Ireland: Flexicurity and industrial relations

  • Observatory: EurWORK
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  • Published on: 14 September 2009



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Ireland
Author:
Tony Dobbins
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Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

This article outlines the main national flexicurity policies in Ireland as of January 2008, considers the positions of the social partners on flexicurity, and provides a few examples of notable workplace collective bargaining agreements encompassing flexicurity issues.

1. Flexicurity policies: main national measures

1.1 Please briefly outline the main nation-wide public policies (even if administered by local authorities), which are usually considered part of the ‘flexicurity’ approach in your country, distinguishing between the four basic components of flexicurity:

In practice, while not explicitly labelled as flexicurity, Ireland’s social partnership process has sought, over the course of recent years, to strike its own particular balance/negotiated trade-offs over issues such as labour market flexibility/contractual arrangements, and employment rights; social security and income tax; and training/upskilling and active labour market policies.

In the current social partnership agreement, Towards 2016 (http://www.taoiseach.gov.ie), the Government and the social partners in Ireland sought to strike a balance between flexibility and security – for instance by introducing a Lifecycle Framework based on the concept of a ‘Developmental Welfare State’ outlined by the National Economic and Social Council (NESC); a raft of new employment rights; unveiling a new National Innovation Fund aimed at boosting workplace innovation; as well as new measures on lifelong learning and active labour market policies.

a) contractual arrangements;

Under Towards 2016, the Government and the social partners established a three-year Workplace Innovation Fund (WIF) aimed at boosting workplace innovation and flexibility through partnership between employers and employee representatives. The commitment is contained in Section 6 (Partnership at the Workplace): ‘The Government has agreed to establish a three year Workplace Innovation Fund to enable the parties of this Agreement and the National Centre for Partnership and Performance to build a stronger commitment to workplace innovation by encouraging the development of new ways of working through partnership, aimed at increasing flexibility and improving performance’.

Also, Towards 2016 provides for a raft of new employment rights measures to provide greater protections to workers – particularly labour market ‘outsiders’ such as migrant workers and agency workers. The Government is committed to publishing two major employment rights laws in 2008: the Employment Law Compliance Bill and the Employment Agencies Regulation Bill. The Employment Law Compliance Bill will contain a substantial package of measures designed to secure better compliance with employment law – including a new statutory office dedicated to employment rights compliance (National Employment Rights Authority, NERA); a trebling in the number of labour inspectors; and higher penalties for non-compliance. The Government is also drafting a new Employment Agencies Regulation Bill 2007, which is designed to tighten up regulation of employment agencies.

b) lifelong learning;

c) active labour market policies;

It is stipulated in Towards 2016 that the social partners are agreed on the need for a review of the workplace learning and active labour market policy options available, especially from the point of view of user friendliness/modularisation; the provision of generic, transferable as well as sector specific skills; future skills requirements; geographical accessibility; cost; and means of activation. They are also agreed on the need to examine, in particular, the availability of workplace learning (including in relation to basic skills) and upskilling for lower skilled and vulnerable workers, including in manufacturing, as well as to workers from overseas. They are agreed on the need to put in place measures to ensure renewed focus for State provision and to ensure more targeted schemes, with a view to maximising the use of resources. In addition, the involvement of employer and trade union representatives in the activation of workplace learning and upskilling will be of particular importance. The overall objective will be to ensure that the institutional framework and provision for the development of skills across the economy matches anticipated requirements; provides a co-ordinated, user-friendly and easily accessible system of workplace learning and upskilling; and is geared to employability and competitiveness. The social partners agreed on the following key areas for action on workplace upskilling initiatives:

  • the development of a targeted guidance, learning and training programmes, particularly accessible to the manufacturing sector, to include coaching and mentoring for workers in vulnerable employments where appropriate;
  • the introduction of measures for the promotion of take up of apprenticeships by older workers;
  • the mainstreaming of the Knowledge Economy Skills Passport (KESP), focusing on computer literacy, science and technology fundamentals, basic business skills and innovation and entrepreneurship;
  • the Skillnets programme will be expanded and will provide more flexible means of delivery and will also include pilot initiatives to focus on those with lower skill-sets;
  • increased financial support will be provided for the existing pilot trade union-led learning network under the FÁS One-Step-Up programme which engages trade union representatives in the workplace as part of the learning activation process, particularly among the lower skilled, to pursue education and training; and
  • the allocation for the Workplace Basic Education Fund, aimed at increasing numeracy and literacy skills in the workplace, will be increased.

d) social security.

