Brief briefing on new social partnership agreement 'Towards 2016'

national | worker & community struggles and protests | other press Tuesday June 27, 2006 17:14 by FG

New Pay Agreement: A bad deal for workers.
Briefing Document

New Pay Agreement: A bad deal for workers.
Briefing Document

In a recent document the Irish Congress of Trade Unions said the following:

“Wages may have risen in Ireland but they are still low compared to our main competitors. Profits have risen very rapidly and only recently have slowed. The wage/profit share in the economy was skewed remarkably away from labour to employers and only recently has there been some mitigation of this trend. Productivity growth in Ireland has been very rapid and is high”.

“Irish workers face much higher prices than virtually all other of the 15 European countries and Irish employers face lower taxes on profits and make far lower social contributions.”

“Not alone are Irish workers very productive, but we work much longer hours than most Europeans…It is worth noting that Ireland has one of the lowest levels of labour regulation in Europe.”

“It is a time for a generous wage settlement, augmented by major improvements in the social wage.”

In April, Congress revealed that real industrial earnings fell last year, for the first time since the 1980s. Earnings only rose by 2.1% in 2005, while inflation rose to 2.5%. Under the terms of Sustaining Progress, earnings should have risen by 4%. Thus the rise was just half of what was negotiated for workers.

The Ireland of 2006, after nearly 20 years of social partnership, has booming profits, high productivity, restrained wages, high prices and low levels of workers rights. We also have low levels of public spending and the highest levels of inequality in Europe. This new agreement will change none of this.

This agreement is to be implemented over 10 years. The trade union leadership has effectively entered into coalition with the most right wing government in the history of the state. If we decide to elect a new government next year it can say that it is abiding by this agreement and refuse demands for better public services and action against poverty. The independence of the movement has been seriously compromised. And this idea of a 10 year deal was never debated within unions.

Pay, Inflation and Growth.

The pay increase on offer barely cover the rate of inflation. There is a six month pay freeze in the public sector. The deal offers 10% over 27 months given an annualized increase of about 4.4%. Inflation is currently running at 3.9%. Irish price levels are already 22 per cent above the EU25 average and the recent rise in inflation is substantially above the EU average of 2.2 per cent. Inflation figures do not include the cost of housing. Figures just published (June 21) show that house prices have risen by 270% in the last decade: 9 times the rate of inflation. The latest inflation figures do not include the recent hike in interest rates.

This deal was to be the payback for workers contribution to the boom. The wage share of national income has fallen from over 70% in the 1980s to about 55% today. This huge transfer of wealth to employers will continue. There are no limits on profits, rent or dividends from shares in this agreement.

Ireland is one of the most unequal societies in Europe. Social partnership was supposed to protect the low paid. In fact over the period of social partnership the risk of poverty for worker has increased. That’s why MANDATE, the shop workers union, has withdrawn for the talks. And they won’t be rushing back. This deal offers the low paid (those on less than €10.25 an hour) an extra ½ % over 27 months. That’s less than €2 Euros per week. Massive profits are being made on the backs of the low paid. Recent figures published by MANDATE show that in the last 10 years wholesale and retail sector profits increased by 338 % while wages went up by 126%.

All pay increases are based on cooperation with change: “the parties are committed to full co-operation with normal ongoing change.”

Cost increasing claims are banned and workers are locked into binding arbitration if a dispute arises as to what is “normal ongoing change”. While there is an inability to pay clause for employers there is no right for workers to claim ability to pay more. The right to local bargaining in profitable companies was a key objective going into the talks. It was not achieved.

Assault on Public Sector Workers

This deal is a watershed in that public sector workers have to give substantial productivity in exchange for pay increases that barely cover inflation. The restrictions on public sector workers are increased by this agreement. Pay increases can be refused if workers do not cooperate with change and modernization. While the last agreement included productivity concessions this was in the context of the implementation of benchmarking. Some groups of workers have had pay increases withheld because of the failure to cooperate with “modernization”.

The demands of this agreement are far reaching:

The parties to the Agreement accept the following principles:
· Co-operation with the implementation of policies, initiatives and reforms following Government decisions or the enactment of legislation (primary, secondary or EU).

This basically requires cooperation with all government decisions. And with no extra resources: “The parties recognize that the growth in the size of the paybill must be kept at a sustainable level and that therefore the total numbers employed must be contained”.

