International Industrial Relations
Insha Akhtar (1915185)
Venkata Vinayaka Sai Charan Ratan (1912755)
Priyanka Shrikhande (1917150)
Poojitha Pentareddy (1916387)
Preethi Manjunath (1914935)
University Canada West
HRMT 621: Human Resource Management in the Global Context.
Professor: Dr. Nisa Chand
Monday, 14th November, 2020.
The relationship between multinational companies and unions across different countries and cultures has generated much interest in employment and industrial relations. The face-off between MNC’s and the trade unions provides significant contrasts and divergent situations to the employees working in the subsidiaries. Collings (2008) says that the transnational structure of the MNC’s and the unions’ working mechanisms are increasingly becoming problematized. In this report, we undermine the issues different MNC’s have faced in host country environments and with the local unions.
In September 2000, Oxfam Community Help Overseas released a report assessing conditions in shoe creation of Adidas that found unprecedented misuse of laborers’ liberties. These included threats of violence against workers who took divide in mechanical action and the use of warm gestures towards people of free associations. In one of the mechanical offices, experts were habitually exposed to verbal maul by assembling plant heads using labels, for example, “you pup”, “you monkey” and “you pig”. In the creation lines, women workers were needed to yield themselves to interfering actual assessments by assembling plant experts at some point as of late they appear to guarantee legitimately commanded feminine take-off.
With full-time compensation as of $US2 a day, specialists live in extraordinary destitution and those with children must either send them to far off towns to be looked after by relatives or else go into an obligation to meet their essential needs. Specialists have reason to fear that dynamic union association may lead them to be rejected, imprisoned or physically assaulted.
Adidas should signal to make plant owners and governments in supplier countries that approval of work benchmarks, tallying extended pay, won’t prompt customized movement in the vibe of less expensive work; Press for the necessity of laborers’ privileges to figure out and bargain by and large; Commit to ensuring workers are paid full-time pay, and work with widespread associations to set up a direct creation line checking program which is affirmed by strong affiliations which are self-ruling of (i.e. not picked by) the organizations themselves.
General Motors, a vehicle manufacturing company has a consistent advancement towards accomplishing 2020 operational responsibilities to lessen energy, carbon and water. General motors were traded on an open market organization from 1916 until its liquidation in 2009. As a component of rebuilding, general motors shut plants, cut its hourly and salaried labour force, paid off past commitments and actualized changes to lessen retiree legacy cost, which had been a major financial drain for the company. (Canis, B et al.,2013)
General motor’s labour relations remained difficult over a period of time. A major cause of tension between General Motors and its manufacturing staff is the legacy cost of labour. The amount needed by general motors to support defined benefit pension for a huge and increasing number of retirees are substantial. The general motor’s duration pension responsibilities are excellent. Furthermore, general motor’s health care benefit expenses are huge and wanted to expand, with cost management being very difficult. The trade union of united auto workers (UAW) was built on other expense which became difficult for the business to finance. General Motors and UAW agreed in 1984 to the employment bank clause that meant that laid-off employees were kept at for a substantial amount of time, for about 95 percent of their base pay. The UAW needed to protect the work bank, defend the health care bank which does coverage for all existing and former worker and the security of a defined pension. It was therefore very vulnerable to the company’s future downsizing. (Senter R,et al.,2009)
General motors can bring considerable changes in wage rate and health care benefit for the employees by transferring large assets to the UAW; the union would then assume the accountability for general motors UAW senior’s health care cost.
Nestlé, world’s largest food corporation launched nearly 150 years ago. While Nestle has a very good brand image around the globe, according to the International Union of Food, Agriculture, Hotel, Restaurant, Catering, Tobacco and Allied Workers (IUF) workers have questioned the management’s hypothesis, there have been many instances where it has hindered their workers’ efforts to act collectively even as they claim to support workers’ rights. One such breach of labor rights can be seen in the nestle factory in Indonesia that manufactures Nescafe, where the local union has been demanding talks to amend the collective bargaining agreement, but the organization has refused the appeal for years and continues to refuse employees the ability to discuss salaries, maintaining that management regulates the determination of wages. Staff is also very limited in their freedom of association. All this shows the utter disregard of Nestlé for both international norms and Indonesian law. While ILO Convention 98 and Indonesian law recognize trade unions’ right to bargain for wages. Demands from the Nestlé Indonesia Panjang Workers Union (SBNIP), the local union and IUF affiliate at the plant, seemed to fall on deaf ears at Nestlé Indonesia, as the organization did not heed any of the requests but instead formed a fake union, forcing workers to join it. The company has also been accused of discrimination against union leaders.
