Industrial Relations Management in Ireland

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Introduction

Industrial relations management deals with how a company runs its industrial enterprises and employees. It mostly revolves around interactions between the company, employees, the government, and the related trade unions. The government plays a very important role in industrial relations. First of all, as an employer and secondly as a player involved in the regulation of the economy as it is directly responsible for a good working relationship between trade unions and employers.

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The Republic of Ireland has been transforming of late as far as industrial relations management is concerned. It has been using pluralism as a key perspective in industrial relations (National employment rights authority, p. 4). A major transformation was witnessed in 1987 after a period of weak economic growth and high inflation. Before the transformation bargaining was mostly done on a local level. In addition to these, it had been preceded by a lot of national employer-union deals. The long-term effect was unsustainable government borrowing and increased emigration of workers.

At this particular time, the government came up with a new plan called the social partnership (National employment rights authority, p. 3). It referred to the term that was used for triennial national pay agreements that had been agreed on before. As a result of this agreement, there has been a lot of wage moderation. The agreements were mainly between the government, trade unions, and the many employer groups.

This partnership has been responsible for the Celtic tiger. The Celtic Tiger is a term that has been used to describe the period that saw rapid economic growth from 1995 to 2007. However, this momentum came to a halt in the year 2008 because of the global economic crisis. Unemployment fell drastically to 4.5% with average industrial wages growing significantly (Irish business and employers’ confederation, p. 5).

In recent years there have been general policy discussions but not in the key element of wage bargaining. The main aim of all these discussions has been to achieve a trade-off that is modest of the wage increases and in return get a lighter income tax burden.

It is argued that social partnership has been responsible for the high influx of multinational corporations in the country. The main reasons that have enabled Ireland to attract these companies include relatively low wages and low government tax. This is because the country’s industrial relations have been made more efficient and effective in handling labor-related issues that had bedeviled the sector before.

The labor force in Ireland

As of 2009 Ireland had a labor force of 2,155,200 of which 1,887,700 were in employment while 276,400 were not employed (Irish business and employers’ confederation, p. 2). This placed the unemployment rate at 12.4%. The figures have been changing in recent years since the social partnership was put in place. Ireland’s labor force has been changing in relation to the occupational structures. In the year 2002, most of the labor force was in the service sector which stood at 65%. But in previous years it has been rising because of the dismal performance of the industrial sector.

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From 1987 since the inception of the social partnership men have been dominating the participation rate of the labor force. There is a lot of gender segregation in employment as the degree of concentration in a given number of occupations is higher amongst women than it is in men.

Before the social partnership in the 1950s there was a lot of emigration but after that this has changed as almost 93% of the labor force comes from Ireland (Migrant rights centre Ireland, p. 4). On the other hand, the country has been attracting a lot of skilled foreign workers mostly in the computing and medical field.

This has been dampened by claims of job displacements of the Irish people. In some cases, the foreigners have complained of social exclusion, a poor work permit system, and exploitation from recruitment agencies. Ireland’s population has been increasing and decreasing but from the 1980s it grew because there were fewer emigrations in the country especially from 1987(Migrant rights centre Ireland, p. 2).

Industrial relations in Ireland

Many key perspectives relate to industrial relations. They have had different managerial prerogatives with a critical look at the origin and nature of conflicts in an organization. There are also many approaches on how these conflicts can be dealt with depending on the different perspectives.

The country has mostly used pluralism in handling its industrial relations. Pluralism has allowed for different interests and objectives to be accepted as rational and legitimate. In looking at the companies the management’s right to manage has been sought by consent to avoid conflicts (Irish business and employers’ confederation, p. 3).

As pluralism is used it has been accepted that conflicts in labor are inevitable but there needs to be a continuous and compromising approach in solving them. Generally, trade unions in the country have been given a legitimate role while the management has been tasked with regaining control through sharing. The only problem is that in doing all these they have neglected the women experience that the country is vested with.

