Effectiveness of 'right to bargain' law questioned

Although the so-called'right to bargain' provisions introduced by Ireland's Industrial Relations (Amendment) Act 2001 are in their infancy, doubts have started to arise within the trade union movement as to their effectiveness in securing union recognition. When talks commence on a new national agreement in late 2002, the issue is sure to figure at some stage. This feature provides an update on the latest developments in this area.

Trade unions had hoped that the'right to bargain' legislation introduced in Ireland in 2001 would lead to more companies recognising unions. In recent years, although overall union membership levels have increased in Ireland to a historically high level, there has nevertheless been a fall in union density, as employment levels have outpaced union recruitment during the recent economic boom (IE0102164F). In 1999 - the last year for which accurate figures are available - union density (union membership as a proportion of those in employment) stood at 44.5%, down from a high of nearly 62% in 1980, when employment levels were significantly lower. Moreover, while density in the public sector is still very high at approximately 90%, it has declined to about 22% in the private sector.

Unions feel that the difficulty experienced in gaining recognition from employers is a key factor contributing to this decline in density. These problems prompted the unions in the late 1990s to seek a procedure designed to promote recognition for collective bargaining purposes.

Voluntarism retained

It was this against this backdrop that a'high-level group' on trade union recognition was established under_Partnership 2000_, the 1997-2000 tripartite national agreement (IE9702103F), to examine union recognition. The group agreed in March 1999 (IE9903135F) to retain a largely'voluntarist' system in this area, with change basically limited to giving existing'third-party' institutions - theLabour Relations Commission (LRC) and theLabour Court- greater powers to resolve recognition disputes. This approach contrasted with that taken by the UK government, which was examining the same issue at the same time, and whose Employment Relations Act 1999 provided for a trade union recognition procedure with an element of compulsion for employers (UK0007183F)

The structure of the Irish recognition provisions reflected the practical requirement to devise a compromise solution that addresses the various concerns of the unions, employers, the government and economic development agencies. It also reflected the balance of power between the various parties. All the parties were unwilling to countenance a more substantial binding/mandatory element in the recognition procedures. For the latter three groups, this reflected a deep-seated concern not to threaten foreign inward investment, while the trade unions perceived that a statutory recognition law could prove to be a'double-edged sword'.

The procedures involve a two-stage process: a voluntary procedure and a binding'fall-back' provision of last resort. The first, voluntary stage of the process - operational since May 2000 - is covered under aCode of Good Practice on Voluntary Dispute Resolution drawn up by the LRC. This voluntary procedure, under which both employers and unions can refer a matter to the LRC's advisory service, aims to secure agreement on the representation of workers on a consensus basis. To this end, a series of conciliation meetings takes place. If no resolution can be reached, a'cooling-off' period follows, during which the LRC advisory service continues to work with the parties, calling on the assistance of outside experts if necessary. If the issues are capable of resolution, the LRC makes a non-binding proposal - either on recognition or representation on pay and conditions - which can then be implemented by the parties.

If the issues are still not resolved, or the employer refuses to engage with the voluntary process, the second, binding'fall-back' provision may be enacted. This has been in place since June 2001 (IE0108242N), when it was introduced by theIndustrial Relations (Amendment) Act 2001. It provides for a full Labour Court hearing, initially resulting in a non-binding recommendation. If this initial recommendation fails to resolve the dispute, then the union can apply to the Labour Court for a binding'determination', which can cover representation relating to pay and conditions, but not formal recognition. If the employer refuses voluntarily to accept this determination, the union may either:

• wait for 12 months and then apply to the Circuit Court for an order to implement it; or

• wait three months and then apply for a'review' of the determination. If the result of the review has not been implemented within six weeks, the union can then apply to the Circuit Court to have it legally enforced.

The union may be excluded from these'right to bargain' procedures if it takes industrial action. This applies from the point at which the dispute is referred to the LRC voluntary process.

Recognition/representation distinction

The procedures outlined above do not give the Labour Court a remit to recommend formal union recognition for collective bargaining purposes. This is a crucial issue, because recognition covering the right to collective bargaining over pay and conditions is what unions ultimately aspire to in any dealings with employers.

Under the current procedures, if successful, unions may secure only the right to_represent_ individual members on pay and conditions etc. The procedures basically amount to a dispute-resolution mechanism, which can establish the right for a union to represent members individually on disputed issues. The number of employers that are likely to concede recognition for collective bargaining purposes as result of these procedures is likely to be very small.