While the agreement provides for discussions on the implementation of change and the processing of disputes where they arise a new provision requires that “staff will co-operate with the changes while the issue is being so processed.”

Almost 30 pages of requirements for different sectors are set out which make it easier to sack
public servants and more difficult for them to get promoted. Contracts are to be renegotiated and performance management schemes are to be implemented. Working hours are to change with workers forced to work unsocial hours. All workers are to vote on specific changes which only affect some workers. This is profoundly undemocratic and removes the right of individual unions to defend their members interests.

And that’s not all. Outsourcing and the use of agency workers is given the go ahead where
“work can be carried out or services delivered more effectively or efficiently”. The work of unionized workers can now be handed over to sectors where they are unorganized. And we thought this agreement as to stop the race to the bottom.

The Race To The Bottom

This agreement was to stop a repeat of the Irish Ferries dispute where workers were made redundant and replaced by low paid agency workers. An elaborate procedure has been agreed which is supposed to stop this but it wont.

The procedure only applies to Compulsory Redundancies: The Irish Ferries redundancies were not compulsory.

It does not apply “to the employment of agency workers, for temporary or recurring business needs, or the use of outsourcing/contracting-out, or other forms of business restructuring”.

To use the procedure the union must show that it has cooperated with restructuring and there can be no industrial action. If its found that the redundancies are bogus and the employer goes ahead the only sanction is that they will not get the rebate from the sates which is normally given to help cover the cost of redundancies. The workers can take unfair dismissals but most of these cases do not result in reinstatement.

Rather than rely on the self organization of workers which was evident in the Irish Ferries dispute a bureaucratic procedure has been put in place which will derail workers action and make it impossible to mobilize against “an Irish Ferries on land.”

Much will made of the commitment to more labour inspectors. While they should be welcomed it needs to be noted:

· That there are currently more dog wardens than labour inspectors. There have been ongoing demands for years for more.
· As seen above the level of labour regulation in Ireland is low. This helps explain why real wages are falling.

The Social Wage

Much will be made of the social provisions in the agreement. There are over 60 pages of proposals which on the face of it might look very progressive. But as the as the Irish Times editorial of June 18 says:

“As on previous occasions, however, the targets set are largely aspirational and accord in broad outline with existing Government policies. Their implementation will rely on the buoyancy of the State's finances”

There are few new proposals which will improve health, education or child-care. Indeed it is made clear that while capital spending on infrastructure (roads, broadband etc) is fixed at 5% of GNP spending in other areas is to reflect growth in the economy. The problem with public services is that we spend a lower percentage of our national income than in other countries. The ratio of social spending to national income will not increase as a result of this agreement. There are no new hospital beds in this agreement. While it makes commitments to reduce class sizes in primary schools the government has already accepted that it will not meet the commitment in the Programme For Government to have class sizes of 20 for under 9 year olds. On the day the pay agreement was published it was announced that the number of children in classes over 30 had gone up in the last two years.

While much is being made of the housing provision it should be remembered that the housing provision in the last agreement have not been delivered.

There Is An Alternative

This agreement endorses key aspects of government policy which is aimed at making Ireland business friendly. The demand for change and flexibility is all over this agreement. In the midst of a boom there are no major concession to workers in the shape of more holidays or shorter working hours. It has not been possible for the Irish Nurses Organisation to advance their demand for a 35 hour week in the context of national agreements.

It endorses Public Private Partnership and will lead to further privatisation. There is no commitment to public ownership. This agreement will not stop the erosion of pension schemes. It should be remembered that during the “Partnership” talks the state announced the privatisation of Aer Lingus and the Bank of Ireland, having announced profits of €1.3 b, said it was dismantling its defined benefit pension scheme.

This agreement imposed further restrictions on workers and unions. While employers are free to continue making super profits workers incomes are restrained for little or no pay back on the social wage.

The leadership of ICTU has failed abysmally in their objectives in going into these talks. This deal must be rejected.

Some say there is no alternative but yet, more than ever, individual unions are coming to the realization that they cannot advance and defend their members interests in the context of these agreements. An alternative is possible. The first step in making it possible is to vote no to this deal.

This briefing was compiled by Eddie Conlon (Former Hon Secretary of the TUI).