Managing the barricades

STRIKE ACTION:With tensions in the workforce mounting and the prospects for a national pay agreement fading, strikes could become a more common prospect. Are we facing a return to the bad old days?

LAST MONTH’S industrial action by bus workers at the Harristown depot brought back memories of what many hoped was a by-gone era in industrial relations. The dispute, that started with the suspension of a driver who would not work a new roster, lasted three days, affected around 150,000 commuters and cost the company an estimated €400,000. Crucially, the strike was not supported by the bus drivers’ official union, the NBRU.

Some fear the unofficial dispute may mark a new phenomenon of wildcat strikes. There is more broad-ranging acceptance however, that official strike activity is likely to increase, especially within public service organisations.

Strike days plummeted in the boom era, reaching a low of around 4,500 in 2008. In the 1970s and 1980s, it was not uncommon to lose 300,000 days a year and for critical services such as transport, post, energy and financial services to grind to a halt, sometimes for weeks.

As a consequence of this, an industrial relations infrastructure has evolved to help prevent strike action and its consequent loss of productivity. On the one hand, we had the national pay agreements that reduced the number of pay-related disputes. On the other, we had the Labour Relations Commission, set up specifically to conciliate where disputes arose.

Industrial relations harmony has been the order of the day in Ireland in recent years, underpinned by back-to-back national pay agreement, endorsed overwhelmingly by both management and employers. But as the economy continues to contract, some fear industrial unrest could once more become a major feature.

As the talks on the national pay agreement stalled early last week, ICTU’s general secretary David Begg conceded that strike action was a likely by-product.

On the surface, the return to a more confrontational industrial relations climate looks inevitable. However, things are somewhat different this time around.

For a start, today’s workforce is more heavily mortgaged and indebted and may have less scope for action that results in suspension of pay. It is also less homogenised and less likely to get easily dragged into disputes. “In general, in the private sector, sensible agreements are being worked out, as nobody wants to join the ranks of the unemployed,” says IBEC’s Brendan McGinty. He is more concerned about potential unrest in the public service. “In the public service there is a greater sense of entitlement – that extends to job security.”

McGinty is disappointed at the noises being made from certain unions in areas such as education and health, and fears the prospect of various forms of various forms of industrial action in the coming months. He feels that Ireland’s economic image has been partly built on having a peaceful industrial relations climate, including strong mechanisms for conflict resolution, and that this image could be jeopardised, at a time when the economy is already facing huge challenges.

Nonetheless, he believes, even in the absence of a tripartite national agreement betw-een Government, unions and employers, bipa-rtite agreements between unions and employers could be operated for the private sector.

John Horgan, former chairman of the Labour Court, believes pragmatism will result in less strikes than some anticipate as there is a greater recognition among the workforce of the need for competitiveness. However, he feels that, in the current environment, there should be a formal mechanism to allow for negotiated decreases, as well as increases in pay.

Horgan is critical of the role of trade unions in reducing the scope for management flexibility, especially in the public sector. “One of the overhangs of the social partnership process is the idea that unions have a veto on change and that every change has to be negotiated.” He cites examples in the public service of situations where practices can’t be changed – not because there is anything intrinsically wrong with the change but because change is resisted as a form of retaliation for something else the union feels has been imposed.

“There has to be a limit to the amount of consultation needed. Some managements have been turned off the consultation process because of frustration at the way it has been abused,” he says. There is another side to this argument, however. Some on the union side feel employers are using the current downturn to fast-track a wide package of reforms, without going through consultation.

Colin Whitston, senior lecturer in industrial relations at the National College of Ireland, says there is a belief in union circles that some management are “piggybacking” on the recession, regardless of financial circumstances. This is part of a worldwide trend. “There are many cases of employers using arguments about global competition to downgrade their relationships with unions.

“We may see more strikes as a reaction to management attempts to force change rather than building on established relations.”

Current examples include what is known as double breasting. Here, a company, typically a multinational with a unionised plant, will establish a second plant, for example, that will not recognise a trade union and will gradually shift its investment towards the non-unionised facility.