It is evident that the Irish procedures have fewer'teeth' than the statutory UK recognition framework, in terms of satisfying trade unions’ pursuit of full-blown recognition deals for collective bargaining purposes. In Ireland, the same degree of legal compulsion on employers to grant recognition does not exist, a fact that has led some commentators to observe that Irish unions may have'lost out'.

Constitutional issues

In Ireland, however, attempts to introduce UK-style union recognition legislation could hit a constitutional barrier. The prevailing wisdom is that theIrish Constitution prohibits statutory recognition. Under the Constitution, the recognition issue involves the conflict of two constitutional rights related to freedom of association: the right of workers to be in a trade union and the right of employers not to recognise a union.

However, some challenge this conventional legal wisdom. Adrian Twomey of the law firmA & L Goodbody Solicitors suggests that, although there is no constitutional imperative for employers to recognise trade unions, at the same time there is also nothing preventing the state from trying to implement a statutory right to recognition for collective bargaining purposes. In a paper presented at aChartered Institute of Personnel and Development (CIPD) conference in March 2001, Mr Twomey pointed out that the state had already done something along similar lines in the context, for example, of consultations over collective redundancies and the transfer of undertakings. Therefore, Mr Twomey argued, the Industrial Relations (Amendment) Act 2001 could have provided for statutory union recognition, rather than going down the route of Labour Court determinations on disputes over pay and conditions.

Mr Twomey referred to Irish case law on union recognition, suggesting that in the 1980 case of_Abbott and Whelan v Southern Health Board_ case, Judge McWilliam'effectively stated that the Constitution did not impose a duty on employers to negotiate with trade unions'. This, Mr Twomey claimed,'falls a long way short of holding that no such duty can be imposed on employers by legislation'.

Double-edged sword

Although many in the trade union movement in Ireland would accept that the UK statutory provisions have been a success (UK0201171F) - at least to date - and some Irish union representatives would probably want similar legal support for recognition, many representatives remain wary of statutory intervention. Significantly, union leaders have not actively lobbied in favour of statutory recognition. Historically speaking, there has always been suspicion of legal interference in the Irish industrial relations arena, and a belief amongst both unions and employers that a predominantly voluntarist approach would best serve their respective interests. A perception remains amongst unions that statutory recognition could potentially constitute a double-edged sword and open up a legal'Pandora’s box', with a fear that some employers could use a workforce balloting process to'de-recognise' unions (however, de-recognition disputes are not yet in evidence in the UK, and unions there have often secured recognition without the need for a ballot).

It is possible that there is also an underlying trade union concern that a statutory mechanism could pave the way for potential legal challenges to traditionalclosed-shop agreements supporting compulsory union membership.

Notwithstanding their suspicion of statutory recognition, there are signs that unions are becoming frustrated with the existing procedures (IE0112226N). For instance, at theService Industrial Professional and Technical Union (SIPTU) national conference in 2001, the union’s vice-president, Jack O’Connor, described the current procedures as a'minimalist measure' and'by no means a law providing for union recognition'.

Lengthy procedures

Unions are particularly frustrated about the time it takes to secure results from the current recognition procedures - successful or otherwise. Few disputes spend less than six months in the voluntary procedures, with some taking well over 12 months. After this, the binding procedure may take at least six months. Thus, it could take up to 18 months or longer to obtain a binding determination, whereas the process takes a maximum of three months to reach finality in the UK.

There is also a perception that some employers are using the voluntary procedures as a delaying or stalling tactic, or are not acting in good faith. Indeed, it would be surprising if employers were not receiving advice on how to delay the process. The use of delaying tactics by employers may hinder the unions’ cause, because the momentum which is vital in any organising drive is often lost. This may cause members, or potential members, to lose interest or become disenchanted. Prospective union members want their new union to represent them in the space of a few months, rather than having to wait what could be up to two years. Unions need quick wins to attract and retain members.

In view of this, some unions may feel that it would be more productive to resort to industrial action from the outset, in order to try to secure recognition in the traditional manner. Once they are engaged in the new procedures, unions have less scope to resort to industrial action than was traditionally the case. As mentioned above, a key element in the current procedures is that a union can potentially be excluded from them if it takes industrial action. Industrial action may be undertaken after all the procedures have been exhausted, but this could take at least 18 months in practical terms.

