New collective bargaining laws to radically transform Ireland's industrial landscape
Demonstrators on O'Connell Street during a pre-budget protest organised by the Cost of Living Coalition. Picture: Brian Lawless/PA
With big banks going bust, simultaneous film releases smashing box office records, tech summit CEOs resigning and world leaders racing to regulate AI, 2023 has undoubtedly been a busy year for business.
From inflation steadying and energy prices falling to lending rates rising while savers were forgotten, one topic in particular managed to dominate Irish headlines last year.
As companies across Ireland’s tech, food, pharmaceutical and consulting sectors announced widespread lay-offs impacting hundreds of staff, many have engaged in lengthy and sometimes messy consultation processes with impacted employees, and in ensuring workers are awarded the best redundancies possible, trade unions across Ireland have had an exceptionally busy year.
The Financial Services Union, Ireland’s largest union specialising in the tech, banking, and finance sectors saw its membership more than double in 2023, with its coverage rising from just 40 companies to more than 140 in just six months.
Similarly, 2023 was a major year for trade unions, which dealt with major lay-offs following the closures of Tara Mines and food retailer Iceland.
However, despite their demand in an era of extensive lay-offs, the rights of Irish trade unions have been described as notably weak within an EU context.
Their presence within the non-public sectors is often described as “gifted by private employers”.
During the redundancy process, this means employee representatives may consult with their union beforehand but are oftentimes forced to negotiate severance packages with their employers on their own.
In addition, the mandatory 30-day consultation period that companies must engage with during a collective redundancy has been deemed by many as too short, with excess pressure on employees to act on their own.
However, the future of collective bargaining may see some radical changes this year. As Owen Reidy, general secretary of the Irish Congress of Trade Unions (Ictu) puts it, 2024 could be a “huge strategic opportunity” for Ireland’s industrial landscape.
At the end of 2022, the European Parliament adopted a directive on minimum wages and collective bargaining, which has since been signed into law.
The Adequate Minimum Wages Directive, which must be implemented into Irish law by November this year, assigns a significant role to collective bargaining and recognises "the right of all workers and employers to organise in local, national, and international organisations for the protection of their economic and social interests and the right to bargain collectively".
“It’s called the Adequate Minimum Wages Directive but it is really about collective bargaining,” Mr Reidy explains.
“This will apply across the European Union. It says that if we want to address poverty, if we want to have a more equal Europe, we need to support collective bargaining.”
Once it is legislated for — talks for which are to begin at the end of this month — the directive will remove several impediments to joining a union and allow workers to do so more coherently.
In addition, the directive aims to achieve collective bargaining coverage of 80% across all member states, affirming that countries with more than 80% coverage are more likely to have "a small share of low-wage workers and high minimum wages".
Countries below this figure will be asked to provide a framework to further enable conditions for collective bargaining, and to establish an action plan promoting collective bargaining and increasing coverage rates.
Although the directive does not set a specific deadline for the adoption of the action plan, The European Commission has urged that member states with a collective bargaining coverage below 80% are expected to establish them by the end of 2025 “at the latest”.
Right now, the average coverage rate for the EU lies just above 60%. In Ireland, however, that number drops to just 34%.
“It is the aim to increase the coverage rate, that is to increase the proportion of workers covered by a collective agreement, whether they are in a union or not,” Mr Reidy told the .
“Another aim is to facilitate the right to collectively bargain. We don’t really have that in Ireland so technically, that’s quite groundbreaking.” As the Ictu general secretary explains, if employees decide to collectively bargain within Ireland’s private sector, they have no legal right to do so.
“Unless you can persuade the employer that it is in their best interest to engage with a union, or through industrial strike action, employees are not entitled to bargain collectively. In the 21st century, that is a crazy situation to find yourself in.
“That’s like playing a football match where one team decides the rules and hires the referee, and Ireland is an outlier in that situation.”
While just over a third of Irish employees are covered by a trade union, a study conducted by researchers at University College Dublin found 44% of non-union member respondents indicated they would vote yes to establish a union. Among young people, that number rises to 68%.
Under this proposal, employers will engage in bargaining on a sectoral level, allowing workers part of a union to receive the same benefit of collective action, and as Mr Reidy explains, industry-wide agreements will limit issues such as wage disparities, something he says could be “radical and transformative,” for the Irish economy.
“Employers and staff will organise with their representative bodies, who then discuss agreements on pay, sick pay, holidays, whatever it may be. These will outline the basic terms and conditions of employment which are then applicable as the minimum standard across the industry.”
“It takes wages out of competition and it creates an equal playing field. It also means employers and unions bargain together in search of a mutually beneficial agreement.”
So, what does this mean for trade union membership once the directive is implemented? According to Mr Reidy, once it is signed into law later this year, the removal of significant barriers and further recognition will translate to not only greater coverage but also further member density.
“So far, union membership has been held in an environment where unions in the private sector technically have no right to exist, gifted entirely by the private employer.
“Unions have worked so well in an environment with so much hostility. The fact we are still maintaining our position in these circumstances is very significant.”
“For this directive to be transposed properly, it requires a major culture shift across all government departments, state agencies and private companies” says Mr Reidy.
“There is no room for ambivalent bystanders — they have to get interested if we are to take this directive seriously.”
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