Whitston says that that, in the current environment, with tax increases and overall remuneration levels falling, prospects for a greater number of strikes is increasing. Wildcat action could form part of this. Some workers, he says, may view unofficial action as a way to deal with short shelf-life issues or to fire a shot across the bows of management or unions. While it may not achieve stated short-term objectives, he says, they may see it as a way of getting management back to the negotiating table.

“There is a feeling that employees are being asked to bear too much of the brunt of solving the economic problems of the country. There may well be a greater level of disputes, not all of which will be containable.”

Tom Gormley, consultant and lecturer at the UCD Smurfit School, agrees that the current environment is fraught with danger in terms of industrial harmony.

“Reductions in take-home pay, work reorganisation and threats of redundancy are the kinds of sparks that may light fires, and the kinds we’re seeing throughout the Irish economy. For a spark to take hold, the tinder has to be dry, however. A single incident or policy change will only lead to serious industrial conflict if there is already a more-or-less vague feeling of dissatisfaction and a belief among workers that managers don’t listen – or don’t care,” he says.

Niall Saul, currently HR Director of McNamara Construction, and a veteran of difficult disputes in companies such as Waterford Crystal and Packard Electric, feels that the trade unions need to show greater leadership at this time. He says that many of the union leaders at the moment appear “trapped in the headlights”.

“Many of the unions are still in denial about the economic problems facing the country. Wages rather than retention is still the issue there and they need to switch their mindsets.”

Part of their problem, Saul believes, is that some union leaders fear the growth of militancy and social unrest if they don’t keep a lid on industrial relations. “This is a misjudgment. If they were confident to stand up and take a leadership position on the economy they would find that they are followed, as was the case before the first social partnership agreement.”

Whitston disagrees. “It’s relatively easy for management to have a common position, because it does its work in private. Unions by their nature are membership organisations so there is wider debate.”

However, at enterprise level, Saul says the onus is on management to communicate with employees. To prevent industrial action, management should attempt to create an informed, questioning workforce. “Ideally, you should be communicating with your entire workforce once a quarter, keeping them up to speed.”

In his experience, says Saul, 20 per cent of employees could be said to favour the management side, 20 per cent the union side, with the balance in the middle. The key is to win as many supporters as possible in the middle ground. “The best way to do this is to be as open as possible,” he advises. “My preference has always been that people are given all the information they need, first-hand.”

In the tricky environment of Waterford Crystal in the 1990s, he recalls, workers were persuaded to take short-term wage cuts, offset by bonuses when conditions allowed. They were persuaded to be pragmatic – to align their fortunes with that of the business – and they did indeed benefit from the upside. Communication was key.

During negotiations, it is important to avoid a win-or-lose perspective, says Norm Solomon, dean of the Charles F Dolan School of Business in Fairfield, Connecticut and expert in labour management relations.“While management wants to lower the wage bill, unions may be reluctant to reduce wages of current members – a compromise may be a two-tier wage structure with new workers put on a different wage grid,” he suggests

If a strike does occur, both sides need to remember that it is about specific issues – intemperate and personal remarks have no place. “Both sides need to remember that they will be working side by side in the future – no one wants the enterprise to fail,” he notes. “There are alternatives to the zero sum game – for example, problem solving. . . What sometimes works is to set up a committee before negotiations to study particularly troublesome issues that might come up during negotiations.”

Saul says it’s important to move on quickly after the conclusion of an industrial relations battle. “You need to sit down with the other side and acknowledge there may have been fault on both sides. There has to be an agreement that certain commitments will be honoured if you want to create a climate of trust.”

Joan Hart of PA Consulting says management needs to look at the psychological factors that drive workers towards industrial action, such as wildcat strikes. “In most cases, this behaviour is driven by the feeling that power has drifted away – solutions are being imposed. You need to create a climate that convinces peoplethat they are part of the solution.”

