Collective Bargaining in Central European Subsidiaries of Multinationals

Report on Trade Union Experiences in Bulgaria, Czech Republic, Hungary, Poland and Slovakia

International Labour Organization
December 1996

Metal Industry

Description of Companies

Ownership and Subsidiaries of the Multinationals

The sample included 15 subsidiaries of 7 multinationals. Most of the subsidiaries had more than one establishment. The questionnaire in each subsidiary was filled only by one establishment.

Table 4: Subsidiaries of the Multinationals and their Ownership, Food and Beverages Industry

Asea Brown Boveri has production also in Slovakia, but the questionnaire was not answered, because there were no trade unions and no collective agreements yet. The manufacturing in Slovakia started as a green field investment in August 1996. In Slovakia, ABB employs 358 people.

American Standard Inc is a metal manufacturing company, but Vidima Jsco produces also sanitary and industrial fittings in addition to the soft drink vending machines. So, Vidima represents also clothing industry. American Standard produces plumbing products, air-conditioning equipment and brake systems.

General Electric has 12 divisions in Europe, GE Lighting being one of them. Lighting has production only in Hungary where it owns Tungsram, the lamp manufacturer. Tungsram has operations in 7 locations in Hungary, in Budapest, Györ, Hajduböszörmeny, Kisvarda, Nagykanizsa, Vac and Zalaegerszeg. GE’s other divisions have operations also in Czech Republic and Poland, but these units were not included in the survey.

Robert Bosch Corporation has production also in Hungary and Poland, but these subsidiaries were not included in the survey. Bosch manufactures automotive equipment in Czech Republic and Poland and communication equipment in Hungary.

Siemens has a lot of manufacturing companies in Czech Republic, Hungary and Poland. Only few of them were surveyed in this study. In Czech Republic, Siemens has a total of six sales, service, software and assembly companies and five manufacturing companies with a workforce of roughly 8,500, making Siemens one of the country’s biggest employers. The largest company is Siemens Elektromotory, which builds electric motors in Mohelenice, Frenstat and Drasov with a workforce of 4,400. The questionnaire was filled only in Mohelenice. A further 1,830 employees manufacture on-board networks and electronic components for automobiles in Stribo, Pilsen and Frenstat. In Trutnov, a workforce of 1,050 produces electromechanical components, in Decin, 500 workers make telecommunication cables and in Prague, 250 workers manufacture systems for public switching systems.

In Hungary, a merger in 1994 with Villanyszerelöipari Rt, a manufacturing and service company specialized in the assembly of electrical equipment, created Siemens Rt, which now coordinates all business activity in Hungary. The Siemens companies - a group with 14 associate companies - including Siemens Telefongyar Ktf (a telephone factory) - employ a workforce of 4,000.

In Poland, Siemens sp.z.o.o has a lot of associated enterprises as well as subsidiary companies, such as Osram sp.z.o.o. The most important of the associated companies is Zwut S.A., the former state telecommunications carrier, in which Siemens purchased a majority holding. Zwut which builds advanced telephone systems is responsible specifically for the Public Communication Network Group’s business in Poland. Siemens employs more than 2,000 employees in Poland.

In Bulgaria, Siemens entered in 1992 into a joint venture with Incoms, setting up Digicom, which installs and maintains digital switching systems. In 1994, the Siemens Medizinska Technika, a service company was set up. Bulgarian units of Siemens did not participate in the survey, because there are no collective agreements and no trade unions are represented. All contracts are individual. Digicom has 84 employees and Siemens Medizinska Technika has 40 employees.

Thomson group consists of Thomson-CSF, Thomson Multimedia and SGS-Thomson. Thomson CSF is the Europe’s leading defense company and also a world leader in traffic control and simulation. Thomson Multimedia is Europe’s second largest consumer electronic company and ranks fourth worldwide. SGS-Thomson produces components and semiconductors. Thomson Multimedia operates also in Czech Republic and Hungary, but only the Polish unit, Polkolor was included in the survey. In Poland, Thomson has three establishments: Thomson-CSF (Delegation Pologne et Pays Baltes), Thomson-Lamina Tubes Electroniques and Thomson Polkolor.

Volkswagen has production also in Hungary where Audi Hungaria manufactures engines, in Poland where VW Boznan manufactures cars and in Slovakia where VW Bratislava assembles cars. These units were not included in the survey.

Domestic Owned Companies as a Comparison Group

ILO Survey on Trade Union Experiences in Collective Bargaining in Central Europe which was conducted in 1995 included 482 units of metal industry, 151 in Bulgaria, 27 in Czech Republic, 153 in Hungary, 58 in Poland and 93 in Slovakia.

