by Joseph Wallace & Noreen Clifford

III. The positions of the social partners on flexibility

B. Social partnership 1987-1997

The issue of flexibility and collective bargaining can only be examined against the backdrop of the system of social partnership which has dominated Irish collective bargaining since 1987. This system of social partnership, or bargained corporatism, was introduced against a severe economic crisis which had lasted from 1980. This acted as the main catalyst for a return to centralized national pay bargaining which had previously existed from 1970 to 1981. The main movers for this return to national bargaining were the trade union movement, led by the ICTU, and the Fianna Fáil Government, under the Taoiseach, Charles Haughey. The employers, led by IBEC, were initially sceptical of the proposed return to centralized agreements but the low average annual level of increases, of 2.5 per cent under the PNR, was sufficiently attractive to ensure their participation. While the pay elements of the agreements were the most important aspects of the accords, they also contained a number of non-pay elements as outlined in table 2.2. Most notably there was an agreement to reduce the working week by one hour to 39 hours. This is sometimes presented as indicating increased flexibility but in reality it merely involves the movement from one fixed duration of the working week to another fixed duration. The initial verdict on that first agreement was one of modest success and it was followed by three further agreements. While these agreements enjoyed varying degrees of success (see table 2.3) the current judgement is that they have laid the foundation for the current resurgence of the Irish economy. Turner and D'Art (1997) note that:

the economic crisis of 1981 to 1987 which acted as a catalyst for the emergence of centralized agreements has vanished. Real National Income increased by 54 per cent between 1987 and 1996 compared to an increase of 7 per cent between 1980 and 1987 (table 2.3). In 1996 alone national income grew by 8 per cent. The debt/GNP ratio has improved considerably and government no longer needs to borrow for current public expenditure.

Table 2.I. Percentage wage increases under centralized wage bargaining,

1987-1997

Programme		Years		Terms
Programme for National Recovery (PNR)		1987-91		Average of 2.5% per annum wage increases
Programme for Economic and Social Progress (PESP)		1991-94		Yr. 1-4% increase Yr. 2-3% increase* *(+3% local (exceptional) bargaining clause)
Programme for Competitiveness and Work (PCW)		1994-97		Yr. 1-2.5% increase Yr. 2-2.5% increase Yr. 3-5%
Partnership 2000 for Inclusion, Employment and Competitiveness		1997-2000		Yr. 1-2.5% increase Yr. 2-2.5% increase* *(+2% local bargaining clause) Yr. 3-1.5% first 9 months +1% in last 6 months
*Indicates the earliest date for payment of Local Bargaining Clauses. Source: Adapted from Turner and D'Art (1997).

Table 2.2. Non-wage elements under centralized wage bargaining, 1987-97

Programme		Years		Non-wage Elements
PNR		1987-91		Government commitment to reduce taxation burden on PAYE worker, improve social policy provisions, increase employment (mainly aspirational), 39 hour working week
PESP		1991-94		Government commitment as above, some tax reductions, unemployment continues to rise
PCW		1994-97		Government commitment as above, additional commitment on social inclusion and equality and extension of partnership arrangements at enterprise level
Source: Adapted from Turner and D'Art (1997).

Table 2.3. Economic indicators 1980-96 (all figures reduced to

base year 1968)

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