Despite 17 years of successive national agreements in Ireland, as of October 2004 partnership is far from becoming a mainstream practice at the workplace. This article reviews the situation and the current debate, which suggests that workplace partnership may potentially offer practical benefits to employers and trade unions/workers, but only under certain product and labour market conditions.
It is widely believed that the key to Ireland’s future economic and social success lies in moving towards a 'knowledge economy' based on high value-added and high skilled activities, which, in turn, requires greater innovation at workplace level and increased collaboration between employers, employees and their representatives.
In view of this context, some commentators suggest that it is timely to move beyond the arguments put forward by advocates and sceptics - in terms of whether partnership or cooperative relations are a good idea or not - and take a more realistic look at whether 'partnership' can offer any practical benefits to the various actors involved when dealing with workplace change issues, including company restructuring and implementing new forms of work organisation.
'Partnership' is arguably a greatly abused term, of which there is still no commonly agreed definition. Employers, trade unions, academics and other interested parties have different ideas of what partnership is, or should be, about. While employers often argue that 'direct' employee involvement (for instance, teamwork and problem-solving groups) in non-union enterprises can constitute partnership, the unions would argue that partnership in any true sense must provide independent collective representation for workers as a counterbalance to employer power.
Further, there is still widespread disagreement as to the outcomes of partnership. At one extreme are the sceptics, who dismiss partnership as constituting little more than an 'ideological smokescreen' for management to use its power to exploit workers and attack trade unions, and argue that partnership is much more beneficial to management than to workers and their representatives. For the critics, 'partnership' brings few or no benefits for workers, and the term is a misnomer given that partnership in any meaningful sense would entail a genuine sharing of decision-making. This is clearly not the case, critics would argue, because management imposes its power in the face of intensified competition to dictate the terms of partnership for its own benefit. Partnership forums are toothless 'talking shops' addressing trivial issues. Conflict in the employment relationship is omnipresent, the critics suggest.
At the other extreme, optimistic accounts often portray workplace partnership as a 'bright new dawn' in Irish employment relations, and as an almost universally applicable model, under which employers, workers and their representatives can all reap mutual gains from the process, the result being higher levels of consensus and performance. Disregarding arguments that conflict between employers and workers will always be an inherent structured feature of the employment relationship and that the power relationship will never be one of equals, the optimists speak about the eventual disappearance of conflict from the workplace, and - driven by inexorable changes in product markets - strides towards a knowledge economy based around highly skilled autonomous workers.
While both the sceptics and the optimists may be right to a certain extent, for some commentators there is a more balanced and practical middle ground, which sees the reality as lying somewhere in between these two extremes. In particular, partnership may potentially bring practical benefits for both employers and workers, but - especially given Ireland’s traditional 'voluntarist' industrial relations system - much depends on the context, and factors such as product market conditions, labour markets, choices made by various actors, and availability and use of institutional supports come into play. Put simply, partnership may 'work' in some contexts but not in others. On a practical level, few employers are likely to adopt an explicit primary goal of using their power to exploit workers and attack trade unions. Likewise, few employers are likely to see partnership through 'rose-tinted spectacles' as a means to change the world radically.
More likely in reality is a practical and more mundane day-to-day interest by management in introducing partnership where it is deemed to offer a more effective and practical means of responding to fast-changing competitive conditions, and implementing workplace change, than traditional methods, such as unilateral management prerogative or adversarial collective bargaining. In other words, partnership is seen to constitute 'good' industrial relations practice and a more viable means of reaching an accommodation with workers and their representatives. In other instances, such as the 'sheltered' services sector, employers may simply not see the need for partnership, especially where competition is based on driving costs down. Here, employers may be content to exploit their workforces like any other commodity, it is suggested.
As for workers, they are likely to have many different interests, which cannot easily be categorised. Workers have interests that conflict with their employers, but they also have interests that coincide, it is argued. For this reason, conflict and cooperation will always co-exist in the employment relationship.