The comparison groups were formed of the domestic owned and private metal companies in Czech Republic, Hungary, Poland and Slovakia. In Bulgaria none of the metal manufacturing companies was private owned, and therefore the Bulgarian group consists of public owned metal manufacturing companies. The number of units in the comparison groups is as follows: Bulgaria 134, Czech Republic 20, Poland 25, Hungary 78, Slovakia 61. The number of Bulgarian units needs an explanation. Out of the 153 metal industry units only 5 were foreign owned, but in 14 units, the respondent did not know the ownership.

Employment, Turnover and Markets

The number of employees had increased in 2 units, Thomson (Poland) and Bosch (Czech Republic), and decreased in 9 units since the unit became foreign owned. (Figure 21) Three Siemens units did not know the number of employees employed by the unit when it became foreign owned or started as foreign owned.

Five of the units had part time workers, Bosch (Czech Republic), Thomson (Poland) and the Czech, Polish and Hungarian units of Siemens. The percentage of part time workers was maximum 1% in all of these units except for Thomson, where it was 3.2%.

Figure 21: Number of Employees in 1996 and when the Unit Became Foreign Owned or Started as Foreign Owned

In 5 units, the number of employees had been reduced by both voluntary and compulsory redundancies and early retirement. These units were ABB (Hungary), ABB-PBS (Czech Republic), Siemens Rt (Hungary), Skoda (Czech Republic) and Tungsram (Hungary). In ABB (Poland), ABB-EJF (Czech Republic) and Vidima (Bulgaria), voluntary redundancies and early retirement had been used. In Siemens (Poland) where the reduction of employees had been most dramatic, compulsory redundancies and early retirement had been used. Siemens offered to the laid off employees a two years severance pay.

When Siemens purchased a majority holding in Zwut in 1993, it introduced new technology into the company and hired a completely new, young, highly-skilled and well educated workforce. New technology reduced further the number of employees. The newly recruited employees had computer skills and not only a knowledge of German, but of English as well. The number of employees was reduced from 10 to 2 in some jobs, and the remaining 2 were not from the old staff. In addition to Siemens (Poland), only 2 units had experienced a significant turnover of employees (more than 50%) when the bargaining unit became foreign owned. Also these were Siemens units, Siemens Rt (Hungary) and Siemens Telefongyar (Hungary).

The annual turnover had decreased over the last three years only in the 2 units of Siemens in Hungary. It had remained the same in Tungsram (Hungary), where the number of employees had decreased by 66% since the unit became foreign owned in 1989. The 2 Siemens units in Poland and Slovakia did not know how the turnover had changed. In 10 units, the turnover had increased, and 6 out of them could estimate the turnover in the last financial year. Altogether, only 7 units could estimate the turnover of the last financial year. Out of these 10 units where the turnover had increased, 6 had experienced a decrease in the number of employees. These 6 units include all ABB units, except the Bulgarian one, which became part of ABB only in August 1996, and Skoda. There was only one unit that did not have export, Siemens Telefongyar (Hungary).

Position of the Trade Unions

In most units, the trade union membership level was of 51-75. (Figure 22) The membership level was higher in domestic owned companies. (Figure 23)

Figure 22: Trade Union membership Level in Multinational Metal Companies

Figure 23: Trade Union Membership Level in Domestic Owned Metal Companies

In most units, the membership level had declined over the last three years. It had declined in all Siemens units. (Figure 24) The decline percentage was much higher than in food and beverages industry.

Figure 24: Change in the Trade Union Membership Level over the Last Three Years, Units of Multinational Metal Companies

In most cases, the decline in trade union membership level did not indicate decrease in trade union influence. Out of those 10 units where membership level had declined, only 3 units, ABB-PBS (Czech Republic), Siemens Rt (Hungary) and Siemens (Poland), had experienced a decline in trade union influence over the last three years.

Both the former President and vice-president of the NSZZ Solidarnosc local in Zwut, which disbanded in August 1996, explained that none of the newly-employed were interested in trade unions. These people were in their mid-twenties, much younger than the previously employed workers who were dismissed. For many of them, the job in Zwut was their first one, and this job was a very well paid first job. They were quite enthusiastic, ambitious and felt well-cared for by the management, as they were indeed working in very modern and well-quipped conditions. The local trade union officials tried several times to meet with them and integrate the two work force, the new one and those few workers remained from the old one, but the new workforce wanted to retain a very high decree of individualism. They felt that there was no need for trade unions. They felt safe in their positions, saying that if they ended up fired, the competitor of ZWUT would happily take them on. NSZZ Solidarnosc decided to disband the local, given the facts that only 5% of the workforce was trade union members, and none of the union officials were no longer employees of the company.

There were no big differences between the domestic owned and multinational companies in the decline of trade union membership level. Decline in membership level was somewhat more typical of domestic owned companies than multinationals in Czech Republic and Hungary. (Figure 25) As in multinationals, also in domestic owned companies, the respondents often felt that the trade union influence had increased even though the membership level had declined.

