EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 2.7.2008 
SEC(2008) 2155 
  
COMMISSION STAFF WORKING DOCUMENT 
The role of transnational company agreements 
in the context of increasing international integration 
{COM(2008) 419 final} 
EN 2   EN COMMISSION STAFF WORKING DOCUMENT 
The role of transnational company agreements 
in the context of increasing international integration 
TABLE OF CONTENTS 
1. Objectives and scope.................................................................................................... 4 
2. The purpose of transnational texts and transparency ................................................... 5 3. Actors in transnational company negotiations ............................................................. 7 4. Effects of transnational texts........................................................................................ 8 5. Dispute settlement...................................................................................................... 10 6. Conclusion.................................................................................................................. 11 
EN 3   EN In the context of the Renewed Social Agenda1, this document aims to contribute to the 
Commission efforts to manage th e process of globalisation in a balanced way and to help 
European citizens benefit from the opportunities pr esented to them. Together with the revision 
of the Directive on European Works Counc ils, the Commission Wo rking Document on 
“Restructuring and Employment: th e Contribution of the European Union”, and the report on 
the implementation of the European Globa lisation Adjustment Fund, this document 
contributes to promoting anticipation and adap tation to structural change in times of 
globalisation, which requires  an appropriate and timely involvement of workers. 
The present document emphasises the key role and the potential of transnational company 
agreements2 in today's increasingly international business environment. It is intended as input 
for the debate on such agreements and on the c ontribution of different stakeholders to their 
development. 
The growing need to anticipate developments in  terms of employment, flanking measures for 
restructuring, and managing human resour ces throws down new challenges for both 
management and workers in transnational companies. Against the backdrop of new approaches to dialogue and corporate soci al responsibility, companies and workers’ 
representatives have begun agreeing  texts in various forms, draw n up jointly for application in 
more than one Member State. The Commission has listed 147 jo int transnational texts in 89 
companies; most of these have been concluded since 2000. 
Such initiatives help to create a climate of tr ust and dialogue that a llows balanced company 
policies to be developed through an approach ba sed on partnership, in pa rticular as regards 
anticipation of, and accompanying m easures for, change. They are also fully in line with the 
approach developed in the Commission’s Communications Towards common principles of 
flexicurity: More and better jobs through fl exibility and security
3 and Restructuring and 
employment: Anticipating and accompanying rest ructuring in order to develop employment 
— the role of the European Union4. 
The growing international dimension of compa ny organisation and of merger and take-over 
operations, the emergence of European companies, the increasing mobility of the factors of production and the ever more transnational scal e of restructuring operations is bringing an 
ever greater need for transnational negotiation within firms. 
This development, which now affects nearly 7.5 million workers across the world, raises 
some fundamental practical, legal and political  questions for the social actors and the 
European Union that are related to the discre pancy between the transn ational scope of texts 
concluded and national norms and references. 
                                                
 
1 Communication of the Commission "Renewed Social Ag enda: Opportunities, acce ss and solidarity in 21st century 
Europe", COM(2008) 412 of 2 July 2008.  
2 For the purposes of this document, ‘transnational company agreement’ means an agreement comprising reciprocal commitments the scope of which extends to the territory of  several States and which has been concluded by one or 
more representatives of a company or a group of companies on the one hand, and one or more workers’ 
organisations on the other hand, and which covers worki ng and employment conditions and/or relations between 
employers and workers or their representatives.
 
3 COM(2007) 359 of 27.6.2007.   
4 COM(2005) 120 of 31.3.2005.  
EN 4   EN This paper forms part of the Social Agenda for 2005-105, which envisages the drawing-up of 
an optional European framework for social part ners wishing to formalise the conduct and the 
outcome of ‘transnational collective bargaining ’ in order to ‘support companies and sectors to 
handle challenges dealing with issues such as work organisation, employment, working 
conditions, training’. The Eur opean Parliament and the European Economic and Social 
Committee have expressed support for this in itiative and have asked the Commission to 
consider proposals in conjuncti on with the European social  partners for drawing up a 
legislative framework on a voluntary basis6. 
