ICTU issues new guidelines on gainsharing, profit-sharing and ESOPs

In April 1999, the Irish Congress of Trade Unions (ICTU) published new guidelines for affiliated trade unions on gainsharing, profit-sharing and employee share-ownership plans (ESOPs).

A new Irish Congress of Trade Unions (ICTU) booklet, entitled Sharing the gains, supporting partnership, provides advice for trade union negotiators on incentive-based reward mechanisms such as gainsharing, profit sharing and employee share-ownership plans (ESOP s). The document, launched on 14 April 1999, provides an overview of these schemes, as well as giving detailed examples in some cases.

Increasing numbers of local-level agreements covering one or other of these systems are being negotiated under the general heading of chapter 9 ("Action through partnership for competitive enterprises") of Partnership 2000 (P2000), Ireland's current three-year national agreement (IE9702103F). The ICTU publication reflects this reality, as well as setting out trade union aspirations for the remaining 12 months of P2000. The document will also act as a blueprint for the trade union bargaining agenda in talks on a new national deal early in 2000. It will be read carefully by union activists and industrial relations/human resource specialists, as claims for the introduction of schemes of this sort are sure to increase as the Irish economy continues to boom.

The booklet indicates how far union bargaining priorities have moved from the traditional annual pay claim. It also emphasises the common interests that employers and employees have as stakeholders in their enterprises.

As mentioned, since the negotiation of P2000 in early 1997, the number of agreements on incentive-based reward mechanisms has steadily increased (IE9811264N). While chapter 9 of P2000 implies no firm commitments on the part of employers to negotiate under the headings listed in the ICTU booklet, it does provide the parties with a loose model which links any gains above the basic terms of the national agreement to profitability, performance and productivity.

At the launch of the ICTU publication, a number of private sector employee representatives explained how such reward systems operate in their particular companies. These came from a variety of well known Irish-based companies: Dairygold-Galtee (food sector); Cement Roadstone Holdings (construction); Irish Permanent (financial services); and Union Camp (box manufacture). For example, Seamus O' Brien, a craft union shop steward at Dairygold-Galtee in County Cork, explained that the impetus for a gainsharing scheme had initially come from a group of 20 maintenance employees who were faced with cutbacks and redundancies in 1993. Mr O' Brien said that it was now corporate policy to develop this team-based gainsharing model throughout the organisation.

Launching the booklet, ICTU general secretary Peter Cassells said that employees could share in the benefits of growth "in a way that does not stoke inflation or hinder competitiveness".