“Risks for all” parties in timely Review of Collective Bargaining and IR
A balanced outcome to the Review of Collective Bargaining and Industrial Relations is needed but there are ‘Risks for All’
The decision by the Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar T.D. to set up of a High-level Working Group to review collective bargaining and the industrial relations landscape in Ireland is welcome. Achieving a balanced outcome is needed but there are risks for all parties.
Amidst predictable enthusiasm from those on the left, urging that such a review must deliver nothing less than a right to collective bargaining, those advocates should be careful what they wish for. At Stratis, we believe that a more nuanced approach will be needed to navigate the complexity of issues that will arise. As part of a balanced approach which includes a review of the industrial relations landscape, as well as collective bargaining, this must grasp the need for substantial and much needed reform of our IR system.
Voluntarism Cannot Be One Sided
The voluntarist approach to industrial relations in Ireland, is foundational and at its core is the premise that the State does not seek to impose a solution on the parties to a dispute but will, where appropriate, assist them in arriving at a solution. Whilst the evolution of individual employment rights and jurisprudence has chipped away at its edifice, the voluntarist ethos has served all parties well for many years. If changes are to be considered based on new design principles, we must be clear that voluntarism cannot end for one side of industry or just in the private sector.
‘Right to Bargain’ Legislation Remains but is Largely Unused
Traditionally, trade unions have pursued recognition through voluntary means, under the Industrial Relations Act, 1969 with unions invariably securing favourable Labour Court recommendations which have no legal force. Faced with declining membership to around 15% in the private sector, in the face of significant employer (and some Trade Union) opposition to mandatory union recognition, legislative arrangements, under the Industrial Relations (Amendment) Act, 2001-2015 were put in place in cater for circumstances in employments where collective bargaining is absent.
The Acts of 2001-2015, created a compromise between the voluntarist model and mandatory legal recognition for union representation. It does not provide for mandatory union recognition or a right to collective bargaining. However, Trade Unions can refer unresolved disputes on pay and conditions, where it is contended these are out of line with comparable employments (with regard being had to rates of pay and other conditions of employment established by collective bargaining), to the WRC and ultimately to the Labour Court for determination which is also enforceable by way of a court order. However, such rulings cannot include matters of collective bargaining arrangements.
In 2004, as part of further reforms, procedures were shortened to six months and a Code of Practice on Victimisation was introduced to give balanced protection against victimisation arising from an employee’s membership or non-membership of a union.
Following a successful Supreme Court challenge by Ryanair in 2007, the legislation was last amended in 2015 to remedy various issues addressed by the Supreme Court and included for the first time the introduction of a definition of ‘collective bargaining’.
‘For the purposes of this Act, ‘collective bargaining’ comprises voluntary engagements or negotiations between any employer or employers' organisation on the one hand and a trade union of workers or excepted body to which this Act applies on the other, with the object of reaching agreement regarding working conditions or terms of employment, or non-employment, of workers.’
Critical to that legislation and to the current review is the need to ensure that in all circumstances that collective bargaining is and must remain in essence a voluntary exercise. Disappointingly the 2015 legislation had various deficiencies for employers, including for example:
1. It did not require minimum thresholds of member support or ballots.
2. It only provided that the Court shall decline to investigate a trade dispute where it is satisfied that, in the context of the dispute, the number of workers party to the trade dispute is ’insignificant’. It did not deal with the circumstance of where the number of union members may be significant within a grade, group or category but is minor in relation to the workforce as a whole.
3. To initiate a process of establishing the position on the number of workers when referring the matter to the Labour Court, the only declaration required was that of a statement made under the Statutory Declarations Act 1938 by the General Secretary or equivalent of the trade(s) unions concerned, setting out the number of its members and period of membership in the group, grade or category to which the trade dispute refers and who are party to the trade dispute. No further proof was required.
4. Trade Union organising campaigns are often built around a small number of disaffected people. Any outcome ultimately affects the wider organisation and the need to ensure that all employees in the organisation have a say in shaping the engagement model was not addressed.