1. O BJECTIVES AND SCOPE  
As part of a gradual approach to the debate on transnational company agreements and in the 
light of the contributions of the various players to the drafting of such agreements, the 
Commission is proposing a number of practical  measures to the social partners, the 
Community institutions and the other stakeholders. A study report prepared by the services of 
the Commission in conjunction with this document outlines the situation regarding 
transnational texts already concluded7. 
The Commission is convinced of the potential of transnational company agreements in a 
context of increasing internati onal integration. However, since this is a new and technically 
complex subject, the Commission has followed a nd will continue to follow a step-by-step 
approach that involves all st akeholders in weighing up the facts and considering options. 
Since 2005 the Commission has collated and analysed  the transnational texts available to the 
public and has conducted a survey of cases cove ring the actors involved in concluding them. 
It commissioned a study8 assessing the legal issues arising in connection with transnational 
collective agreements and identifying the obstacle s to their further development and ways of 
resolving them. It also orga nised two study seminars attende d by the social partners, the 
Member States, experts and parties with firs t-hand experience, with a view to making the 
findings available, exchanging first impressions , considering the analyses and discussing the 
issues9. 
Some points need clarifying as regards the scope  of this paper. First, it concentrates on 
companies. Social dialogue at other (sectoral an d inter-trade) levels is increasingly structured 
within the Community on the ba sis of Articles 138 and 139 of  the Treaty establishing the 
European Community, and the Co mmission has dealt with this in depth in the Communication 
Partnership for change in an enlarged Europe: Enhancing the contribution of European 
social dialogue10. The European social partners also included monitoring of the 
                                                 
5 COM(2005) 33 of 9.2.2005.  
6 Resolution P6_TA(2005)0210 of 26 May 2005 (Rapporteur : R. Oomen-Ruijten) and EESC Opinion 846/2005 
(Rapporteur: U. Engelen Kefer) adopted on 13 July  2005 by 60 votes to one, with three abstentions.  
7 European Commission, DG Employment, social  affairs and equal opportunities, "Mapping of 
transnational texts negotiated at corporate level", 2008 available online at 
http://ec.europa.eu/employment_social/labour_law/documentation_en.htm#5  
8 Transnational collective bargaini ng: past, present and future , E. Ales (coordinator), S. Engblom, T. Jaspers, S. 
Laulom, S. Sciarra, A. Sobc zak and F. Valdés Dal-Ré.  
9 Documents and information at  
http://ec.europa.eu/employment_social/labour_law/documentation_en.htm#5 . 
10 COM(2004) 557 of 12.8.2004.  
EN 5   EN implementation of autonomous agreements concl uded and analysis of their impact at various 
levels of social dialogue in their work programme for 2006-08. 
Next, this paper focuses on Europe. Here the Commission is looking at texts largely for 
application in the Member States. Those rela ting mainly to compliance with international 
labour standards outside Europe ar e dealt with in the Communication Promoting decent work 
for all: The EU contribution to  the implementation of the decent work agenda in the world11. 
Lastly, since the analysis set out below is base d on concepts developed within widely varying 
national systems of industrial relations, the way certain terms are used needs to be explained. 
Texts intended to apply in more than one Me mber State and which have been concluded by 
companies and workers’ representatives are referred to by the generic term ‘transnational texts’. They cannot generally be termed ‘collect ive agreements’ as they are not concluded in 
accordance with the collective bargaining rules of a particular Member State. Since they deal 
with specific subjects at company level and do not seek to lay down a general framework for 
working conditions or wage leve ls, they cannot be regarded as ‘collective conventions’. 
Where they are referred to as such by the partie s or they involve mutual  commitments that set 
them apart from mere declarations, the term ‘a greements’ is used. The process that leads to 
the joint signing of texts by representatives of the employer and of the workers and which 
may range from straight acceptance by one party to  an interactive process leading ultimately 
to a compromise is referred to by the gene ric term ‘negotiation’. It cannot usually be 
considered equivalent to ‘colle ctive bargaining’ as practised at national level, such as that 
covering wages and salaries.  