It is well proven that pluralism mostly favors men through its bargaining be it full-time or part-time (Equality authority 7). Through this perspective, there has been the distribution of wealth through trade unions. In Ireland, people have appreciated that the structures of bargaining and pay systems are influential in the conduct of industrial relations.

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Competing groups have been legitimized to improve the overall industrial relations. The government formed the Donovan commission in 1968 to look at industrial relations. The commission found out that the country had two systems of industrial relations (formal and informal). In the process, it was discovered that wages were drifted with a lot of unofficial disputes (Equality authority, p. 2). To solve these problems, it was recommended that voluntary workplace reforms be initiated to solve the many industrial relations problems.

From there on other reforms had to follow where eventually the social partnership came into place. Although it has achieved considerable success the approach has faced numerous challenges. Over the recent years, the country has witnessed a lot of multi unionism and union conflicts. It has been argued that to improve industrial relations the country needs a lot of institutional reforms and not legal reforms.

Social and Legal context of IR in Ireland

The government of Ireland established voluntarism through the trade disputes act of 1906. The trade union act allowed for trade union immunity from action over breach of contract in case there was any furtherance of a trade dispute. It was characterized by negative protection instead of giving them the right to strike (Irish congress of trade unions, p. 3).

The act was also restricting judicial interpretations in problems that faced trade unions. Later on, as a matter of concern, the constitution was amended to allow for freedom of association for workers. In 1946 there was the establishment of a labor court. From 1987 onwards the industrial relations act limited immunities that were being enjoyed by trade unions. The country was also able to conform to EU laws that insisted on parental leave, consultation, and working time. From there on the country has been strengthening the social partnership geared towards a centralized pay agreement (Irish congress of trade unions, p. 2).

Through this, there was the achievement of a national minimum wage setting and most of the institutions that relate to industrial relations have remained voluntary. The long-term effect of these achievements has been the elimination of non legally binding terms. There was the establishment of social pacts as a result of the social partnership.

The country has seen a lot of programs aimed at strengthening the social and legal context of industrial relations. From 1987 to 1990 there was a program for national recovery, which was followed by the program for economic and social progress from 1991 to 1994.1994-96 saw the implementation of the program for competitiveness and work that led to more partnerships from the year 2000. The program for fairness and prosperity brought about the sustainable progress that has been witnessed (Irish congress of trade unions, p. 5).

From 2001 to 2004 the government came up with the industrial relations act that strengthened the right to bargain in industrial relations. The role of the state in industrial relations has been neutral which conforms to pluralism. In recent years the country has embarked on industrial reforms through industrial relations acts.

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This has seen the need for third-party specialist institutions in industrial relations. Ireland has a lot of institutions that are tasked with overseeing the country’s industrial relations (Irish congress of trade unions, p. 3). The labor court was established in 1946 and under it we have various departments that deal with;

  1. Investigation of disputes by looking at equality, working time, minimum wage, part-time work, fixed-term contracts and industrial relations disputes.
  2. Registration of agreements.
  3. Establishment of joint labor committees.
  4. Appeals against rights commissioners’ decisions.
  5. Appeals against equality tribunal decisions.

In 1990 there was the establishment of the labor relations commission that is tasked with nominating rights commissioners and also conducting industrial relations research. The commission has the ability to provide conciliation and mediation of disputes, industrial relation advisory services, and enforce codes of practice (bullying, grievances, and voluntary dispute resolution).

1967 witnessed the establishment of the employment appeals tribunal which was to oversee disputes in relation to the legislation of employment. These disputes included; dismissal, redundancy pay, minimum notice, payment of wages, terms and conditions and part-time workers. The tribunal also deals with maternity protection and the protection of young workers.

Equality Tribunal was established in 1999 and it has the department of justice, equality and law reform. It also deals with discrimination mediation and gives out alternative inequality cases.

Trade unions in Ireland

Trade unionism has been described as the continued association of people who earn wages where they have benefited by being able to improve and maintain their working lives. The trade unions have played a wider role in social functions (by strengthening the national and workplace functions).

