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Collective Bargaining

A series of National Partnership Agreements provided a non-binding framework for pay bargaining from 1987 to 2009. However, the agreementnote1 signed in 2008, was unable to withstand Ireland’s economic crisis, and the country has returned to company level bargaining in the private sector, although in the public sector the government reached agreement with the unions following pay cuts

The framework

From 1987 to 2009 collective bargaining in Ireland took place within the framework of a series of national agreements (National Social Partnership Agreements), initially between the ICTU, the employers’ association IBEC, the government and farming organisations. Community and voluntary organisations then became involved from 1997 onwards. These agreements dealt with pay but also tackled broader economic and social issues, such as, from 1997 onwards, poverty and social exclusion and the promotion of social partnership.

 

 

These pacts did not have legal force but unions and employers' organisations were expected to exert discipline on their own members to ensure they kept to the terms of the agreements. Any disputes related to their implementation at industry or local level could be referred to the Labour Relations Commission (LRC) and, in the case of a failure to reach agreement, to the Labour Court. Both the LRC and the Labour Court are state bodies intended to improve industrial relations and minimise disruption from disputes. The LRC was set up in 1991; the Labour Court in 1948.

 

 

The last full social partnership agreement was “Towards 2016”, agreed in 2006.

 

Following the start of the economic and financial crisis, this agreement was reviewed and an updated “Transitional Agreement 2008-2009” was signed in September 2008.

 

 

However, the growing economic crisis and unilateral actions by the government put severe pressure on the agreement, with many employers in the private sector not implementing the pay element of the deal in early 2009. Despite this, discussions between employers and the government continued. These finally broke down in December 2009, when the government announced it intended to impose direct pay cuts in the public sector. In the same month IBEC formally withdrew from the terms of the Transitional Agreement, following the failure of attempts to agree a revised deal.

 

 

Since then pay in the private sector has been set primarily at company level, either through negotiations in unionised companies or through a unilateral decision by the employer where unions are not present. However, in March 2010, IBEC and the ICTU agreed a voluntary protocol “for the orderly conduct of industrial relations and local bargaining in the private sector”. This did not set any pay norms, but it did state that both sides would encourage their members “to abide by established collective agreements” and ensure that “local negotiations … take place on the expiry of existing agreements.” The document also stated that the key objective was “the maximisation of sustainable employment”. The protocol was initially only valid during 2010 but it was extended in February 2011 and again in October 2012,2 and the arrangements will continue to be valid until one of the parties decides otherwise.

 

 

Up to 2012 a majority of companies maintained pay freezes.3 Since then pay has started to rise, with IBEC reporting that half of the employers it surveyed in 2014 expected to increase pay.4

 

 

In addition to company level bargaining, there are also some industry-level agreements – the most important covers the construction industry.

 

 

In the past, some of these industry-level agreements (including those for construction and electrical contracting) were extended, as so-called Registered Employment Agreements, to all employees in the industry concerned, following a request of the two parties to the Labour Court. However, in May 2013, the Supreme Court ruled that this practice was unconstitutional. The government promised to address the issue and on 1 August 2014 it announced that it would bring forward legislation to replace the Registered Employment Agreement system. This will allow unions and employers to ask the government to make orders on wages and conditions in certain sectors, but it will also provide for greater flexibility in response to changing economic circumstances than the old system did, allowing companies to avoid the obligations of the orders if they face economic difficulties.5 Legislation is likely to be in place by 2015.

 

 

A second mechanism for setting minimum pay levels in particular industries has also been revised after being found unlawful. In July 2011, the Irish high court ruled that the Joint Labour Committees, which set minimum terms and conditions in low-paid industries, were exceeding their powers, and that orders setting out minimum rates were unenforceable. The government responded by introducing legislation (Industrial Relations (Amendment) Act 2012) which again permits Joint Labour Committees to fix pay rates, but which requires them to take specific account of the interest of employers and the need to maintain competitiveness. The legislation also allows employers to be exempted from the rates in the case of financial difficulties. In January 2014, the government announced that it was abolishing two of the existing Joint Labour Committees but that eight would continue to exist. However, the orders establishing minimum pay and conditions for each of the industries will not come into effect unless agreed by both parties.6 Employers in some of these sectors, such as hotels, have indicated that they are hostile to the operation of Joint Labour Committees,7 so it may be that in these industries minimum rates and conditions will not be agreed.

 

 

In the public sector, such as in the health service or the civil service, bargaining on pay continues to be at national level. Following the imposition of pay cuts on the public sector at the start of 2010, the government reached agreement with public sector unions in June 2010 on changes in the public services.8 A follow-on agreement, which involved further pay cuts for higher-paid employees, was finally accepted in July 2013.9

 

 

There is no single set of national statistics on the coverage of collective bargaining. The results of the 2009 National Workplace Survey show that only 18% of private sector employees work for companies which engage in collective bargaining.10 However, this figure does not include those companies, such as many in the construction sector, where terms and conditions are governed by industry-level agreements. In addition bargaining coverage is much higher in the public sector. Overall, Eurofound estimated in 2014 that 44% of employees were covered by collective bargaining.11

 

Who negotiates and when?

The national partnership agreements, which were in place between 1987 and 2009, were negotiated between the ICTU for the unions, IBEC for the employers, and the government, with other groups, such as farming and voluntary organisations also involved. Currently negotiations in the private sector are normally between unions or groups of unions and individual employers or employers' federations. Negotiations at company level are undertaken by shop stewards (workplace union representatives), although often with the support of a full-time union official. Trade unions and employers’ organisations must be registered with the Register of Friendly Societies and need a licence to negotiate. This system aims to exclude bodies which are very small or financially unviable.

 

 

There is no obligation on employers to negotiate with unions, irrespective of the level of their membership in the company concerned. However, the government is introducing legislation which, in the last resort, can compel companies to provide terms and conditions similar to those in companies where employers have negotiated with unions (see section on workplace representation).

 

 

Collective agreements can be signed at any time during the year and usually last 12 months.

The subject of the negotiations

The national partnership agreements set pay increases, but they also dealt with a wider range of other social topics. This has now ended and agreements of this type seem unlikely to return in the near future. Richard Bruton, minister for Jobs, Enterprise and Innovation, said in March 2014, that there was no case for a return to old-style social partnership, which had “involved issues that were primarily matters for government to decide”.12

 

 

Currently pay and job security are the main issues in negotiations at company level.

 

 

Ireland has had a national minimum wage since 2000, which is set by the government. The 2000 legislation gave an explicit role to national partnership agreements in fixing the rate, although the final decision remained with the government. Following the collapse of the national partnership agreement in 2009, the minimum wage has remained unchanged, apart from a brief period of six months in 2011, when it was cut by €1 an hour (12.5%). This cut was reversed when the government changed following elections.

L. Fulton (2015) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.