A critical factor driving outcomes is the level of management competence, according to some views. The argument is that if workers perceive that management is good at managing different aspects of the business, including employment relations, then workers are more likely to respond positively than where managers are poor. A partnership approach, based on good industrial relations, is part of this equation. It is the overall level of management competence, rather than particular industrial relations and human resource policies, that is the critical factor generating good employment relations.
What is actually happening on the partnership front in organisations today? If partnership is taken to consist of a 'benchmark' for what are sometimes called advanced work systems, comprised of bundles of industrial relations/human resources practices - for example, a partnership forum, teamwork, 'gainsharing', annualised hours, skill-based pay and single employee status - then, beyond a small number of high-profile exemplars, it is thin on the ground in Ireland (IE9807120F). However, in the view of some observers, the widespread adoption of such a 'benchmark' model may be expecting too much. Few organisations are likely to adopt such an ideal-type model in practice, and are likely to respond to the uncertainties of competition in different ways.
Substantial funding has been made available for partnership initiatives in Ireland over the course of recent years, and there has been a proliferation of partnership consultancies. Despite this, partnership is yet to become a mainstream way of doing things. Examining the diffusion of partnership over the last 10 years, there has not been a significant increase, although there are signs of increased experimentation (IE0208203F)
This is confirmed by two recent major surveys of employer and employee reactions to change, conducted by the independent Economic and Social Research Institute (ESRI) on behalf of the National Centre for Partnership and Performance (NCPP) (IE0001204F). When employers in the private sector were asked about the existence of partnership processes - ranging from explicitly labelled formal structures to informal partnership structures - the ESRI found that the incidence of explicitly labelled formal partnership is low (just 4% of employers surveyed), but that informal partnerships are somewhat more prevalent (19%). As many as 36%-42% of private sector employees responded that they hardly ever receive information in areas such as product/service innovation, new technology and new work practices. Many employees also indicated a lack of prior consultation on decisions affecting their work - as many as 27% reported that they are consulted rarely or almost never.
It is important to ascertain whether partnership agreements can stand the test of time. In other words, what is the durability of partnership? This is critical because whatever goes on in the workplace is conditioned by wider external competitive pressures, and the degree of insulation from these pressures required to sustain the concurrent interests of employers and workers is very difficult to achieve, particularly under a voluntarist industrial relations system with few institutional supports for partnership. With this in mind, below we examine whether some of main examples of partnership at the end of the 1990s are still in place five years or so later in 2004. This provides an indicator of the resilience of voluntary partnerships, which, to a great extent, are reliant on the leadership of senior management and trade union 'champions'. Partnerships, it is argued, need the space and time to develop and evolve, and require support from the very top.
On the face of it, there would appear to be little new happening on the partnership front in the private sector beyond the exemplars that have already existed for some time. Against this, however, some attempts to develop more collaborative workplace arrangements are in their early stages, and may not be very visible to outside observers. In recent years, the NCPP - which is charged with diffusing collaborative and innovative methods of responding to workplace change - has played an important role in attempting to spread the message of the practical benefits of partnership and bring it more into the mainstream of employment relations.
Of the current examples of workplace partnership, the following would appear to have evolved to a relatively advanced stage, and indicate some of the practical benefits of partnership.
A significant level of change has been introduced at Tegral Metal Forming (TMF) through partnership. Partnership has proven to have staying power at TMF (which manufactures metal cladding), having been introduced back in 1997, and it has since become more advanced. Developments of particular note at TMF include the reorganisation of work around a skill-based pay system, annualised hours, and the bedding down of a seemingly effective 'gainsharing' scheme (IE0007153F), despite some initial teething problems.