Figure 25: Change in the Trade Union Membership Level over the Last Three Years, Domestic Owned Metal Companies

In most units, only one trade union confederation was represented. (Table 5) However, it has to be noticed that 5 out of 15 units were from Czech Republic. In all cases, all confederations represented in the bargaining unit were represented also in the bargaining process through their affiliated trade unions. Only in ABB’s Polish unit, a company trade union that was not affiliated to any confederation was represented. The Independent Trade Union of Engineers’ and Technicians’ in ABB Zamech accounted for 150 members, 4.4% of the employees in the unit. NSZZ Solidarnosc accounted for 35%, OPZZ 18% and Kontra less than 1% of the employees. Rest of the employees were not organized. The relationship of trade unions belonging to different trade union confederations was cooperative in all units except for this one, ABB (Poland).

Table 5: Trade Unions and their Confederations in the Bargaining Units of the Multinationals, Metal Industry

Employees’ Participation in the Decision Making Process

In 7 units, the respondents described the relationship of trade unions with the employer as "both partnership and opposition". Only 4 respondents described the relations as co-operative, ABB (Bulgaria), Vidima (Bulgaria), Bosch (Czech Republic) and Siemens Telefongyar (Hungary). In the other Hungarian Siemens unit, Siemens Rt, the relationship was described as distant. Open confrontation was missing from all units. In this respect the relations were worse in domestic owned companies where also open confrontation was present.

In all units of multinationals where trade unions were represented, they had organized meetings with the employer. These meetings took place once every month or when necessary.

In 5 units, all employees were informed about the financial situation of the unit, in 5 units some employee categories, usually only management, and in 4 units nobody. (Figure 26) The respondent in Tungsram did not know the answer. In domestic owned companies employees were better informed. (Figure 27)

Figure 26: Disclosure of Information about the Financial Situation of the Unit in Multinationals, Metal Industry

Figure 27: Percentage of Units where No Employees Were Informed about the Financial Situation of the Unit, Domestic Owned Companies of Metal Industry

The representatives of trade unions and employees were quite well consulted about production, hiring, dismissals and short time work. On investments, employees were consulted much less frequently. (Figure 28)

Two companies are missing from the figure below, ABB (Hungary) and Siemens (Slovakia). In ABB’s Hungarian unit, consultation took place on investments and production. In the Slovakian unit of Siemens the trade union representatives were consulted about production, hiring and short time work.

Figure 28: Consultation/Information about Investments, Production, Hiring, Dismissals and Short Time Work in the Multinationals of Metal Industry

In 6 units, employees were represented on the management bodies of the unit. These unit were the following: Skoda and both units of ABB in Czech Republic, Siemens Telefongyar (Hungary), Siemens (Slovakia) and Siemens (Poland). However, in Poland, the situation was currently somewhat unclear, because the President of NSZZ Solidarnosc local used to be the representative, but he had retired, and new elections had not been held to elect a new personnel representative on the board of trustees.

European Works Council had been established by ABB, Siemens, Thomson Multimedia and Volkswagen. At the time when the survey was conducted, Bosch was negotiating an agreement. Volkswagen, ABB and Thomson had included the Central European units in the agreement. ABB agreement includes the company’s businesses in Czech Republic and Poland, and Thomson agreement includes businesses in Poland, but Polkolor has only an observer status.

In 7 units, the respondents knew that there was a European Works Council in the undertaking of which the unit was a part, but only 3 respondents reported that their units were represented in the European Works Council. These 3 were from ABB (Poland), Skoda (Czech Republic) and Siemens Telefongyar (Hungary). According to EMF, the Siemens EWC agreement should not cover the Hungarian unit. According to ABB press release on September 10, 1996, ABB’s EWC agreement covers also ABB businesses in Czech Republic. But the respondents in both ABB-EJF and ABB-PBS did not even know about the establishment of the works council. In addition to the respondent in the Hungarian unit of Siemens, only the respondent in the Czech unit of Siemens did know that Siemens has an EWC. The respondents in Thomson (Poland) and Bosch (Czech Republic) knew that the group their unit belongs to has an EWC. But according to EMF, the Bosch agreement had not yet been signed.

Major issues related to collective agreement were usually communicated to employees directly by the employer (10 cases) and/or through a local organization of the trade union or through a shop steward (14 cases). Compared to domestic owned metal companies, there were no noteworthy differences in the communication methods.

Collective Bargaining

All units had a local level collective agreement, and 26.6% had also a higher level agreement. (Figure 29) The local level agreements were company agreements, i.e., all establishments of each subsidiary company were covered by same collective agreement, but each subsidiary of the multinational had its own collective agreement.

Two of those 4 units that were covered by both local and higher level bargaining reported that there was a high degree of coordination of claims and other bargaining activities between the levels. One reported that there was a limited degree of coordination, and 1 did no know.

