Partnership agreements may point way forward

A survey published in December 1999 found 68 local "partnership" agreements that had been concluded in line with chapter 9 of Partnership 2000- Ireland's current three-year national pact. These deals commonly include the establishment of partnership bodies and agreement on major change, such as teamworking or the introduction of "world-class manufacturing", often in return for innovative pay mechanisms.

In line with chapter 9 of Partnership 2000 (P2000), the three-year national agreement that expires in early 2000 (IE9702103F), a small but significant number of trade union and management negotiators at enterprise level have been concluding agreements which often involve new working arrangements in return for novel pay systems. In its latest round-up of such "partnership" agreements last December, the independent Dublin-based magazine, Industrial Relations News (IRN), recorded 48 agreements on top of the 20 which it detailed in October 1998 (IE9811264N).

The agreements vary considerably in scope and ambition, but all have some aspirations towards the realisation of the partnership idea as spelled out in P2000:

Partnership is an active relationship based on recognition of a common interest to secure the competitiveness, viability and prosperity of the enterprise. It involves a continuing commitment by employees to improvements in quality and efficiency; and the acceptance by employers of employees as stake holders with rights and interests to be considered in the context of major decisions affecting their employment.

Partnership involves common ownership of the resolution of challenges, involving the direct participation of employees/representatives and an investment in their training, development and working environment.

Chapter 9 of P2000 states that issues which are "appropriate for discussion" at enterprise level include: "employee involvement for competitiveness;" "training, personal development and support"; "equality of opportunities"; "representational arrangements"; "forms of financial involvement"; "occupational health and safety in the work environment"; " composition of the workforce"; "cooperation with change including new forms of work organisation"; "problem-solving" and "conflict avoidance; and adaptability, flexibility and innovation".

The various forms of financial involvement involved can include: pay increases above those agreed in P2000; gainsharing; profit-sharing; skill-based pay; and improvements in "fringe" benefits. Key "change" items include the introduction of "world-class manufacturing" (WCM), teamworking and joint management/union working parties.

Pay and change

In IRN's latest survey of 48 agreements, 16 of them (33%) involved major changes in work practices, such as teamworking, WCM or some form of new work organisation. Gainsharing schemes were either in place, or a commitment was entered into regarding their establishment, in 18 of the agreements. However, a scheme had actually been set up in just over half of the cases concerned. Profit-sharing in some form featured in eight of the deals, while skill-based pay was rare, featuring in just three of them. In those agreements where it was acknowledged that major change had been agreed, almost all of them included a significant pay increase above the basic terms of P2000. However, in most cases the extra increase was a modest one.

Gainsharing schemes enjoyed mixed fortunes. At Flair International, a textiles company, the scheme was based on large teams with relatively low rewards accruing from the scheme. This meant that individual employees did not have a strong connection between extra effort expended on their part and the additional financial reward available. The scheme was later redesigned and based on smaller teams with larger awards available. At the medical products manufacturer, Kendall Company, the gainsharing scheme is likely to be discontinued as it failed to meet management and employee expectations. Instead, the parties are set to agree a new pay deal based on a recommendation from the Labour Court in November 1999, part of which will be determined by improvements achieved in efficiency levels.

Partnership forums are common among the agreements surveyed and, while industrial relations problems often arise in such cases, this should not necessarily be seen as evidence that such bodies have little value. In some cases, the forums have been established in cases where industrial relations was already fraught with difficulty. A turnaround in workplace relationships, therefore, generally cannot happen immediately and must be considered over a longer period.

Commentary

The significance of these agreements is that they have been agreed under the loosely worded and vague aspirations of chapter 9 of P2000. This allowed companies and unions to agree something additional to the basic terms of P2000.

Chapter 9 gave unions some room for manoeuvre in securing higher than normal pay rises, often in return for change, and based on a broad band of performance indicators. Meanwhile, it allowed companies to introduce change, sometimes in return for new pay systems which are more "market-driven" than basic "cost-of-living" pay rises.

At a time when the pay parameters of P2000 allowed for pay rises totaling just 9.25% over 39 months in the private sector, chapter 9 provided unions and companies at local level with a formal - albeit loose - set of provisions which could be used to negotiate either additional pay rises or profit-related pay and change at local level. In the estimated 10%-12% of cases where chapter 9 was availed of, these headings - or a combination of them - were used to conclude agreements which went beyond the P2000 norm.

Most of all, however, chapter 9 points the way forward for a more inclusive culture at enterprise level, with a greater emphasis on the commonality of interests between the company, the management and the employees. It is expected that once a new national agreement to replace the soon-to-expire P2000 is successfully negotiated, it will also contain a "partnership"-style chapter (IE9911146F). It is likely, however, to be more specific than the P2000 version. More importantly, it will seek to encourage employee and management representatives to be innovative with regard to new pay and reward mechanisms which are closely linked to performance and profitability, whilst allowing companies to introduce change and new forms of work organisation in as flexible a manner as possible in order to meet the rapid pace of change and maintain competitiveness. (Brian Sheehan, IRN)

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