In the process they have gained different identities like:

  1. A market function where they have looked at the economic wages of the members.
  2. Class functions through being strategic as far as class struggles are concerned.
  3. Society functions by ensuring that there is social justice in society.

Ireland’s trade unions have operated on a voluntarism approach when dealing with legal issues. Trade unions in Ireland must be independent and they should get a negotiating license from the Minister of employment. Other employer bodies like the Employer Federation have also been classified as trade unions in the legal sense (Irish congress of trade unions, p. 4).

The country has had a wide trade union structure in job territories like the craft, industrial and white-collar jobs. There are 43 trade unions in the Republic of Ireland with the largest being the Services, Industrial, Professional and Technical union with 200.000 members (Irish congress of trade unions, p. 6).

. Most of these trade unions are affiliated with the Irish Congress of trade unions. All the trade unions have a total membership of 602, 035 people, where 46% of the members are females while 54% are males. 36% of the people who are employed are unionized meaning that the penetration rate of trade unions is still low compared to other countries like Sweden, Denmark and Finland that have almost 78% membership (Central statistics office Ireland, p. 5).

The unions employ full time officers like the branch secretaries while some other officials are elected during the delegate’s conference. In cases where we have inter- union disputes the Irish Congress of Trade unions has come in to mediate. It has also been instrumental in cases revolving around national level bargaining of trade unions.

Other individual trade unions are affiliated with the Irish Congress of Trade unions. Irish Congress of Trade unions has been the umbrella body that has acted on behalf of other trade unions. Trade unions have been having shop stewards, a union representative employed by the company and elected by the local workforce. They have been responsible for representing the workers’ interests, liaising with union officials, and communicating between the members and the management.

. Wholesomely they deal with workplace issues and other grievances like discipline, disputes, dismissals and equality. In cases where the disputes have been manifested, they have initiated negotiations with the management at the local level. In addition to these, they recruit new members and collect monthly union subscriptions. As stipulated out in the 1993 code of practice stewards should be afforded reasonable time for their duties and other facilities like an office.

Significant growth in unionization was witnessed in the country from 1930. There was a dramatic acceleration up to the early 50s before it became more gradual from there onwards. Overall membership figures mainly rose in the 1980s especially during the social partnership that had been implemented. In recent years there has been a decline in the density of membership from 37.4% in 2003 to 31.5% in 2007(Central statistics office Ireland 2). On the other hand, figures from the year, 2009 show that there is an increase (34% density among employees).

Union membership has been rising and falling because of some influences. Cyclical influences have had a great impact on the economy and the labor market. In addition to these, structural influences have directly dictated the composition of the market labor force. Since the social partnership was instituted in 1987 the numbers have risen significantly because of proper institutional frameworks (Construction industry federation, p. 3).

Other reforms in industrial relations have followed with the most notable of them being the industrial relations acts that allowed for the rights to bargain. But on the contrary the Supreme courts judgment in the Ryanair case in 2007 quashed the right to bargain. Trade unions have some collective powers which are manifested in their ability to control the social and physical environment. In the long run it has allowed them to influence the decisions that are or not taken by others. The power vested by these trade unions has been responsible for the high prices as exploitation has thrived through their monopoly power (Construction industry federation, p. 2).

Many economists have argued that trade unions are supposed to be blamed for the low pace of modernization in the country as they have seen them be barriers (Irish congress of trade unions 6). Their ability to disrupt power, economic growth and production has been a barrier to the achievement of productivity in the economy.

Reforms in industrial relations have granted them political power where they have a privileged legal position. In some cases, they have even vetted government policies yet they are not elected to carry out such functions. In Ireland, trade unions are social partners yet they are not elected like parliamentarians.

Many of the trade unions have been criticized for their greed and materialism. They have only been concerned with narrow and sectional interests which have compromised those principles that they are built on. To make matters worse trade unions have refused to subordinate to the wider interests of the community by championing their own hidden agenda (Irish congress of trade unions, p. 4).

