Changing representation of labour within value chains: overcoming the distinction between the «formal» and the «real» employer

One of the most significant developments in corporate organisation over the last three decades has been a tendency to vertical disintegration through outsourcing and subcontracting. This has given rise to complex inter-organisational relationships for the production of goods and services which often extend over the boundaries of national countries, and which have been variously named interorganisational networks, global value chains, and global production networks. These structures are characterised by asymmetric power relationships between firms located at different levels of the value chain. The literature has analysed the consequences of such processes of reorganisation for traditional models of trade union representation. Indeed, they have weakened workers possibility to exercise their voice, especially at lower levels of the value chain, because of scarce trade union presence and lower bargaining power. Moreover, the presence of strong power asymmetries between firms reduces the effectiveness of traditional trade union strategies focused on collective bargaining with the employer: given the economic pressures that chain leaders exercise on their subcontractors, employers itself get less and less autonomous the lower the company is positioned in the value chain. Furthermore, while the power on the employment relationship transcends organizational boundaries, workers have no channels to exercise their voice beyond firm boundaries. In recent years, trade unions have become more aware of the need to engage with the «real employer» at the top of any contracting chain in order to improve working conditions at lower levels and have started experimenting with new strategies. This paper will discuss these issues through a case study analysis of two recent campaigns organised by the German metalworkers union, IG Metall, to represent and improve the working conditions of agency workers and workers employed by subcontractors in German automotive companies.