This article gives a brief overview of collective bargaining on changes in work organisation in Ireland, as of September 2004. It looks at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands, flexibility and security in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future.
The EU’s European employment strategy was revised in 2003 (EU0308205F), following demands for a more results-oriented strategy contributing successfully to the targets for more and better jobs and an inclusive labour market set at the Lisbon European Council in 2000 (EU0004241F). To support the three objectives of full employment, quality and productivity at work and cohesion and an inclusive labour market, the current employment guidelines identify 10 priorities ('commandments'), including one on 'promoting adaptability of workers and firms to change'. This identifies work organisation (alongside skills, lifelong learning and career development, gender equality, health and safety at work, flexibility and security, inclusion and access to the labour market, work-life balance, social dialogue and worker involvement, diversity and non-discrimination, and overall work performance) as an element in improved quality at work, which should be pursued through a concerted effort between all actors and particularly through social dialogue.
The 2004 Council Recommendation on the implementation of Member States’ employment policies provides for four priorities:
- increasing adaptability of workers and enterprises;
- attracting more people to enter and remain on the labour market, making work a real option for all;
- investing more and more effectively in human capital and lifelong learning; and
- ensuring effective implementation of reforms through better governance.
The Recommendation refers to promoting flexibility combined with security in the labour market, by modernising and broadening the concept of job security, maximising job creation and raising productivity. As defined in the employment guidelines, 'job security' refers not only to employment protection but also to building people’s ability to remain and progress in work. Changes in work organisation thus appear to be seen as a main vehicle for increasing the adaptability of workers and enterprises. Related to this issue is flexibility and security in the labour market and the relative attractiveness of 'standard' and 'non-standard' employment relationships (with the aim of avoiding a 'two-tier' labour market).
With work organisation playing an increasingly important role in European employment policy, in September 2004 the EIRO national centres were asked, in response to a questionnaire, to give a brief overview of the industrial relations aspects of the topic, looking at: the extent to which collective agreements introduce changes in work organisation that take into account productivity demands and flexibility and security at the workplace in an integrated way; the main areas in which changes are being introduced; the overall success or otherwise of bargaining on the topic; and the prospects for the future. The Irish responses are set out below (along with the questions asked).
Recent agreements on changes in work organisation
Please provide information on recent developments (over the last three-five years) in collective agreements on work organisation that introduce changes in flexibility, security and productivity in an integrated way. The kind of issues that such agreements might cover include: introducing autonomous (or semi-autonomous work) teams; reducing the number of hierarchical layers; new forms of employee involvement; reorganising work functions; moving away from product-based structures to business unit; flexible working hours; multiskilling; job rotation; improving training (eg making it more systematic, ensuring wider participation, or changing the focus); new pay systems (eg performance-based pay, profit-sharing, share ownership schemes), and new financial and non-financial performance measures; or new appraisal systems.
The kind of agreements that we are interested in here are those that deal with a number of the issues listed above as an overall 'package'. Please provide any overall information available on this kind of development, if possible, and brief details of three or four agreements (at company and/or sectoral level) that you consider particularly innovative and interesting. Below is an indicative list of the kind of information we are seeking.
- What are the main aims of bargaining on work organisation - eg increasing productivity? Increasing personnel flexibility? Improving the company’s position in the market? Avoiding redundancies and lay-offs?
- What is the extent of bargaining on work organisation - how many agreements are there? How many companies/employees are covered?
- What are the main areas in which changes are being introduced - eg new organisational structures, new more flexible and less hierarchical methods, new corporate cultures, new business practices, more training, new performance measurement techniques, new reward systems?
- In the context of the introduction of work organisation changes, what kind of contractual and working time arrangements are provided - ie how is the flexibility and security issue being addressed?
- In the context of work organisation changes introduced with a view to improving productivity, what specific measures have been agreed?
- What are the motives of the parties in concluding such agreements - please indicate the motives of each side (management and workforce), such as reducing costs, promoting flexibility, securing employment, preventing compulsory redundancy, or improving terms and conditions.
A recent review of company-level 'partnership' arrangements (IE0410202F) in the Dublin-based Industrial Relations News (IRN) magazine suggests that if partnership over work organisation is taken to consist of 'advanced work systems' comprised of bundles of industrial relations/human resource management practices - for example, a partnership forum, teamwork, gainsharing, annualised hours, skill-based pay and single status (ie for all categories of staff) - then, beyond a small number of high profile examples (especially the three cases cited below) it is not very common in Ireland.