Therefore, unions facing a recognition dispute now effectively face a choice between three main options. They can: attempt to force recognition by taking industrial action straight away; ask their members to'sit tight' for up to two years before a result emerges from the new procedures; or pursue a Labour Court case under Section 20 of the Industrial Relations Act.

A recent recognition dispute involving SIPTU and the Navan-based foam manufacturerQ Flex provides an illustration of union frustration. SIPTU decided to resort to industrial action in pursuit of recognition. However, the Labour Court expressed its dismay at the move, and referred the union back to the voluntary procedure, while adding that the company should cooperate with the process. The Court was of the view that the new procedures should be exhausted before any industrial action is taken.

An analysis in the independent publication,Industrial Relations News (IRN), in November 2001 examined the initial impact of the new procedures (IE0201260F). As of October 2001, 28 union recognition disputes had been referred to the LRC advisory service under the voluntary procedure. The majority of firms involved were indigenous (ie Irish-owned), while just six were foreign-based multinationals. Of the 28 cases, only three had completed the voluntary process. Two of these resulted in improvements in pay and conditions, with the third (Jetwash- see below) being referred to the second-stage procedures. Of the 25 remaining cases, 13 were still ongoing. In nine of the 12 other cases, employers had refused to enter the process or failed to respond. This left three other cases, which were either withdrawn or put on hold. Effectively therefore, in 12 of the 28 cases - almost half - the voluntary process was effectively'stillborn', with no engagement taking place, let alone successful engagement.

Since the IRN report, it is understood that the number of cases handled by the LRC has doubled under the voluntary procedures. Moreover, the Labour Court has issued two recommendations under the second-stage fallback procedures of the Industrial Relations (Amendment) Act 2001:

• the first case involved Jetwash, an engineering services firm, and theTechnical Electrical and Engineering Union (TEEU), with the Court issuing a non-bindingrecommendation in March 2002. The Court ruled in the union’s favour, and the company accepted the recommendation. Thus, there was no need to invoke a binding determination. The parties had been through the voluntary Code of Practice procedure, which resulted in agreement on pay. However, the union then claimed that the company had not complied. The Court accepted the union’s interpretation, and judged that the employer had not acted in good faith, and had failed to observe the provisions of the pay terms; and

• the second case under the second-stage procedures involvedBantry Bay Seafoods, a food company, and SIPTU (IE0209201N), with the Court again issuing a non-bindingrecommendation in the union’s favour in August 2002. The Court noted that the employer had declined an invitation from the LRC to process the dispute through the voluntary procedures, which the Court felt was'particularly regrettable'. The Court set a one-month deadline for the firm to establish a grievance and disciplinary procedure for 30 SIPTU members. The company was also told to provide each employee with a written statement to the effect that the company respected their right to join a union and that no employee would suffer any disadvantage if they exercised that right. Significantly, however, the Court said that it'cannot and does not recommend' that the parties engage in collective bargaining.

More Labour Court cases are in the pipeline, with a number of hearings due soon. No case has yet gone all the way down the legally-binding determination route, and theIrish Business and Employers Confederation (IBEC) feels that it is too early to judge the legislation.

It is true to say that the new procedures are at an early stage of development, and the unions have not yet full tested the creative potential of the legislation. It remains to be seen what would happen if unions decided continually to process a large number of individual claims against a particular employer, relating to a wide range of issues - such as pay, terms and conditions, and disciplinary procedures. If confronted with this scenario, an employer might pragmatically decide that it would be easier to deal with all the issues together, which would effectively constitute de facto collective bargaining.

Inward investment

Employers and development agencies have been opposed to mandatory recognition, primarily on the grounds that it would endanger foreign inward investment, particularly from USA-based multinationals, many of which are unwilling to deal with independent worker representatives, and have their own individual human resources policies in place, often dictated from board level. In this regard, employers' organisations such as theUnited States Chamber of Commerce represent a powerful lobby group in Ireland, and this has undoubtedly had an impact in terms of changing state policy towards recognition. Crucially, it is no longer a fundamental tenet of the state and of agencies such as theIndustrial Development Agency (IDA) to encourage incoming multinationals, or new indigenous companies, to recognise, and bargain collectively with, trade unions - which was traditionally the case. As a result, the Irish institutional context has become more amenable to the diffusion of different models of employment relations - including individualised non-union models.

