Decent Work in Global Supply Chains

Chapter 4.1 TNCs and labour: the contested terrain


"Contested Terrain" with regard to employment refers to the conflicts that emerge regarding employment practices between workers and managers. Workers key interests (e.g. job content, type of contract, salaries & other benefits, working hours & leave benefits, training & development opportunities, health & safety conditions, promotion systems...) are directly affected and affect the corporation strategy, objective and performance. As such, the interest of the managers and the interest of the workers conflict.
Due to the increasing complexity of employment practices and ownership structures, these conflicts may increase. The outsourcing of certain tasks, the multiplication of subsidiaries, the restructures due to mergers & acquisitions, the globalisation / transnationalization and the augmentation of level of supply chains are some of the factors that may impact and render additionally complicated this "contested terrain".
I would like to mention as examples 3 types of management decisions that may conflict with workers conditions, even if not directly addressed to them.
1) the decision of a company to reduce costs by employing all new workers with a different contract (e.g. lower salary scales, lower pension and health coverage rights, non guaranteed inflation increase, temporary contracts...) may negatively influence the existing workforce as they may face an additional pressure over performance as the new contracts may make it more difficult to attract seasoned qualified employees, the workers internal incentives may change...
2) the decision by the management to change the production (e.g an increase in volume, the development of new products, the reduction of production costs, the decrease of production times...) without consulting with the relevant members of the workforce, may create internal tensions if the existing systems and resources would allow for such changes without unrealistic pressures on the workers.
3) increasingly relevant in highly skilled labour industries in developed economies, decisions that may negatively impact the environmental and social footprint of the corporation may prompt some workers to search for a new employer. Workers in developed countries are more and more concerned about the ethical performance of the corporation they work for. Thus, in certain sectors and economies, it is fundamental for a company to market itself as the employer of choice not only regarding the employment conditions, but also its overall conduct.

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