Substantial funding has been made available for partnership initiatives 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 in Ireland, and there has not been a significant increase in workplace partnership over the last 10 years.
In 1998, Bill Roche and John Geary of University College Dublin conducted a study which found that workplace partnership is rare, and that managerial prerogative seemed to be the predominant mechanism for handling workplace change and work organisation. In terms of the percentage of employers claiming to have various collaborative employment relations policies in place, Roche and Geary found as follows: teamwork (59%), ad hoc task forces (45%), and joint consultative committees/work councils (representative or indirect partnership structures) (13%) (IE9807120F). Since this survey, there does not appear to have been a major increase in enterprise partnership. This is confirmed by two recent major surveys of employer and employee reactions to change, conducted by the independent Economic and Social Research Institute on behalf of the National Centre for Partnership and Performance, an institution with a remit to promote and diffuse partnership IE0208203F.
When employers were asked about the existence of partnership processes in the private sector - ranging from explicitly labelled formal structures and 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%).
In relation to employees’ responses, an important aspect of employees’ experience of work is the extent of autonomy or control over their work. The ESRI findings relating to autonomy are mixed: 27% of employees have low levels of control, around half (46%) have some level of discretion, but only 27% have a high degree of control over work tasks. Turning to employee responses, 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 indicate a lack of prior consultation on decisions affecting their work - as many as 27% report that they are consulted rarely or almost never. Employees experience a higher incidence of direct participation than collective representation. Overall, 23% of all employees indicate that partnership committees involving management and unions exist at their workplaces, with about one quarter of those reporting such arrangements being personally involved in them. Meanwhile, about 38% report direct participation provisions - such as teamwork/problem-solving groups - with over 70% of employees in such workplaces being personally involved.
Three workplace 'partnership' agreements between employers and trade unions that appear to deal with work organisation issues in an integrated and noticeably innovative way are outlined below. These three agreements appear to provide mutual gains for both employers and trade unions/workers. For employers, there is the benefit of greater flexibility, higher productivity, improved industrial relations and so on. For workers, they bring greater job security and improved working conditions.
According to commentators, employer interest in these 'partnership' agreements is likely to be driven by a practical concern to respond to fast-changing competitive conditions and implement workplace change issues. Such an approach may be seen to constitute 'good' industrial relations practice and a more viable means of reaching an accommodation with workers and their representatives than traditional methods, such as unilateral management prerogative or adversarial collective bargaining. In other instances, however, employers may simply not see the need for partnership, especially where competition is based on driving costs down. Here, employers may be content to 'sweat' their workforces like any other commodity, it is claimed.
Tegral Metal Forming
Partnership around changes in work organisation would appear to be at quite an advanced stage at engineering firm, Tegral Metal Forming (TMF) (IE0007153F). Partnership has proven to have staying power at TMF, 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, despite some initial teething problems.
TMF came into being in 1977, and currently employs 80 people, and its main activities are steel forming and supplying steel roofing. Clerical workers are represented by the Services Industrial Professional Technical Union (SIPTU) and craft workers by the Technical Electrical and Engineering Union (TEEU). A joint union-management partnership forum was established in 1997 to address challenges such as new competitors, service demands from customers, and complying with the terms of the EU working time Directive. The day-to-day activities of this joint forum are conducted by an eight-member steering committee, and various joint task teams 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 per tonne produced. However, there was early resistance from teams to this cost per tonne measurement, and a joint team was established to come up with an alternative; the result being that four key performance indicators were jointly established, and a joint monitoring team set up to jointly review performance against these indicators.
The main benefits reportedly associated with partnership at TMF include: a more stable work organisation; the near elimination of overtime; higher trust; very little time spent on industrial relations issues; reduced hours of work; and stabilised costs.
Aughinish Alumina Ltd
Partnership is quite advanced at Askeaton-based alumina refinery Aughinish Alumina Ltd, (AAL) and dates back to 1993 - which, again, signals that it has stood the test of time. AAL was established in 1983, and currently has 435 employees, represented by three unions: SIPTU, Amalgamated Electrical Engineering Union and TEEU. Before 1993, AAL reportedly had a climate of adversarial industrial relations, high levels of overtime and a very 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 teamwork system introduced is perhaps one of the most advanced in Ireland, with workers having a significant degree of control over work organisation, and quite considerable freedom to engage in problem solving.
