The internal and external chains of the multinational groups are analysed: both the relations with the subsidiaries, owned or controlled companies and the business relations with third entities. The dynamics of the management of the multi-sectorality are in-depth analysed.

This study implements a methodology for the analysis of the company behaviour already tested in the framework of the Open Corporation project (please see, project aimed at monitoring and fostering responsible practices, social dialogue and social accountability.

The CSR (Corporate Social Responsibility) policies, a fortiori if negotiated with the worker representatives or shared with the other stakeholders, have a big importance to facilitate effective participation processes which enable workers to cooperate to the corporate governance.

The study analyses the positive and negative practices of employee involvement as well, in particular the positive experience of EWC and TCA in anticipating and managing changes, with a view to sharing and highlight the added value of a transnational dimension of the industrial relations.

The role of EWC and the transational cooperation among workers’ representatives and between the workers’ representatives and the multinational companies has a crucial relevance as it opens new spaces for dialogue and bargain with the level which takes the decisions. However, both the European directives on information and consultation and the transnational company agreements are instruments still to be well-known and used. Therefore, the potentialities of such instruments are largely unexplored, particularly the capacity to anticipate changes, prevent and solve any disputes relating to the changes in a supply chain context.