In terms of social security policy, the adoption of the Lifecycle Framework, as set out by NESC in its report, ‘The Developmental Welfare State’, is a core feature of Towards 2016. The term ‘developmental welfare state’ describes a social policy system that would support and facilitate the development of each person, enabling them to reach their full potential. In view of this, the lifecycle approach in Towards 2016 places the individual at the centre of policy development and delivery, by assessing the risks facing him/her, and the supports available to address those risks, at key stages in his/her life. The key lifecycle stages are identified as: Children, People of Working Age, Older People, and People with Disabilities. It is acknowledged by the social partners that translating the lifecycle framework into explicit policy terms is an ambitious exercise and the long-term goals pose major challenges in terms of availability of resources, building the necessary infrastructure, and institutional and service delivery at both national and local level.

In particular, the Government and social partners are committed to working together to sustain an acceptable standard of living for all people of working age in particular by:

  • Ensuring that social protection adequately supports all people of working age, whether in the labour force or out of it. It will facilitate labour market participation, mobility and transition. Reforms will be introduced that aim to provide those most marginalised with the confidence and supports necessary to accept the risks involved in taking up employment. This will involve the provision of extended information and supports dealing as far as possible with the financial and non-financial barriers to employment, in particular those which present poverty traps and encourage dependency;
  • Other elements of social protection will be examined to ensure that atypical working, the reconciliation of work and family life and those working on low incomes are supported;
  • Achieving the National Anti-Poverty Strategy (NAPS) target of €150 per week in 2002 terms for lowest social welfare rates by 2007.

For each policy, you should specify whether the involvement of trade unions and employer associations in the implementation is: i) substantial; ii) marginal; or iii) none and, if relevant, briefly illustrate their role.

Through Ireland’s evolving model of social partnership, trade unions and employers would tend to have substantial involvement in the implementation of all the areas in 1.1 above, although this can vary from issue to issue.

1.2 Please briefly present the main national labour market trends since 1990: labour market participation and employment, unemployment and long-term unemployment.

The total labour force in Ireland has grown rapidly since 1990 and now exceeds two million people. Ireland has experienced strong gains in employment in the period 1990-2005, concentrated in certain sectors, particularly construction and domestically traded services, including public services. Economic and employment growth has been facilitated by a growing population of working age, increasing female participation rates and net immigration. Overall labour market participation rates in Ireland climbed from 60% in 1990 to 68.6% in 2004 but remain below the OECD average for both males and females. While participation among women between 25 and 34 is almost 80%, for those over 55, it remains close to 40%. Ireland’s national rate of unemployment remains low at 4.8% - especially when set against the dark days of the 1980s when unemployment reached a high of 18% in 1986.

2. Flexicurity policies: the role and positions of the social partners

2.1 Please, illustrate briefly the role of the social partners and social dialogue – at all levels – in the policymaking process which led to the introduction of any of the policies mentioned under point 1.1 and linked to the efforts to combine flexibility on the labour market and security.

Ireland has a highly developed social partnership/social dialogue at national level, which provides the social partners with a great deal of input into the policy-making process associated with the various flexicurity policies noted in 1.1 above. The role of the social partners in policy-making is summarized in the current national deal, Towards 2016, under the heading ‘The Role of Social Partnership and Protocol for Engagement’. It is stated that the social partnership process can be ‘best understood as a set of relationships based on the pursuit of common goals for Irish society, trust and a problem solving approach. The ten-year framework agreement provides a stable context within which those relationships between Government and the Social Partners can evolve’.

