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This record reviews 2003's main developments in industrial relations in Ireland.
The current government is a coalition between the majority centrist Fianna Fail party and the small right-of-centre Progressive Democrats (PDs). This coalition government has been in power since June 1997, and was re-elected at a general election in May 2002
The main collective bargaining development in Ireland in 2003 was the securing of a sixth successive national partnership deal, Sustaining Progress, covering the unionised public and private sector. A draft agreement was reached in January (IE0301209F) and the deal was ratified in March (IE0304201N).
The Sustaining Progress agreement included a 7% pay increase over 18 months, broken down into three phases of 3%, 2% and 2%. On top of this, in January 2004, public servants were due to receive the second instalment of payments awarded under the Public Service Benchmarking Body (PSBB) process (IE0402202N). The PSBB conducted a pay benchmarking exercise during 2000-2 (IE0207203N), comparing public service pay with private sector comparators. As a result, it awarded public servants increases averaging 8.9%, to be paid in three instalments of 25%, 50%, and 25%.
Sustaining Progress was the first in the series of national pay agreements - dating back to 1987 - that did not include a full three-year pay deal. This time, the pay deal - the key ingredient of the entire process - was for just 18 months. As 2003 ended, the attention of the social partners was once again turning to the commencement of negotiations on what was expected to be a further 18-month pay arrangement, which would apply up to the end of 2005.
The Sustaining Progress 'stage one' pay deal proved a particularly difficult issue, because the pressures on the Irish Business and Employers Confederation (IBEC) and the Irish Congress of Trade Unions (ICTU) would not allow for an easy compromise. For the first time in many years, a significant number of IBEC members questioned the wisdom of reaching a national pay deal. IBEC itself had stressed a constant message - pay rises could not exceed those in Ireland's main trading partners. For the trade unions, however, pay rises had to match inflation. In the end, however, the social partners were able to 'sell' the agreed 7% over 18 months to their members.
A significant feature of the new agreement was the role mapped out for various new pay 'compliance' mechanisms (IE0312204F). These include the creation of a new 'pay assessor' service operated by the third-party dispute resolution body, the Labour Relations Commission, to establish the legitimacy of 'inability to pay' claims by employers. Accordingly, employers claiming that they are unable to pay the wage increases due under Sustaining Progress may bring a case under these new procedures. Ultimately, a report by an LRC-appointed assessor in each case may go all the way to the Labour Court and inform the Court in making a binding ruling on whether payment should proceed. The number of 'inability to pay' cases was just below 100 by the end of the year, but with none yet going all the way to a binding decision, there was little evidence to suggest that there would be any major problems in this regard in the private sector. In many instances, the parties were able to negotiate deals locally.
Sustaining Progress also incorporated a new public sector 'performance verification' system, established to assess whether there has been sufficient progress in the area of public service modernisation and change, which would determine whether payment of the public sector benchmarking pay awards (see above) should go ahead on the agreed dates. Five Performance Verification Groups (PVGs) were established to conduct this task, producing their first reports at the end of the year. The vast majority of public servants were cleared to receive pay increases, it having been judged that they had made sufficient progress under the modernisation and change agenda - although there were a few exceptions, including prison officers and some civil servants (IE0312201N).
Together, these various pay 'policing' mechanisms represent the growing formalisation of pay enforcement, perhaps mirroring the 'loosening' of voluntarism in the broader industrial relations arena.
Market forces also played a key role in dampening down pay expectations in 2003, the exact opposite of what happened at the height of the so-called 'celtic tiger' economic boom years. During the first two years of the previous national agreement, the 2000-2 Programme for Prosperity and Fairness (PPF) (IE0003149F), the pressure on employers to breach the pay agreement and award higher increases came primarily from the labour market, not from the trade unions. Equally, the pressure leading to the 'inability to pay' cases under Sustaining Progress mentioned above comes largely from market forces, with the unions trying to hold the line.
The unionised commercial semi-state companies, meanwhile, regarded as part of the private sector for pay purposes, tend now to react to local circumstances like private sector firms. The semi-state airline, Aer Lingus, for example, has adopted a vigorous approach to applying national pay deals, with even 'frozen' pay increases due under the PPF only paid much later after agreement on commitments on change. The airline has sought different levels of productivity-related change with different categories of staff (IE0302201N). It even fought a dispute with cabin crew (IE0301201N), organised by the Irish Municipal Public and Civil Trade Union (IMPACT), over the appropriate level of 'pay for change'. It ended 2003 by warning that it would only pay the Sustaining Progress increases in return for further 'ongoing change'.
