MGMT3025 Chap.10 International Employment Law and Employee Relations
International Employment Law and Employee Relations
Multinationals employ people under several legal systems at once, and this chapter follows the Week 10 lecture from law to labour relations.
It begins with the three layers an HR manager must satisfy: the law of each country of operation, international labour standards built around the ILO Declaration on Fundamental Principles and Rights at Work, and home-country law that reaches abroad, such as the anti-bribery and age discrimination statutes the lecture names.
Codes of conduct and corporate social responsibility then show how a firm sets one standard of behaviour across its subsidiaries.
The second half turns to employee relations: what the field studies and aims to achieve, why union membership means different things in different regions, how density and bargaining coverage have fallen across the OECD, the ways unions can constrain multinational strategy, the barriers to bargaining across borders, forms of employee voice without unions, and the rising risk of being sued at home over conduct abroad.
What this chapter covers
- 01
Local law, international labour standards and extraterritorial home-country law
- 02
Codes of conduct and corporate social responsibility in employment
- 03
The aims of employee relations and what shapes a multinational's approach
- 04
Union density across countries and the Ghent system
- 05
How unions constrain multinational strategy and what they fear
- 06
Barriers to bargaining across borders and international union responses
- 07
Works councils, codetermination, co-operatives and litigation risk
Worked example · free
Union influence at a Swedish plant versus a US plant under the Ghent system
- +1Compare density: in the lecture's 2020 OECD table, 65.2% of Swedish wage earners were union members against 10.3% in the United States.
- +1Explain the gap: Sweden is one of the Ghent system countries, where unemployment benefits are linked to unions, and those countries keep much higher membership.
- +2Apply the constraints: where unions are strong they can influence wage levels, limit changes to headcount and slow global integration, so the Swedish plant is where the policy will be tested.
- +1Note the limits of the evidence: the table reports 2020 membership, not the agreements in force at each plant, so HR should confirm the local bargaining arrangements before acting.
- +1Recommend early consultation with Swedish representatives and a common framework applied within each country's law and bargaining system.
Key terms
- Extraterritorial law
- Home-country legislation that continues to bind a firm and its staff when they operate in other countries.
- Code of conduct
- A company statement of acceptable behaviour in employment relations, applied across subsidiaries as part of corporate culture.
- Ghent system
- An arrangement found in countries such as Denmark and Sweden where unemployment benefits are linked to union membership, which keeps membership high.
- Works council
- A body through which employees receive information and are consulted on decisions with social and economic effects on them.
- Codetermination
- A legal requirement for employee participation on company boards, so major strategic decisions need their agreement.
International Employment Law and Employee Relations FAQ
Which bodies of law does an international HR manager have to satisfy?
Three at once, according to the Week 10 lecture. Each host country has its own employment law and regulation; international labour standards, centred on the ILO Declaration on Fundamental Principles and Rights at Work, set a global floor; and some home-country statutes travel with the firm, such as the Foreign Corrupt Practices Act the lecture names.
Why are union membership rates so different between countries?
History and institutions explain much of it. The lecture links union differences to technology and industrial organisation, government regulation, ideological divisions, religious influence and managerial strategies. Benefit design matters too: Ghent system countries, where unemployment support runs through unions, keep far higher density, and the 2020 table puts Denmark at 67.0% against 10.3% in the United States.
How can trade unions limit what a multinational does?
They can raise pay across the organisation, restrict how freely the firm adjusts employment levels, hinder or block the integration of operations across countries, and mobilise public campaigns against the company. Unions also respond collectively through international trade secretariats, coordinated bargaining, lobbying for restrictive legislation and pressing bodies such as the ILO and OECD to regulate multinationals.
What forms of employee representation exist besides trade unions?
The lecture names three. Works councils entitle employees to information and consultation on decisions that affect them socially or economically. Codetermination gives employees seats on supervisory or company boards with a say on major strategy. Worker co-operatives are built on collective ownership and governance by the workforce itself, a distinct third model of employee relations.
Why is litigation a growing risk for multinational employers?
Courts are increasingly asked to hold multinationals accountable for how well they protect employee and human rights in foreign operations. Claims are often brought in the firm's home jurisdiction about events in a subsidiary abroad, so headquarters cannot treat labour standards at distant sites as purely local matters.
Exam move
Organise this chapter around two lists you can write quickly: the three layers of law, and what unions can do to a multinational against what they fear it will do to them. Practise turning each list into an argument about a specific firm rather than reciting it.
Learn a few figures with their years and sources, such as OECD density falling from 30% in 1985 to 15% in 2023/24 and the gap between public and private sector membership, because a cited number strengthens an evaluation.
When a question involves moving work between countries, check the density and bargaining context in both, name the union concern it triggers, and finish with the HR roles the lecture lists: consultation, workforce planning, redeployment, training and risk reporting.
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