Local level bargaining was as typical of domestic owned companies as of multinationals. In Czech Republic, Hungary, Poland and Slovakia, all domestic owned companies had a local level agreement and in Bulgaria 96% of the units. But in all countries, the percentage of units that were covered also by some higher level agreement was much higher among domestic owned companies.

Figure 29: Bargaining Levels in Multinationals of Metal Industry

In most cases, the nationality of the counterpart in the negotiating process was the same as the nationality of trade union representatives. (Figure 30)

Figure 30: Counterpart of Trade Unions in the Negotiating Process, Multinationals in Metal Industry

The teams that negotiated the collective agreement on behalf of the employees had received most valuable assistance from municipal, regional and/or national trade union bodies. 7 teams had received at least some assistance from the trade union of the home country of the parent company, 1 team from ILO and 3 teams from the international trade secretariats. Except for 2 teams, all teams assessed that the assistance received from these national and international bodies and organizations had no substantial effect on the outcomes of the bargaining. (Table 6)

Usually the negotiating team was given a mandate within which the team could use its own judgment. In 2 Bulgarian units (Vidima, ABB) and in 1 Polish unit (Thomson), the claims were defined in advance, and the team had to stick to them. In ABB (Hungary), the team could make independent decisions and alter the claims drafted in advance.

The negotiating teams had much more extensive negotiating powers in these multinationals than in domestic owned companies. In Bulgaria, 52% of the domestic owned companies had to stick to claims defined in advance. In Poland, the corresponding percentage was 46%, in Slovakia 16%, in Czech Republic 10% and in Hungary 28%.

Table 6: Assistance which the Negotiating Teams Received from Various National and International Bodies and Organizations, Metal Industry

Except for ABB-PBS (Czech Republic), all teams made compromises in the negotiating process. Compromises were most common on remuneration and social issues. In 11 units, the negotiating teams made compromises at least on three issues. (Figure 31)

In domestic owned companies, compromises were made much the same way as in the multinationals. In all countries, the two most common issues were remuneration and social issues. Also, the frequency of compromises on each issue was much the same in domestic owned companies and multinationals.

In 73% of the units, the counterpart was willing to negotiate on all issues listed in the questionnaire. 3 of those 4 units, where the counterpart refused to negotiate on some issues belonged to Siemens. In domestic owned companies, the willingness of the counterpart to negotiate was weaker.

Figure 31: Percentages of Units that Made Compromises on each Issue, Multinationals in Metal Industry

In most units, the bargaining atmosphere was either good or acceptable. In 1 unit, it was bad. (Figure 32) In domestic owned units, the atmosphere was worse in all other countries, except for Bulgaria. (Figure 33)

Figure 32: Bargaining Atmosphere in Multinationals, Metal Industry

Figure 33: Bargaining Atmosphere in Domestic Owned Companies, Metal Industry

In most units, bargaining took at least 6 weeks. (Figure 34) In Siemens (Poland), the collective agreement had never been signed. In domestic owned companies bargaining duration was shorter in Bulgaria and Hungary, but longer in Czech Republic, Poland and Slovakia.

Figure 34: Bargaining Duration in the Multinationals of Metal Industry.

The bargaining result was usually approved by the trade union committee/council and/or negotiating team. This was the case also in domestic owned companies. In most units, many different instruments were used in publishing the bargaining result. Most popular were notice board and union meeting. 87% of the units used notice board, 73% union meeting, 53% personnel newspaper, 47% union newspaper and 33% personnel meeting. At least three instruments were used in 73% of the units. In domestic owned units, information was distributed somewhat less extensively.

Collective Agreement

The respondents of those 5 units that were covered by a local collective agreement and some higher level agreement described the relationship of these agreements mainly as supplementary. In ABB (Bulgaria), Vidima (Bulgaria) and Siemens (Slovakia), the collective agreements dealt with same issues, but the lower level regulations were supplementary to the higher level regulations. In ABB-EJF (Czech Republic), the agreements were mutually exclusive, i.e., the higher level regulations were replaced by lower level regulations, if they were more advantageous to the employees. Also in domestic owned companies, the relationship was supplementary in most cases in all countries.

Except for the Bulgarian units, the collective agreement covered all wage and salary earners in the bargaining unit. In Bulgaria, the legislation differs in this matter from the legislation of all other survey countries. In Vidima, the agreement covered only those trade union members who belonged to the organizations which had originally signed or later on joined the collective agreement. In ABB (Bulgaria), it covered all trade union members. In domestic owned Bulgarian units, 40% of the collective agreements covered all wage and salary earners in the bargaining unit.

In 73.3% of the units, wages, shift supplements, overtime payments and normal working hours were determined at the local level by the company collective agreement. In ABB (Hungary) and Siemens Rt (Hungary), basic wages were not determined by the collective agreement, but by an individual agreement between the employee and the employer. In Vidima (Bulgaria), normal working hours were determined by the branch level collective agreement. In ABB (Bulgaria), shift supplements were determined by the branch level collective agreement and working hours were according to the national legislation.