By contrast, in the semi-state electricity supply sector, the more powerful unions at the Electricity Supply Board (ESB) were unaffected by the 'ongoing change' elements in the PPF and Sustaining Progress. Late in 2003, they fired a warning shot at government, effectively insisting on another internal 'partnership' deal at the company that would include a shares and reward element. Essentially, this showed that a different kind of 'reality' exists in ESB compared with the airline business. According to some commentators, the ESB unions know they are strong and they use the twin covers of 'partnership' and 'change' to wrest higher than average concessions.
In the non-union sector, pay and bonus payments were kept low or held back in many cases in 2003, again reflecting the business environment. The case of the Intel computer company was indicative. Intel Ireland implemented a pay freeze covering 2003 for a large proportion of staff at its manufacturing plant in County Kildare, in a bid to cut costs during the economic downturn in the information technology industry (IE0303205N).
In terms of bargaining developments in the areas of working time, a major breakthrough in 2003 was the conclusion in April of a 'partnership' collective agreement by Allied Irish Banks (AIB) and the Irish Bank Officials Association (IBOA), which incorporates a 35-hour working week (IE0305201N). As a result, the normal working day is now seven hours. Previously, IBOA members worked a 36.75-hour week, so the concession was a substantial one. This aspect of the agreement represents a major development in the context of Irish industrial relations, as a 35-hour week is quite rare - collectively agreed normal working time generally stands at 39 hours.
The AIB agreement referred to above was also 2003's most notable in terms of job security, with the company making a commitment to no compulsory redundancies during the lifetime of the three-year deal. In the event of voluntary redundancy or early retirement, there will be full negotiation and agreement in line with partnership principles. Other significant aspects of the agreement include: a commitment to no rural branch closures for the duration of the agreement.
The reduction of the gender pay gap is currently a key consideration in Ireland under the national bargaining arrangements. In view of this, the Minister of State at the Department of Justice, Equality and Law Reform published a report in February 2004 aimed at providing practical recommendations for narrowing male/female wage differentials, compiled by a consultative group established under the previous national agreement, the PPF. Under the terms of the PPF, the 'consultative group on male/female wage differentials' was charged with the task of developing proposals for action to address the issues raised in an Economic and Social Research Institute (ESRI) report on the gender pay gap released in late 2000 - How unequal? - Men and women in the Irish labour market (IE0011160F).
While there has been much analysis on the causes of the gender wage gap, there is less agreement on how to address the issues giving rise to the gap or on measures to reduce it. In an attempt to correct this state of affairs, the Department of Justice report is intended to be a practical response to the problem of how to reduce the gender pay gap over time. The rationale for the report is that after almost 30 years of equality legislation and the introduction of a national minimum wage, there still remains a gap of nearly 15% between the average hourly wage of men and women (to the detriment of the latter). In most cases, the report says, it is too early to reach definitive conclusions as to the efficacy of the recent body of anti-discrimination legislation in addressing some of the issues that give rise to this pay gap. The consultative group is of the view that more time needs to elapse before changes to equality/anti-discrimination law could be recommended.
In relation to the balance of 'family-friendly' workplace measures, the consultative group suggests that, while recent improvements to maternity leave provisions are to be welcomed, in the absence of well-developed provisions for fathers, they may have the effect of reinforcing the primary role of women in child-rearing. Actions to address occupational segregation are required on a number of fronts.
The group recommends that a public awareness campaign on the gender wage gap, including one specifically directed at students, could contribute to the recognition of the gap as an issue, and thereby assist in narrowing it. In addition, the Department of Justice should arrange for research to be undertaken in relation to the graduate gender pay gap in Ireland. The group also recommends that public and private employers review the current situation in their respective organisations, setting strategic objectives for the achievement of gender equality accompanied by clear time-based targets. The national minimum wage is deemed to have a key role to play in narrowing wage differentials. However, if it is to have an impact on the gender pay gap, the group argues, it must be set at a level where it will actually affect the wages of significant numbers of low-paid workers.
Training and skills development is a key bargaining issue at national and workplace level, with 'upskilling' of the labour force a key policy goal in the face of international competition.
A number of company-level 'partnership' agreements were concluded during the year. The new three-year agreement at AIB (see above under 'Working time') was the most concrete development in a process that was started five years previously as part of a wider effort to develop workplace partnership at the bank (IE0304203F). This involved the establishment 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 include improved communications, joint problem solving, security of employment, commitment to adaptability and flexibility. As well as the 35-hour week, other aspects of the 2003 agreement include: significant long-service increments for several hundred bank officials; a commitment on no rural branch closures for the duration of the agreement; and discussions on employee financial participation issues such as gainsharing, profit-sharing, share options and bonus payments. Another deal with a partnership dimension was a pre-entry closed shop agreement negotiated in 2003 between Connex, the operator of Dublin's new LUAS tram system, and the Services, Industrial, Professional and Technical Union (SIPTU) on behalf of tram drivers. The deal includes a strong 'no-strike' clause, which is seen as essential as the company faces financial penalties if there is any discontinuity of service.