Clerical workers at TMF are represented by the Services Industrial Professional and Technical Union (SIPTU) and craft workers by the Technical Engineering and Electrical Union (TEEU). A joint union-management partnership forum was established in 1997 to address challenges such as new competitors and service demands from customers. The day-to-day activities of this joint forum are conducted by an eight-member steering committee, and various joint 'task teams' have been established to address special issues of concern. Initially, these task teams addressed core business issues that were deemed to be reasonably 'safe', which helped the partnership process achieve credibility and generate trust. Thereafter, the process became more ambitious and, eventually, a team-based system was implemented across the plant, incorporating a jointly agreed pay system based on skill levels, as well as a 'gainsharing' system based on cost of production per tonne. The main benefits associated with partnership at TMF are reported to include a more stable work organisation, the near elimination of overtime, higher trust, less time spent on industrial relations issues, shorter working hours and stabilised costs.
Partnership is also quite advanced at the Askeaton-based alumina refinery Aughinish Alumina Ltd (AAL), and dates back to 1993 - which signals that it has stood the test of time. AAL was established in 1983, and currently has 435 employees, represented by three unions: SIPTU, TEEU and Amicus. Prior to 1993, AAL had a climate of adversarial industrial relations, high levels of overtime, and a hierarchical structure. This began to change in 1993, when management introduced a much flatter team-based structure, with just three levels of decision-making. The semi-autonomous teamworking introduced is perhaps one of the most advanced in Ireland, with workers having quite a high degree of control over work organisation. Union-management partnership is based on informal cooperation, and there is no permanent formal partnership structure. A number of joint partnership groups have been established to address significant business issues. Moreover, single status provisions are in place, as well as annualised hours for all unionised employees.
The Allied Irish Bank (AIB) partnership with the Irish Bank Officials Association (IBOA) appears to be evolving to an advanced stage, with the parties recently using the partnership process to help secure a groundbreaking three-year industrial relations agreement incorporating a new 35-hour working week at the bank - a major breakthrough in Irish industrial relations (IE0305201N). The agreement includes a mutual commitment to business transformation, and 'best practice' is to apply in regard to consultation and agreement, adherence to existing agreements and consensus-based bargaining.
Jurys Doyle is one of Ireland’s leading hotel groups, employing approximately 4,000 people in 32 hotels. The partnership initiative here dates back to 1998. In conjunction with the SIPTU union, Jurys established a partnership steering committee, consisting of five union and five management representatives. Local department partnership committees have also been established. For instance, a job-sharing initiative has been introduced on a permanent basis in the accommodation and reservations sections of the hotels. The partnership committee is still in place and its role has gradually expanded.
In the semi-state sector, Electricity Supply Board (ESB) management and unions concluded a novel 'greenfield' industrial relations agreement in July 2003 to cover two new state-of-the-art power plants in the midlands (IE0308201N). This comprehensive agreement is specific to the two new stations, and includes annualised hours, team-based working and new payment mechanisms. Crucially, there will be a single representation forum, a joint management/union body. This will 'build in' the partnership-based principles and processes that were integral to the negotiation of the agreement. In doing so, the joint forum should reflect, or mirror, the team-based working that has been agreed for the two plants.
A number of other companies often come in for favourable mention in relation to their partnership initiatives. These include Medtronic, Abbott and Boxmore Plastics. One of the key lessons to emerge from these case studies is that securing a 'quick win' is important for inspiring confidence in partnership. Further, there is growing recognition that partnership and industrial relations processes need to be intertwined, and that a number of shared objectives must be identified that can deliver mutual gains for all 'stakeholders'.
There is evidence that partnership is beginning to take more of a hold in the public sector than has hitherto been the case. In particular, the establishment in 2003 of five public sector 'performance verification groups' (PVGs), with the power formally to sanction - or withhold sanction from - both payments under the current Sustaining Progress national agreement (IE0301209F and IE0304201N) and the myriad of public sector 'benchmarking' payments (IE0207203N), marked a new practical partnership development across the public sector. These payments are conditional on adequate progress being made in relation to the modernisation and industrial peace agenda set out in national agreements. In addition to an independent chair, each PVG has equal representation of trade union, employer and independent members representing customers/service users. So far, the PVG process has operated quite smoothly, underlining the practical benefits of a partnership approach (IE0402202N). It will take time, however, to move away from adversarial traditions across the wider public sector.
