Social partners agree voluntary private sector pay protocol

A voluntary protocol on procedures to manage future private sector pay claims has been agreed between the Irish Business and Employers’ Confederation and the Irish Congress of Trade Unions. It comes in the context of the formal collapse of the previous pay agreement negotiated under social partnership. The social partners seem reluctant to break with a process-based system, which suggests a preference for the resumption of formal national agreements.

In December 2009, the Irish Business and Employers’ Confederation (IBEC) formally withdrew from the terms of the private sector pay agreement that had been negotiated as part of the Transitional Agreement (2.8Mb PDF) in 2008, paving the way for the first period of company-level bargaining in Irish industrial relations since 1987 (IE1001029I, IE1002029I). However, in March 2010 IBEC and the Irish Congress of Trade Unions (ICTU) agreed a protocol providing negotiators with broad pay guidelines, using a set of criteria for issues like competitiveness and information and consultation. The protocol establishes a tripartite overarching structure between the government, IBEC and ICTU with a view to managing private sector pay claims.

Pay claims and tripartite structures

Regarding pay issues, IBEC and ICTU state that they are ‘operating in a new context without a formal agreement on pay determination’, which suggests that there may be some level of informal coordination between them. Due to the economic recession, pay pressures in the Irish economy have been limited; nevertheless, the protocol provides a basis for the processing of pay claims if and when they do emerge.

The protocol also provides for the maintenance of several important institutional features of the social partnership system. It commits IBEC and ICTU to set up ‘agreed tripartite structures under a rotating chairmanship to include government’. According to the specialist weekly publication, Industrial Relations News (IRN), this is similar to the social partners’ special dispute resolution arm, known as the National Implementation Body (NIB), which operated from 2001 until late 2009. Officially, NIB is no longer functioning, although the vacuum it left has been filled on occasion by the Labour Relations Commission (An Coimisiún um Chaidreamh Oibreachais, LRC).

Emphasis on stability

Under these new tripartite structures, the parties will ‘meet as required to review the operation of this protocol, to oversee the delivery of industrial peace, stability, good industrial relations and to consider any procedural matters where difficulties arise’. Another continuation from social partnership is the concept of an agreement being in place for a fixed period of time. The protocol is effective for 2010 and the parties will meet in the autumn ‘to discuss arrangements to apply thereafter’.

No private sector pay agreement had been in place for 2010. Even if IBEC had not withdrawn from the Transitional Agreement in mid December 2009, that agreement had been due in any case to expire at national level on 31 December 2009. The new commitment to meet in the autumn of 2010 essentially bridges the gap between the Transitional Agreement and whatever may come after 2010.

Core principles

The first paragraph of the new protocol affirms the importance of maintaining employment. It states that both sides ‘are agreed that the maximisation of sustainable employment is the most important objective to be secured during the economic downturn’. This shared commitment on employment means that both parties would accept that ‘the economic, commercial, employment and competitiveness circumstances of the firm are legitimate considerations in any discussion of claims for adjustments to pay or terms and conditions of employment’.

The term ‘adjustments’ can be interpreted as including both increases and cuts in pay and conditions. This paragraph also states that ‘it is not the intention of the parties to alter their historical approach to dealing with normal ongoing change’. National wage agreements have tended to see normal ongoing change as insufficient to justify a pay increase.

Keeping to procedures

Procedurally, the parties are committed to conducting industrial relations in ‘an orderly manner and to serve the primary purpose of protecting jobs’. This is to include ‘meaningful and timely engagement at local level’, encouraging members of ICTU and IBEC to abide by established collective agreements and to use the Labour Court (An Chúirt Oibreachais), LRC or other agreed machinery to resolve disputes. The parties are also committed ‘to ensuring that their respective members do not engage in strikes, lockouts or other forms of industrial action in respect of any matters covered by this protocol where the employer or trade union concerned is acting in accordance with its terms’.

Commentary

The negotiation of the protocol reflects concerns within IBEC and the private sector trade unions regarding their respective organisational capacities and the capacity of human resource (HR) and industrial relations management generally to deal with local face-to-face pay negotiations – something many have not had to do for decades.

The protocol also indicates that the social partners are reluctant to break with a voluntary process-based system that will help them to manage local pay claims. This strongly suggests that they both retain an institutional preference for the resumption of formal national social partnership agreements.

Brian Sheehan, IRN Publishing

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