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Interests and Incentives of the Bargaining Partners

In: Contracting International Employee Participation

Author

Listed:
  • Felix Hadwiger

    (University of Hamburg)

Abstract

Very well-known MNCs have signed GFAs in recent years, for example the car manufacturers Volkswagen, Ford, Daimler and Saab; the retail companies Tchibo, H&M, Inditex, Carrefour, and Metro; the service providers Sodexo, Securitas, G4S; the industrial conglomerates Siemens and Thyssen-Krupp; and in the oil and gas sector Petrobras, Total, and Lukoil. GUFs cannot effectively force MNCs to sign GFAs, as they are voluntary commitments by companies to negotiated labor and employee participation standards. But why do MNCs sign GFAs? This is puzzling as, in principle, the conclusion of such an agreement can mean a loss of competitiveness. Labor standards such as the right to collective bargaining are likely to result in higher labor costs. All else equal MNCs should prefer a situation with weaker labor standards and lower costs to maximize profits. Additionally, many MNCs have already instituted voluntary codes of conduct relating to their own labor policies. What is the added value of a GFA for a MNC?

Suggested Citation

  • Felix Hadwiger, 2018. "Interests and Incentives of the Bargaining Partners," International Law and Economics, in: Contracting International Employee Participation, chapter 0, pages 85-108, Springer.
    • Handle: RePEc:spr:intchp:978-3-319-71099-0_5
    DOI: 10.1007/978-3-319-71099-0_5
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