Unit 3: Industrial Relations
Industrial Relations (IR)
Industrial Relations (IR) refers to the relationship between employers, employees, and trade unions, focusing on collective bargaining, labor laws, dispute resolution, and workplace cooperation.
🌐 International Practices in Industrial Relations
As companies expand globally, industrial relations vary due to differences in legal systems, union strength, and cultural attitudes toward work.
🌍 Key Features of International Industrial Relations
Challenges in Managing International IR
- Adhering to different labor regulations and compliance laws
- Managing multi-country union negotiations
- Balancing home-country policies with host-country norms
- Handling industrial disputes that may affect global operations
Strategies for Effective International IR
- Global HR policy framework with local flexibility
- Regular communication with local unions and labor representatives
- Training managers on cross-cultural labor laws and negotiation styles
- Monitoring compliance with international labor standards (e.g., ILO norms)
- Collaborative conflict resolution mechanisms
✨ Summary
- Industrial Relations in IHRM involves managing employee-employer relations globally.
- Practices differ across nations due to legal, social, and economic factors.
- Successful IR management requires local adaptation, strong communication, and proactive dispute handling.
Shifts in IHRM and IR
1. Shifts in International Human Resource Management (IHRM)
Key Drivers of Change in IHRM
- Globalization and digital transformation
- Rise of remote and hybrid work models
- Talent shortages in global markets
- International mergers and acquisitions
- Compliance with international labor laws and ethics
2. Shifts in International Industrial Relations (IR)
International Strategic Human Resource Management (ISHRM)
International Strategic Human Resource Management (ISHRM) is the process of
aligning global HR policies and practices with the overall international
business strategy of a multinational company (MNC).
🎯 Objectives of ISHRM
- Align HRM with global business goals
- Ensure talent availability across countries
- Maintain cultural sensitivity with operational consistency
- Develop global leadership capabilities
- Achieve competitive advantage through people
⚙️ Key Components of ISHRM
Approaches to ISHRM
- IHRM and IR have evolved from basic administrative roles to strategic, globally integrated systems.
- ISHRM aligns HR strategy with global business needs and enhances a company’s ability to manage talent, culture, and performance worldwide.
International Labor Standards (ILS)
International Labor Standards are legal guidelines and principles set by
international bodies—mainly the International Labour Organization (ILO)—to
promote fair and safe working conditions globally.
📜 Core ILO Labor Standards
Objectives of ILS
- Ensure dignity and fairness at work
- Promote equal rights and opportunities
- Protect workers in global supply chains
- Support sustainable and inclusive development
🧩 Importance in IHRM
- MNCs must comply with ILS to maintain ethical standards
- Reduces risk of legal penalties and reputational damage
- Enhances corporate social responsibility (CSR)
- Builds employee trust and employer branding
Global Unions
Global unions (also called Global Union Federations or International Trade
Union Federations) are international labor organizations that represent the
interests of workers across multiple countries and industries.
🌐 Major Global Union Federations
Role of Global Unions
- Advocate for workers’ rights worldwide
- Support collective bargaining across borders
- Monitor labor conditions in multinational companies
- Partner with ILO and NGOs to ensure fair labor practices
- Campaign against labor abuses in global supply chains
Global Framework Agreements (GFAs)
- Agreements between global unions and multinational companies
- Promote respect for ILS in all countries where the company operates
- Help enforce fair treatment and dispute resolution internationally
✨ Summary
- International Labor Standards ensure ethical, fair, and safe working conditions globally.
- Global Unions protect workers’ rights across borders and industries, influencing multinational companies to adopt fair labor practices.
- Both are critical pillars of ethical and strategic International HRM.
Regional Integration and Framework Agreements
1. Regional Integration
Regional integration is the process by which countries in a
geographical region increase their level of cooperation through
economic, political, social, or labor-related agreements.
🌍 Key Regional Integration Examples
Impact on IHRM
- Harmonization of labor standards and employment laws
- Easier movement of labor across borders
- Collaboration on training, education, and employment policies
- Shared labor dispute resolution frameworks
2. Framework Agreements
Framework Agreements (FAs), especially Global Framework Agreements (GFAs),
are formal agreements between multinational companies and global or regional
union federations to uphold labor rights across countries.
🔑 Features of Framework Agreements
Purpose of Framework Agreements:
- Promote fair labor practices in MNCs
- Prevent labor exploitation in developing countries
- Improve social dialogue between management and unions
- Strengthen corporate social responsibility (CSR)
Companies with Framework Agreements:
- IKEA
- Volkswagen
- Danone
- H&M
- TotalEnergies
These agreements demonstrate the company's commitment to ethical
employment practices globally.
✨ Summary
- Regional Integration fosters labor cooperation and policy harmonization across neighboring countries.
- Framework Agreements help MNCs and unions ensure fair labor standards globally.
- Both support the strategic goals of International Human Resource Management by aligning with global labor values and practices.