CHAPTER 13: END CASE DISCUSSION
Case Study 13.1: Freedom of Movement
Decision:
A national of a Member State who, while maintaining his employment in that State, has transferred his
residence to another Member State and has since then carried on his occupation as a frontier worker can
claim the status of migrant worker for the purposes of Regulation (EEC) No 1612/68 on freedom of
movement for workers within the EU Community. In circumstances such as those at issue in this case,
Questions for Discussion
1. How should the Court decide this case to support the European Union’s commitment to labor
mobility between Member States? Explain.
2. Contrast and compare compelling Germany to grant child-raising benefits to the plaintiff, a
resident of Austria, to the State of Illinois granting state unemployment benefits to a resident of
Indiana.
Case Study 13.2: Discriminating Against Union Official
Recommendations:
The Committee finds that appeals against acts of antiunion discrimination can be examined most
appropriately within a national procedure. In these circumstances, the Committee recommends that the
case before it be dismissed.
Questions for Discussion
1. What are some of the reasons that the ILO does not defer to national procedures, such as U.S.
Courts defer to arbitration, before hearing a labor complaint?
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2. If the practice of the Ministry of Industry had been to return loaned personnel on a routine basis,
give some of the reasons why the union in this case would believed Laganier was being
discriminated against?
CHAPTER 13: Review Questions
1. What are the key components of globalization and how can they influence collective bargaining?
The components of globalization that have impacted the employer–employee relationship include
increased foreign investments, growth of multinational enterprises, the growth in the import and
export of goods and services, deregulation of financial transactions, and the revolution in
technology that has resulted in an increased pace and scale of information exchange as well as
dramatically altered production, distribution, and management processes.
2. Discuss the challenges globalization presents to trade unions and how trade unions are
responding.
• Capital is much more mobile than workers, so different forms of business organizations
and relationships have been created that shift employment and threaten collective
bargaining relationships.
3. Why did the industrial revolution, the democratic revolution, and the rise of capitalism result in
different labor movements in Anglophone, European, and Far East countries?
Anglophone countries shared a common cultural and political history; the United States, Canada,
and Australia were all former British colonies. The industrial revolution coincided with the rise of
Europe’s shared cultural and political history based upon the rule of kings and a feudal land
system caused the democratic revolution to take a decidedly more torturous path. The industrial
revolution came a little later in time and by then socialism as the antithesis of capitalism had
begun to take hold. Nonetheless, industrial relations systems in Europe reached maturity in the
4. Using one of the countries described in this chapter, discuss how its government attempted to
suppress, then tolerate, and then support unions and why.
In Great Britain at the beginning of the industrial revolution, the Combination Acts, passed in
1799 and 1800, made a union of employees illegal as a conspiracy to restrain trade. Great Britain,
however, from as early as the 1830s, began to tolerate unions, primarily because unions
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5. Why was the International Labour Organization created and what influenced its structure and its
mission?
6. What beliefs of the British labor movement influenced its post–World War I development?
7. Compare and contrast the industrial relations system in the United States, Canada, and Australia.
Canada’s economy is centered on resource extraction industries of mining and timber, rather than
manufacturing. This inhibited the growth of a large urban-based, wage-earning labor force. And
because of Canada’s reliance on a few key industries, its economy was more vulnerable to the
disruptive effects of strikes and labor conflict. For these reasons, Canada’s labor relations
first contracts when employers refuse to bargain with a new union. Canadian labor laws have also
provided public sector unions a stronger position by giving them the right to strike (in most
instances) and the right to compulsory arbitration.
Australia adopted a federal compulsory conciliation and arbitration system in 1904, which gave
8. Describe the various ways European work councils are organized and their purpose.
Works councils are permanent elected bodies of workforce representatives, or in some instances
joint committees with employer representatives, established on the basis of law or collective
bargaining agreements with the overall task of promoting cooperation within the enterprise. Their
9. Explain the reasons why there is a dichotomy in European countries between union membership
and collective bargaining coverage.
In France, as long as government-recognized bodies take part in the negotiations, all employees in
a sector or company are covered by an agreement through a State approved extension. Companies
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10. Labor union membership dropped in most nations after the 1950s. What were the common
reasons in the countries discussed in this chapter and what were the unique reasons?
