Multinationals have adopted a 'double-breasted' approach to unions, recognising them in older plants but not in newer ones, writes Gerard Flynn

A SPECIAL Labour Relations Commission (LRC) symposium on the practices employed by 262 Irish and foreign multinational companies has noted that many of them are opting for "double-breasting".

This has nothing to do with the sartorial preferences of the senior management, but rather it is a term used by researchers into organisational structures and employee representation when explaining how the same multinational company may have a unionised structure in one plant and ensure a "union-free zone" in another, usually a more recent investment.

The LRC has been involved in a major international research programme into human resource practices in multinational companies with a research team at the University of Limerick's Kemmy Business School*.

It is the Irish part of a comparative international study covering similar corporations in Canada, Britain, Australia, Mexico, Singapore and Spain.

The University of Limerick study shows that trends are not quite that straightforward.

Broadly, multinationals differ in their approaches depending on the country of origin and whether they are operating in manufacturing or services.

Prof Paddy Gunnigle led a series of papers at the Croke Park conference centre yesterday morning comparing the outcomes identified by the research teams in the other five states.

On the "double-breasted" front, a large proportion of the multinationals in Ireland (61 per cent) engage with trades unions, but this is more likely in manufacturing plants and less likely with US-owned corporations.

However, three out of five multinationals have ceased negotiating directly with trades unions in their newer plants and this is particularly evident in US companies such as Wyeth and Coca Cola Beverages.

Partly, this is a legacy from the earlier wave of industrialisation when the ITGWU leader Mickey Mullen was fond of doing "sweetheart" single union deals with new companies.

They were glad to have a single-union plant and probably relieved that what was perceived to be the more militant ATGWU did not get a foot in the door.

Three decades later the multinational chiefs have realised that they can operate even more freely without any union presence and, instead, focus on direct employee engagement.

An interesting aspect of the research focuses on the practices adopted by Irish-based multinationals, as often the focus here is on inward investment rather than on the management practices of successful Irish corporations with large operations overseas such as Smurfit-Kappa, CRH, Kerry Group and Dunnes Stores.

Irish multinationals afford a low level of discretion to union recognition in its foreign subsidiaries compared with "high levels of discretion" afforded by non-Irish multinationals on trades union involvement at their operations in Ireland.

Likewise, Irish multinationals run much more controlled operations in their overseas subsidiaries over pay/reward and performance assessments methods than do foreign multinationals with operations in Ireland, with local management allowed greater discretion over pay policies and performance appraisal, especially in the manufacturing sector.

Overall, American companies were to the fore in providing employees with information on the financial performance and investment decisions, while Irish-owned multinationals reported higher provision of details on staffing plans but were a bit more coy on financial performance.

When it comes to spending on training and staff development the US firms led the field, spending more than 4 per cent of their annual pay bill, followed by British-owned and continental European multinationals, with the Irish organisations more likely to be found in the 1 to 4 per cent bracket.

Interestingly, staff climate surveys appear to be on the wane, either because they produce little relevant information or are potentially embarrassing to senior plant managers.

Only three of the responding multinational operations here considered them the most important communication mechanism, preferring instead face-to-face meetings with line managers, often through "problem-solving groups" or formally-designed work teams.

US companies in particular were adept at identifying "key groups" of employees who are highly skilled, such as research chemists or financial analysts, and not easily replaced.

They are more likely to have performance-related payments or bonuses and to be provided with investment in skills and management development based on the old training adage: "The more you have; the more you get".

According to the United Nations, there are now more than 65,000 multinationals worldwide, employing a sizeable 54 million people, more than twice the 24 million that they employed in 1990.

This comparative, international research is of significant importance to the 200,000 people employed by these companies in Ireland but, a bit like a bespoke suit, not so many are likely to seek it out.

* Human Resource Practices in Multinational Companies in Ireland: A Large-Scale Survey by P Gunnigle et al, University of Limerick.

Gerald Flynn is an employment specialist with Align Management Solutions in Dublin. gflynn@alignmanagement.net