Government to trim industrial relations bodies in cost-cutting exercise

The Irish government is considering a massive €5.2 billion list of expenditure cuts as part of a major effort to deal with the state’s fiscal crisis. The spending cuts could result in significant changes for the formal industrial relations dispute resolution agencies and various social partnership bodies. The proposed cuts were recommended by a special group set up to examine exchequer spending and identify areas for expenditure and staff savings.

The report of the Special Group on Public Service Numbers and Expenditure Programmes – known as the McCarthy report – was published on 16 July 2009_._ The group was chaired by the economist Colm McCarthy and was given the mandate of examining all current exchequer spending across all government departments and agencies, in order to determine where expenditure cuts and staff savings might be made in light of the current economic crisis.

Recommended changes for industrial relations bodies

Major changes are likely to arise for the state’s dispute resolution agencies, the employment rights-related organisations and various bodies that operate under Ireland’s 22-year old social partnership process if some or all of the cuts in expenditure and rationalisation contained in the McCarthy report on the public sector are implemented.

Proposing significant changes to the various industrial relations institutions, the authors of the McCarthy report have called for the merger of the two main statutory dispute resolution agencies, the Labour Relations Commission (LRC) and the Labour Court (An Chúirt Oibreachais). Meanwhile, social partnership bodies under the umbrella of the National Economic and Social Development Office (An Oifig Náisiúnta um Fhorbairt Eacnamaíoch agus Shóisialta, NESDO), all of which fall within the ambit of the Department of the Taoiseach (Office of the Prime Minister), face major change. In this case, only the National Economic and Social Council (An Chomhairle Náisiúnta Eacnamaíoch agus Shóisialta, NESC) would remain in operation if the McCarthy proposals are accepted, as the report proposes the discontinuation of the National Centre for Partnership and Performance (An tIonad Náisiúnta Comhpháirtíochta agus Feidhmíochta, NCPP) and the National Economic and Social Forum (An Fóram Náisiúnta Eacnamaíoch agus Sóisialta, NESF).

It is, however, the proposed merger of the LRC and the Labour Court that is likely to be the most controversial change, and the one that could have the most long-term impact. This would, in effect, reverse the amendments introduced under the 1990 Industrial Relations Act, which led to the creation of the two bodies by splitting up the ‘old’ Labour Court.

The McCarthy report also asks ‘whether the role of other bodies, such as the National Implementation Body, is needed’. The National Implementation Body (NIB) is not a formal organisation, but is rather an informal arrangement agreed by the social partners. The NIB is chaired by the Secretary General of the Taoiseach’s department who, with a leading representative from both the Irish Congress of Trade Unions (ICTU) and the Irish Business and Employers Confederation (IBEC), assesses and advises on disputes of national importance.

Streamlining complex industrial relations structure

The McCarthy group highlights that the employment rights, industrial relations and occupational safety area, which has an allocation of €51 million for 2009 and involves some 517 staff, ‘has greatly expanded over the years and increased in complexity’. The report states that the ‘already complex situation within the ambit of the Department of Enterprise, Trade and Employment is further complicated by the use of partnership structures or organisations under the ambit of the Department of the Taoiseach in the resolution of many industrial relations disputes.’

The report recommends that all industrial relations institutions be moved to a single location ‘to maximise efficiencies and synergies, then rationalise them’; the LRC and the Labour Court are already based in the same building. According to the report, ‘the very complex structure for industrial relations institutions has to be simplified and streamlined’. The report continues:

As this process will need to be pursued over a medium-term period … the institutions should all be relocated to one site where efficiencies and synergies can be realised with immediate effect. Target savings from the initial process should be €1.5 million each year, including staff reductions of 15. Following rationalisation of the structures, target savings should be in the region of €3 million each year.

Rationalisation measures

The rationalisation should include:

• the merger of the Labour Court and the LRC;

• the transfer of activities such as the administration for Joint Labour Committees and the Rights Commissioners to the National Employment Rights Authority (NERA);

• an examination of whether the role of other bodies, such as the NIB, is needed;

• a consideration of the merits of merging the Equality Tribunal into the rationalised industrial relations structure, given that many of its cases occur in the workplace;

• the discontinuation of functions such as the Industrial Relations Advisory Service, industrial relations research and public relations.

The report also recommends the merger of the Health and Safety Authority (HSA) and NERA, in order ‘to realise operational efficiencies and synergies worth at least €5 million each year’. In this regard, staff reductions of 10% should be targeted, to reduce the number of posts by 33.

Brian Sheehan, IRN Publishing