The Shifting Contours of Collective Bargaining: Employer and Union Responses in the Post Economic Crisis Period in the Republic of Ireland

Thursday, 2 July 2015: 10:15 AM-11:45 AM
TW2.3.04 (Tower Two)
Eugene Hickland, NUI Galway, Galway, Ireland
Tony Dundon, University of Manchester, Manchester, United Kingdom
The shifting contours of collective bargaining: employer and union responses in the post economic crisis period in the Republic of Ireland

Tony Dundon and Eugene Hickland

It is now well known that Ireland’s famed “Celtic Tiger” era ended with the sudden and dramatic collapse of the country’s corporatist model of social partnership amidst neo-liberal pressures (McDonough and Dundon, 2010).The onslaught of a housing bubble, a banking crisis and public sector wage deficit led to the arrival of the ‘Troika’ of the ECB, IMF and EU with a programme of financial stabilisation and reform (Whelan, 2013:2). In Ireland it is almost impossible to consider changes to collective bargaining and pay determination without acknowledging both the role of the domestic State, the ‘Troika’ as well as that of international institutions shaping bargaining outcomes, including Ireland’s large multinational corporations sector and employer associations such as the American Chamber of Commerce (AmCham) and the Irish Business and Employers Confederation (IBEC) (Gunnigle, et al. 2007; Turner, et al. 2013).

In this article data is drawn from 32 interviews with multiple actors at national, sector and workplace levels to assess the changing patterns and features of collective bargaining across Irish manufacturing.

The findings contribute to an understanding of the responses made by industrial relations actors and attendant patterns of collective bargaining in the aftermath of the global economic crisis (Roche and Teague, 2012). Unsurprisingly, the findings identify a drastic shift from centralised bargaining under Ireland’s (former) national system of partnership to local negotiation (Roche, 2009; 2011). No formal or structured sector-level bargaining has evolved since the collapse of Ireland’s national corporatist regime which appeared to be over-reliant on the voluntary goodwill of employers and the state rather than establishing the sort of statutory footing evident in other European corporatist models ( Dobbins, 2010). While collective bargaining has adapted since the crisis in 2009 with enterprise level negotiations taking on new concession bargaining other adversarial or crisis-driven bargaining features were found to be prevalent across key manufacturing sub-sectors.

The findings point to at least four developments that contribute to knowledge concerning the changing dynamics of collective bargaining and labour market regulation post crisis. There are labelled: Varied Employer Preferences; Pragmatic Union Strategizing; an Extended Neo-liberalised State Role; and finally is a new Enterprise-Centric Bargaining Coverage. These four overlapping bargaining features and contours will be elaborated further. First, employer responses to labour market reforms have adopted ‘Varied Employer Preferences’that appear highly pragmatic, yet also signal underlying tensions among and within employer groups. Significantly, employers in unionised manufacturing plants report continued support for collective bargaining. Notwithstanding some managerial concerns about length of time to conclude negotiations, the evidence shows that employers continuing with collective bargaining have achieved a high degree of stability, predictability, and a mechanism to help persuade workers of change in response to exogenous global forces.. The result is a varied set of responses that mean any anticipated wave of overt employer hostility or opposition to union bargaining is not widespread, although tensions and variability among and within employers is noted.

A second collective bargaining impact concerns what we term ‘Pragmatic Union Strategizing’, evident as a response to the new de-centralised bargaining regime following the collapse of social partnership. In particular, SIPTU devised what may be described as a ‘manufacturing sector 2%-plus’ pay campaign. The strategy consciously targeted leading employers’ initially in medical devices and pharmaceuticals and later rolled it out across other manufacturing areas (IRN, 2013). Consequently, individual company successes were quietly and progressively rolled-out as benchmark agreements from one employer to another. From a database of negotiated agreements given to the research team, the campaign has resulted in over 220 ‘2% plus’ negotiated pay agreements across manufacturing between 2010 and 2014. It has since been reported . Arguably, union strategising post-crisis has had mixed results yet the scope of collective bargaining has become perhaps even more politicised at the point of production with a renewed emphasis on streamlined agreements through concessions at workplace levels.

Third is an Extended Neo-liberalised State Role. In addition to unilaterally withdrawing from national bargaining (partnership) in 2010 subsequent changes to national minimum wage rates (originally reduced and since restored under a Fine Gael-Labour coalition) and the functioning of Joint Labour Councils (JLC) have affected bargaining rates. A constellation of changes, including pressures for further privatization of state assets and semi-state industries, are in part direct measure impose by the Troika, but also the result of domestic government policy to follows patterns of neo-liberal finanicalistion. For example, JLCs provide previously legal protected rates of pay for workers in certain low paid sectors (Turner and O’Sullivan, 2013). Along with employer legal challenges and external agency pressures (e.g. IMF, troika), the Irish government is now legislating for employers to claim an ‘inability to pay’ clause to legally protected pay minima (Whitston, 2014). The result is a State and government response that has buttressed a global neo-liberal project which has weakened labour market institutions designed to protect those most vulnerable.

The final change to collective bargaining patterns from our study across selected manufacturing sub-sectors is what appears to be a more exclusive focus on Enterprise-Centric Bargaining Coverage. Conventional literature on collective bargaining coverage reports how the system tends to extend negotiated terms and conditions to other workers not directly covered by the collective agreement. The rationale for wider bargaining coverage is typically explained by sector, industry or national adaptation of negotiated rates, often by those party to an employer federation. Contemporary changes, however, are pointing to derogations from sector or national coverage to company agreements which have had a tendency to minimise or weaken union’s collective capacity (Marginson, 2014). In Ireland the pattern has changed overnight from a national to multiple local levels, without any intermediary formal sector or industry structure.  Nonetheless, the combined responses of the state, employers and unions with the proposed changes in the IR architecture and workplace level outcomes signal both ‘structural change’ and some ‘process continuity’ in the contours of the Irish system of collective bargaining.