Luas dispute heralds wider discontent in public sector

At issue in the Luas dispute and the recent row between Kieran Mulvey and Jack O'Connor is the continuing disruption of a vital public service in the capital. But also under scrutiny is the future of pay bargaining in Ireland. Mulvey's forthright comments on the rejected settlement proposals need to be seen in this light.

A Martian arriving in Ireland over the past few weeks would be forgiven for thinking that the country was awash with industrial militancy. In fact, overall levels of industrial conflict remain at historically low levels. The great majority of pay deals during recent years have been concluded at moderate and competitively sustainable levels without any of the parties threatening or resorting to sanctions of any kind. During 2015, about 90 per cent of all the pay deals concluded between employers and unions were agreed without the parties even feeling the need to invoke the services of the Workplace Relations Commission or the Labour Court in search of settlements.

In part, the evolution of pay bargaining during recent years reflects the moderating effect of the economic and fiscal crisis on pay expectations and on union members’ willingness to take the risk of pursuing pay claims through industrial action. Over the period from 2009 to 2011, much of the collective negotiations that occurred between unions and employers took the form of concession bargaining: employers demanding concessions from unions and unions often feeling forced to agree concessions over pay, conditions of employment and work practices to bolster the employment security of their members.

Since recovery gathered pace from about 2013, pay rises have been closely co-ordinated by trade unions to keep them in line with the evolution of pay costs in major competitor countries and to ensure that pay norms were affordable across the economy and would not pose a threat to jobs and employment. The union at the centre of the Luas dispute, Siptu, has been to the fore in this type of wage-moderating “pattern bargaining”, which is without precedent in Irish industrial relations.

Recent improvement

Since 2011, pay deals in unionised firms in the pharmaceuticals and chemicals sectors have consistently set the pattern for wage settlements generally, while the incidence and sectoral spread of pay deals have grown significantly as the economy has continued to rebound. The resulting pay rises have been of the order of 2 per cent a year, with more pay rises towards the close of 2015 and during 2016 edging upwards into the 2.5 per cent to 3 per cent range – reflecting the dramatic recent improvement in the fortunes of the economy.

There can be little doubt that this pattern of orderly and competitively sustainable pay-fixing is now at serious risk of degenerating into more fragmented and hostile bargaining. And there can be little surprise that actual or impending industrial disputes in the public sector, including the Luas, which is in effect an outsourced public utility, now present the most significant challenges to the future of orderly pay-bargaining.

For several decades industrial conflict in Ireland has been migrating from the private to the public sectors – a trend also evident in many other developed countries. Significant perils now attend industrial conflict in private sector firms, including unrecoverable losses of markets to competitors, increased job insecurity, and the prospect that multinationals caught up in work stoppages might relocate or could deny further investment to their Irish subsidiaries. These types of deterrents do not arise in the public sector, or they arise in a much more muted or indirect fashion.

While the parties to the Luas dispute continue to contest publicly what the annual percentage pay rise at issue between them in fact represents, it is clear that the Luas debacle has cranked up pay expectations. This is the case most immediately among the other public transport providers, but the headline pay figures at issue are also being watched well beyond transport. The resolve of the transport companies’ union members to press for ambitious pay rises reflects their having to accept pay reductions or pay moderation over a significant period of time. It also reflects high levels of workplace union organisation and often troubled industrial relations legacies.

Trouble brewing

In the wider public services, trouble also appears to be brewing among the teachers’ unions over allowances that were suspended under austerity and over lower pay scales introduced for new recruits to the profession. Added to these sources of discontent are the continuing concerns of some unions over reforms to the curriculum and student assessment. Health service unions have also shown a growing impatience with working in excessively pressurised conditions, especially in accident and emergency departments.

The Irish Nurses and Midwives Organisation

is the first union to call for the renegotiation of the Lansdowne Road agreement to take account of improving economic and fiscal conditions.

Some observers believe that the agreement may now unravel in the light of these pressures. Were escalating pay settlements across the private sector to be added to the increasing combustible mix of pressures in the public service, it would surely sound the death knell for an agreement that has so far maintained industrial peace across most of the public service.

Bill Roche is professor of industrial relations and human resources in the UCD college of business