Long-awaited legislation to protect fixed-term contract workers was finally introduced in 2003, outlawing discrimination against such workers and giving them rights to open-ended employment after a certain amount of time. The new Protection of Employees (Fixed-Term Work) Act implements the 1999 EU Directive (1999/70/EC) on fixed-term work (EU9907181F), which should have been transposed into Irish law by July 2001. The late implementation of the Directive led ICTU to make a formal complaint to the European Commission, which had been on the point of taking proceedings against the Irish government on the issue in the European Court of Justice.
Another key legislative development during 2003 - which was negotiated under the Sustaining Progress agreement because of trade union dissatisfaction with the original provisions for processing union representation/recognition disputes - was the decision to amend the existing 'right to bargain' legislation, which gives employees the right to have disputes over representation rights pursued all the way up to a binding Labour Court decision (IE0309205F). To this end, the Industrial Relations (Amendment) Bill 2003, was drafted, and, when finally implemented (expected in early 2004), the number of procedural steps will be reduced, thereby bringing down the timeframe for reaching the ultimate end stage, a binding Labour Court decision, to a maximum of 26 weeks. At present, most disputes in this area have taken considerably longer than that to reach a conclusion, which has frustrated the unions.
However, the latest changes will still not provide a mechanism for granting full-blown trade union recognition for collective bargaining purposes. There is no statutory union recognition mechanism in Ireland. The unions are still pursuing one, but employers are vehemently opposed to any concessions in this regard. Entering talks on Sustaining Progress early in 2003, the unions seemed to want 'UK-style' recognition legislation, but their strategy now seems to be to push forward on all fronts, and they believe that there are possibilities provided by European-level developments in this area.
Also as part of Sustaining Progress, the government agreed to enhance statutory redundancy pay terms to provide for two weeks' pay per year of service, with the abolition of differentiation by age, and to retain the existing 'bonus week' in the calculation of payments. The existing statutory redundancy pay entitlement amounted to half a week's pay per year of service up to age 41, and one week's pay per year of service from age 41 onwards.
Changes to maternity/adoptive leave legislation were also announced by the government during 2003. The change that will affect most parents is a reduction in the minimum period of maternity leave to be taken before the birth of a child, from four weeks to two weeks. Therefore, while previously at least four weeks had to be taken before the birth and 14 weeks after, now two weeks can be before the birth and 16 weeks after. On adoptive leave, the current 14 weeks of paid leave is to be increased to 16 weeks.
Although the majority of anti-discrimination measures required under recent EU equality Directives are already in place in Ireland (IE0109101F), during 2003 the government drafted a new Equality Bill in order to comply fully with EU law, and the Bill was close to being published at the end of the year. The government intends to transpose the various Directives at the same time (IE0308202T) and the new equality legislation will extend the current equality provisions to self-employed workers, private households, the defence forces and those beyond the current 18-65 age range. In this regard, the following changes will be necessary:
There were no major changes in the organisation and role of the social partners in 2003. However, early in the year, almost 1,900 members in Ireland of the UK-based Graphical, Paper and Media Union (GPMU) applied to join the Irish Print Group (IPG), an autonomous division within SIPTU (IE0303204N). GPMU responded by making a ' complaint to ICTU over what it alleged were SIPTU’s 'unhelpful and divisive activities'. However, several months later, a 'truce' was brokered in the membership transfer dispute, with any transfer of GPMU members to SIPTU on hold (IE0305202N).
As noted above (under 'Collective bargaining'), the social partners negotiated a sixth successive national pact, Sustaining Progress in 2003. The trade unions pushed for a statutory union recognition mechanism, but employers remain vehemently opposed to this (see above under 'Legislative developments'). Thus, the contentious issue of union recognition remains a thorny issue in Ireland’s social partnership.
Strike activity remained at historically low levels in 2003. The modernisation/peace criteria agreed under the Sustaining Progress national agreement (see above under 'Collective bargaining') had a major impact in the public sector in the second half of the year, with most disputes doused in advance of the big benchmarking 'pay day' of 1 January 2004. The power of the modernisation criteria was also clearly demonstrated when the Association of Secondary Teachers, Ireland (ASTI) backed down from a 'non-cooperation' policy with a new junior school science syllabus, following an arbitration ruling that such action would preclude payment of the next phase of the teachers' benchmarking award.