Since then, only a trickle of cases have been taken under the revised legislation, with some suggestions that unions can struggle to meet burdens of proof on comparators, to find accurate information on pay and conditions in non-union firms or that in sectors with low union membership rates, to be able to justify improvements sought. Whilst these reasons have been put forward, it is perhaps more obvious that trade unions have instead taken a tactical decision not to use the legislation, believing that there is now a bigger prize at hand.
More recently, whilst the legislation remains available, trade unions at enterprise level have generally reverted to public relations campaigns and the more traditional route of processing disputes for union recognition under the Industrial Relations Act 1969 which have produced predictable outcomes from the Labour Court which ignores the wishes of the majority within an employment and the legitimacy of models of engagement other than collective models of representation and bargaining.
Overall Ireland is fortunate to have had minimal interference by the state in ER and to encourage voluntary collective bargaining between employers and unions on pay, working conditions, procedures and other negotiable issues. Government provides a legislative framework along with a growing body of employment rights and it is the preservation of this delicate balance which has served us well and to attract substantial foreign direct investment. This has been the most important factor in raising pay, benefits, and employment levels in Ireland.
A Change of Union Strategy has sought to avoid the Constitutional Question.
We have seen trade unions change strategy over the past 5 years, to pursue a campaign for mandatory recognition rights and a right to collective bargaining. This is targeted both at national and EU level, with most commentators believing that success at home would first require a constitutional amendment. In Ireland, the constitution contains a “double-edged sword”. While guaranteeing citizens’ rights to form associations and trade unions, the Irish courts also interpret this as not imposing obligations on employers to recognise such bodies.
The ICTU has also focussed on a European agenda through its European affiliate the European Trade Union Confederation (ETUC). ICTU has campaigned for an EU Directive on harmonising collective bargaining and as a result to then establish a right to bargain in Irish law. This approach is favoured by ICTU as it would avoid the pitfalls inherent in any constitutionality debate as any legislation that would follow would apply across the EU.
Europe & Efforts to Boost Collective Bargaining Coverage
The trade unions’ European campaign is already in evidence as part of the recent EU Commission proposal ( October 2020) for an EU Directive on Adequate Minimum Wages, which if transposed in its current form, would fundamentally alter the nature of our IR system in Ireland. It would remove the discretion to set minimum wage levels as absolute criteria would be established to determine ‘adequacy’. Furthermore, it would force Member States to provide a framework for collective bargaining and establish an action plan to promote collective bargaining, if, as would be the case in Ireland, at least 70% of workers are not covered by collective agreements. Worryingly, the proposed Directive is also predicated on the assumption that collective bargaining is the only means through which employees can secure fair terms and conditions of employment.
This suggests that trade unions wish to continue to practice ‘voluntarism’ in areas where they are strongest and create a highly regulated space in areas of the private sector where employers could be compelled to engage in collective bargaining. The mechanism of achieving further EU regulation through the focus on adequacy of minimum wages by ensuring commitments on the promotion of collective bargaining is intended to bring about an outcome where such regulation would supersede the Irish Constitution.
The principle of subsidiarity is being undermined in this instance and the autonomy of collective bargaining arrangements is being tested as the EU has no competence to introduce a binding legal instrument on minimum wage levels or on collective bargaining and the representation of workers and employers’ interests. This is an effort to hijack a laudable policy objective to ensure minimum wage adequacy to promote wider adoption of collective bargaining.
In Ireland, we have many examples of multinational employers who have a direct engagement model and are market leaders in their approach to remuneration. Whilst those multinationals, may have little to fear from any policy objective of ensuring minimum wage adequacy, those multinationals, will be concerned if, because of the Directive, or as an outcome to the current IR Review, we see efforts to promote collective bargaining being given primacy, which will encroach on their freedom to engage directly with their employees.
