Multinational Enterprises and Labour Laws

In the current state of law, multinational enterprises (MNEs) do not have a specific legal status in the field of labour relations. There is not a specific set of rules that govern them. Thus, in labour relations, MNEs are generally subject to the national law of the host countries. There are, of course, exceptions. For example, the supranational law of the European Union recognizes the pan-European enterprise insofar as it obliges the Member-States to ensure that a European enterprise committee is created within a pan-European group. Similarly, MNEs are, on the whole, understood through different instruments decreed by regional or international organizations, including the International Labour Organisation (ILO), the Organisation for Economic Cooperation and Development (OECD) and the United Nations. These instruments can be characterized as “green” or “soft” law due to their lack of legal “compellability.” Notwithstanding these exceptions, the MNEs’ lack of a transnational legal status reduces legal intervention to a set of national laws, that is, those of the host countries of its legal components and activities. Indeed, national labour laws, whose vocation is, in principle, strictly territorial cannot affect an MNE in its entirety since, by definition, it extends beyond the borders of a single country.Despite their naturally territorial vocation with regard to MNE activities’, national laws could be adapted, albeit marginally, to cover a number of extraterritorial applications of their labour law. The legislator of the subsidiary’s host country or the parent corporation’s country could affect the MNE if the parent corporation presented itself as the “usual” employer, on its own or together with its subsidiary. Moreover, although the conservatism of standard international jurisprudence rejects the extraterritoriality of the law of the parent corporation’s country, it has not stopped the American legislator from expressly recognizing the extraterritorial application of laws on workplace discrimination to foreign subsidiaries of American parent corporations.However, the question of the normativity applicable to MNEs cannot be dealt with on its own. It must be addressed at the same time as the question of its implementation. This involves determining to what extent the courts of the host country are able to apply these norms in order to grasp the true nature of MNEs. Therefore, it can be proposed that these courts—those of the subsidiary’s host country and those of the parent corporation’s country—will generally be able to compel the parent corporation to meet a number of obligations deriving from their national labour law subject to two conditions: first, that the parent corporation has the legal status of an employer at the location of the subsidiary or together with the subsidiary ; second that the principle of “piercing the corporate veil” is admitted in their national law. Moreover, despite their non-binding nature, the ILO’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, as well as the OECD’s Guidelines for Multinational Enterprises, take into account the true nature of MNEs based on the follow-up mechanisms provided for their respective implementation.Although it is true that currently, in labour relations, MNEs are still almost exclusively governed by the national law of the countries in which they are based, it is entirely possible that this situation can and will eventually change. As shown by history, labour law has always demonstrated an adaptive capacity, reflecting the gradual development of employer-employee relations.

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