In France low union density, 9.7 percent in 2000, may be a result of: change in the French
economy caused by a shift from unionized industrial sectors to service sectors; more small- and
medium-size enterprises (SME); high unemployment; increase in part-time and temporary
11. Why and how is the Japanese tradition of lifetime employment changing?
12. What primary role do trade unions fill in China?
Previously, the All-China Federation of Trade Union described trade unions’ role in China as
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CHAPTER 12: YOU BE THE ARBITRATOR
Minimum Wage
1. As arbitrator, what would be your award and opinion in this arbitration?
2. Explain why the relevant provisions of the collective bargaining agreement as applied to the facts
of this case dictate the award.
3. What actions might the employer and/or the union have taken to avoid this conflict?
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CHAPTER 13: EXTRA CASES
Insider Trading by Union Official
Facts:
Mr. Bang is the politically elected general secretary of the Finansforbundet, which is a trade union
representing workers employed within the financial sector. Mr. Grøngaard was the employee-elected
member of the executive board of the company RealDanmark, a publicly traded company and a major
financial institution. Mr. Grøngaard had also been appointed by the union as a member of the corporate
liaison committee, established by an agreement between RealDanmark and the union.
Further discussions on merger details were held at a RealDanmark board meeting and at a
meeting of the Liaison Committee. Mr. Grøngaard was present at both meetings. He again approached
Mr. Bang with a view to helping employees deal with the consequences of the merger. They notably
discussed the planned schedule for the merger, as well as the expected increase in the value of
RealDanmark’s shares of between 60 percent and 70 percent. Mr. Bang passed on information to the head
of the secretariat of the Union, Mr. Larsen, and to his colleague, Mr. Christensen, including the planned
date of notification of the merger and the anticipated conversion rate. Mr. Christensen purchased
additional shares in RealDanmark for approximately EUR 214,000.
The issue was brought to the attention of the EU Commission because of Mr. Bang and Mr.
Grøngaard’s contention that their disclosure was protected under the EU’s Directive concerning the
fundamental rights on the information and consultation of workers. The right of workers to be informed
and consulted can conflict with the disclosure requirements imposed by the law on Transferable
Securities. The rationale behind the disclosure prohibition is that the more people are entrusted with
inside information, the higher the risk is that someone will take advantage of it, thereby affecting the
integrity of the market. Any exception to such prohibition risks undermining investors’ confidence in the
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All parties thus acknowledge that a member of the board of directors acts within the normal course of his
duties when seeking expert advice. However, the Danish government argued that does not amount to
authorizing board members to disclose inside information to their advisers. In other words, a board
workers’ rights, he cannot be considered unbiased.
As to whether or not all board members had the right to consult their appointing authority, the
Danish government contended that it would remain doubtful whether the general secretary of a trade
union could be considered the appointing authority of an employee-elected board member, because the
latter represents all employees in a company and not only those who are members of the trade union.
Finally, the Danish government argued that the roles of board member and liaison member as it relates to
disclosure of insider information were the same.
The Union contended that there are interests other than the proper functioning of capital markets,
such as the interests of workers, which have to be taken into account. As a result, the interests of workers,
The Union further contended that in its interpretation of Danish law, the Danish court will have to
take European Community law into account, specifically that the workers’ rights to be informed and
consulted are protected by Community law. The purpose of that directive, as interpreted by the case law,
is “to ensure that the employees of Community-scale undertakings are properly informed and consulted
when decisions which affect them are taken in a Member State other than that in which they are
employed.”
Mr. Bang an expert, the Court ruled that Mr. Grøngaard cannot disclose inside information to that expert
unless, and only to the extent that, such a disclosure is necessary for the expert to be able to give qualified
advice.
Mr. Bang was equally bound by the prohibition on communication contained in the law on insider
trading. So in determining whether Mr. Bang could disclose inside information in the normal course of
Questions for Discussion
1. Do you think Mr. Grøngaard’s duty as an employee-elected member of the board of directors
should have precluded him from, or authorized him to, advise the union of the upcoming merger?
2. If Mr. Grøngaard’s disclosure to Mr. Bang was protected disclosure because he needed advice on
protecting employees when exercising his vote as a member of the board of directors. Is Mr.
Bang’s disclosure to various union members protected or not protected and why?
3. Is there an inherent conflict for an employee-elected member of a board of directors or a liaison
committee member asked to perform his or her representative role without divulging confidential
information concerning the enterprises’ workers?
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CHAPTER 13: EXERCISE AND EXERCISE GUIDANCE
Purpose:
To determine whether your attitudes toward unions have changed since originally completing this
exercise in Chapter 1.
Task:
Reconvene the original small groups that completed the survey at the end of Chapter 1. Retake the same