Taoiseach calls on social partners to decide on recovery plan

The prospect of a special national recovery plan increased in early May 2009, when Ireland’s Prime Minister, Brian Cowen, wrote to the General Secretary of the Irish Congress of Trade Unions, David Begg, setting out the government’s latest position on issues such as job protection measures, pensions, pay and public sector change. Mr Cowen’s letter must be seen as a serious bid by the government to break the social partnership stalemate hindering progress on a recovery plan.

Government letter to trade unions on new recovery plan

In a letter to the General Secretary of the Irish Congress of Trade Unions (ICTU), David Begg, in May 2009, the Irish Prime Minister (Taoiseach), Brian Cowen, reiterated the government’s commitment to social partnership and its desire to negotiate a new recovery plan. The letter came just six months after trade unions, employers and government ratified the current [Transitional Agreement (2.8Mb PDF)](http://www.taoiseach.gov.ie/attached_files/Pdf files/Taoiseach Report_web.pdf), under the framework of the [Towards 2016 (2.86Mb PDF)](http://www.taoiseach.gov.ie/attached_files/Pdf files/Towards2016PartnershipAgreement.pdf) national social partnership agreement. Mr Cowen also made it clear, however, that other commitments already agreed to in the transitional agreement are contingent on a new ‘robust’ agreement that can deliver change in the public sector.

Mr Cowen’s letter to Mr Begg also built on a formal paper given to all of the social partners in early May, which set out the broad parameters of what might be achievable from the government’s perspective.

Content of Taoiseach’s letter

Job protection using social welfare payments

On the critical issue of job protection, at a time when unemployment in Ireland is up to 11.8% with almost 400,000 people out of work, the Taoiseach highlighted in the letter his belief that there is a ‘broad degree of alignment’ between the objectives of government and ICTU. This alignment is related to the initiation of new measures to support the maintenance of employment and ‘the re-entry to employment of those who have lost their jobs’.

Mr Cowen stated that the government intends to put in place new approaches to intervening and to apply resources to job protection:

which would otherwise be required for social welfare payments to interventions that are worthwhile, targeted and effective and which address the constraints which inevitably arise in order to ensure effectiveness and to meet the relevant regulatory requirements.

Noting the ICTU’s call for an allocation of €1 billion in relation to an employment-protection agenda, Mr Cowen emphasised that:

insofar as we can transfer resources that would otherwise go in income support we should do so to the limit of what is feasible, beginning with a specific resource envelope which can be increased over time in line with the scaling up of effective measures.

It should be noted that the Irish Business and Employers’ Confederation (IBEC) called for a similar allocation of funding to protect employment in the country. The government could work closely with both trade unions and employers in the design and monitoring of such measures.

Public sector must change

Mr Cowen called for a ‘transformation agenda for the public service’ and the government’s desire to conclude:

a robust agreement which delivers greater flexibility in the deployment of people and resources within and where necessary across the public service boundaries so that we can restructure public service delivery to better meet citizens’ needs and the urgent need for greater efficiency.

It was only in that context, he said, that agreement on ‘other issues’, including the concerns of the public service trade unions, can be addressed. These concerns refer to the public service unions’ demand for the maintenance of existing wage and pension levels, and the retention of job security for public servants. The other issues referred to by Mr Cowen include a set of employment rights commitments entered into in the transitional agreement. The specialist weekly journal, Industrial Relations News (IRN), reported that Mr Cowen, also told the trade unions that such ‘specific commitments would no longer be applicable’ unless social partnership is maintained.

Pensions and pay

Other issues raised by the Taoiseach include the trade union demand for a government commitment to a new national universal pension scheme, which they have been told the state cannot afford. However, there are indications that specific problem cases, like the imminent closure of the Swiss-owned company SR Technics in Dublin (IE0903019I), where the pension is insolvent, might be addressed by the government.

Private sector pay is another area that requires the attention of IBEC and ICTU. In this regard, suggestions have been made that a formal accommodation may be reached to defer the pay rises of 6% over 21 months provided for under the transitional agreement (IE0810019I). While about 100 unionised companies have honoured the deal, a majority are observing a pay ‘standstill’ while they await the outcome of the social partner talks.

Commentary

The Taoiseach’s letter must be seen as a serious bid by the government to break the social partnership stalemate that has hindered progress on a recovery plan in recent months. Mr Cowen claims that if the process fails, this will not be due to the government’s lack of desire to conclude a deal; rather, it will be because one or all of the other social partners have decided to abandon the process.

Brian Sheehan, IRN Publishing