The Potential for IR Reform is significant
We cannot have changes being considered to collective bargaining or to trade union recognition which might increase workers’ rights or the level of compulsion on employers in the private sector and to have these bolted on to an otherwise ‘voluntarist’ IR system. Any review of collective bargaining and the industrial relations landscape in Ireland will do a disservice if the following issues are not addressed about how our dispute resolution bodies function and how trade disputes are regulated. At Stratis, we believe that this will show to employers, that the review is intended to produce a balanced outcome which will ensure that our IR system is reflective of the modern needs of employers and workers.
The following are examples of the areas that need to be considered as part of a wider review (a non-exhaustive list is below):
Diverse models of engagement must be respected- The important role and function of trade unions in society and at enterprise level is fully acknowledged and through voluntarily agreed arrangements for collective bargaining but the importance of direct engagement for most firms is a fact often ignored by our third-party system. An engaged workforce is a competitive advantage achieved through different models. However, our workplace relations system needs to acknowledge that where employers are implementing progressive HR practices with market based and competitive remuneration, and practice direct engagement, they should not face a default outcome to adopt a collective model of representation from any processes (including from the Labour Court as is commonplace under S.20(1) of the Industrial Relations Act, 1969).
Updated rules on Balloting & Industrial Action are needed - The legal protection for industrial action should be contingent on a statutory requirement to exhaust IR procedures before a ballot for industrial action can be taken or action legitimately initiated. Currently industrial action is unfettered, even unofficial Industrial action is not unlawful, and no restrictions apply on proportionality of any official industrial action taken. Picketing currently can take place at any location where the employer carries out business and not necessarily where the employees in question carry out their duties.
Picketing should be confined to the place where the employees work. Furthermore, there is no requirement for a ‘cooling off period’ to allow for any reflection, exchange of new information or final intervention.
The notice period for industrial action in law is still only 7 days, after the completion of a ballot and there is no requirement for the notice to the employer to contain explicit details of any proposed action(s) and the period(s) of such action. There is no requirement for a ballot for industrial action to have an ‘expiry date’ or to provide clarity of the type and duration of the proposed action on the ballot paper.
Stratis believes the requirement for protected action should be raised from a simple majority of those voting to a higher threshold of there being both at least a 50% turnout of those eligible to vote and the ballot being supported by over 50% of the balloted workforce. Stratis would argue that an employer of any union members who will be given entitlement to vote should receive a sample voting paper (and a sample of any variant of that voting paper) within a specified period before the opening day of the ballot.
Put simply, the existing rules are ludicrously out of date and ballots for industrial action must be open to independent external scrutiny. The availability of the immunities for trade unions must be updated to reflect such revisions and those immunities should not be available to any union acting outside of these suggested changes. This shows that a review of collective bargaining and of industrial relations, cannot be in isolation and must reflect more progressive requirements concerning dispute resolution and the regulation of industrial action. It must be a policy goal that where legal immunities are to be availed off, they must come with greater responsibility and accountability.
The Status of Labour Court Recommendations - The role that the Labour Court can play in bringing finality to industrial relations disputes (disputes of interest) between parties through arbitration should be an increasingly important part of its remit. It may also be time to consider that in most IR cases, that a default position is adopted where the Court’s recommendation shall be deemed to be binding on the parties, unless there is a compelling set of circumstances.
Essential Services - Across the public service, despite successive public service agreements, in disputes in essential services, there has been a failure to strengthen the statutory requirement to exhaust IR procedures, up to and including recourse to the WRC and Labour Court, to provide for cooling off periods prior to the taking of a ballot for industrial action and before a dispute can occur.
Status of the Pre-Entry Closed Shop – Whilst the post entry closed shop has been found to be unconstitutional, it is highly likely that the pre-entry closed shop is also unconstitutional and is also most probably a breach of competition law. Our industrial relations laws should be amended to deal with this reality.
Refreshing a Recognition Mandate – If further changes are to be made to our system of collective bargaining, which raises the bar on employers, then surely as part of any balanced reflection of system changes must be the need to also address the continued recognition of a Trade Union by an employer where that Union has lost its mandate?