These clarifications are offered in  the particular context of this document to facilitate the task 
of the reader, who needs to bear their limits in mind since the concepts covered by the terms 
may themselves differ in the various nati onal systems and in different languages
12.  
2. T HE PURPOSE OF TRANSNATIONAL TEXTS AND TRANSPARENCY  
Knowledge of transnational texts is still in its infancy, and during the study seminars in 2006, 
the social partners stressed the need to cont inue gathering and exchanging information on the 
subject. The 88 transnational texts focusing on Eu rope that the Commission listed mainly deal 
with the following topics, in addition to th e organisation of soci al dialogue itself: 
• specific subjects such as health and safety at work, equality in employment, and data 
protection; 
• restructuring, work organi sation, training and mobility; 
• the principles behind human resources polic y and corporate social responsibility. 
They reflect the need for flanking measures to  accompany developments in company structure 
and activities, the determination to develop soci al dialogue and to deal  with the big social 
issues arising in the company, a nd the desire to respond to speci fic needs in terms of health 
                                                 
11 COM(2006) 249 of 24.5.2006.  
12 Distinctions such as that between ‘ Betriebsvereinbarung ’ (company agreement) and ‘ Tarifvertrag ’ (collective wage 
agreement) or between ‘ négociation collective ’ (collective bargaining) and ‘ négociation ’ (negotiation ) do not exist, 
for instance, in all Member St ates or all Community languages.  
EN 6   EN and safety, financial particip ation, data protection and equa l opportunities. They deal only 
incidentally with wages and working hours, th e key issues in national collective bargaining. 
Anticipating, and providing for accompanying measures for, restructuring are especially 
important in this process and concern more th an one third of the te xts agreed. Both the 
workers’ representatives and the company ma nagement who have conducted this type of 
dialogue see it as worthwhile beca use it leads to a shared, overall  view of what is at stake, 
develops anticipation, fosters a relaxed social  climate that is favourable to acceptance of 
change, encourages the search for innovative prof essional transitions and heightened security 
for the workers concerned. 
The last few years have also seen the conclusion  of transnational texts relating to fundamental 
rights and corporate social re sponsibility. Such texts are usually termed ‘international 
framework agreements’ where they are signed by  international trade-un ion federations. Most 
of them mainly concern the non-European sphere and are not dealt with in this paper, except 
where a key aspect of their application and monitoring takes place within Europe.  
The existing transnational texts have varied titles , such as ‘joint opinio n’, ‘joint declaration’, 
‘draft’, ‘programme’, ‘convention’, ‘principles’ , ‘framework’, ‘code of conduct’, ‘charter’, 
‘framework agreement’, ‘agreement’ or ‘European  agreement’. They may also be published in 
the form of brochures or as annexes to agreem ents setting up European works councils. There 
is no necessary link between the title of the te xt, its content, the procedure for negotiating it 
and the type of commitments it involves.  
In 2004 the Commission drew up a typology of Eur opean social dialogue texts comprising 
four major categories13: 
• agreements laying down minimum standard s and implemented autonomously or by a 
Council decision in accordance w ith Article 139 of the Treaty; 
• process-oriented texts: frameworks for action, guidelines, code s of conduct, policy 
orientations; 
• opinions, declarations and tools for exchanging information; 
• procedural texts laying down rules on dialogue between the parties. 
The drafting of transnational texts should observe  certain principles where the parties wish 
them to produce effects other than declaratory. Fo r example, texts will be clearer and easier to 
implement if they are dated and signed and th e name and capacity of the person signing are 
shown clearly, if the persons to whom the text is addressed are indicated, if the date by which its provisions are to be implement ed and the way this is to be done are indicated and the rules 
for monitoring and settling disputes are shown, etc. 
