The current peace will unravel at the forthcoming pay talks if any group is seen to be favoured under benchmarking, writes Martin Wall, Industry Correspondent
We are living in an era of unprecedented industrial peace. During the third quarter of 2007 - for the first time since the Central Statistics Office began compiling detailed records more than 20 years ago - no disputes either began or were underway and there were no days lost to industrial action.
However, in recent months there have been some close-run things. The intervention of the State's industrial relations machinery averted potentially widespread and protracted disputes at Aer Lingus and the ESB, while it also facilitated a resolution of a row at Dublin Bus which had left 60,000 passengers without services for a week.
And as management and unions prepare to enter into a new round of national pay talks in the spring, there are indications that social partnership, the entire process which many observers argue has underpinned industrial peace and economic prosperity in recent years, is coming under increasing strain.
In October, Jack O'Connor, the head of Siptu, the country's largest union, said that if social partnership was to survive, the Government and employers' representatives would have to bring into line companies such as Aer Lingus - in which the State has a 25 per cent stake - after the airline had refused to pay national wage agreement increases until a €20 million cost saving plan was implemented.
In early December, the general secretary of the Irish Congress of Trade Unions (Ictu), David Begg, warned that it would be difficult if not impossible to sell another partnership deal to members unless a range of issues - such as pensions, the use of agency workers and union representation rights - were addressed, as well as pay. Another trade union, Unite, said recently that it would be impossible to negotiate a new national deal in the aftermath of the recent budget.
Employers' group Ibec has criticised Siptu for setting preconditions for a new partnership deal and said unions had to decide whether they were in or out of the process.
HOWEVER, EVEN BEFORE the partnership talks commence, the industrial relations picture could be further complicated by the publication of the long-awaited benchmarking report, which will compare pay scales in the public and private sectors.
Unlike under the first benchmarking deal in 2002, when public servants received an average of over 8 per cent in addition to rises under the national agreements, the situation this time around is likely to be very different.
For some weeks now, public sector unions have been actively seeking to dampen down the expectations of members in relation to benchmarking.
One of the main unions, Impact, last week warned members that most public sector groups could get nothing at all from benchmarking. It said that zero awards could be common if the benchmarking body followed the example of a recent review body on top-level pay and discounted increases to take account of the value of public sector pensions.
Benchmarking was conceived as a concept to get away from the controversial old system of relativities in the public sector, whereby whenever one group, such as nurses, teachers, gardaí or various grades in the civil service, local authorities or health sector received an increase, others would immediately lob in follow-on claims to maintain perceived traditional pay linkages.
Although there was grumbling from some groups about the nature of particular increases in 2002, as well as strong criticism over the lack of transparency on how awards were determined, the new system did represent a break with the old public pay system.
There has been speculation in recent weeks that the benchmarking body, like the review body on top-level pay, could award higher increases to senior staff with more responsibilities. It is now widely expected that the increases under benchmarking for most grades will be in the low single figures, if not less.
However, some highly placed observers of the industrial relations world believe that the main dangers to the stability of the benchmarking system will arise if one group is seen to do considerably better than others.
Nurses, for example, were aggrieved at the outcome of the last benchmarking report. They believed that it and other deals in the health sector left them behind other groups such as some social care staff. After a seven-week dispute earlier this year, nurses agreed to take their case for increased pay to the benchmarking body, which the Government had strongly argued was the only game in town for dealing with this issue.
In a submission to benchmarking, nursing unions sought increases of around €6,000 per year, or more than the 10.6 per cent they had sought during the dispute. They argued that this was required to bring pay into line with that of other therapy grades in the health sector such as physiotherapists, occupational therapists and dieticians. If nurses in the end get little or nothing from benchmarking, it is likely to strengthen the hand of those in the profession who argued that they should have pursued their go-it-alone strategy for higher pay.
On the other hand, if nurses receive significantly higher awards under benchmarking than other groups, some observers believe that it will send out the message among public sector unions that those who shout loudest get the most. One highly placed union source says there was a feeling teachers did better than other groups in 2002 in the aftermath of their campaign of protest at the time and that, if this was seen to happen a second time, it could have implications for the entire benchmarking process.
Relatively low increases under benchmarking could also have implications in a number of other ways. Public sector reform is likely to be high on the agenda in the new year, particularly on foot of a forthcoming report from the OECD. Unhappiness over pay could spill into any future negotiations between unions and the Government on the implementation of any change and modernisation programme in the aftermath of the OECD document.
Meanwhile, Begg has argued that relatively small increases under benchmarking could also increase the pressure from members for more significant rises under the national agreement talks, which will commence in February.
The Taoiseach, Bertie Ahern, and the Minister for Finance, Brian Cowen, have both signalled the need for pay restraint in the forthcoming talks. The credibility of this message was, perhaps fatally, undermined by the controversy over the €38,000 pay hike for the Taoiseach under the top-level pay report.
The belated decision by the Cabinet to postpone these increases is unlikely to influence the unions in their arguments for increases to take account of higher-than-expected inflation. The last pay deal provided workers with increases of 10 per cent over 27 months. The unions argue that, particularly in 2007, virtually all of the pay rise was eaten up by inflation running at around 5 per cent.
ICTU WARNED IN mid-December that the failure by the Government to increase tax rates and credits in line with wage inflation in the Budget "will mean a reduction in earnings next year for most workers, unless there is a substantial rise under the next round of Towards 2016." But the new talks will not be all about pay. Unions will press hard for Government action to deal with the growing phenomenon of companies using employment agencies to recruit workers, often at lower rates of pay than full-time staff.
O'Connor has argued that it would be "totally untenable to contemplate continuing" in social partnership if Ireland remained one of only three countries in the EU where it was legally permissible to pay agency workers lower rates than regular staff.
Employers argue that existing regulations in this area are sufficient and that flexibility in recruitment is necessary to maintain competitiveness. The Government has also joined with a number of other states to block an EU directive in this area, much to the anger of the union movement.
Unions will also demand that the Government moves to copperfasten their right to represent workers as part of any new deal. They argue that compromise legislation in this area which gave workers in non-union companies some representation rights was effectively emasculated by the Supreme Court earlier this year in a case brought by Ryanair.
So while 2007 may have been peaceful, we will have to see whether this was just the calm before the storm as the partnership process enters a more difficult phase - or whether what we are witnessing now are just the traditional tensions and shape-throwing in advance of another national agreement.