In the current environment, there is an expectation of change and management should not be afraid to communicate the challenges facing the organisation, even if they do not have all the answers. “People have choices. They need to decide if they accept the need for change, are they willing to change or do they have the capacity for change,” she says.

Ian Duncan of Vision Consulting spends a lot of time working on organisational transformation projects. He says he has noticed an increased level of scepticism among employees in Ireland about achieving change. It is important for management to deal with this, as a disengaged workforce is one that destroys productivity and creates industrial unrest.

“There are three issues most employees have. Firstly, are they broadly satisfied with their remuneration? Secondly, is their work interesting and meaningful? And thirdly, is their identity a positive one? The question of power is very important – whether they feel they have been overlooked for a promotion or someone has been given responsibility for a job they feel they could have done better.”

Communication is key to breaking down barriers, he agrees, and a culture of secrecy breeds unrest. Too often management engages in a one-way process without listening to workers. “It’s no good going through the motions – people aren’t stupid. You need to identify the issues and see if there is a collaborative approach. Handled properly, even negative feedback can be good – it gets issues out in the open.”

Right and wrong: Strike Action
 
THE LAW relating to industrial action is covered under the Industrial Relations Act 1990. For a strike to be deemed lawful or official, three conditions must be fulfilled: Firstly, a secret ballot must be held by a trade union; secondly the result must favour industrial action; and thirdly, at least one week's notice of the action should be given to the employer.

In the case of an unofficial strike, such as the one at Dublin Bus last month, none of these conditions apply, so a court would probably have been open to granting an injunction restricting the picket had it been requested by management.

The law provides greater protection and rights to members of trade unions during industrial action. There are three types of immunity: immunity from a claim of breaching one’s own contract of employment ; immunity from a claim of inducing somebody else to breach their contract of employment, ie not performing their work obligation; and immunity from claim for actions such as trespass or nuisance.

Immunities are available to members and officials of trade unions regardless of whether the notice etc as long as the worker is a member of an authorised trade union, notes Joanne Hyde, solicitor at Eversheds Sweeney O’Donnell.

“However, there is a significant legal question mark over the constitutionality of this provision given that there is a constitutional right to join or not to join a trade union. Yet workers who are not members of a trade union do not enjoy the same immunities as members of a trade union taking the same action,” she explains.

The relevant section does not deal specifically with immunity to breach a commercial contract which often arises in strike situation, ie, Company A has a contract to deliver a particular amount of product to Company B but cannot do this because its employees are on strike. Company A is therefore in breach of its contract, she explains.

“The question is whether the striking workers can be sued for inducing that breach of contract. Surprisingly, this question has not been addressed by Irish courts so we don’t know the answer for definite. However, the courts have been clear that the immunities must be interpreted narrowly so there is a risk of such a successful claim against the trade union and its members,” she says.

Easy Tiger!: Taming a Wildcat

THE BEST response to a wildcat dispute is to ignore it as much as possible and, under no circumstances negotiate with organisers of an unofficial dispute.

That's the advice of veteran industrial relations negotiator Niall Saul. "If you concede anything in a wildcat dispute you are undermining both yourself and the official union position and sending out a message that this type of action is rewarded," he says.

"Employers should make it clear that they will not engage in dialogue with striking workers until there is a full return to work," advises Brendan McGinty of IBEC.

The Dublin bus dispute, he says, is a classic example. A full consultation process took place and the transformation programme was supported by the union, following a recommendation by the Labour Court. To concede anything in a situation like this could unravel months of work between management, unions and independent bodies such as the Labour Court and the Labour Relations Commission.

Unofficial disputes, by their nature, are typically supported by only a small minority of the workers. Unlike official disputes, workers engaging in this action are not immune to prosecution - in theory, they can be sued for damages.

Allowing a situation to escalate to this level is generally considered to be counter-productive, Saul notes. "You want to avoid creating martyrs," he says. "You don't want a situation where someone faces prosecution and then refuses to pay a fine that then leads to a jail sentence."

There is a better response, he says. "The best form of sanction is to dock the pay of the strikers for the days when they were not working."