Trying to get a deal across the line

As both sides appear increasingly boxed in, a legislated pay cut could result in a freeze in co-operation with change across the public sector. However, Kyran Fitzgerald warns that more widespread disruption could be on the cards

Has the long era of peace in industrial relations come to an end following the two-to-one rejection of the so-called Croke Park II proposals on pay and working conditions?

Will Labour deputies celebrate the 100th anniversary of the Dublin ‘lockout’ by voting through legislation putting into effect mandatory cuts in public pay?

Are we headed for a Summer-Autumn-Winter of discontent involving disruption to the public and serious damage to the country’s image, coinciding with Ireland’s long mooted exit from the EU/IMF bailout? These questions must be exercising the minds of many in Government, in trade union circles and among the wider business community.

Both sides appear increasingly boxed in.

The Government simply cannot afford to retreat from its commitment to impose €1bn in savings in the public service pay bill, without incurring huge damage to its authority.

Labour is in a particularly invidious position. Should its deputies bolt, or buckle under pressure, a general election would loom. Nothing like the prospect of a communal political hanging to put a dampener on those free spirits.

And the alternative political scenario?

The prospect of a Fine Gael minority administration or FG-FF Government appears either too unpalatable, or in the latter case, at this stage, too unlikely to contemplate.

The political imperative appears clear: plod on, like World War I soldiers marching towards the sound of the gunfire.

Some may still dream of a deal.

The long-serving head of the Labour Relations Commission, Kieran Mulvey, has been charged with the task of pulling a rabbit out of the hat in the form of a “tweaked deal” which would contain enough to persuade SIPTU members, at least, to back a revised package thereby pulling the deal across the line.

Mulvey will know that if he leans towards one union, he risks pushing another union, such as IMPACT — whose members backed the deal by 56% to 44% — into the “no” camp, if the latter perceives itself to be suffering under the new arrangement reached.

Public servants have simply said, enough is enough, no more pay cuts, no more flexibility and reductions in overtime.

There are some who still believe that Mulvey can get there.

Public affairs consultant and former Government advisor and industrial relations journalist, Jackie Gallagher, believes that “something is probably salvageable” in the new Mulvey process. In his view, union members balked at the prospect of accepting permanent as opposed to temporary concessions in areas such as overtime.

If Mulvey can accommodate the needs of hard-hit blue collar employees, a deal might be on, he believes.

Union members should be wary about all out industrial action, given the public mood.

The State could be facing into a fresh round of bank re-capitalisation, later in the year. This could have a sobering effect on those contemplating industrial action.

“Public sector employees may conclude that, at least, we are better off than the people in Greece,” says Gallagher.

But equally, the “enough is enough” mood may persist.

People may wish to flex their muscles on the picket line, or at least, by engaging in more calculated forms of non cooperation and disruption.

Professor Bill Roche of the Smurfit School of Business in UCD traces the current impasse back to December 2009 and the collapse of the last national social partnership agreement covering both public and private sector, “Towards 2016”.

In his view, the Croke Park Agreement was a “beneficial shadow” of the national deal. He warns that if the “Croke Park” era has come to an end, it will also mean the end of the peace premium in the public sector.

“There are risks for the public sector. Public goodwill would evaporate after industrial action.”

He believes such action would vary from union to union.

The INMO (Irish Nurses and Midwives Organisation) and junior civil servants appear “up for it”, but education unions, apart from the TUI, may be less enthusiastic about conflict.

Many public servants are carrying large mortgage and other debts. Some unions such as SIPTU have built up strong reserves — others are less well endowed.

Many top civil servants and Government members blame social partnership for many of our current ills and in particular, for the pay explosion that was part of the Ahern era.

However, Bill Roche believes that the Croke Park Agreement brought a significant dividend in the form of internal flexibilities and a reduction in public service numbers and the overall public pay bill.

Groups such as the gardaí and laboratory technicians have given much in the way of flexibility.

The fear is that a freeze in co-operation with change across the public sector would be an inevitable outcome of a legislated pay-cut outcome.

However, more widespread disruption could play into the hands of policy hawks, who favour large scale outsourcing and inevitable redundancies.

The union leadership continues to favour a negotiated approach, fearful of losing influence over the restructuring process.

SIPTU head, Jack O’Connor, has revived plans put forward, in 2009, by the head of Congress, David Begg, calling for a new social partnership compact, involving pay restraint, combined with investment in infrastructure aimed at boosting employment.

The signs are that O’Connor’s appeals will fall on deaf ears. The financial room for manoeuvre simply does not exist — and if it were to emerge, fiscal give would take the form of tax cuts. Ironically, tax carrots formed a key part of the early social partnership deals from 1987 on.

Social partnership became a bit of an organisational monster towards the end. UCD political scientist Niamh Hardiman has highlighted the sheer number of bodies and committees that came into existence, not to mention the huge drain on the time of top officials involved in servicing over one hundred such committees.

But there were also success stories, not least the highly cost efficient National Implementation Body, which cost very little to run and involved senior officials, union leaders and IBEC executives cooperating to secure deals.

Some may argue that the destructive asset price boom could have been halted in its tracks had social partnership not managed to control accompanying wage pressures, a case of short term success working to the long-term detriment of the country.

Perhaps, partnership ended up boosting national complacency, but it also helped end recession in the 1990s, paving the way for the boom. It eventually perished on the rocks of financial and economic meltdown, yet interestingly, it has continued to exist in a new form in the private sector since that date.

According to Industrial Relations News, a new hybrid model in unionised firms, in manufacturing, has emerged from the ashes of formal national partnership.

Local bargaining is being conducted, with flexibility to accommodate differing sector performance around a general pay increase level of 2%.

The approach followed is more Germanic than adversarial. It is a case of “needs must” winning out, a new realism on the shop floor.

The real test will come when the economy eventually begins to recover and pent up wage pressures start to emerge.

In the meantime, productivity-led approaches to pay may provide a template for the public sector, but perhaps not before it — and the rest of us — undergo a damaging period of confrontation as people let off steam.