Multiple Union Sites – Significant issues can also arise for existing employers, who have established collective bargaining arrangements with unions because of inter union rivalry or the activities of breakaway groups, or by those unions who may not be affiliated to the ICTU. Any review of collective bargaining and IR should encourage the consolidation of the number of negotiating bodies within a company as being compatible with the requirements of orderly industrial relations, and as a means of supporting established negotiating structures within a company and decision making by employees.
Status of Collective Agreements – Whilst a collective agreement is enforceable through the individual contract of employment where it is included, the status of collective agreements should be made directly enforceable.
Our IR framework needs to be more ‘fit for purpose’ for the future requirements of a modern economy. Change must only be considered with a full understanding of their real implications rather than as a response to a growing ‘populist’ agenda. We have a strong value proposition to encourage multinational employers to locate in Ireland including a highly articulate and educated workforce, and the ability of employers to work with employees directly or via representative mechanisms as appropriate. The voluntarist system has served us well and we believe it should be preserved and strengthened as part of a renewed framework based on:
National Social Dialogue and engagements with Government between representatives of employers and representatives of trade unions on strategic policy and direction, building on the work of the Labour Employer Economic Forum (LEEF) over recent years but with a structured agenda and programme of work. Indeed, Stratis would argue that under the auspices of the LEEF, there is a strong case to be made for the establishment of an oversight type body at national level to oversee industrial peace and good industrial relations which if it existed, could make an important contribution to finding a pathway to resolving disputes and in a manner, which is supportive of the role of the WRC and the Labour Court.
Sector Level Arrangements –Some observers have argued that the State should promote collective bargaining, in the ‘public interest’ by way of multi-employer agreements including on a sectoral basis. As a result, if employers refuse or abstain, the law should in their view be utilised to ensure sectoral standard setting. However, our experience in Ireland is that these sector agreements can only be successful where they are established by voluntary agreement between employers and Trade Unions who are representative of the majority interests in their sector.
Enterprise Level – The form of engagement at enterprise level must continue to reflect the diversity of requirements, culture and structures that already exist, whether through information and consultation mechanisms that are determined locally or through voluntarily agreed collective bargaining arrangements between employers and employees and Trade Unions where they represent such employees.
‘Add On’ Solutions Will not Work.
If changes are to be envisaged to our so called ‘right to bargain’ laws, it remains unclear if this will be within the design principles of the Industrial Relations (Amendment) Acts 2001/2015, or not. That legislation did not give rise to mandatory union recognition or a right to collective bargaining but allowed unions/worker representatives to have pay, terms and conditions of employment, and dispute resolution procedures addressed in a non-union employment where it is not the practice of the employer to engage in collective bargaining.
If not, this may give rise to a need to a repeal of that legislation in its entirety. What cannot be allowed to happen, is that we have new arrangements being introduced, which would increase the levels of compulsion on employers, whilst leaving the 2001/2015 Acts in place and while Trade Unions remain otherwise free to pursue issues in other parts of the private and public sectors without any effective oversight or compliance and under existing outdated rules on the conduct of industrial relations and possible industrial action.
When policy changes are envisaged in these sensitive areas, they must be evidence based and considered for the impact they will have on competitiveness and our reputation as a preferred location for doing business. All elements of our industrial relations framework, including for the conduct of collective bargaining should not detract from these efforts as Ireland seeks to recover from the Covid-19 pandemic.
Stratis will be continuing to assess the key issues arising from the High-level Working Group to review collective bargaining and industrial relations. If you would like to talk to us about any of the above issues, please get in touch with me at firstname.lastname@example.org or any of our Partners.
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Disclaimer: The information in this article is for practical guidance only and does not constitute legal or case specific advice. The answers to specific situations will vary depending on the circumstances of each case. This is not a substitute for specific professional advice relevant to individual circumstances facing your business.