It goes on: ‘Government has ultimate responsibility for decision making, within the framework of democratic accountability. However, in recognition of the special relationship that encompasses social partnership, Government, and Departments on its behalf, commit to consulting with the social partners on policy proposals and the design of implementation arrangements. While not all policy issues covered by this ten-year framework agreement are necessarily agreed with the social partners they do provide a reference for engagement in the relevant areas. In this context, Government is committed to involving the social partners in the development of policy through:

  • Effective consultation in a spirit of good governance on the basis that Government Departments and organisations under their aegis will provide a meaningful opportunity for social partners to input into the shaping of appropriate relevant policy issues and the design of implementation arrangements, where appropriate;
  • Government Departments will manage the consultation process effectively, by giving sufficient notice, information and appropriate process for engagement, consistent with the overall requirements of effective governance, and;
  • As part of these good governance arrangements the social partners also commit to engaging constructively with Government Departments and recognise the need for the Government to deal with urgent matters in a timely manner’.

In terms of mechanisms for implementing policy, it is stated in Towards 2016 that ‘The Steering Group representing Government and each of the Social Partner Pillars will be reconvened to take overall responsibility for the management of the implementation of the ten-year framework agreement as it applies to the wider non-pay issues. The Steering Group will engage in high-level analysis and focus on these areas where it might add value. This includes ‘spot-light’ issues which have a longer-term focus but which require further work to be done in the first period of the ten-year framework agreement’.

Finally, the social partners are also involved in monitoring and review arrangements relating to policy-making in the area of flexicurity:

A meeting of all the parties to the national agreement, with the political process, chaired by the Taoiseach (Prime Minister), takes place annually. Quarterly plenary meetings of the four social partner pillars, chaired by the Secretary General of the Department of the Taoiseach, are held to review, monitor and report on overall progress in the implementation of the ten-year framework agreement. A formal review will take place during 2008. This will provide an opportunity to take stock of outcomes achieved in relation to the overall goals and to consider any opportunities arising to refocus and reprioritise.

2.2 Please outline briefly the main positions of the social partners on flexicurity, with reference to its four basic components (contracts, lifelong learning, active labour market policies, social security):

a) Do employer association and trade union especially stress some dimensions?

b) In their opinion, do the policies mentioned under point 1.1 effectively implement flexicurity (i.e. they balance/combine flexibility and security)?

c) According to the social partners, which are the main shortcomings of the policies undertaken so far? What should be needed to progress towards a full-fledged flexicurity approach?

Partly in reaction to European level developments, the social partners in Ireland are presently debating the concept of ‘flexicurity’, and it will feature in any new social partnership talks due to commence in spring 2008. Unions and employers will be seeking negotiated ‘trade-offs’ around issues like training/lifelong learning. Going forward, the Irish Congress of Trade Unions (ICTU) believes that a move in Ireland towards flexicurity along Dutch and Danish lines should be seriously explored. ICTU held a conference in Dublin on September 26, 2007, to debate flexicurity and the challenges it raises for the union movement.

Meanwhile, the Irish Business and Employers Confederation (IBEC) is treading carefully on flexicurity. IBEC is wary of the notion of ‘insiders’ and ‘outsiders’ in the labour market, suggesting that many employers do not view part-time work, for instance, as offering a lesser form of contract. And IBEC sees a legitimate role for good employment agencies as an intermediary in the labour market. Also, the employer’s body has questioned whether an expensive Danish style flexicurity model would be acceptable in Ireland - given, for instance, the leap in taxation and public spending that it would entail.

A number of difficult ‘big themes’ relating to flexicurity are likely to be prominent in any new partnership talks, including workplace upskilling, equal treatment rights for agency workers, and progressing the ‘Developmental Welfare State’ agenda. These issues came up for discussion at the ICTU flexicurity conference in September.

1) Contractual arrangements: The ICTU has warned the Irish Government that it must provide greater protections guaranteeing equal pay and treatment for vulnerable agency workers, if there is to be genuine engagement on flexicurity. The ICTU wants the Government to legislate for equal treatment of agency workers in terms of pay, conditions and employment status – suggesting that Ireland is only one of three EU member states (along with the UK and Hungary) which has not yet legislated for equal treatment of agency workers. However, IBEC views agency working as a critical part of labour supply for key sectors in the economy.

2) Workplace upskilling, life-long learning and active labour market policy: This is one big flexicurity area where the social partners find it easier to reach consensus and common ground, given that the mutual gains potential for both employer and employees from improvements in this area are more readily apparent. They will both be seeking new upskilling measures.