Labour rights are one of the crucial factors that companies should not ignore on as we can see in the research (Mantouvalou, V.,2013) that now more than ever how powerful the labor unions are and with the security of ILO who ensures these laws. And as we saw in nestles case where disrupting workers from their rights has led the workers to go against the company and file the case which indirectly affected the overall company.
Nike started manufacturing shoes in Indonesia in the early 1990s and produced about six million shoes per year in its five factories spread across Indonesia. As Nike increased its production in Indonesia, the company came under a lot of scrutinies. Asian-American Labor Association, a branch of AFL-CIO, revealed that the Indonesian factories where Nike was producing were profuse with exploitation, poor working conditions, and labor abuses (Locke, 2012). Nike’s issues didn’t stop there, and in 2012, Serikat Pekerja National (SPN) trade union accused Nike of not paying overtime to workers (BBC, 2012). The union said that Nike didn’t pay a total of 593,468 hours of overtime.
Initially, Nike refused to answer these criticisms. Later, Nike found these accusations to be true when they investigated. Nike’s vice president for Asia claimed that the company didn’t know about the labor abuses in their factories. Nike subsequently made sure that the employees hired to work were above the legal age and worked in safe conditions. They also increased the wages from US$1 to US$30 (Locke, 2012). In the 2012 case, as mentioned above, the SPN trade union started a legal war with Nike for not paying its workers the overtime amount. The legal war lasted for 11 months, and finally, Nike ordered its Indonesian subsidiary to pay back the amount it owed to the workers. Nike said that they commend the factory for their actions and tried to correct the current policies’ inadequacies. Nike also started offering training programs to workers and set up a task force to address grievances (Lamare, 2013).
Nike has always reacted after the action has taken place and must create a procedure that helps them prevent the issues from happening altogether. They must send a team of their own to work with the local manufacturers and suppliers. This will help them have a clear understanding of the situation first-hand and solve the issues before they explode, and all the other factors such as media, trade unions, and governments get involved, which will damage the company’s image.
Walmart ranked number 1 in the world’s 500 largest corporations in 2010, with over US$400 billion revenue and a low-cost strategy as its primary competitive advantage. The low-cost strategy sure has contributed to higher profits because of the strong resistance to well-paid unionized labour (Gereffi & Christian, 2009). Walmart managed to avoid trade unions in the organization by exploiting American Labour Laws in the US (Lichtenstein, 2008). In 1996, Walmart branched beyond the American retail sector and set up its first supermarket in Mainland China. By the end of 2008, Walmart had successfully set up 110 stores across 60 cities in China (He & Xie, 2012).
Constant pressure by The All-China Federation of Trade Unions as a part of mandatory Chinese custom and law, forced Walmart to accept trade unions by 2006. (Liu, 2007). This decision raised several concerns that 20,000 Walmart workers in China had a union while millions of Walmart workers in America were union-free. Owing to its low-cost labour strategy, Lichtenstein (2008) states that Walmart created a large pool of low-skilled workers across the world. Additionally, Walmart’s entry into the Chinese retail industry forced supermarkets to reduce costs, hindering union and supermarket contract negotiations. In February 2009, Walmart faced its first lawsuit for racial discrimination and settled it for 17.5 million dollars (He & Xie, 2012). The case also focused on child labour, violations of employee rights due to discrimination against gender, class, and age in global supply chains. He and Warren (2011) also state that many lawsuits had the allegations of having associates work off the clock or during breaks, supporting wage disparities between male and female employees, and aggressively challenging unions.
