| Partnership is a cornerstone concept in attracting multinational corporate investment projects to Ireland. While partnership with government and indigenous business is to be expected, partnership with labor is a uniquely Irish strength. The IDA's objective is to maintain Ireland's position as a prime location for investment, to attract new companies, as well as to win repeat investment from established ones, all the while moving up the value chain as a corporate site. This multifaceted goal requires a synthesized presentation of Ireland's competitive advantages over other Western European countries . Ireland's well- educated labor force offers the advantage of skill availability at a competitive cost. The competitive cost factor is due largely to a strong labor union organization (which has taken an active, positive role in Ireland's social partnership), a coalition of employers , government, and trade unions. This partnership brought an awareness to the trade unions of the long- term necessity of flexibility in relation to the multinational corporations' labor force conditions. For example, until the mid-1980s the IDA had been encouraging the investing corporations to talk to unions. This approach changed to accommodate companies like Intel and Dell, who had clear no-union policies. Generally, Ireland's relationship with multinationals has been a rocky one. As we will show, the government encouraged a laissez-faire attitude on this issue. Trade Unions The Irish Congress of Trade Unions (ICTU) functions as an umbrella trade association for Ireland's trade unions. Approximately 50 trade unions are affiliated with the ICTU, representing around 550,000 workers in the Republic of Ireland, of which half work in the private sector. The main objectives of the ICTU, as outlined in its constitution, are to protect workers' rights to join a union, negotiate pay and working conditions, and participate in decisions affecting their work. In addition, the ICTU negotiates with employers and government to promote macroeconomic and social policies reflecting the interests of the labor force. Until 1987, relations between unions and employers were adversarial; free pay bargaining was the norm, contributing to the high level of inflation and frequent strikes. From 1987, a more realistic attitude on the part of the unions, led by progressive, visionary leadership, ushered in a period of wage stability, with pay restraint being traded for tax cuts. Tom Wall is assistant general secretary of the ICTU. He spoke with us about the "social contract" and the challenges of labor relations in a high-tech economy. We have also provided the comments of Bill Riley, who illustrates the difference of opinion on the management/labor relationships. Tom Wall Reasons for labor changing its approach Two aspects were the stimulus for action. One was the depth of the economic crisis; it forced a rethink. And, linked to that, the fact that real earnings had been decreasing . Clearly, enterprise-level bargaining wasn't working and there was a move back to the centralized agreements we had in the 1970s. The second factor was a generation change that occurs in the leadership of all organizations. Around 1987 Peter Cassells was acting general secretary, but there were also some trade union leaders , Phil Flynn and Billy Attley, who developed a new strategy that proposed a clear statement of what our objectives were in the social and economic fields, moving away from the narrow bargaining arena. They saw there was no way they could achieve anything on this unless they sat down with government and considered the possibility of tradeoffs. Social partnership 1987 “2000 The union delegations were not optimistic that they would get a deal because we had a significant agenda; we were willing to trade off moderate pay, but we didn't just want aspirations about employment creation, we wanted targets. To our side's surprise the taoiseach was prepared to put figures on it and stick his neck out. The trade-off between pay moderation and tax cuts was key, there was no way we could get an agreement without that. Although inflation had been dropping, it was still around 4% to 5%, so to move to 2.5% for the average earner, we couldn't have done that without significant tax cuts. | Securing wage moderation contributed to lowering inflation and public spending, and consequently boosted the competitiveness of Irish-based corporations. Employment and growth improved, and the foundations for the remarkable takeoff of the Irish economy were laid. The payoff for the Irish work force was an across-the-board increase in real take-home pay. The three-year social partnership format was repeated in the 1991 Programme for Economic and Social Progress, the 1994 Programme for Competitiveness and Work, and the 1997 Partnership 2000. By abandoning the hard-nosed approach to pay bargaining, union leaders were able to increase their input into, and influence on, economic management. Union representatives are positioned to play a more proactive role through participating with employers and government. Relations Between Labor and High-Tech Multinationals The arrival of multinationals in Ireland in the 1960s met with some resistance. Major and sometimes violent disputes arose. The labor movement, however, soon came to recognize that foreign direct investment was the motor of growth and employment. Tom Wall described it this way: "By the 1980s the view had emerged that if there's anything worse than multinationals, it's no multinationals." In the late 1970s and early 1980s, the IDA had a policy of encouraging companies to talk to unions. That changed with the shift toward a high-tech industrial base. Companies such as Intel would not have come to Ireland if they had been encouraged in that direction. So as a consequence, foreign direct investment did not tend to lead to any growth in union membership. Tom Wall So we had this divide, with companies like Apple, who were there before and who were unionized, and with the newer computer companies who weren't. The cross-over point was DEC; there was actually an agreement with DEC, which said that if anybody wanted to join a union they could be a member of the ITGWU. But then they did their damnedest to make sure nobody would actually apply. A few were members but they never recognized a union. After that, international companies had the confidence to forego that exercise. ICT companies are not renowned for their positive attitude toward unions The problem for us is that American multinationals see unions as what they experienced in the past in America ” this slight taint of crime, these highly rigid and conflict-ridden contractual arrangements. We've tried to convince them that's not what we're about. | Intel prides itself on what it considers an enlightened style of manager-employee relations. It sees little role for unions. Next, Bill Riley provides Intel's perspective. Bill Riley Our work force is not unionized. There is no legal requirement for us to do that in Ireland, although EU labor legislation is gradually encroaching on the freedom of Irish business to manage its employees. Going back 20 years or so, the IDA were certainly encouraging people to do sweetheart deals with unions, a practice which they have sensibly ceased because it was counterproductive. If you look at the investments that have come to Ireland in the past 15 years , the vast majority have been by companies who do not use third parties as part of their relationship with their employees . Intel would not be in Ireland or any country that obliged us to work with a third party. It's counter-intuitive. The knowledge and engagement of our employees is the critical success factor. If we are not free to work with those employees in an open and transparent fashion to win that commitment, then we fail. You don't get commitment from people by pushing them around or treating them badly . Intel managers are held very accountable for the people who work for them. We wouldn't even allow our HR people to get between a manager and the employee, so why would we put anybody else inside that relationship? Therefore we spend enormous amounts of time and energy with managers and supervisors whose job it is to bring out the energy and commitment of every single employee, particularly in a very competitive job environment. If you have the wrong approach to people, they're just going to get up and walk out and say, "Hey, I can go and make my living elsewhere." That wouldn't have been true ten years ago when Intel came to Ireland, but Intel's culture has always been egalitarian and a meritocracy, valuing knowledge above hierarchy. | Irish labor leaders rebut this argument and maintain that they make positive contributions to the employee management process. Tom Wall Intel has had its problems. The fact that a company is non-union doesn't mean it doesn't have labor problems. Intel was threatened with a strike over a shift system; it wanted to introduce a 24- hour shift over the Christmas period and people stopped working. So they brought in an ombudsman, Kevin Heffernan; now he's essentially the union. If people have a grievance, they go to Kevin Heffernan. It's the same thing. We reckon that we could probably add value to that company. I think there is a value in having an independent forum for people to express their grievances in confidence, without the fear of their promotion or employment prospects being affected. People have the courage, through a union, to actually say what they think instead of what they think the managers want them to say. But that's an ideological question; we're not likely to convince most employers of it. | |