3) Social security/welfare state: From a union viewpoint, Ireland has two sides of the flexicurity ‘triangle’ more or less in place: flexible labour markets and active labour market policies. But the one side of the ‘triangle’ that Ireland does not have in place is a highly-developed welfare state and high quality public services. So, unions would argue that one key side of the triangle is missing. To a large extent, Ireland is playing catch-up following years of underinvestment in the welfare state/public services. Spending on public services has been increasing significantly during the last decade or so – albeit from a very low base line. However, public investment remains low by Nordic standards and this reflects the very different taxation regimes that apply respectively in the Nordic economies (high) and Ireland (low). And as noted above, the employers body IBEC has questioned whether an expensive Danish style flexicurity model would be acceptable in Ireland - given, for instance, the leap in taxation and public spending that it would entail. In view of this, doubts remain whether the third side of the flexicurity triangle (a highly developed welfare state) is feasible in Ireland. To a large extent, the Irish welfare model is predicated on providing a basic ‘means tested’ floor for welfare recipients. Given that the Irish welfare model does not provide the same level of universal income security as, say the Danish model, people will be less likely to take the ‘risks’ and transitions associated with flexicurity.

2.3. How are trade unions and employer associations in your country contributing, either independently or jointly, to implement a flexicurity approach by their own initiative?

As noted above, the social partners are still in the process of debating and grappling with the concept of flexicurity. In terms of independent initiatives, the ICTU held a conference on flexicurity in September 2007. Previously, while not explicitly labelled as flexicurity, unions and employer associations have engaged both independently and jointly on a range of flexicurity-related policies – most notably in the area of training.

In recent times, a growing number of unions in Ireland have begun to take a more active role in the provision of work-based learning for their members and provide career development training for their members, paid for in whole or in part by employers. Following on the success of a skill development programme for maintenance craftspersons, the Irish Congress of Trade Unions came together with affiliate unions to form a company entitled Education and Training Services (ETS). ETS provides technical training for union members, as well as a number of organisational change training modules such as Industrial Teamwork, Problem Solving, Changing World of Work Awareness Training and Total Productive Maintenance. The company also provides training in such areas as safety and workplace partnership development.

On the employer side, the Irish Business and Employer Confederation operates a High Level Education and Training Group, which identifies human capital policy priorities including education, training/upskilling and lifelong learning. It monitors developments in education and training in order to assess their implications for Irish business and assists in the development of policies in this area. The Group also provide a focus within IBEC for sector based and other education/training initiatives.

3. Collective bargaining and flexicurity

3.1 How is decentralised collective bargaining in your country, either at workplace level or territorial level, contributing to implement a flexicurity approach?

Ireland has a specific state funded agency, the National Centre for Partnership and Performance (NCPP), with a remit to diffuse cooperative flexicurity based approaches at the workplace and beyond. The NCPP has enjoyed some success with its various ventures, but has found it difficult to overcome traditional mindsets on the part of both employers and unions. Therefore, while centralised bargaining is increasingly encompassing flexicurity type policies, there is less evidence that, on the ground, employers and worker representatives are engaging in partnership at the workplace on flexicurity issues.

However, there are a few noteworthy examples of workplace collective bargaining embracing the flexicurity agenda.

A cooperative flexicurity approach to collective bargaining between the employer and its unions is in evidence at engineering company Tegral Metal Forming (TMF). It is significant that partnership has proven to have staying power at TMF, having been introduced back in 1997 – and it has since become more advanced. A joint union-management partnership forum was established in 1997 to address challenges such as new competitors and service demands from customers. The day-to-day activities of this joint forum were conducted by an eight-member steering committee, and various joint task teams established to address special issues of concern. Initially, these task teams addressed core business issues that were deemed to be reasonably ‘safe’, which helped the partnership process achieve credibility and generate trust. Thereafter, the process became more ambitious, and more recent developments of particular note at TMF include the re-organisation of work based on a team-based system across the plant, a jointly agreed pay system based on skill levels, as well as annualised hours and a gain-sharing system based on cost per tonne. The main benefits associated with partnership at TMF include a more stable work organisation, greater flexibility, higher job security, the near elimination of overtime, higher trust, less time spent on industrial relations issues, shorter working hours, stabilised costs.