When it comes to their internal state of affairs, the quality or representativeness of the leaders has been wanting. In response to these, it has been proposed that the power of unions must be measured or measured to improve their performance. There is a general imbalance in labor contracts of individuals that have been seen (Irish congress of trade unions 3). Most of the economic and social power has concentrated in the capitalist class of the society.

Another contrasting issue is that the power of the union leaders has not been the same as the one that is given to the members yet they share the same interests. To add to these, the visibilities of the activities that are conducted by the unions are not the same as the power exercised by press barons, bankers, Multinationals and CEOs.

Since the social partnership, the country has had many legal challenges that relate to recognition. It has mainly witnessed an increase in the number of non-union multinationals. The result has been the demise of the social partnership in the 21st century (Irish congress of trade unions 2). There has been a decline in density throughout the boom but the prospects have increased in recessions.

Impacts of Multi-Nationals in Ireland

Ireland has seen the need to have a management strategy in industrial relations. Management has entailed those roles where the holders are given an authority (formal and informal) to make binding decisions in an organization. The sole purpose is to ensure that the management’s objectives are supported for the effective operation of the businesses.

Globalization, a process of increased economic integration has seen a lot of multinationals establish a business in Ireland. Multinationals have been wholly or mainly foreign and domestically owned but with a worldwide presence. They have contributed by 9.5% towards employment opportunities in the country (Central statistics office Ireland, p. 2). As a matter of fact, Ireland is one of those economies that mostly depend on Multinationals.

The country has 1000 foreign companies that employ more than 135, 000 people (Irish congress of trade unions 2). Multinationals have had an impact on the industrial labor practices in Ireland but they have been forced to conform to the existing practices. There has been evidence that some of the different industrial practices are similar to the ones they practice at home. Some of these practices are; single union representation, pre-employment agreements, trade union recognition and avoidance.

Most Multinationals started coming to Ireland after the social partnership but of late they have resisted recognizing trade unions. Other foreign-based Multi nationals opted for union substitution instead of trying to suppress them. They have also acted as catalysts in bringing about desirable change in industrial relations in the Republic of Ireland (Central statistics office Ireland, p. 6).

61% of the Multinationals recognize trade unions and 25% have been recognized at all their sites. There is a lot of high union density in the manufacturing sector at 74%, followed by the service sector (Central statistics office Ireland, p. 2). The majority of the Multinationals have adopted the method of national-level bargaining in matters relating to industrial relations.

Over 80% were able to follow the terms of the national partnership agreements by implementing a 17% pay above the terms and 2% pay below (Irish congress of trade unions 1). As a result of these, there is a lot of high-level union engagement with Multinationals. However, there are concerns that most of the new sites in the country are not unionized. In Ireland, partnership models have been rare but they have embraced human resource management alongside traditional industrial relations.

Work Place Partnerships in IR

There are high prospects for partnership and innovation that can be advanced in the country. This will lead to strong unions, social partnerships, and an educated workforce. These leading-edge human resource practices will make Ireland an ideal place for the emergence of new employment relations.

Innovations have been common in communication, recruitment, and appraisal where unions are perceived to be less resistant. Significant achievements are there in job satisfaction and productivity. On the other hand, the country lacks a general interest in supporting the private sector through partnerships and mutual gains.

Before the Social partnerships’ most trade unions wasted the gains, they had made. They concentrated their bargaining strength on wages and their efforts towards the organization were poor. After major reforms and restructuring, the majority of the workers are flocking back to the trade unions. Recent trends have seen that regulation is no longer being seen as a restraint on workers as they have got more space to regulate their working conditions.

Arguments for and Against Social Partnership

The social partnership was a result of the economic crisis of the 1980s but it came into existence in 1987. It allowed for voluntary and tripartite bargaining by looking at the pay and influence on policy for employers, union leaders, and state ministers. Previously Multinationals were not under any obligation to recognize trade unions in the country.