While the successes of partnership are often extolled, it is equally important that partnership 'breakdowns' are assessed and discussed. Partnerships that have broken down may offer some salutary lessons.
At its zenith, the 'compact for constructive participation' at Aer Rianta, the state-owned airport company, was widely deemed to be the most advanced partnership in Ireland to date (IE0312202F). The compact was without precedent in terms of the level of ambition in attempting to establish multi-level, direct and indirect joint-problem-solving arrangements, and nothing has been attempted on the same scale since. One of the central principles of the compact was 'jointness'. In other words, no one party would seek to impose unilateral change, and all proposals for change would go through an agreed partnership process involving those who would be affected by it prior to any decision being made to implement change. These principles would appear at odds with the current adversarial approach to the proposed restructuring of Aer Rianta (IE0403202F).
However, the compact has imploded. Ultimately, the Aer Rianta partnership was a casualty, according to observers, because neither the management nor unions believed in it sufficiently, nor were they prepared to invest enough faith in it. Various parties were also concerned with maintaining their own power bases, it has been argued. Aspects of the compact also appeared to be overly complex. It is clear that it was over-reliant on key senior management and trade union 'champions', and once this 'inner circle' disbanded, there was little to prevent the process from withering on the vine.
Acute industrial relations problems exist at An Post (the national post office), despite a series of partnership initiatives in recent years, as well as agreement on an employee share-ownership plan (ESOP) (IE0007216N). Relations between management and the various trade unions, in particular the Communications Workers Union (CWU), have remained difficult over many years. Management has accused the unions of consistently failing to deliver on agreements.
Dairygold Cooperative Society Ltd has used autonomous teams and gainsharing in the maintenance area at its Galtee pigmeat plant in Michelstown for many years - with an advanced and much lauded form of partnership well established. Recently, however, Dairygold announced the closure of the Michelstown plant from October 2004, with 170 redundancies. Dairygold decided that it had to reconfigure its pork operations to compete in the increasingly harsh climate of international competition. The closure announcement indicates the difficulty of insulating partnership from competitive pressures.
SIPTU members at the at the Waterford-based Irish subsidiary of the US-owned contact lens manufacturer, Bausch & Lomb, recently voted to pull out (IE0410201N) of a joint union-management partnership forum that had been in place since 1996 (IE9802242N). SIPTU members are disillusioned with the forum, the perception being that their industrial relations concerns are not being adequately dealt with. The future of the forum is therefore in some doubt.
Workplace partnership in Ireland is voluntary, in the sense that there is no statutory obligation on employers to share power over the key operational and strategic issues facing company stakeholders. Partnership institutions such as the National Centre for Partnership and Performance can try to persuade organisations to enter into voluntary partnerships by 'selling' them as a method of good industrial relations, but there are limits to this influence. Moreover, even where partnership does exist, employers can withdraw at any time, because there are currently few institutional and legal underpinnings, and the harsh winds of competition in product and service markets may simply blow partnership away. Equally, the trade union side has not always been as proactive as it might in exploring this area and responding to the diverse interests of members.
EU-level developments may yet be significant in boosting partnership. In particular, the 2002 EU information and consultation Directive (2002/14/EC) (EU0204207F) - which is due to come into force in March 2005 - will require Irish employers that fall under its provisions to provide workers with new rights to information and consultation. It remains to be seen whether the Directive can provide the 'institutional architecture' to diffuse partnership more widely in years to come or, alternatively, whether a 'minimalist' interpretation of the Directive will take root. Much depends on how it is transposed (IE0309204F), which will be driven by the choices of the various actors. (Tony Dobbins, IRN)