Home / National Industrial Relations / Countries / Ireland / Financial Participation

Financial Participation

The measures taken by the Irish government in the 1990s to develop and improve the statutory and fiscal regulations governing employee financial participation initially led to an increase in the number of profit-sharing and share ownership schemes, though the number later dropped. The current incidence of profit-sharing schemes in private-sector companies with 10 or more employees is currently 11% (according to the “European Company Survey”). The same survey shows that employee share ownership schemes exist in ca. 6% of Irish companies.



In Ireland, there has been a development towards more elaborate government support for financial participation schemes which started in the 1980s, resulting in employer and trade union organisations becoming involved in the discussion. Both unions and employee representatives have welcomed these schemes as a form of financial involvement and a support to partnership initiatives at the enterprise level.1

The national partnership agreement (Programme for Prosperity & Fairness), which was concluded in 2000, contains a number of provisions regarding the enhanced diffusion of employee financial participation at enterprise level. Thus, the agreement includes options for innovation in pay determination and pay practices, including employee share ownership and profit-sharing. There is a “partnership clause” that provides for the voluntary implementation of financial participation: “The Government and the social partners acknowledge the role of Employee Share-Option Trusts (ESOTs), gain-sharing, profit-sharing and other financial employee incentives in developing and deepening partnership and in increasing performance and competitiveness”.2 Moreover, a consultative committee comprising the Irish Business and Employers Confederation (IBEC), the Irish Congress of Trade Unions (ICTU) and appropriate government departments and agencies was set up to give impulses with regard to foster financial participation and to prepare proposals on corresponding initiatives, essentially concerning taxation subjects.



In the last two decades before the advent of the economic and financial crisis in 2008/2009 the socioeconomic conditions in Ireland had changed fundamentally. A series of challenges emerged from the preceding economic boom, including the urgent need for new remuneration systems, such as profit-sharing and gain-sharing. The Irish government and the social partners recognised the need to introduce new forms of financial participation. It was thus accepted that there should be more emphasis on promoting new forms of financial participation at enterprise level. Up till the onset of the economic and financial crisis, a favourable tax regime with generous tax incentives from the state was an essential factor in promoting the rise of approved profit-sharing schemes.

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.