Dispute over pay rise for electricians despite court ruling

A five-day strike by 10,000 electricians, who are covered by a mandatory registered sectoral pay agreement, came to an end in July after the Labour Court recommended that a 5% pay rise be granted, albeit at a somewhat later date. However, the 5% pay increase is again in doubt after two key employer groups voted to reject the dispute resolution proposals. An investigation into the dispute has since been launched to prevent further strike action later this year.

Following a five-day strike, about 10,000 electricians – whose pay and conditions are normally covered by a Registered Employment Agreement (REA) – seemed to have secured a 5% pay increase, after the intervention of the Labour Relations Commission (LRC).

However, payment of the 5% increase is again in doubt after two key employer groups voted to reject the dispute resolution proposals – namely, the Association of Electrical Contractors Ireland (AECI) and the National Electrical Contractors Ireland (NECI). A special investigation into the dispute is to be carried out by a former general secretary of the Irish Congress of Trade Unions (ICTU), Peter Cassells, and a former chairman of the Labour Court, Finbarr Flood. It is hoped that the investigation will help to prevent another strike in the autumn and winter months of 2009.

Background to dispute

The origins of the dispute date back to late last year, when the larger employers that are part of the formal wage-setting process changed their minds after initially indicating that they would agree to a 5% pay rise. The change was made after consulting with member companies that have been hard hit by the downturn in the construction sector.

The Technical Engineering and Electrical Union (TEEU) responded to the change in decision by initiating strike action, the timing of which coincided with the biennial conference of ICTU on 6–10 July 2009. The dispute was complicated by the fact that a number of informal employer groups which do not participate in the legal wage-setting framework for the electrical industry, but which are legally bound by its terms, threatened to mount a series of court challenges to the legality of the entire wage-setting mechanism. This was one of two key problems on the employer side that helped to trigger the strike.

Impact of economic downturn

The other main problem that helped to spark the dispute was that the membership of the two official employer bodies that negotiate with TEEU – namely, AECI and NECI – felt that a 5% wage deal, which had been tacitly agreed, was too high in the context of the sudden and dramatic downturn in the Irish economy – particularly in the construction sector. This led the employers to rethink their position, which meant that the Labour Court was not presented with a compromise position by both sides.

Strike initiative

TEEU then decided to launch a campaign to force the employers to concede to the 5% pay rise. The TEEU strike initiative was quite effective, although it tended to hit only large-scale projects being undertaken by major employers. The trade union leaders were also given a standing ovation by delegates at the ICTU conference.

The strike prompted the Minister for Enterprise, Trade and Employment, Mary Coughlan, to ask the LRC to intervene. This move resulted in a recommendation by the LRC’s sister body, the Labour Court, that the 5% pay rise should be granted, albeit at a somewhat later date. However, one of the two official employer groups that are normally signatories to the registered agreement voted – as is their entitlement – against the proposed agreement.

Legal challenge to wage-setting system

Like a number of other industries, such as the hotels, catering and cleaning industries, the electrical contracting industry is covered by Ireland’s sectoral wage-setting system. Basically, this system operates through joint employer and trade union negotiations. When an agreement on a compromise is reached, it is then registered in the Labour Court and becomes the formal legally binding agreement covering wages and conditions for the industry or sector. Usually, these agreements ‘track’ the nationally negotiated social partnership wage agreements, negotiated every two to three years.

The underlying legal issues mirror wider concerns within the social partnership system that such wage-setting systems could be open to legal challenge on the basis that they restrict the freedom of employers to set terms and conditions. The national minimum wage, which covers all workers, is not open to such a challenge as it must be approved by the Irish parliament (the Dáil). New draft legislation that would make sectoral wage mechanisms – such as the one for the electrical contracting industry – subject to similar parliamentary scrutiny has been published by the government. This could resolve the legal questions raised by the dispute, although it remains to be seen whether the trade unions and employers will be able to further accommodate the pay issue to avoid additional disruption in the industry.

Brian Sheehan, IRN Publishing