At the same time, and despite these fears over foreign investment, it could be remarked that many of the multinationals operating in Ireland are unlikely to be the main target of the unions, as their pay and conditions are often broadly in line with those in unionised employment. Rather, indigenous employers, frequently in the non-trading service sectors, appear to be the unions' primary targets.

The'Horgan thesis'

John Horgan, a former director of human resources atAnalog Devices' European operations and former chair of the Labour Court (1984-9), offers an interesting perspective on the new'right to bargain' provisions. The'Horgan thesis' is that the new legally binding provisions may act as a disincentive to foreign investors, given that the Labour Court now has new powers ultimately enabling it legally to impose pay rates and conditions on employers - where trade unions make an application to this effect. The implication of this is that, in such circumstances, it is the state, rather than the employer, that fixes pay and conditions.

Mr Horgan describes the new Industrial Relations (Amendment) Act as a bad piece of legislation'that doesn’t appear to satisfy anybody'. It does not provide the unions with a right to collective bargaining, while for employers it constitutes an irritant and a disincentive to invest, Mr Horgan suggests. Indeed, the new provisions appear to represent something of a'fudge', he believes.

Under the new provisions, companies that refuse to grant recognition unions will face a choice between two unattractive options, Mr Horgan argues:'They can take a misleadingly named voluntary decision to grant de facto recognition by allowing the LRC to examine any union demands and make recommendations. Failing acceptance of the LRC decision, the Labour Court itself will issue a recommendation, which, while not binding, will have enormous persuasive force. By that stage employers will have lost forever the opportunity to resolve the issue directly with its employees.' Significantly, he adds:'The stark and only remaining alternative is to allow a trade union to trigger a procedure, which will, for the first time in this country since World War II, effectively allow the state to legally fix the pay and conditions of employment of the employer. The Labour Court is to be given new and unprecedented powers to determine the pay and conditions of employment of any company that refuses to grant the right to bargain to a trade union.'

Mr Horgan believes that statutory recognition provisions along the lines of the UK legislation may not, after all, be as great a disincentive to investors as the current Irish procedures, because the UK procedures are more clear-cut - for instance, the size of the bargaining unit required to qualify for recognition is clearly stipulated - and, crucially, the state does not have the power to fix pay rates and conditions. However, a statutory mechanism would not be possible under the Irish Constitution, and there would have to be a referendum to change this, Mr Horgan suggests.

Commentary

Trade unions in Ireland often argue that it is difficult to have a meaningful partnership in circumstances where employers are unwilling even to recognise, or negotiate, with a union. The unions are likely to seek some changes to the current recognition provisions, in an attempt to bolster their organising capacities and satisfy members’ concerns. This seems sure to figure in the negotiations due to start in late 2002 over a possible successor to the current tripartite national agreement, theProgramme for Prosperity and Fairness (IE0003149F), which expires at the end of the year. However, there are unlikely to be any major changes, given that the old argument that statutory union recognition would frighten foreign investors is likely to be prominent in any talks. Nor is it clear that the unions themselves actually want statutory recognition, given the dilemmas outlined above. The choice now facing the unions is seemingly this: do they lobby for statutory recognition, or do they try to improve the existing procedures?

The likelihood is that a reduction of the time-lags in the present procedures will figure on the unions’ negotiating agenda, and, indeed, it is difficult to refute the argument that, as they stand, the procedures are too complex and protracted. By securing a simplified'fast-track' approach - possibly involving reducing the time-lags between the various stages of the procedures, or even removing one of the stages - the unions may be able to satisfy members' concerns, at least to some degree.

Employers remain opposed to mandatory recognition, and it remains to be seen whether they would accept a further tightening of the timescales under the existing procedures. Under the consensus-based approach, as embodied in partnership agreements such as the current PPF, a reformulation and simplification of the existing procedures is perhaps the best that the unions could secure, given that IBEC, the main employers' organisation, is constrained by the opposition of many of its non-union affiliates to mandatory recognition and collective bargaining (significantly, over 50% of IBEC members are now non-union firms). The concern both to attract and to retain foreign inward investment, particularly from the USA, is perhaps the dominant factor now shaping the union recognition climate in Ireland. (Tony Dobbins, IRN)