In domestic owned companies, local agreements on wages, shift supplements and overtime payments were less typical than in multinationals. (Figure 35) The questionnaire addressed to these companies did not include the question about working hours.

Figure 35: Percentage of Units Where Remuneration Related Issues Were Determined by Local Collective Agreement, Domestic Owned Companies in Metal Industry

Most common provisions of collective agreements concerned implementation of the collective agreement and dispute settlement. (Figure 36) Collective agreements of the two ABB units in Czech Republic were almost the same. ABB-EJF had all provisions listed in the questionnaire and ABB-PBS had all provision, but two, child care allowances and housing. ABB units in Poland and Bulgaria had much less provisions, and ABB in Hungary had provisions only on dispute settlement. Of all Siemens units, those in Czech Republic and Slovakia resembled most each other. Both had provisions on health care services, shorter working hours than stipulated in the Labour Code, more paid leave than stipulated in the Labour Code, occupational safety and health, job security, trade union facilities, dispute settlement and implementation of collective agreement. Neither of them had provisions on workplace child care, housing and paid education leave. The two Siemens units in Hungary resembled much less each other.

Figure 36: Provisions of Collective Agreements in the Multinationals of Metal Industry

There were no systematic differences between the collective agreements of domestic and foreign owned companies. In domestic owned companies, the coverage of collective agreements was slightly better, but the differences between the survey countries outweighed the differences between domestic and foreign ownership.

Concerning working arrangements, collective agreements limited most often overtime and weekend work. (Figure 37) Of all ABB units, ABB-PBS (Czech Republic), ABB (Poland) and ABB (Hungary) were most similar, all limiting weekend work, shift work, night work and overtime in their collective agreements. ABB-EJF (Czech Republic) and ABB (Bulgaria) had much less limitations on working arrangements in their collective agreements. Siemens units were very different in each country. Changes had taken place most often in the use of overtime, shift and weekend work. All respondents, except for two, were able to estimate the overtime percentage. In 7 units, it was less than 5% and in 6 units at least 5%.

Figure 37: Working Arrangements in the Collective Agreements of Multinationals, Metal Industry

There were no systematic differences between the collective agreements of foreign and domestic owned companies. Fixed term work was limited less often than in multinationals and part time work and subcontracting more often, but, in general, differences between the survey countries outweigh the differences between domestic and foreign ownership.

In 11 units (73.3%), the respondents reported that they had been adequately consulted about the changes in working arrangements. In ABB’s Bulgarian and Polish units and in Siemens’s Czech unit the consultation had been inadequate. Siemens’s unit in Poland did not answer this question. In domestic owned companies, the percentages were much the same. In Bulgaria and Poland, 65% had been adequately consulted, in Czech Republic 67%, in Slovakia 73% and in Hungary 80%.

In most units, minimum duration of the collective agreement covering general provisions was over two years. (Figure 38) Siemens Rt (Hungary) and ABB (Poland) reported that there is no minimum duration. Siemens (Poland) did not have a collective agreement. In domestic owned companies, the duration was usually maximum one year in Bulgaria, Czech Republic and Slovakia. In Poland, it was most often more than two years and in Hungary unlimited.

Figure 38: Minimum Duration of Collective Agreements Covering General Provisions in Multinationals of Metal Industry

Except for 4 units, the minimum duration of collective agreement covering specific provisions, such as wages, was maximum one year. In Thomson (Poland), it was over two years, in Siemens Rt (Hungary) and ABB (Poland), it was unlimited and in ABB (Hungary), the respondent did not know the minimum duration. Also in domestic owned companies, the minimum duration was most typically maximum one year.

Summary and Conclusions

This comparative study on collective bargaining in the Central European subsidiaries of multinationals involved 15 subsidiaries of 7 multinationals in food and beverages industry and 15 subsidiaries of 7 multinationals in metal industry. These subsidiaries were located in Bulgaria, Czech Republic, Hungary, Poland and Slovakia. The questionnaires were answered by trade union/employee representatives of the negotiating teams of collective bargaining.

The food and beverages sample contained 4 Danone companies, 4 Nestle companies and 3 Interbrew companies, and the metal sample contained 5 ABB companies and 5 Siemens companies. Also rest of the multinationals had manufacturing in more than one country of the region, but only one subsidiary from each was surveyed.

All Interbrew units were situated in Bulgaria, two of the ABB units were situated in Czech Republic and two of the Siemens units were situated in Hungary. Most of the food and beverages units were situated in Bulgaria, and most of the metal units in Czech Republic and Hungary.

In most cases, the metal companies had become foreign owned earlier than food and beverages companies. Majority of food and beverages companies had been foreign owned maximum two years.

