PROGRAMME FOR ECONOMIC AND SOCIAL PROGRESS
| IRELAND |
| PROGRAMME FOR ECONOMIC AND SOCIAL
PROGRESS |
The Programme for Economic and Social Progress (PESP), which commenced in 1991, is the successor to the Programme for National Recovery (PNR). In 1990, which was towards the end of the lifetime of the PNR, the Irish Congress of Trade Unions took the initiative and called for tripartite national negotiations based around the notion of a 10-year development strategy. This idea eventually formed the long-term objective of the PESP: the development of "a modern, efficient market economy with innate capacity for satisfactory and sustainable growth and discharge of the obligations of a developed social conscience." The PESP contained commitments in similar areas as the PNR: macro-economic stability, tax reform, employment and training and so on, with the introduction of commitments in new areas, such as worker participation and labour legislation.
The Government's principal economic aims during the lifetime of the Programme have been to reduce the ratio between the national debt and GDP (gross domestic product) and as part of this to achieve broad balance on the current budget; to maintain a strong exchange rate policy within the European Monetary System; to maintain low interest rates; and to increase competition within both sheltered and exposed sectors of the economy. In order to achieve lower unemployment and high employment growth, there was seen to be "a need for a system of pay determination which delivers improvement in competitiveness, maintains industrial peace and handles distributional conflicts without disruption to the functioning of the economy" (PESP, 1991).
On pay and conditions of employment, the PESP provided for the following: during the three years of the agreement, annual pay rises of 4 per cent. in the first year, 3 per cent. in the second year and 3.75 per cent. in the third year. Minimum increases for adult low-paid workers as defined by the agreement were also agreed: ¥5 per week in the first year, ¥4.25 in the second and ¥5.75 per week in the third. As with the PNR, basic increases were to be negotiated through normal industrial relations machinery, due regard being had to the economic and commercial circumstances of the particular firm, employment or industry. It was understood that only in the most extreme circumstances would any question arise as to workers' entitlement to basic increases. In addition to the basic pay increases as outlined, provision was made in the PESP for unions "exceptionally" to negotiate locally for further changes in pay or conditions. The value of the increases or changes in conditions was not to exceed 3 per cent. of the basic pay cost - in practice, this meant that workers could negotiate an additional pay rise. In implementing this clause of the PESP, account was to be taken of the implications for competitiveness, the need for flexibility and the contribution made by employees to change. Trade unions made it clear that as far as they were concerned, all their members would benefit from the additional 3 per cent. However, the employers' associations were relying on the use of the word "exceptionally" in the agreement. In addition, claims for pay increases which did not have a cost-increasing effect could be made; in other words, productivity-related increases and profit-sharing schemes could be negotiated.
Other aspects of the agreement included a commitment to job creation in both manufacturing and international services. 20,000 new jobs per annum were to be created in each of these sectors. Other areas where job creation was promised were forestry (1,500), tourism and transport (15,000) and the marine (1,500). The PESP also acknowledges the need for measures to aid the long-term unemployed. In the area of labour legislation, the Minister for Labour undertook measures in particular areas, including enactment of the Worker Protection (Regular Part-time Employees) Act 1991 , a new Bill on employment equality to be introduced by the end of 1991 (writing in early 1994, this Bill is still awaited), a Bill to amend the Unfair Dismissals Act 1977 (introduced in 1993) and a new Bill on the payment of wages other than in cash (now in force as the Payment of Wages Act 1991 ). Other legislative areas where action was promised as part of the PESP were employment agencies and agency workers and a review of legislation on conditions of employment and on holidays . Finally, another aspect of the PESP covered worker participation: a joint declaration was produced by the Federation of Irish Employers and the ICTU which encourages increased employee involvement in terms of financial participation and increased communication and consultation, and the use of quality circles . This commitment to specific measures to be implemented by the Government, in the area of legislation, for example, stresses the tripartite nature of the PESP.
As with the PNR, the evidence to date appears to be that the terms of the PESP were being adhered to in local bargaining, with one study showing 90 - 95 per cent. of 550 companies surveyed complying with the percentage increases. However, there have been problems in relation to the Government's commitment to the PESP. With economic growth at a lower than expected rate, the Government began hinting that it might be necessary to go "back to the drawing board" and renegotiate the pay aspects. This led to a confrontation in late 1991, when the Government announced that it was not going to pay the full increase for public sector workers; instead, it would pay a flat-rate ¥5 in place of the 3 per cent. which was due. A national strike of public sector workers was called for the end of January 1992, for which there was strong support. Even the GRA, the association for Garda (police officers), for whom industrial action is unlawful, called on its members nationwide to take one day's holiday on the day of the strike. The strike was called off less than two weeks beforehand after the direct intervention of the Minister for Finance in negotiations with the Public Sector Committee of ICTU . The result of the intervention was that the ceiling of ¥5 per week would remain, but that the terms of the PESP would be reinstated from December 1992. Losses arising from the application of the ¥5 ceiling were to be recouped at some future date, no later than 1994.
The PESP expired on 31 December 1993, and at that date public sector workers had not received the 3 per cent limit which had been allowed under the PESP for productivity. For this reason, and others, many trade unions were unhappy about continuing with national bargaining, and in fact in late 1993 a decision was taken by ICTU's Executive Committee not to enter into negotiations unless certain conditions were met. These included ensuring that public sector workers received their full entitlement, abolition of a supposedly temporary income levy, and the reversal of a number of public sector spending cuts. There were in addition other arguments against entering into new agreements: a number of unions, mainly but not exclusively British-based, argue that it is not necessarily a good thing for the trade union movement to appear to be so closely identified with the Government of the day and its policies (regardless of the fact that the Labour Party is one of the partners in the coalition government which took office after the 1992 election). This reflects the argument that incomes policies invariably have the effect of isolating the trade union hierarchy from the membership, which as a result feels alienated and remote from the full-time officials. This view was confirmed to some extent by a small study in 1991 of SIPTU members in the Dublin hotel and catering sector (Croke 1993) which showed that the majority of members who responded were not in favour of national bargaining but believed that they had no power to influence their union's commitment to the agreements.
As at the expiry of the PESP, therefore, it appeared that there would be no new agreement. However, in January 1994 talks began between the Social Partners, and agreement was reached on a new Programme in early February. This agreement, called the Programme for Competitiveness and Work , also runs over three years, but for the first time the public and private sectors are treated differently in respect of pay rises.
Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.