The Commission could usefully suggest how transnational te xts could be made more 
transparent, as it did for the European social dialogue texts, without prejudice to the freedom 
of the parties. 
                                                
 
13 COM(2004) 557 of 12.8.2004.  
EN 7   EN 3. A CTORS IN TRANSNATIONAL COMPANY NEGOTIATIONS  
The issue of who the actors are is crucial in a transnational ne gotiation, as in any negotiations. 
At present one or more categories of actor s play a part in representing workers: 
• European works councils play a key role in concluding transna tional texts. Almost all texts 
relating to Europe bear their signatures; 
• Almost half of the texts relating to Europe  bear the signatures of European and/or 
international workers’ federations by virtue of  their coordination or legitimation role in line 
with the workers’ desire; 
• Several texts relating to Europe  bear the signatures of nationa l workers’ organisations, in 
particular where effects identical to that  of national company agreements are sought. 
Today none of these three categories of actors has the full legitimacy or the legal capacity 
needed to conclude transnational texts to which the parties would like to  give the effect of 
company agreements in several Member States. 
The competences of European works councils under Directive 94/45/EC are information and 
consultation, not negotiation. Their membership is  tailored to that end and determining their 
representativeness is problematic given the fre quent lack of proportionality when set against 
the worker head count. Furthermor e, their involvement in negotia tions is at odds with national 
systems that make a clear distin ction between the consultative role of elected bodies (works 
councils) and the negotiating mandates entrusted to trade unions or which utilise a single 
trade-union channel for worker representation. 
The representativeness of European and inte rnational workers’ organisations and their 
mandates to negotiate and sign are not always clear. Organisations such as the European 
Metalworkers’ Federa tion have begun to adopt internal rules of procedure in this respect. The 
involvement of trade-union organisations in nego tiations on issues such as restructuring also 
comes up against national systems under which the works council is responsible for such 
topics. 
When it comes to concluding transnational texts, the crucial limitation affecting national 
workers’ organisations lies in their national  field of competence. 
When negotiating and signing transnational agreem ents the actors’ capacity to represent and 
enter into commitments on behalf of others is not a theoretical matter. The existing texts may 
stem from a centralised process involving th e management and the coordinator of the 
European works council and from the active invol vement of local actors at various stages. 
Certain opt-outs have occurred  following disagreements on the approach, the substance or 
compatibility with national law. In other case s, the European text provides a framework for 
‘transposition’ via national agreements.  
At the study seminars held in 2006 and in internal resolutions adopted since 2005, the 
European trade-union organisations, who believe  the role of the trade unions cannot be 
circumvented, highlighted their special concer n regarding the issue of the actors in the 
negotiation.  
EN 8   EN The type of actors involved and the process fo llowed in concluding tr ansnational texts also 
pose a problem for the company negotiators, who need  to innovate to ensure  the text agreed is 
accepted as widely as possible and has the biggest  impact. The issue of the actors is thus 
crucial for the development of transnational company agreements.  
4. E FFECTS OF TRANSNATIONAL TEXTS  
Nowadays commitments entered into when transn ational texts are agreed vary considerably, 
ranging from joint declarations of general principl es to the explicit determination to give legal 
force to binding provisions of transnational company agreements. Similarly, while uniform 
effects across Europe can be exp ected in terms of data protec tion, certain tran snational texts 
function as a framework laying down objectives th e procedure for implementing which is left 
to the discretion of, or negotiation by, local parties. 
During the study seminars, this diversity led to a debate on the type of commitments entered 
into by the parties signing transnational texts a nd on what effects they expect such texts to 
produce. Several representatives of employers’ organisations took the view that the texts 
agreed are declaratory and are not intended as co llective agreements. They also insisted that 
transnational texts can only lay down general guidelines and are not intended to establish 
precise rules that are directly applicable. 
