Partnership set for overhaul as winter of discontent looms

Kyran Fitzgerald reports on the upcoming pay agreement talks

AS we enter the final furlong in the run-up to negotiations on a successor to the Programme for Prosperity and Fairness, the mood is far from upbeat.

Around 10,000 people have taken part in a nationwide march organised by the trade union movement. Senior figures in the employers organisation, IBEC, warn that any new pay agreement must be markedly less generous than its predecessor, while privately, many employers question whether such an agreement is in their interest.

Economists throw up their hands over the cost of public pay benchmarking proposals, which in turn, are rejected by a number of key public sector unions. Across the public sector, industrial disputes are threatened, or underway, while concern over pay and working conditions spreads across the unionised private sector.

As the economic climate turns chilly, the Government no longer has cash to throw around in the form of tax cuts. And as the post mortem on the tiger economy gets underway, many workers in the private sector are wondering if the bosses ran off with the real fruits of the boom.

IBEC, for its part, frets over what it perceives as a very real loss in competitiveness on the part of many Irish firms. Secretary of the Irish Congress of Trade Unions, David Begg has settled in as successor to Peter Cassels as General Secretary of the Irish Congress of Trade Unions.

Begg is pushing hard for further gains across the social policy spectrum.

However, many employers and economists believe the real pay/ competitiveness foundations of at the base of the national partnership agreement are being eroded.

As they see it, the pay donkey can no longer pull the increasingly weighty social cart.

Ireland's largest union, SIPTU, will soon get a new general secretary and president as John McDonnell and Des Geraghty prepare to step down.

The experienced Noel Dowling appears to be the front runner to succeed the low-key McDonnell while Jack O'Connor is well-placed to take over from the media-savvy Geraghty.

Dowling is an astute negotiator in the field but he remains something of an unknown quantity when it comes to national partnership talks.

O'Connor comes across as much more sceptical about the current partnership model than Geraghty, who has projected an image as a keen moderniser.

On this occasion, however, the real threat to the future of the current model may come from the employers' flank.

Turlough O'Sullivan and his right-hand man, Brendan McGinty, IBEC's director of industrial relations, have not bothered to hide the fact they question the benefits of partnership in its current form.

The approach taken by O'Sullivan and McGinty differs from that followed by O'Sullivan's urbane predecessor, John Dunne.

McGinty, in particular, has presented a fairly tough face when doing the round of TV interviews.

Some observers believe there is an element in this of pre-negotiation posturing for the benefit of an increasingly disillusioned membership, many of whom appear to believe a return to 1980s-style free collective bargaining would represent an injection of fresh air into the whole pay talks process.

Bill Roche, Professor of Industrial Relations at the Smurfit School of Business, University College Dublin, believes, however, that those who place blind faith in free collective bargaining are in line for an unpleasant surprise.

"The 1980s was not some golden age. Pay rises, at the time, were quite high given the state of the economy and the level of industrial conflict was also out of kilter with the labour market. Even earlier, in the '60s, you had the decentralisation round. This turned out to be a nightmare with considerable industrial disruption. It led to emergence of national bargaining in the Seventies."

The prospect of a "free for all" looks even more daunting when one considers that over the past 15 years of centralised pay bargaining, plant level negotiation skills, on both sides of the table, have all but faded away as a whole generation of union officials, shop stewards, managers and HR experts have passed into history.

In Bill Roche's view, partnership can still perform a vital role, but a very different form of national partnership arrangement is now required.

The rather rigid centralised arrangement should give way to a new two-tier structure, what he refers to as "organised pay decentralisation."

This would involve some form of combination of centrally determined guidelines and enterprise level bargaining. A real attempt to tackle the whole issue of employee participation and gainsharing should also be made. "The unions make a strong accusation that companies have been tardy when it comes to financial participation." There have been signs in recent weeks that the leadership on both sides have been moving away from their entrenched positions.

On the union side, SIPTU representatives have given backing of around 90% to some form of centralised bargaining while IBEC recently launched a blueprint for social partnership in which it called for "deliverable mechanisms to enforce single digit pay rises".

IBEC is still talking tough, but at least it is getting ready to talk and the usually trenchant McGinty even has kind words for the trade unions, praising their contribution to economic stability over the past 15 years.

The public sector, however, remains a huge area of concern with pay disputes proliferating despite an ongoing escalation in pay costs.

The findings of the Benchmarking Review Body look set to impinge on the central pay talks, even though public pay determination is carried out separately.

The concern is that a further round of public pay rises implementing benchmarking will cost 1.1 billion in a full year on top of a bevy of recent increases could stoke the fires of resentment in the private sector.

In a hard hitting article in Industrial Relations News, last month, the Maynooth University lecturer, and former stockbroker, Jim O Leary, a member of the Benchmarking body who resigned shorlty before it issued its less than transparent report, was scathing about claims that the public service has fallen behind in terms of real pay and faced serious problems in the area of recruitment and retention.

The failure of the Government to control the explosion in public pay could yet rebound on the private sector as enforced cutbacks hobble the ability of employers in the private sector to meet pay demands.

This queasiness about the country's economic prospects has led many key IBEC members, particularly in the struggling manufacturing sectors of the economy, to blanch at the prospect of another set of open ended pay commitments.

IBEC, in turn, cannot escape criticism for its failure to highlight the problems inherent in the public pay explosion and the lack of control over spending in the public sector.

Bill Roche accepts that management in the public sector has been "less than effective" when it comes to achieving long promised restructuring and efficiencies whereas the unions have been particularly skilled when it comes to extracting further reward in return for concessions on the productivity front.

In Bill Roche's view, neither party to the pay talks have devoted sufficient thought to the question of how to bring forward a more flexible agreement yet, he says, putting in place the appropriate reward infrastructure to meet the demands of the coming years is absolutely vital.

It is hard to disagree with his analysis that it may be time to consider putting in place a holding agreement of, for example, one year's duration to give the parties time to put in place more sustainable arrangements.