INDUSTRIAL RELATIONS:As the social partners and the Government go their seperate ways, it remains to be seen who will take custody of the economy, writes Industry Correspondent
MARTIN WALL
IN THE WORLD of industrial relations, 2009 will be remembered as the year in which social partnership broke down. The process is considered by many to have played a key role in creating the conditions that led to the boom, but it couldn’t cope with the stresses of dealing with the recession.
The final break, when it came in early December, was perhaps inevitably over public-sector pay. However, fault lines had been evident in many other areas, ranging from employment-protection measures to the minimum wage.
The year started with the national agreement, which had been endorsed only the previous autumn, already in deep trouble. By the early weeks of 2009, with the public finances deteriorating, the employers, unions and the Government were seeking to agree a national recovery deal. However, the real sticking point was always going to be the Government’s plans to reduce public expenditure by €2 billion and its effects on the pay of more than 350,000 public-sector staff.
The crunch came in the early hours of a freezing night in February when the unions rejected proposals by the Government to introduce a pension levy for public-service staff. The levy itself was a subtle invention – it kept nominal pay rates intact and so preserved pension entitlements – but take-home pay was reduced on a sliding scale. To the unions, such cuts were anathema. However, the Government pressed ahead.
In the fall out, the Irish Congress of Trade Unions (Ictu) brought an estimated 120,000 people on to the streets of Dublin. Lower-paid civil servants in the Civil Public and Services Union (CPSU) staged a one-day strike and Ictu announced an effective nationwide strike on March 30th. However, this was called off after the Taoiseach Brian Cowen invited the parties back into new talks on an economic recovery deal.
The unions and employers both sought a €1 billion State investment to create and preserve jobs. The public-sector unions also red-circled the protection of existing pay and pension levels as a condition of any new deal.
In June, the Government announced proposals for a job-protection scheme with an initial budget of €250 million. The unions were furious when, the following morning, the Minister for Finance Brian Lenihan went on radio and, as they saw it, effectively poured cold water on the proposals.
But as they prepared to meet for Ictu’s biennial conference in Tralee, the public-sector unions were increasingly concerned that the Government had not responded to an offer of cooperation with reform, in return for guarantees on pay, pensions and jobs.
Relations between the Government and the unions deteriorated further in July after the Minister for Finance suggested that the minimum wage could be cut. Over the summer and into the early autumn, a number of lengthy and bitter private-sector disputes, such as those at Marine Terminals and Coca Cola, had dominated the industrial-relations agenda, but public-sector pay came back to centre stage on September 9th, when the Taoiseach hinted strongly that the Government would look at again cutting this in the Budget.
Individual unions responded by balloting for strike mandates. In late September, a new umbrella group representing frontline staff emerged to resist any threat to allowances, overtime and premium payments. In October, Ictu announced plans for a series of mass rallies in support of its fairer way of dealing with the economic crisis. The Taoiseach warned the social partners that the Government was committed to making cuts of €4 billion (with €1.3 billion to come from the public-sector pay bill) with or without them. He later reiterated it was not for turning, even after around 70,000 people demonstrated at the Ictu rallies.
With attitudes hardening, the stage was set for 250,000 public-service staff to hold a one-day strike on November 24th, a move which closed schools and disrupted hospital services for around 16,000 patients.
With another strike looming, talks resumed, with the unions proposing an alternative plan for generating the savings sought by the Government. This involved staff effectively taking a pay cut in 2010 in return for 12 unpaid leave days. From 2011, the original salary levels would be reinstated and the money saved through wide-ranging reforms and reductions in numbers.
After initially appearing to signal that it could do business on this plan, the Government eventually rejected it, following opposition from some ministers and Fianna Fáil backbenchers.
With the unions’ plan rejected, the Government reverted to its original proposal and introduced pay cuts of between five and 15 per cent in the Budget. The wheels have now come off the partnership process and the year is ending with unions planning wide spread industrial action and warning that there is no hope of the Government securing its planned public-sector reforms.