The social partnership was the best way for Ireland to move forward in Industrial relations and there are many proofs to these. It provided for stability in the industrial relations climate while retaining flexibility. In addition to these, it helped to move away from the prescriptive nature of dealing with industrial relations. Another achievement is that it mostly concentrated on minimal standards rather than emphasizing distributive goals.

Through this, the economy was able to recover after the economic crisis of the 1980s. This is the main contributor of the Celtic tiger; a term that has been used to describe the period that saw rapid economic growth from 1995 to 2007. However, this momentum came to a halt in the year 2008 due to the global economic crisis. Social partnership has enabled a modest increase in wages in exchange for a reduction in income tax. Before the social partnership, most of the country’s nationals were emigrants in other countries in search of jobs. This period was characterized by a lot of unemployment which was made worse by the economic crisis. But, from 1987 after the partnerships, the country has attracted a lot of multinationals that have helped increase the number of jobs.

Multinationals were attracted to the country because of the favorable industrial relations climate that had been brought by the social partnerships. The social pacts or corporatism were very friendly to the foreign Multinationals. Though the social partnership has been successful as it was expected there has been some criticism towards it.

Social partnerships led to a lot of freedom in industrial relations. This made a lot of trade unions to be strong which enabled them to start vetting some of the government policies. In the long run, parliamentary democracy has been usurped because trade unions have had a lot of influence yet they are not elected by the people.

It is argued that social partnership provided insufficient institutional support for partnerships compared to the continental social acts. The partnership was only insisting on voluntary trade unions and forgetting other aspects that can strengthen them. Another major problem is that most of the trade unions have brought a bad culture where union leaders are at the top table and out of reach with their members.

Since the members and the union leaders share the same interest they are supposed to be closer and strengthen their relationship. This could be the reason why there has been reluctance from some employees to join the trade unions because the country has only 34% of its workers in unions.

There was a lot of inequality in the distribution of wealth before the social partnership. In it being instituted it was hoped that disparities in the distribution of wealth were to be reduced but this was perpetuated during the partnership period.

The fragility of the social partnership was seen during the recession period and this has led to the crook park agreement. If this agreement is accepted most of the trade unions will have to adapt to the new and unpleasant realities. This will likely result in the resurgence of social democracy although there are few signs that this will occur.

Conclusion

Social partnership has come out as the best way forward for trade unions, employers, and the government of Ireland. It was able to enhance economic success and it helped to bring many multinationals into the country. Relatively low wages and government have been an incentive to the multinationals. Through this, the rate of unemployment was reduced and in the long run, attracted more expatriates. From 1995 to 2007 Ireland has seen an economic boom because of the positive effects of the social partnership.

The country has experienced a lot of improved human resource management in industrial relations which has increased productivity and efficiency. Innovations have been common in communication, recruitment, and appraisal where unions were perceived to be less resistant. Trade unions have some collective powers which are manifested in their ability to control the social and physical environment.

The role of the state in industrial relations has been neutral, which conforms to pluralism. Before the social partnership in the 1950s there was a lot of emigration but after that this has changed as almost 93% of the labor force comes from Ireland. On the other hand, the country has been attracting a lot of skilled foreign workers mostly in computing and the medical field. Although the social partnership has been successful as it was expected there has been some criticism towards it but these have been taken positively by the various players.

Works Cited

  1. Central statistics office Ireland. Statistical Yearbook of Ireland, Dublin: Stationary Office, 2009.
  2. Construction Industry Federation. Industrial relations, 2010.
  3. Irish Business and Employers Confederation. The voice of Irish business and employers, 2010.
  4. Irish Congress of Trade Unions. Stronger together, 2010.
  5. Equality Authority. The Gender wage gap in Ireland, Dublin: Economic & Social Research Institute, 2010.
  6. Migrant Rights Centre Ireland. Tools for Social Change: A Resource Guide for Community Work with Migrant Workers and their Families in Ireland, 2010.
  7. National Employment Rights Authority. Nera Quarterly update, 2010.

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