High-level (LEEF) Working Group on Collective Bargaining (CB) & Industrial Relations and EU Proposal
Draft EU Directive on Adequate Minimum Wages Moves Closer.
The draft EU Directive on adequate minimum wages continues to work its way through the EU approval process and further negotiations between the European Commission, EU Parliament and the Council will determine the final text of the Directive. These discussions are taking place under the French Presidency over the first half of 2022.
The current text of the draft Directive will require all Member States to “take measures to (further) increase the coverage of collective bargaining, notably by supporting the capacity of social partners and encouraging negotiations on wages among social partners.”
Furthermore, If collective bargaining coverage is below a certain threshold* Member States “will also have to provide for a framework of enabling conditions for collective bargaining, either by law or through an agreement with the social partners, and establish an action plan to promote collective bargaining”. (* Note: The Council of EU believes that the figure should be 70% and The EU Commission / EU Parliament position is 80%)
It has also been clarified that the percentage of collective bargaining coverage is not an objective, but a threshold triggering the obligation to provide for a framework of enabling conditions and an action plan to promote collective bargaining.
Rather than legislate, Member States may permit Social Partners to establish jointly the action plan themselves. If Ireland has to take measures to enhance collective bargaining, it could have implications for our ‘voluntarist’ model of IR as an EU directive will have primacy over Irish law and the Constitution, therefore Stratis will continue to monitor this important development.
High Level Review Group sets out Key Principles
Meanwhile in Ireland, engagements continue within the High-level Working Group to review collective bargaining and the industrial relations landscape under the Labour Employer Economic Forum (LEEF) process involving representatives of Government, Ibec/CIF and ICTU. In a 2021 year end update to Government, Prof Michael Doherty, Chair of the Group advised that the “three principles” for “meaningful reform of collective bargaining and industrial relations in the State” are:
To restore the Joint Labour Committee (JLC) process to its intended operation, as set out in the Industrial Relations Acts;
To allow the Labour Court to appoint technical assessors to assist workers or employers in referring disputes to it under the Industrial Relations (Amendment) Acts 2001-2015;
To explore ways in which good faith engagement between workers and employers at enterprise level could be facilitated.
The Chair noted that the “careful drafting of these principles reflects the challenging and complex nature of Ireland’s voluntarist industrial relations tradition.”
We appreciate that this is a complex area and the parties within the LEEF process have some very fundamental issues to grapple with. Nevertheless Stratis would make the following observations in relation to the “three principles” as set out above :
1. In relation to JLC’s there would appear to be a gap in understanding as to their original intention. They were set up to establish sectoral minimum pay, terms and conditions when there was no National Minimum Wage in Ireland and very little by way of a floor of employment rights. Until 2000, the JLC system was the only statutory minimum wage system in Ireland. A National Minimum Wage Commission was established to study the issues around the introduction of a NMW. The Commission (1998:36) considered that “a radical assessment of the role and function of the JLC system will have to take place in the light of the Commission’s recommendation to introduce a national minimum wage”. However, no such review was undertaken and when the NMW was introduced the JLC system was retained and unchanged. Despite some reforms introduced since then, only two functioning JLCs’s now operate and the current structures and operation of the JLC mechanism continues to attract significant opposition from employer bodies in sectors such as in retail and hospitality, amongst others.
The Government has decided to legislate for Statutory Sick Pay (SSP) and to provide for pension auto enrolment. The Low Pay Commission has also been tasked to examine the introduction of a Living Wage. We must question the continued relevance of JLC’s in this context as the traditional space occupied by JLC’s will be filled and indeed enhanced. We can reasonably predict that if these measures are introduced as a consequence of Government policy, it can be expected that trade unions will pressure the JLC’s at sectoral level to allow for better terms in excess of these new legal minima.
2. The Industrial Relations (Amendment) Acts 2001-2015, or the so called ‘right to bargain’ legislation, has effectively been abandoned by Trade Unions in Ireland with very few cases since the last set of changes in 2015. The appointment of ‘technical assessors’ may be of some assistance in verifying data on remuneration but it remains the case that Unions have shown little interest in a significant piece of legislation that is not replicated elsewhere in the EU or the UK.
3. It is hard to argue against the principle that all employment interactions should be conducted in ‘good faith’ However, in Employment Relations the phrase “good faith” is often linked to the word “bargaining” and indeed to obligations on employers to engage with Trade Unions or to facilitate employees having access to external representatives. It leads to an articulation of the circumstances when ‘good faith’ must be practised, the relationships where good faith is required and the consequences of non-compliance with ‘good faith obligations. This would represent a fundamental change to our IR system.
4. Finally, despite the remit for the Review Group, there would appear to be no references thus far to wider and essential reforms of our IR system which Stratis has identified in a previous paper. As part of a balanced approach we believe the Review Group must grasp the need for substantial and much needed reform of our IR system. The apparent primary focus is on issues around collective bargaining in the Private Sector alone and limited focus on efforts to boost collective bargaining coverage through sectoral agreements such as the JLC’s. How these principles are articulated will be of concern to employers generally and in particular to the FDI sector in Ireland. 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.
Stratis will be continuing to assess the key issues arising from the High Level Working Group and if you would like to talk to us about any of these issues, or about engaging your people through the period ahead, please get in touch with me at email@example.com or any one 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.