Because of financial difficulties and declining memberships, the international trade union movement has had to have a long, hard look at its own role over the last few years. It is clear that TCA's help the international trade union movement in maintaining or regaining lost power, influence and legitimacy. As the CBI's representative for UK employers at the International Labour Organisation (ILO), I can confirm that global trade union federations see TCA's as a first step towards "international industrial relations".
A TCA is defined by the European Commission as "an agreement comprising reciprocal commitments the scope of which extends to the territory of several States and which has been concluded by one or more representatives of a company or a group of companies on the one hand, and one or more workers' organisations on the other hand, and which covers working and employment conditions and/or relations between employers and workers or their representatives" (European Commission definition).
A number of global companies that have already signed up to TCAs have emphasised that it has led to much better working relationship with unions. These companies principally see TCAs as a device principally for improving dialogue, and not as an industrial relations exercise. Some also report that TCAs have resulted in competitive advantages when seeking investment in new markets, especially when responding to requests concerning their "ethical" obligations. However, TCAs require careful strategic analysis, as they are undoubtedly an industrial relations tool.
HR professionals need to be mindful that a poorly drafted agreement could compel the company to meet regularly with global union federation officials to discuss its compliance with various ILO core labour standards. These UN standards are legally drawn up and set out basic rights of work. These standards manifest themselves as either Conventions, which are legally binding international treaties that have to be ratified by member states first in order to be binding, or Recommendations, which are non-binding guidelines for UN member states. It is vital to appreciate that ILO Conventions are ratified by countries, not by companies. Until such ratification is reflected in English law, the actual content of a Convention is not applicable to an English company. Despite this, global companies are making reference to ILO instruments. Consequently it is vital that English companies be aware of the content of the TCAs and understand what ILO core labour standard obligations could be incurred.
A coherent internal strategy is required to determine whether to implement a TCA within a global company, especially given the impact on group companies. In forming that strategy, think about the legitimacy and representativeness of such agreements, think about the language used or commitments made, especially as some agreements come with a requirement to translate them into different languages. Be very wary of any reference to an "enforcement" clause. View such requests carefully to ensure they are "agreements to dialogue" rather than an "agreement to do". Avoid being locked into a "legal process"; a "dialogue process" is far more preferable.
Christopher Syder is head of employment at law firm Davies Arnold Cooper
