V. The process of collective bargaining on flexibility
A. Level of collective bargaining
In the Irish system of collective bargaining as it has developed in the last ten years, national agreements have established framework agreements on pay and a number of other issues since 1987. Table 1.18 contains detailed responses to the CUL study outlining the level of pay determination in Ireland and there is an extended discussion of these results in Part I. This discussion indicates that, especially in relation to manual workers, national level bargaining has been the most important level for pay determination in recent years. By contrast, regional levels of pay determination were only present in 9 per cent of organizations in 1995 (see table 1.18). There is considerable scope for companies to determine managerial pay outside of collective bargaining, with 44 per cent of companies reporting that they determined managerial pay on an individual basis (see table 1.18). In general such groups of workers have enjoyed increases above those specified in the national agreements.
Table 4.1. Outline of levels of collective bargaining
| Level of negotiation | Activity | Flexible provision | ||
| National level | Framework agreements negotiated | Exceptional clauses under PESP and Partnership 2000 | ||
| Industry level | Very limited since early 1980 | special pay agreement in construction industry | ||
| Enterprise plant level | National agreements applied | Unionized firms flexibility subject to
negotiation -- significant flexibility introduced in last 15
years
Flexibility negotiated for PESP 3% exceptional clause Team working leading to informal flexibility |
||
| Regional level | Not a feature of Irish industrial relations | |||
| Public sector | Special provisions for public sector pay | Nursing and teaching pay concessions
in excess of 5.5% in PESP without significant flexibility concessions
Prison officers concessions in excess of 5.5% for significant flexibility |
||
| Non-union sector | Not covered by national agreements but
may apply them
Significant level of merit/performance related pay (PRP) |
Non-union firms flexibility introduced by managerial prerogative (mostly USA firms in electronics sector and small firms under 50 employees) |
As indicated in Part IV, there were four agreements during this period: the PNR, PESP, PCW and Partnership 2000. Following agreement at national level, the agreements are then applied at local level. Employers may plead inability to pay but, unlike in the preceding national agreements of the 1970s to 1981, there has been no specific provision for this in the agreements since 1987. Thus, while above the norm (ATN) or below the norm (BTN) payments are not excluded, they are not specifically provided for and there is evidence of significant compliance with the terms of the agreements and only limited pay drift. This is unlike the experience in the previous period of centralized agreements which lasted form 1970 to 1981. Thus the pay terms under centralized agreements since 1987 can be categorized as being less flexible than either the preceding centralized agreements, in the period 1970 to 1981, or the period of decentralized bargaining form 1981 to 1987. This gave the recent agreements a large degree of certainty. This certainty is favoured by employers and, along with the generally modest terms of the agreements, is their most attractive feature. The employers' representative made this clear in his affirmative reply to the question as to whether employers preferred national agreements that are less flexible in their pay elements and give greater certainty:
One of the serious attractions for the employers in any kind of national deal in that it gives certainty, that it means that [for] the three years we can be sure what our costs on the labour side are going to be and that sort of certainty allows companies to respond to the market place, to decide on their pricing structures, to concentrate their energies on the sales and marketing side of their businesses and the research and development side of their businesses. So the key attractiveness of a national agreement from the business side of view is this certainty that it gives. As far as the flexibility is concerned it is important we are clear in our definition of terms. Flexibility in terms of work practices is one thing - we regard that as utterly essential. Flexibility in the pay side of the agreement is another matter and in this particular agreement, Partnership 2000, we were prepared to accept an element for local bargaining but on a very different basis to the basis on which we accepted it in the PESP. ... Our understanding of Partnership 2000 was that the two per cent that's there for local bargaining will actually apply in the vast majority of cases. We see it as an inclusive part of the agreement, in the only cases where it won't apply are cases where companies are experiencing serious commercial circumstances and where they will actually be pleading their inability to pay it. (Source: Interview with Turlough O'Sullivan, Director IBEC).
Flexibility toute force then is not, in fact, favoured by employers. It depends on the type of flexibility and that flexibility which leads to uncertainty in future wage rates is not favoured. By comparison trade unions have tended to favour an element of local level bargaining and thereby flexibility.
An important element of flexibility in the Irish system is that pay rates are not subject to legal regulation, affecting all employers in an industry, unless these are incorporated into a registered employment agreement under the auspices of a Registered Joint Industrial Councils (JICs). Only three Registered JICs exist at the moment and only one is at all active, the JIC for the construction industry; meetings of the other two JICs have not taken place since the early 1970s and 1980s respectively (Labour Court, 1997). Non registered JICs also exist for a total of five industries or industrial groups (Labour Court, 1997). There has been a significant reduction in the importance of JICs since the early 1980s. As pointed out in Part III, this reflects the greater influence of national agreements from 1970 to 1981 and the external competition which has affected the Irish economy since the 1970s. The primary function of JICs was to take wages out of domestic competition by setting uniform wage rates for certain industries. The growing internationalization of trade made this objective less and less relevant in the 1980s. Sexton and O'Connell (1996, p.86) note that multi-employer bargaining does however remain in place in a number of sectors characterized by the presence of many small and medium-sized enterprises operating in competitive markets, for example contract printing, public houses and hotels, garages and the construction industry. However even where this is the case the level of bargaining is unlikely to be related to the degree of flexibility, as this will generally be decided at enterprise level. Thus this level of collective bargaining has little relevance in relation to flexibility except in so far as the national agreements allow for flexibility to be pursued at local level.