The latest industrial action data from the Central Statistics Office shows that no public service disputes were recorded in the third quarter of 2003. This contrasted with the second quarter, when a 10-week public health doctors’ strike and action by clerical workers in the Department of Agriculture made up approximately 28,000 out of a total of of the 29,000 working days lost. Overall only 938 working days were lost in total in the third quarter of 2003, in six disputes involving 641 workers, compared with 4,613 in the same period in 2002. The majority of days lost occurred in manufacturing (462), followed by construction (161) and financial and other business services (143). In the first nine months of 2003, a total of 33,215 working days were, compared with 17,902 over the same period in 2002.
The Irish Medical Organisation (IMO) conducted a campaign during 2003 for greater pay parity for consultants (senior doctors) with top public servants, which was still unresolved by the end of the year (IE0312203F). Further, IMO demands for a pay increase for junior doctors, in exchange for a shorter working week being introduced in accordance with the EU working time Directive, remained deadlocked. IMO did not, however, engage in industrial action - another 'victory' for the benchmarking 'peace' rules.
Industrial conflict was most pronounced in the state transport sector, and remained so going into 2004 (IE0403202F). Among the major 'flashpoints' in 2003 were the Aer Rianta airport company, Aer Lingus, and the CIE train and bus operator, with the unions, and in particular SIPTU, at loggerheads with the Transport Minister, Seamus Brennan. Mr Brennan’s stance was as trenchant and determined as those opposing him, with little evidence of 'partnership'. In fact, research published in 2003 indicated the country’s most expensively funded and ambitious partnership project, at Aer Rianta, has been left to atrophy, with neither management or unions prepared to invest enough faith in it (IE0312202F). In early 2004, SIPTU was threatening industrial action at Aer Rianta, in protest at the Minister’s plans to break up the company into three parts, which, it fears, would cause a downgrading in the employment conditions of its members.
Trade unions at Dublin Bus, SIPTU and the National Bus and Rail Union (NBRU), staged something of a coup with a 'no fares' day in July 2003, when members did not collect passengers' fares. This resulted in few delays as the company decided, at least for a day, not to challenge the legality of the 'action'. The bus unions were still battling with the Transport Minister at the end of the year, in disagreement over his plans to open up 25% of the Dublin bus market to competition.
Acrimony in the prison service resulted in the Justice Minister, Michael McDowell, threatening to close four prisons in a dispute over his plans to introduce a new annual hours system to reduce drastically an overtime bill that has been a feature of the service for decades. No end to this long-running 'flashpoint' was in sight as 2003 ended.
In August 2003, the government published a consultation paper (IE0309204F) on the national implementation of the EU information and consultation Directive (2002/14/EC) (EU0204207F). In the consultation paper, the government sought views from interested parties on a number of key issues related to transposition. The Directive is to be enacted by March 2005, but there are 'transitional arrangements' for Member States, such as Ireland, currently without 'general, permanent and statutory' information and consultation systems, allowing these countries to phase in the application of the Directive to smaller undertakings up to March 2008.
A recent major survey of employee work experiences, conducted by the independent Economic and Social Research Institute (ESRI), concluded that although employees are highly committed to their work, employers are 'under-utilising the enthusiasm' of their workforces, and employees 'feel increasingly stressed and under pressure'. The message was that workers are feeling the pressure and many employees are at risk of 'burn-out'. A total of 95% of respondents said they now had more responsibility than previously, while one in four felt under more pressure at work than two years ago. It was found that work stress peaks among the 25-39 age group, while one in three of the survey respondents described themselves as 'too tired to enjoy their home life after work'.
There is no concrete information on the level of undeclared work in Ireland.
The year's most significant development in terms of new forms of work was that, after much delay, the provisions of the EU fixed-term contract Directive were finally transposed into Irish law in 2003, through the new Protection of Employees (Fixed-Term Work) Act (see above under 'Legislative developments').
An important development in 2003 was the announcement in the 2004 state budget that over 10,000 Dublin-based public servants must decentralise to the regions. Opinion was divided on the issue. From one perspective it smacked of political opportunism. From another it was a brave move that will regenerate smaller towns and communities.
One of the issues likely to dominate 2004 is whether the social partners can negotiate a second stage 18-month pay deal when the first 7% phase of Sustaining Progress expires. The task has not been made any easier by an outbreak of industrial conflict in the semi-state transport sector early in the year, with unions threatening industrial action at Aer Rianta and CIE. (Tony Dobbins, IRN)