CROSS-BORDER SOCIAL DIALOGUE AND AGREEMENTS: An ...

Cross-border social dialogue and agreements
Most IFAs do not increase the social rights to which a holding company’s
workers are entitled under national labour law. However, they are
of interest for workers in subsidiaries and subcontractors because the
holding company recognizes its responsibility towards these workers to
respect the social norms included in the IFA.
Most IFAs state that the norms they contain apply to the whole
group. However, very few of them define what “the group” is. This is also
a weakness in most national laws, as the definition of groups there
remains very vague (Hopt, 1982; Sugarman and Teubner, 1990). At best,
the group is a functional notion, the definition of which varies according
to the field concerned. In the absence of any IFA definition, the group is
defined by the national law of the holding company. However, it is always
possible that another country’s court will apply another definition. IFAs
should, therefore, clearly define what constitutes the group. Among
agreements with such a definition, most refer to subsidiaries in which the
holding company holds the majority of the capital or voting rights.
In a similar way, only a few IFAs deal with changes in the company’s
structure. Certainly, an agreement will apply to companies that join the
group after the IFA has been signed, even if only after a certain transition
period. Yet the case of subsidiaries that are sold by the group may be more
complicated. Of course, it seems hard to believe that the IFA will continue
to have an impact after the subsidiary has left the group. But does
not CSR imply that the holding company maintains IFA-based social
guarantees when it sells a subsidiary?
About 80 per cent of IFAs refer to relations with the company’s subcontractors.
However, many IFAs only encourage subcontractors to
respect the IFA, or parts of it, and do not contain precise obligations. In
this field, too, a definition of “subcontractors” seems necessary, since the
term covers very different realities. A distinction must be made between
subcontractors that work regularly in the company’s factories, and
others. 5 The power of the company and its social responsibility is of
course higher for the former category. If the subcontractor is heavily
dependent on the company, the company’s social responsibility is greater
than when the subcontractor has developed specific skills, which allow
for significant autonomy. Consequently, a precise definition of subcontractors
would be useful.
5
This distinction is used in the IFA negotiated at Arcelor in 2005.
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