Decrease in the number of employees since the company became foreign owned or started as foreign owned was less typical of food and beverages industry than of metal industry. But most of the food and beverages units were Bulgarian, and the sale contracts between the Privatization Agency and the purchaser included a liability to maintain the existing level of jobs for a certain period that had not yet expired. In metal industry, the number of employees had decreased also in the majority of those companies whose turnover had increased over the last three years.

Food and beverages companies were oriented much more on the local, regional and national markets than the metal companies, of which all, except for one, had export.

From each five countries domestic owned companies in food and beverages and metal industries were used as comparison groups for the subsidiary companies of the multinationals. These domestic owned companies were selected from the material of ILO survey on Trade Union Experiences in Collective Bargaining in Central Europe conducted a year earlier, in 1995. This survey used basically the same questionnaire as the multinational survey and the questions were answered by members of the negotiating teams of collective agreement. The aim was to include only private companies to the domestic comparison groups, but also public owned units had to be included in the Bulgarian samples of both industries and in Czech and Polish samples of food and beverages industry. This was necessary in order to have more than four units in each sample.

Trade unions position was weaker in multinationals and in metal industry than in domestic owned companies and food and beverages industry. Trade union membership level was lower in multinationals, and in metal industry, trade union membership level had declined over the last three years more often than in food and beverages industry. Foreign ownership had lasted longer in metal companies than in food and beverages companies, but trade unions’ position was weaker in metal industry also among domestic owned companies. Among domestic owned companies, the membership level was lower and had declined more often in metal than in food and beverages industry.

One reason why this survey did not succeed according to the original plan was that the questionnaires were circulated by trade union confederations, and trade unions were not represented at all in many of the multinationals of chemical industry and transportation.

In those units of food and beverages industry where trade unions were represented, more than one trade union confederation was usually represented. But most of the food and beverages units were Bulgarian. In Czech Republic and Slovakia, only one confederation was represented in each unit. In those units of metal industry where trade unions were represented or, at least, had been represented until recently, it was more typical to have only one trade union confederation represented in each company. But most of the metal companies were located in Czech Republic and Hungary. All confederations represented in the unit were also represented in the collective bargaining through their affiliated trade unions.

In Poland, two companies had their own independent trade unions that were not affiliated to any regional or national trade union or confederation. It looks like these independent trade unions were only a Polish phenomenon, but the samples of this study were very small. Other studies indicate, that in United States and some Western European countries, e.g. in France and Great Britain, these company unions have become more popular among subsidiaries of multinationals. It could be argued that their bargaining position is weaker than the position of those unions who receive back-up for their claims from their national or regional structures. In Danone’s unit in Poland, where the majority of employees is organized in Danone’s own trade union, no collective agreement had been signed. Another problem is that these independent company unions have difficulties to participate in the international co-operation of trade union movement. Danone’s trade union does not belong to the IUF that plays an important role e.g. in European Works Council (EWC) negotiations. Much of the international co-operation of these independent trade unions depend on the good will of the employer.

Independent company unions tend to be established at the subsidiary level. There is no Danone trade union joining together all Danone employees around the world. Danone Group employs 73,823 people, and Danone was one of the smallest multinationals included in this survey. Siemens employs 373,000 people, Volkswagen 242,420 people, General Electric 222,000 people, Nestle 220,172 people, ABB 209,637 people, Robert Bosch 156,771 people, Philip Morris 151,000 people and Thomson 96,000 people. Consequently, if the company trade unions would be established at the group of companies level, the unions would be more powerful than many of the national trade unions, and, not just because the number of employees, but also because their potential to set their goals and direct their collective actions in a more precise and effective way.

There were only two units, where a significant turnover of employees (more than 50%) took place when the unit became foreign owned. In both of these units, trade union membership level was low and had declined. The newly employed people were not interested in trade unions. An interview with the former President and Vice President of the trade union local in Zwut S.A. revealed some reasons for this phenomenon. The new employees were young, highly-skilled and well educated. The management offered them modern and well equipped working environment and good remuneration. Although, trade union membership level had declined in all Siemens units, the level was still high in Czech and Slovakian units. It has to be noticed that, no matter what industry or ownership, trade union membership level is in general much higher in Czech Republic and Slovakia than in the rest of the survey countries.

Trade union membership level and the change in it were alike in companies with same ownership and same location. Both Siemens companies in Hungary had a membership level of 1-25% and both ABB companies in Czech Republic had a membership level of 51-75%. In all four units, the membership level had declined. Interbrew companies differed from each other.

Subsidiaries of the multinationals disclosed information much less often than the domestic owned companies. In 40% of the subsidiaries of food and beverages multinationals, employees were given no information about the financial situation of the company. Among domestic owned companies, this percentage was much lower in all countries, varying from 10% to 29%. In metal industry, companies were better informed about the financial situation than in food and beverages industry, but the difference between the subsidiaries of multinationals and domestic owned companies was as evident. The situation in the subsidiaries of multinational food and beverages companies is portrayed by the fact that only two out of fifteen respondents were able to estimate the subsidiary company’s turnover in the last financial year.