Union-management partnership arrangements at AAL are based on informal cooperation, and there is no permanent formal partnership structure. A number of joint partnership groups have been established to address various significant business issues, such as future business strategy. Moreover, single-status provisions have been implemented, and an annualised hours scheme introduced for all unionised employees.
Allied Irish Bank
The Allied Irish Bank (AIB) partnership with the Irish Bank Officials Association (IBOA) appears to be evolving to an advanced stage, with the parties using the partnership process to help secure a groundbreaking three-year industrial relations agreement in 2003 incorporating a new 35-hour week in the bank - a major breakthrough in Irish industrial relations. 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 (IE0305201N).
The three-year agreement is the most concrete development in a process that was started about five years previously as part of a wider effort to develop workplace partnership in AIB. The next stage involved the official launch of a formal partnership process in 2000, which was characterised by the use of joint working parties and a commitment to a series of principles. These principles included: improved communications; joint problem-solving; security of employment; commitment to adaptability and flexibility; and acknowledgement of the role of IBOA.
Assessment
What have been the results of collective agreements introducing work organisation changes? Drawing on assessments/evaluations made by researchers or the parties to agreements (employers, trade unions, works councils etc) or other sources, please provide information on issues such as the following:
- whether agreements have been successes or failures, and the reasons why in both cases;
- the impacts on flexibility and security (eg are there any successful examples of collective agreements addressing this issue as part of work organisation changes?);
- the impacts on productivity (has productivity been improved as a result of the work organisation changes introduced?); and
- the impacts on collective bargaining - are such deals broadly considered as concession bargaining, or as 'zero-sum' or 'positive-sum' situations? What are the implications for the structure, process or nature of collective bargaining (eg company versus sectoral? workplace representatives versus trade union? from “distributive” to “integrative” bargaining [with mutual gains for both sides]) and the role of management?
Where significant differences of interpretation exist in assessments on these questions - notably between the social partners - please report on the differing views.
The IRN study referred to above suggests that workplace partnership arrangements may potentially offer mutually beneficial outcomes for employers and unions/workers, but only under certain contextual conditions, including the nature of product and service markets, labour markets, choices made by various actors, and availability and use of institutional supports.
One of the key lessons to emerge from the case studies summarised above is arguably that securing a 'quick win' is important for inspiring confidence in partnership. Further, there is said to be 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 still no commonly agreed definition of workplace partnership in Ireland. 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, trade 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 of the spectrum 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 regarded from this perspective as 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 employment relationships, 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. Not believing 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 on 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 in a voluntarist industrial relations system such as Ireland's - much depends on the context, with factors such as product market conditions, labour markets, choices made by various actors, and availability and use of institutional supports, coming into play. Put simply, from this viewpoint, 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 radically to change the world.
While the successes of partnership agreements - such as the three above - are often extolled, it is equally important to discuss partnerships that have 'failed' and broken down.
For instance, at its zenith, the Aer Rianta airport company's 'compact for constructive participation' 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. However, the compact has since imploded. Ultimately, according to researchers, the Aer Rianta partnership was a casualty because neither the management or 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 is reported. Aspects of the compact also appeared to be overly complex. It is also thought to have been as overly reliant on key senior management and trade union 'champions', and once this 'inner circle' disbanded, there was little to prevent the process from breaking down.
Dairygold Co-Operative 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 this plant from October, 2004 with 170 redundancies. Dairygold decided 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 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 reportedly 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.
Debate and prospects
What impact has the kind of agreement referred to above had in your country, and what impact might such agreements have in future? What is the current debate on the topic? Please provide an assessment of prospects for the future in terms of work organisation bargaining in your country (differentiating by sector, if relevant).
Despite 17 years of national-level agreements in Ireland (IE0409203F), partnership is far from becoming a mainstream practice at the workplace. Workplace partnership may potentially offer practical benefits to employers and unions/workers, but is only present under certain conditions, notably where trade unions are strong and competition is based on quality, rather than just cost. Elsewhere, the conditions may not be apposite for partnership to take root and prosper, and, ultimately, employers may simply not need partnership, and/or may view the costs of developing partnership as too prohibitive.
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' it as a method of good industrial relations, but there are limits to this influence. Even where partnership does exist, its durability may be severely tested. 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 and IE0411202F), which will be driven by the choices of the various actors. (Tony Dobbins, IRN)