Walmart’s inability and weakness to protect its Chinese workers’ rights resulted in the ACFTU, forcing them to accept trade unions, which caused a rift among its workers worldwide. The existence of trade unions in China imposed a challenge to Walmart’s neoliberal order. Walmart should focus on implementing a strategy that aims more at relying on managerial departments, reducing the influence of unions. Fostering an environment that educates workers of their rights will improve bargaining power and allow clear communication on demand of wage increase. Walmart should adopt ethical practices with regards to labour force and supplier relations.
The aim of this paper was to analyse the impact of Labour Unions on host countries of the Multinational National Companies situated across the world. To understand the emphasis of the labour unions, each of the team members chose five MNCs: Adidas, General Motors, Nike, Nestle and Walmart and conducted research on the background and challenges faced by them. Adidas and Nike were accused of poor working conditions, while General Motors and Nestle were allegedly challenged with low wages and ill treatment of workers under harsh conditions. Walmart, on the other hand was filed with a lawsuit for discrimination and is prime example of succumbing to host country’s pressure to accept the union trade. Therefore, it can be concluded that the activities of MNCs in the host country not only stimulates the economic growth but also have a direct impact on the trade unions and industrial relations between the two countries.
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1. Team Project – Due Week 11 Monday 11:59AM – 30%
Topic – Team Report – MNCs and Global Industrial Relations context (30%)
Students will write a 1500-word report concerning the following issues:
Q1. How do the MNCs adopt/face/respond to Industrial relations/labour relations policies of host countries they operate in, especially if the parent country and host countries have contrasting views on the role of unions? (For instance, Home country is low unionized/anti-union and Host country is unionized/pro-union and vice versa)
Q2. Based on your research provide suggestion on how the MNCs can overcome the industrial relation challenges faced in host country.
Report should be based on multiple real life MNC examples and/or country/region wide discussions. Descriptive assignments will be marked down. Provide a very short introduction one paragraph half- page only. Your focus should be on Q1 as that’s your main analysis. Include proper in-text citations and APA style referencing for all sources. A minimum of 15 references are required. Follow the APA Report style but DONOT include executive summary – This way you can use your 1500 words towards analysis.
Requirements: TEAM CHARTER – GROUP SUBMISSION – You are required to submit team charter for the team project after you have finalized your team members (only one charter per team). You should agree on meeting times, team goals, allocation of tasks and deadlines for work submission. Signing the charter means you all agree to the goals and tasks. Hand over the team charter to your instructor in week 5 using ‘dropbox’ submission available in week 5.
TEAM EVALUATIONS – INDIVIDUAL SUBMISSION – In week 10 each team member will separately submit the team evaluation form using ‘dropbox’ submission. Inform your instructor right away if any team member is not cooperating and not performing the assigned tasks. After the result is out instructor will not be responsible for any group conflicts that were not communicated in advance.
Each team has to have 5 members strictly – A team with less than 5 people will not be accepted by instructor and your paper will not be checked. If you have a serious issue that requires exception contact your instructor right away and seek permission/approval.
You will be marked for the following:
1. Clarity: Refers to clarity of writing – How easily understandable your concepts are. How grammatically correct the entire project is. Although simple, error free English is okay but at post grad level you are required to write in formal/academic style.
2. References/Sources: You are required to use at least 15 references for the team project (at least 6 of 15 references should be academic/peer reviewed)
3. Formatting: Assignment should adhere to the APA formatting style; Times new roman, font size 12, double spacing. You should also know the difference between essay/paper and report.
4. Coherence: Since this is a team project, this should not look like different pieces of writing put together. The paper should have connectivity, good transitions and coherence through out.
5. Analysis: Analysis is at the heart of paper – this project requires you to analyse either regions or multinational companies and their union relations globally. You must focus your analysis on region specific/company specific knowledge. Theoretical assignments will be marked down. Use as many region specific/company specific examples as you can.
6. Paper requirements: Lastly, you will be assessed based on whether or not you have answered the questions being asked AND whether your group understood the paper requirements or not.