Irrespective of the intention of the parties signing them, the issue of the legal effects of 
transnational texts needs to be looked at. In the present situation this is a complex matter, which — depending on the content of the texts in question — is conditional on the national 
framework that may apply, whether or not they are signed by national trade unions and 
whether or not there is unilateral commitment on  the part of the employer. At present, only 
texts bearing the signature of national trade unions may be rega rded as collective agreements 
likely to produce legal effects as such, and onl y where they are concluded in accordance with 
the rules applying in the Member State concerned. 
What makes a collective agreement varies signifi cantly from one Member State to another, in 
particular as regards the repr esentativeness of the parties signing, compliance with negotiation 
procedures, requirements as to substance, and registration formalities. National law also varies as regards the legal eff ect of collective agreements, e .g. whether or not they have a 
binding effect on employment contracts, whether th ey affect solely thos e parties signing them 
or all employees. Such differences should also prompt reflection on the existing texts and on a 
possible Community instrument, which should take  account of the risk of interference with 
national industrial relations systems and explore the possibility of making provision for 
transnational company agreements to have the same sort of effects as company agreements 
concluded at national level. 
Transnational texts also raise questions regardin g data protection: on this subject, reference 
should be made to the opinions and documents  of the Working Party on the Protection of 
Individuals with regard to the Processing of Personal Data
14, which lay down guidelines on 
                                                 
14 This independent European advisory body was set up unde r Article 29 of Directive 95/46/EC of the European 
Parliament and of the Council of 24 October 1995 on the protec tion of individuals with regard to the processing of 
personal data and on the free movement of such data (OJ L 281, 23.11.1995, p. 31). Documents WP 48, WP 117, 
WP 74, WP 107, WP 108 and WP 133 relate to the processing of personal data in a professional context, the 
application of European data protec tion rules to internal whistleblowing schemes and the use of binding company 
rules for international transf ers of personal data within transnational groups (WP 74). 
EN 9   EN how personal data are to be processed in a ccordance with the principles set out in 
Directive 95/46/EC. In particular, in order for binding company rules to constitute a valid 
instrument for making transfers of personal data  processed in the Member States to other 
companies in a transnational group which ar e established in non-member countries, the 
Working Party states that the persons concerne d and the national data-p rotection authorities 
must be legally in a position to demand compliance with such rules. 
Given the potential development of transnationa l negotiations, thought sh ould also be given to 
the position of transnational company agreements  in relation to other norms and levels of 
social dialogue. 
5. D ISPUTE SETTLEMENT  
Rights and obligations arising from  texts agreed may also include penalties in the event of a 
failure to observe the provisions of a transnational agreement. The risks of someone ‘going it 
alone’, of action being taken by associations external to the company or of non-compliance 
with previous commitments following a merger or  restructuring have been raised in several 
cases. 
Nonetheless, in cases where a signatory party,  employee, local employe r or third party seeks 
to have rights under transnational texts recogni sed by the courts, the situation as determined 
by the rules of international private law is  particularly complex and unclear today. 
Furthermore, the legal uncertainty created by the difficulty national courts may have in 
understanding the logic behind a transnational agreement wher e their only references are 
national was pointed out by one co mpany during the study seminars. 
In terms of law applicable, the Rome Convention, which will be replaced by the ‘Rome I’ 
Regulation as from [add date of  publication of Rome I in OJ]15, does lay down a special 
conflict-of-laws rule for individual employ ment contracts, but makes no provision for 
collective agreements. 
Article 6 of the Convention on th e Law applicable to contractua l obligations seeks to protect 
the weaker party, i.e. the employ ee. Accordingly, the result of the parties’ choice of law to 
apply to the employment contract cannot be to  deprive the worker of  protection under such 
mandatory provisions as are applicable by de fault. The law applicable by default — unless 
closer links with another count ry arise from the whole set of circumstances surrounding the 
employment contract, in which case the law of that  other country is applicable — is that of the 
country where the worker habitually carries out his work or, if the worker does not habitually 
carry out his work in one and the same country, that of the country where the establishment that employs him is located. However, coll ective agreements conc luded at national or 
international level do not fall within the scope of this special rule. Several Member States consider, nevertheless, that their collective social  legislation are ‘mandatory rules’ within the 
meaning of Article 7 of the Convention, which apply solely on condition that the work is 
carried out within national territory. 
