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When negotiations or collective bargaining take place in the context of a parent-subsidiary relationship, the subsidiary may not be fully empowered to negotiate and to conclude an agreement. There may be special problems in the case of a subsidiary situated in a country different from that of the parent company. In these situations, the parent company is expected to take the necessary organisational steps to enable its subsidiaries to observe the Guidelines, inter alia, by providing adequate and timely information and ensuring that the enterprise s representatives carrying out such negotiations at the national or local level are duly authorised to take decisions on matters under negotiation. The management of a multinational enterprise should see that this is observed in the circumstances of each case.4
Where relevant national law provides for negotiations prior to final decisions being reached, employee representatives should be given an opportunity to conduct negotiations with authorised management before major decisions are predetermined through co-ordination andor contractual arrangements between the enterprises concerned.5
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``Collective bargaining'' and ``Labour management relations''
There exists no internationally agreed standard of the scope of the terms ``collective bargaining'' and ``labour management relations''. In fact, there is wide diversity among adhering countries concerning national practices with respect to both of these.
In some countries, collective bargaining or labour-management relations are limited to conditions of employment in a more traditional sense (for example, wages, working hours, health and safety standards) In other countries, there is a trend towards including information and consultations on the economic and financial management of the enterprise, extending to future production and investment plans to some extent. As they are used in the Guidelines, the terms are sufficiently broad to permit a variety of interpretations in light of different national situations. Their specific meaning is determined by reference to national law, regulations and prevailing labour relations and employment practices in each country.6
- ii)
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``Negotiations'' and ``Consultations''
The Guidelines do not define what is meant by ``negotiations'' or ``consultations''. As a general rule, ``negotiations'' implies an effort to reach agreement by the parties concerned, whereas ``consultations'' are less formal and do not necessarily presuppose a specific decision. It may, however, be difficult in practice to distinguish between ``negotiations'' and ``consultations'', the latter term in some countries being used in situations where management retains the prerogative of a final decision in case of disagreement, after listening to the views of employee representatives. In some cases, ``consultations'' may be understood to imply an effort to reach agreement, although management retains final decision-making power.7
Paragraph 8 does not institute a claim for opening consultations or negotiations in the absence of other relevant provisions. Such consultations or negotiations are conducted in the framework of national laws and practices of the country where the entity of the multinational enterprise is located. When interpreting the Employment and Industrial Relations chapter, and in particular paragraph 8, the precise sense of ``consultation'' or ``negotiation'' should be defined by these laws and practices.8
Management has a range of possibilities from which to choose to enable meaningful negotiations or consultations between management and employee representatives. With respect to negotiations, management's choice depends on various circumstances such as the matters under discussion, the decision-making structure within the enterprise, and the importance of the decision to be taken. Examples of these possibilities include:
- to provide the management of the subsidiary with adequate and timely information and to ensure that it has sufficient powers to conduct meaningful negotiations with employee representatives;
- to nominate one or more representatives of the decisionmaking centre to the negotiating team of the subsidiary in order to ensure that management has sufficient power to conduct meaningful negotiations with employee representatives;
- to engage directly in negotiations.9
Consultations are intended to ensure adequate communication among the parties, and dissemination of information by representatives of management within the decision-making structure of the multinational enterprise. Consultations facilitate understanding of the views of the parties so that if and when negotiations are undertaken, or decisions are made, the parties are well informed. Management representatives of the entity concerned could be provided with adequate and timely information to enable them to undertake meaningful consultations with employee representatives, while protecting sensitive business and other information.
This clarification is also relevant to the recommendation of paragraph 2c) of the Employment and Industrial Relations chapter.
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Future production and investment matters
When dealing with the specific issue of consultation or negotiations in which future production and investment plans are involved, paragraph 8 avoids the need for defining the locus of the negotiations or the proper level of management to be involved in such negotiations. This depends on the decisionmaking structure of each multinational enterprise. Negotiations conducted in accordance with national practice should take place in a meaningful manner with management representatives in a position to directly influence decisions on investment matters and to engage in effective negotiations. Where negotiations are defined by national practice in a way that management, in case of disagreement, remains free to make the final decision, these negotiations should still provide employee representatives the opportunity to discuss with management representatives who have a real impact upon the final decision.10
- iv)
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Information on the decision-making structure of the enterprise
The Guidelines do not imply an unqualified right of employees to be informed about the decisionmaking structure within the enterprise. However, for meaningful negotiations to take place, employee representatives have a legitimate interest to be informed about the decisionmaking structure within the enterprise in the negotiating situations referred to in the Guidelines, and in particular, paragraph 8.11
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