In a second example, at Aughinish Alumina, an alumina refinery, management and unions have for many years operated a form of workplace partnership that embraces many elements of a flexicurity approach. The alumina refinery has a full bundle of workplace partnership practices, notably extensive flexibility in work practices, management-union partnership, semi-autonomous teamwork, training and skills development, gainsharing, annualised hours, communications, single status provisions, and an employment security clause. There is evidence that labour flexibility and productivity has improved considerably, workers feel relatively secure, while grievances, conflict, absenteeism and accident rates have also declined. The partnership model has generated higher levels of mutual gains consensus than has been possible in the past.

The third example of flexicurity in practice at workplace level is the Allied Irish Bank (AIB) workplace partnership with the Irish Bank Officials Association (IBOA). Management and unions at AIB used the partnership process to help secure a groundbreaking three-year collective bargaining agreement in 2003 incorporating a new 35-hour week in the bank - a major breakthrough in Irish industrial relations. The agreement includes a mutual commitment to business transformation, and best practice is to apply in regard to consultation and agreement, adherence to existing agreements and consensus-based bargaining. The three-year working time agreement is the most concrete development in a process that was started as part of a wider effort to develop workplace partnership in AIB. The process gained momentum in 2000, when management and unions jointly committed themselves to a number of principles, including: improved communications; joint problem-solving; security of employment; commitment to adaptability and flexibility; and acknowledgement of the role of IBOA. Most recently, management and unions at the bank concluded a collective agreement on innovative new pension arrangements.

3.2 Are there any sectors where the issue of flexicurity is particularly relevant? Please present shortly the basic economic and labour market features of these sectors and their specificities with respect to the implementation of flexicurity, with special reference to collective bargaining.

No particular sectors. Generally however, flexicurity type approaches are most likely to be found in ‘high-end’ companies in areas of the private sector exposed to external competition.

Please indicate whether, according to existing analysis, the contribution of collective bargaining to flexicurity is: i) substantial; ii) marginal; or iii) none.

4. Commentary by the NC

4.1 Please provide your own comments on the issue of flexicurity and industrial relations in your own country.

The forces unleashed by the internationalisation of world markets for products and labour, together with technological change, has clearly altered the traditional ‘rules of the game’ in Irish employment relations to some extent – hence the attention now being both implicitly and explicitly paid to the concept of flexicurity: how to reconcile labour market flexibility with new securities for workers. Employers and workers in Ireland face more frequent pressures for change and adaptability, and old jobs in traditional sectors are being shed as new jobs in newer industries are being created – a process that has been labelled ‘creative destruction’. But there tends to be considerable exaggeration of the extent of uncertainty, instability and change. The so-called traditional employment relationship, far from disappearing, is still very much the norm in Ireland. And a certain amount of stability and predictability is actually good for employers, as it provides the bedrock for building long-term high-productivity high-trust employment relationships through sustained investment in employees. Therefore, it is more accurate to portray a mixed picture of change and continuity existing side-by-side.

Through its long-lived social partnership model, Ireland has been developing its own flexicurity problem-solving pathway – although it has not been explicitly labelled as such. A number of flexicurity ‘big themes’ may be put on the table in any new round of social partnership talks in spring 2008, including equal treatment for agency workers; greater progress on upskilling and life-long learning, particularly for the low-skilled; and progressing policies for a ‘Developmental Welfare State’. The balance between flexicurity and security in the employment relationship will always be a ‘contested terrain’, and unions and employers negotiate trade-offs.

As things stand, while Ireland has two sides of the flexicurity triangle more or less in place (a flexible labour market and active labour market policies), the same cannot be said for the missing third side of the triangle: a highly developed welfare state. Ireland’s National Economic and Social Council has outlined a vision of the ‘Developmental Welfare State’ (DWS), but the challenges of practical implementation are formidable. A welfare state and public service model providing universal securities and income protections requires huge investment, and it is debatable whether this is feasible under Ireland’s low tax regime. Furthermore, the Irish economy has been slowing down, which begs the question of whether flexicurity, and the ambitious policy vision of a radically revamped DWS, will be jettisoned in the event of a prolonged economic downturn.

Tony Dobbins, IRN Publishing

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