PROGRAMME FOR NATIONAL RECOVERY (PNR)
| IRELAND |
| PROGRAMME FOR NATIONAL RECOVERY
(PNR) |
The Programme for National Recovery was the three-year national agreement on pay and aspects of economic policy, agreed between the Government and the "social partners": the Irish Congress of Trade Unions , the Federation of Irish Employers and the Construction Industry Federation, and farming organisations. In some ways the PNR was similar to the National Understandings of the late 1970s and early 1980s; at any rate, it certainly represented a return to centralised pay bargaining after a period of decentralised bargaining in the private sector since 1981. The return to centralised bargaining , particularly that in which pay was linked with Government policy objectives, was not an inevitable consequence of the 1980s developments. Instead, the PNR was explicitly an election promise of the Fianna Fail party which won the 1987 election. The agreement was also negotiated on rather different terms to the previous National Understandings, since the Irish economic situation had worsened, and trade unions held less of a bargaining advantage than they had previously. There had been a certain amount of open discussion in the mid-1980s, to which both employers and trade unions had contributed, on how best to plan for medium-term economic recovery, and from this discussion the idea of a new centralised agreement had emerged. Significantly, also, the trade union movement had been losing influence with the Government in the period up to 1987, and recognising this, Fianna Fail in opposition developed a close relationship with the unions.
The Government in 1987 made it clear that it was willing to modify its restrictive stance on public service pay and discuss issues like job creation, tax concession and welfare provisions. Discussions began between the Government and the ICTU, and although the Government as employer was only empowered to negotiate a pay agreement with public sector employees, it became evident that any such agreement would be regarded as a norm for the rest of the public sector and the private sector. As a result, the two main employer organisations became drawn into the negotiations. There were a number of apparent advantages to the ICTU and the trade union movement in becoming involved in a national agreement. First, the seriousness of the economic situation meant that the new Fianna Fail Government had been following its predecessor's actions in making some quite severe job cuts in the public sector, particularly in the health service. As a quid pro quo for trade unions becoming involved in negotiations , however, the Government was prepared to relax the programme of public spending cuts. Secondly, Irish trade unions had the example of the increasing marginalisation of the union movement in the United Kingdom. The opportunity to become involved in these sort of negotiations with the Government seemed to offer Irish trade unions a way of avoiding the fate of their British counterparts.
The PNR was eventually concluded in October 1987, resembling National Understandings in scope but not in content. The agreement provided for percentage pay rises (an annual increase of 3 per cent. on the first ¥120 of weekly pay and 2 per cent. on any amount over that) over three years, which in a lowinflation 1987 was acceptable to the unions, and a flat-rate ¥4 per week increase for low-paid workers. Also provided for was an agreement that there should be a reduction in the working week, which led to a framework agreement on the shortening of the working week by one hour, the implementation of which was to be negotiated locally. The Government committed itself to some income tax and other tax reforms over the three-year period. Extra employment was promised in both the public and private sectors, although no new money was set aside for this. Other aspects of the agreement, not directly connected with industrial relations, included policy on health, social welfare, housing, industrial development and productivity in statesponsored bodies.
The agreement was ratified by the ICTU at a special delegate conference with about 60 per cent. of delegates voting in favour. It is clear that the ICTU's approach was pragmatic in attempting to avoid the fate of British unions, as this comment by Peter Cassells, the ICTU General Secretary, shows:
"We took the view that the most acceptable models on which to build a Programme for National Recovery should be successful European countries such as Austria, Denmark, Finland, Norway and Sweden. These countries have rejected the confrontationist approach of the New Right and have lower levels of unemployment than the US or the UK."
The agreement was also acceptable to the FIE and the CIF as a result of the low percentage increases and the further stipulation that no further cost-increasing claims could be made during the lifetime of the agreement. This ruled out claims of pay increases based on cost-of-living increases or comparability.
In the main, the terms of the PNR were adhered to by all sides, and this could be attributed to two factors, apart from the trade union movement's own self-interested pragmatism, as described above. The first is that there was a general consensus that there existed a state of national crisis over such issues as unemployment, emigration and the national debt, and the second is that the commitments made by the Government under the PNR were rather more realistic than those made under previous agreements, the first National Understanding in particular. Although there were attempts among certain sections of the trade union movement to effect a withdrawal from the PNR and a special delegate conference was held in early 1990, delegates voted -albeit by a narrow majority - to continue with the agreement until its expiry date. The trade union movement was in a difficult position in relation to the PNR, in any case, since accompanying it was a programme of massive cost-cutting in the public sector, as well as other stringent measures aimed at depressing inflation and reducing the budget deficit. These measures were not ones which would in normal circumstances have found favour with trade unions, but since in practice the PNR locked the unions into an alliance with the Government, it was very difficult to voice any serious criticism of or opposition to Government economic policy.
In the sense that its terms were largely adhered to, however, the PNR was seen as having been highly successful. Pay bargaining kept to the percentage increases agreed under the PNR, and the annual increases were more or less in line with inflation, which itself fell to under 3 per cent. in early 1991. Job creation targets in the private sector were mainly met, although the jobs gained were partly offset by redundancies elsewhere. Economic growth rose to an average of more than 4 per cent. per annum between 1987 and 1990, and GDP rose to 68 per cent. of the EC average by 1990. The negotiations on the reduction of the working week were concluded without any great difficulty for most employees. The PNR concluded at the end of 1990, and was followed by a new three-year agreement, the Programme for Economic and Social Progress . This in turn was succeeded in 1994 by the Programme for Competitiveness and Work.
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.