In general, employees of the multinationals were very poorly informed about the operation of the company. In 6 units out of 15 units in food and beverages industry, trade union or employee representatives were not consulted on any issue listed in the questionnaire: investments, production, hiring, dismissals or short time work. In 5 of these 6 units, no information was given about the financial situation either. In metal industry, the situation was better. In 4 units, consultation took place on all five issues. It was more typical of employers of metal industry to communicate major issues related to the collective agreement directly to employees without any trade union or personnel representatives.

Employees’ participation on the management bodies of the subsidiary company was rare. Only 3 respondents in food and beverages industry and 6 respondents in metal industry reported that employees were represented in the management bodies. In this respect the employees of the home countries of the multinationals are in a much more advantageous position. In Austria, Germany, France and Netherlands, employees have, by law, representation at least on the supervisory board of the company.

European Works Councils had been established by Danone, Nestle, Philip Morris, Interbrew, ABB, Siemens, Thomson Multimedia and Volkswagen. At least some of the central European units were represented in Danone’s, Nestle’s (only as observers), ABB’s, Thomson’s (only as observers) and Volkswagen’s EWCs. There seemed to be a lot of confusion about the EWCs among the respondents of the questionnaire. The Czech and Polish units of Danone did not know that Danone had established an EWC. In Nestle’s Bulgarian and Slovakian units, the respondents did not know that Nestle had an EWC. Respondents in metal industry were somewhat better aware of the situation. But the respondents in Czech units were very ignorant. For example, neither of the ABB units knew that ABB has an EWC, and that Czech units are represented in this EWC. At least according to ABB’s own press release, they are represented.

Among 30 subsidiaries there was only one where all answers to the information/consultation/participation questions indicate that the trade union/employee representatives were well informed and participated in the decision making process of the company. This subsidiary was Skoda (Czech Republic). In Skoda, all employees were informed about the financial situation of the company, trade unions were consulted on all issues listed in the questionnaire, employees had representation in the management bodies of the company and in the EWC. This high degree of information and participation had obviously impact on the way the questionnaire was filled. In Skoda, the respondent knew answers to all questions, including annual turnover and overtime percentage, which was rare among the respondents. Well informed trade union representatives can obviously take better care of employees’ interests. In Skoda, trade union membership level had risen and the collective agreement had provisions on all issues listed in the questionnaire.

The results on disclosure of information and employees’ participation contradict the information that the headquarters of the multinationals disclose on their human resource and personnel policies.

Danone has e.g. the following information on its human resources on its WWW site on the Internet: "Danone Group has always been aware that lasting success must be built on policies that ensure the personal commitment and dedication of all staff members. Annual meetings with representatives of IUF have already led to the development of constructive ties at the international level, notably through the adoption of joint programs in areas including availability of business and economic information and recognition of union rights." In spite of this program on availability of business and economic information, no employees are informed about the financial situation of the company in the Bulgarian unit and only some employee categories in Czech unit. In these units, employees are not informed or consulted about any of the issues that belong to the sphere of cooperation or co-determination in most Western European countries. In Danone’s Polish and Hungarian units, employees are consulted only on dismissals.

Nestle states in its Management Report 1995 e.g. the following: "The concept of Management Commitment/Employee Involvement has continued to penetrate every level of the Group, promoting a more intensive dialogue with employees and involving them directly in decision-making, thereby increasing their motivation." At least not the Central European employees are involved directly in decision making. They can be only informal observers by mutual agreement in the EWC, and only the Polish and Slovakian employees have representation on the management bodies of the subsidiary company.

Not only trade union locals, but also trade union confederations had limited knowledge of the multinationals established in their countries. Knowledge of acquisitions, names and industries of the multinationals was inadequate. Not all international trade secretariats were well informed either. Most of the multinationals and their subsidiaries included in the original list of survey units had to be selected without their help, because they simply did not know what companies were established in which countries. Functioning information and communication network, both at the national and international level, is the basic prerequisite for managing the use of labour in multinationals. The network of trade union movement seems not to be a functioning one.

Except for two breweries, all companies of the multinationals had local collective agreement. Local agreements were company agreements, i.e., all establishments of each subsidiary company within one country were covered by the same agreement. In metal industry, 74% of the units were covered only by local level agreement. In food and beverages industry, it was more common to have both local and higher level agreements. But in both industries, domestic owned companies were covered much more often by both local and higher level agreements. The frequency of local level agreements was almost the same, but local level agreement was not the only agreement that covered the domestic owned companies.

Remuneration related issues (basic wages, overtime payments and shift supplements) were determined by the local agreement in all food and beverages units that had a local level agreement and in all but three units in metal industry. In two of the metal industry units, basic wages were determined individually, not by collective agreement, and in one unit shift supplements were determined by a branch level collective agreement. In domestic owned units, it was more common to determine these issues at the branch level.

