Supranational grievance mechanisms and firm‐level employment relations

• Author: Htwe Htwe Thein,Michele Ford,Michael Gillan
• Date: 01 July 2020
• Published date: 01 July 2020
• DOI: http://doi.org/10.1111/irj.12298

Supranational grievance mechanisms and

firm-level employment relations

Michele Ford, Michael Gillan*and

Htwe Htwe Thein

ABSTRACT

The dynamics of regulation of employment relations in the global supply chains

of multinational enterprises (MNEs), including the growth of various forms of

private regulation, has attracted significant scholarly attention. However, the role

of international organisations in supporting supranational institutional pathways

for social contestation of business practices has been neglected. This study addresses

this gap by analysing cases lodged by national and global unions through the specific

instances mechanism of the OECD Guidelines for MNEs. It reveals the design and

operational deficiencies of this mechanism but also points to the current and future

opportunities for firm-level labour grievances and justice claims to be addressed at

the supranational scale.

1 INTRODUCTION

While labour relations are becoming increasingly global, enforceable collective

bargaining and institutions of conflict management remain linked primarily to the

authority of sovereign states. The ramifications of this bifurcation have drawn the

attention of international organisations, civil society organisations (CSOs) and states

to the possibilities of regulating global supply chains (ILO, 2016). Yet while private

regulation and multi-stakeholder regulatory initiatives have burgeoned, attempts to

develop a comprehensive and enforceable transnational regulatory response have been

confounded by the relative autonomy of multinational enterprises (MNEs) and their

limited and territorialized regulatory responsibilities as legal entities (Ruggie, 2018).

New formsof soft regulation andassociated corporatesocial responsibilityinstitutions

are an important topic foremployment relationsresearch (Jacksonet al., 2018). Scholars

have recognised that the enforcement of labour standards in global supply chains

requires greater complementarity between regulatory mechanisms at the national and

transnational scales (Bair, 2017; Locke, 2013). They have also examined how local,

national and global unions have sought to push MNEs to take responsibility for

employment relations practices in their global supply chains through protests and public

❒Michele Ford, Sydney Southeast Asia Centre, The University of Sydney, Sydney, Australia, Michael

Gillan, UWA Business School, The University of Western Australia, Perth, Australia and Htwe Htwe

Thein, Curtin Business School, Curtin University, Perth, Australia. Correspondence should be addressed

to: Michael Gillan, Associate Professor, Faculty of Arts, Business, Law and Education, The University

of Western Australia, Perth, Australia.

Email: michael.gillan@uwa.edu.au

Ford and Gillan joint first author.

Industrial Relations Journal 51:4, 262–282

ISSN 0019-8692

© 2020 Brian Towers (BRITOW) and John Wiley & Sons Ltd

campaigns (Anner, 2015; Brookes, 2017; Wright, 2016), union–MNE dialogue (Helfen

and Sydow, 2013; Stevis, 2010) and selective participation in various forms of private

regulation (Harvey et al., 2017; Reinecke and Donaghey, 2015). However, little attention

has been paid to the role of states and international organisations in this endeavour,

despite the fact that the primary responsibility, and capacity, for legal enforcement

continues to reside with individual states. Instead, as Mayer et al. (2017: p. 130) note,

‘the focus rests on private power, broadly conceived as represented by both firms and

civil society organisations’, leaving ‘public authority to sink into the shadows’.

It is perhaps unsurprising, then, that few studies have examined unions’use of

state-supported supranational institutional mechanisms to pursue industrial relations

grievances. This study addresses this gap by examining the impact of union use of the

OECD Guidelines for Multinational Enterprises (hereon, the Guidelines), a hybrid

intergovernmental institution that permits individuals and organisations to lodge

company-specific and location-specific employment relations-related grievances

within the supply chains of MNEs domiciled in an OECD member or other adhering

state through its specific instances mechanism. The Guidelines have attracted little

attention from industrial relations scholars, who have rightly criticised them for being

voluntarist and non-binding (e.g. Baccaro and Mele, 2011; Hendrickx et al., 2016;

Marx and Wouters, 2017). These criticisms notwithstanding, the inner workings

and impact of the specific instances mechanism are worthy of investigation because

it is government-backed, premised on public reporting of most complaints, and has

a broad supranational scope—but also because unions are prepared to devote the

time and effort required to use it to lodge complaints.

In this study, we show how labour justice claims can be raised, assessed and

potentially resolved based on a process analysis of the mechanism and its impact on

firm-level employment relations. Our findings support assessments that point to the

mechanism’s problematic design and operational flaws. At the same time, however,

they explain why unions continue to use it, in conjunction with other sources of power

and leverage, to assist with the resolution of industrial conflict and improve firm-level

employment practices within global supply chains. These findings make a substantive

contribution to the literature by establishing the salience of supranational and

intergovernmental institutions for contemporary employment relations and the

need for further study of their operation as industrial relations actors pursue their

organisational interests beyond the national scale. They are also significant for

policymakers and practitioners, as they (i) reveal the limits of national industrial

relations systems in dealing with labour justice claims in global supply chains and

(ii) point to the need for more accessible, consistent and effective supranational

grievance mechanisms capable of influencing firm-level practice.

2 LABOUR GRIEVANCES AND SUPRANATIONAL INSTITUTIONS

There is burgeoning interest in transnational labour regulation and the governance

and regulatory gaps that characterise the social and economic dynamics of MNEs

and global supply chains (Marginson, 2016). Once conceived as national and

circumscribed, labour governance and regulatory institutions are increasingly

understood to be multi-actor and multi-scalar (Bartley, 2011; Kolben, 2011). There

is also a growing, but still limited, body of research on the process and outcomes of

supranational labour–management negotiation. Several studies have engaged with

the processes that have given rise to global or regional framework agreements

263Supranational Grievance Mechanisms

© 2020 Brian Towers (BRITOW) and John Wiley & Sons Ltd