New industrial relations principles in the Irish public sector

Over 1996 and 1997, a wide range of human resources management initiatives aimed at a complete transformation of the public sector have been launched by the Irish Government on foot of the most thorough review of public administration since the foundation of the State. This article outlines the changes and examines developments so far.

The most ambitious element of the Government's plan to transform the public sector, the Strategic Management Initiative (SMI), aims to replace a system dominated by grades and rigid pay systems with more flexible working and performance pay, with secretaries of Departments becoming effective chief executives or secretaries general. The new plan, backed by legislation, is also making its mark on state-owned commercial enterprises, many of which are in the throes of painful restructuring, forced by EU deregulation and the demands of cost competitiveness. However, the jury is out on how long the plan will take to implement in an administrative system originally built on the British model and underpinned by traditional approaches.

The Strategic Management Initiative (SMI)

While "New Public Management" (NPM), which emphasises cost-cutting and transparency as well as breaking traditional bureaucracies into separate organisations, has been the dominant international form of corporate public management, the Irish Government has decided to select and refashion elements of the model. Delivering Better Government, the central plank of SMI, can be seen as a distinctly Irish variant of NPM. Successive Irish Governments have, despite similar pressures on public spending to those experienced throughout the developed world, resisted the neo-liberal strain of NPM typified by countries such as the UK and New Zealand. The consensual approach to social and economic policy which was developed through the series of national programmes since 1987 and the absence of a significant neo-liberal strain in Irish politics have been important influences.

The backdrop to recent developments in Irish employee relations is the now 10-year-old series of national economic and social agreements covering pay and wider decision making in the economy. The latest of these agreements, Partnership 2000 (1996), which was signed in January 1997 (IE9702103F), has as one of its central objectives the introduction of partnership models in both private and public sector employment. The platform provided by this largely centralised consensus has allowed for the development of new industrial relations principles and personnel approaches based on "human resources" thinking, but within a distinctly pluralist setting or - as one study put it - alongside, rather than in place of, collective bargaining.

Delivering Better Government, issued in May 1996, demanded the creation of a results-driven Departmental Civil Service clearly aligned with Government priorities and focused on quality of service. However, it recognised that this was not possible within the existing personnel structures. The group which prepared the document believed that traditional personnel policies have had too narrow a focus and that a more "proactive" personnel management approach needs to be adopted. It also envisaged a significant restructuring of existing personnel systems arising from the redefinition of the role of the Secretary as the person who will have responsibility for managing the Department and for ensuring that responsibility is taken at all levels throughout the organisation.

The group recommended that departmental personnel units reorient their activities and focus to take a more strategic/developmental approach and devolve responsibility for day-to-day human resources matters to line managers. This reorientation is taking place in tandem with a process of devolving authority from the Department of Finance to departments generally, with each department being required to develop a human resources management (HRM) strategy linked to the overall strategy for the organisation. Despite the critical tone, Delivering Better Government accepts the current national pay and grading system as the basis for future developments, on the grounds that the unified structure does not constitute a sufficient constraint on management to warrant the introduction of a fully devolved system under which each department would operate independently by setting its own grading structure and conditions of service. There are definite limits to the extent to which devolution and the decentralisation of the management of employee relations can be pursued in the Irish public sector.

While the public sector has continued until very recently as a site of predominantly adversarial industrial relations, a number of commercial state companies - such as the state electricity provider, the ESB, and the state telecommunications provider Telecom Eireann- have begun to develop a more sophisticated approach to industrial relations, based on the integration of strong trade unionism, a more strategic approach to competition, collective bargaining and the introduction, to varying degrees, of HRM. In the case of the ESB, the company has been divided into five separate divisions and an IRL 200 million cost-cutting plan has been agreed, in what was formerly a highly adversarial industrial relations environment. Workers have been offered a 5% shareholding and a corporate forum has been established to underpin partnership principles. Within Telecom Eireann the company and the unions have agreed a new plan which involves flexible working from 08.30 to 20.00, the creation of an internal jobs markets for surplus positions and the establishment of a partnership forum. Despite being agreed, the plan was stalled owing to a row between the Government and the unions over the size of the workers' shareholding.

Commentary

All the evidence suggests that a variety of human resource management approaches aimed at securing employee commitment have taken root in the Irish public sector, posing significant challenges for unions and management. Early indications point to the bulk of initiatives underway being of the "soft" or people-based variety and, given the current context of the Partnership 2000 pay agreement, this is likely endure into the medium term. Alongside these developments in the commercial semi-state sector, initiatives have been launched and changes introduced which conform to the more robust "hard" model of human resources management. Both, however, are based on the principles of social partnership. But the deep involvement of unions means there are considerable restrictions on hard approaches. (John O'Dowd and Tim Hastings)

(John O'Dowd is director of the Irish Government's Centre for Partnership and Tim Hastings is group industrial correspondent with Independent Newspapers. Both are Phd students at the Graduate School of Business, University College Dublin.)