                                                
 
15 Proposal for a Regulation of the European Parliament and the Council on the law applicable to contractual 
obligations (Rome I) (COM(2005) 650 of 15.12.2005); Regu lation (EC) No 864/2007 of the European Parliament 
and of the Council of 11 July 2007 on the law applicable  to non-contractual obligat ions (Rome II) (OJ L 199, 
31.7.2007, p. 40).  
EN 10   EN In terms of jurisdiction, the rules of international private law, and in particular the ‘Brussels I’ 
Regulation16, are also difficult to apply in connection with collective labour relations. 
According to the Regulation, the competent courts are, in prin ciple, those at the place of 
residence of the defendant, but th e latter may be sued in the courts in another Member State in 
certain circumstances, for example at the place of execution of the cont ractual obligation. In 
connection with individual employment contracts,  the employer may be sued in the courts at 
the place where he is domiciled or at the place wh ere the worker habitually carries out or last 
carried out his work or, failing that, at the pl ace where the establishment which employed him 
is located.  
Although dispute settlement is far from being th e foremost concern of the actors involved in 
the first transnational texts, the potential development of transnational negotiation makes it necessary to consider mechanisms allowing social  actors to protect ag reements concluded, to 
follow their development and to resolve any diffe rences of interpretation and disputes that 
may arise in their application. Such mechanisms , which exist in national industrial relations 
systems, do not apply in the case of agr eements extending beyond the province of national 
actors. 
The Commission considers that the situation should be more widely known and that thought 
should be given to the way di sputes arising in connection with transnational company 
agreements can be settled both in and out of court. 
6. C
ONCLUSIONS  
The existence of transnational texts and the issues their development throws up for social 
actors and the European Union are the underlying reasons for this paper, which is intended to 
lay sound foundations for further consideration by the stakeholde rs, and in particular the 
social partners. 
The conclusion of transnational company agreements  is a key factor in the development of the 
European actors’ future capacity  to conduct a social dialogue in  keeping with the increasingly 
transnational nature of compa ny organisation and the need to anticipate change and have 
strategies to deal with it. Yet actors wishi ng to conclude transnational agreements today 
encounter uncertainties and difficu lties that may prevent or at l east reduce the im pact of such 
agreements. These relate to the determination of  the parties to conclude an agreement, its 
effects and the settlement of any disputes  that may arise in its interpretation and 
implementation.  
With a view to promoting social dialogue and supplementing the action of the Member States 
as regards the representation and collective defe nce of the interests of workers and employers, 
the Commission will support initiatives to c onclude transnational company agreements 
without prejudice to compliance with the applicable  national or Community provisions.  
To that end the Commission will set up an expe rt group on transnational company agreements 
whose mission will be to monitor developments and exchange information on how to support the process under way, and it will invite the social partners, gove rnmental experts and experts 
of other institutions to take part.  
                                                
 
16 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of 
judgments in civil and commercial ma tters (OJ L 12, 16.1.2001, p. 1).  
EN 11   EN The Commission will provide the expert group with  its initiatives and work on the subject, 
which will focus on: 
• developing a data base of  transnational texts; 
• organising exchanges of experience and analyses; 
• reviewing the effects produced by company agreements and the way norms relate to each 
other in the Member States; 
• clarifying the rules of international private law in connection with transnational texts. 
The Commission will also propose that support fo r the conclusion of transnational company 
agreements be among the priorities in th e budget headings on social dialogue. In this 
connection the Commission will consider projects to: 
• identify ways of ensuring the texts agreed are more transparent; 
• facilitate the identification of the actors, appr oaches or mechanisms th at could be promoted 
in this area, 
• determine conciliation or mediation mechanisms  that could be promoted with a view to 
facilitating dispute settlement.