Also normal working hours were determined at the local level in all cases in food and beverages industry. In metal industry, normal working hours were determined at the branch level in one unit and not at all by a collective agreement in one unit.

The counterparts of trade union locals in collective bargaining were most often same nationality as the trade union representatives. Situation in companies with same ownership and same location was alike. In both ABB units in Czech Republic, both Siemens units in Hungary and all Interbrew units in Bulgaria trade unions had nationals as their counterparts.

Most of the negotiating teams representing employees had received no assistance from the trade union of the home country of the parent company, international trade secretariats or ILO. Out of 30 teams, 13 teams had received at least some assistance from the trade union of the home country of the parent company, 8 from international trade secretariats and 5 from ILO. In most cases, assistance had been received only by municipal, regional or national trade union bodies, and this assistance was usually good assistance.

Strategic decisions concerning operations and labour of multinationals are made in the headquarters of the parent company, but most probably the trade unions of the home country of the parent company are not capable to provide information which would be relevant for the bargaining claims of Central European subsidiaries. It has to be remembered that e.g. in Germany, the works councils, partly due to powers granted to them by legislation, are well aware what is going on in the company, but, by law, these works councils are formally independent from trade unions. Works councils have to be established, by law, both at the establishment level and at the company level. Works agreements concluded with works councils are compulsory by law, but no collective agreements with trade unions. In principle, international trade secretariats could be a great source of information for the subsidiaries of multinationals. But already the conduct of this study has proofed that they lack company specific information. ILO’s role is more in advising national organizations and public authorities. Trade union organizations and bodies within the country can provide technical help for the bargaining and conclusion of collective agreement for the negotiating teams of multinationals the same way as for domestic owned companies.

Consequently, all teams in metal industry, except for 2 teams, assessed that the assistance received from these municipal/regional/national and international bodies and organizations had no substantial effect on the outcomes of the bargaining. In food and beverages industry, the result was somewhat more positive.

The negotiating teams had much more extensive negotiating powers in the subsidiaries of multinationals than in domestic owned companies. Percentage of those teams that had to stick to claims defined in advance was much lower in multinationals. In Bulgaria, the negotiating powers depended on the trade union confederation the trade union and its local representatives belonged to. In the same bargaining unit and in the same bargaining team, negotiating powers of KNSB representatives differed from those of PODKREPA representatives.

Except for 2 teams, all teams made compromises, most common compromised issues being remuneration and social issues. Compromises were made very much the same way as in domestic owned companies. Concerning bargaining issues, the most important difference between subsidiaries of multinationals and domestic owned companies was that the multinational employer was more willing to negotiate on all issues presented by the representatives of employees.

The bargaining atmosphere was much better in the subsidiaries of multinationals than in domestic owned companies. But bargaining duration was longer in multinationals. Bargaining atmosphere was clearly related to the employer’s willingness to bargain on all issues. For example, in those 3 Siemens units where the employer refused to bargain on some issues, the bargaining atmosphere was either acceptable or bad.

Also, relations between the employer and trade unions were better in the subsidiaries of multinationals than in the domestic owned companies. Open confrontation was missing from the relations in the subsidiaries of multinationals. Co-operative relationship was more common in food and beverages industry.

The bargaining result was usually approved by the trade union committee/council and/or negotiating team. This was the case also in domestic owned companies. In most units, at least three different instruments were used in publishing the bargaining result. In domestic owned units, information was distributed somewhat less extensively.

Collective agreements of the subsidiaries of multinationals covered slightly less issues than the collective agreements of domestic owned companies in metal industry. In general, differences between the countries outweighed the differences between domestic and foreign owned companies. Somewhat surprising was that social provisions, such as health care services, housing, workplace child care etc., were no more typical of collective agreements of domestic owned companies than of agreements of multinationals. Obviously, the domestic owned companies have managed to get rid of their social liabilities, while multinationals have accepted social liabilities to compensate to their own employees the decrease in social protection provided by the state.

In addition to health care services, also vocational training was more typical of the collective agreements of multinationals than those of domestic owned companies in food and beverages industry. On part of the vocational training, this is understandable because many of the companies purchased by multinationals have gone through a massive modernization program.

Concerning limitations on various working time arrangements, collective agreements in the subsidiaries of multinationals did not differ from those in domestic owned companies in any systematic way. In metal industry, limitations in the collective agreements of multinationals were somewhat less frequent. However, differences between survey countries outweighed differences between domestic and foreign ownership.

In metal industry, duration of collective agreements covering general provisions was longer than in food and beverages industry. In most metal companies, it was over 2 years and in most food and beverages companies maximum 1 year. Duration of collective agreements covering specific provisions was in both industries usually maximum one year.