Assignment
Discuss the factors reshaping Industrial Relations and the prospect for future pay settlement modules.

In the last few years Ireland has been on a difficult economic journey. High unemployment, huge decline in the construction sector, loss of union’s power, people are afraid to take any actions in a case of a job loss. The economic collapse forced the country to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations. But rather than being rewarded for its actions, though, Ireland has been penalized. Industrial Relations are about the balance of power and control between the employers and employees. The Industrial Relations climate is changing very fast, with many strikes than any time since the 1970's. The cause is that we are in the middle of an economic crisis. Towards 2016, partnership, with it linked incremental percentage wage increases, can be described as ambition. Unemployment rate in Ireland stands at 14.8 per cent, from 4 per cent.” The EU-IMF-ECB troika described levels of joblessness as “unacceptably high, especially among the youth” in its latest review of the State’s bailout programme last week.” (Minihan, 2012).
‘During the recent crisis, it says that increases in youth unemployment were “significantly higher” in countries with high minimum wages than in countries where minimum wage was below the median.’ ( Sheehan 2012).

“Employers would be paid four-figure cash incentives to retain interns and recruit long-term unemployed people under two new schemes being considered by Ministers for announcement on budget day.” ( Minihan, 2012)
It is argued, that “industrial relations is increasingly being dominated and reshaped by legal processes while concerns about the dynamics of collective bargaining and gradually being pushed to one side”.(Tim Hastings. The state of the unions .Challenges facing organised labour in Ireland). Therefore, “this had led to trade unions themselves collaborating in their own decline via focusing on right a legislation as the only way to resolve bargaining difficulties at the expense of their key role as negotiators”.( Mallon, 2008).
High density and growth of membership in unions is very beneficial in current time as recession. Union density in public sector 35-39%, private sector- 25%. International research shows that it is best for unions to recruit people during time of high inflation, as inflation threatens people’s life. Irish inflation has risen dramatically during economic recession time and also poor labour market. “Inflation in Ireland (as measured by the Harmonised Index of Consumer Prices) over the period 2007-2011 was the lowest in the EU.” (Finfacts Team, 2012).
It is a bit of challenge for unions to organise activities when multinationals workers are involved, as they can be suspicious of unions based on their experience in their own countries.
Kelly and Brannick examined the Industrial Relation practices of 27 MNC’s operating in Ireland and concluded that ‘in general, multinationals are regarded as no different than Irish firms and the trend seems to be one of conformity with the most country’s institutions, values and practices and they adapted to the traditions of the Irish Industrial Relations system.’( Roche and Gerry, 1996, The state of the unions .Challenges facing organised labour in Ireland).

As part of a dispute, staff at Aer Lingus are going onto a two hour work stoppage over the pension dispute on November 19,2012. Unions involves Impact, Siptu, Teeu and Unite. The unions said that any trouble to customers or businesses in November would be “solely due to the decision of Aer Lingus management to stop talking to staff representatives about their future retirement incomes”. Also unite said it saw the two-hour work stoppage “as laying down a marker for what may prove a long-term battle for fair treatment on pensions”. (Wall, 2012).
It is likely the unions will allow job loses to reduce the wage bill rather than real wage cuts. Today, Ireland’s biggest telecoms company, Eircom, plans to drop 2,000 jobs over the next 18 months in an attempt to save €100 million a year. Steve Fitzpatrick, who represent staff at Eircom, said that “it’s not pleasant but then it hasn’t been for the past five years. I will be looking to see that the pain is evenly spread across the company.” (Hancock, 2012)
According to Minister Howlin’s report, he said ‘The next six months will be a critical phase in implementing change and building a public service that is equipped to meet the challenges we face as a country’. ( Frawley, 2012). The achievements under the Croke Park to date that had been well acknowledged , that would include a reduction in the gross exchequer from € 17. 4 billion to € 14.4 from 2009 to 2112, an introduction of a new single public service pension scheme, standardisation of annual leave and reform of sick leave. Also includes a new roster for Garda on a pilot basis, for more Garda available at peak times, 2 million teaching hours a year, 3000 medical laboratory staff to work 8 am to 8 pm, new rosters for radiographers.
“”We need to recognize “how very poor has been the record of public service HR reform in the past”, Roche argued that Croke Park has delivered more reform “than recorded in the history of the Irish public service””. ( Brian Sheehan)

Looking at the minimum wage in Ireland, the IMF report says that the “nominal wages in Ireland were adjusted downward during the crisis, but the decline was small in nominal terms especially given the scale of the total employment loss”. (Sheehan, 2012). However the public sector cut down wages to a big extent from 2009 to 2011. Firms in Ireland cut employment, with nearly 15% job losses, which is the second highest fall in Europe. In the private sector employment cuts by 18% since 2008, exceeded the 8.25 % reduction in the public sector. Construction sector suffered the worse, ‘average labor costs have fallen by only 9 percent so far, to 2008 levels, despite facing one of the highest employment declines in Europe”, the report notes.( Sheehan, 2012).
It cites Dickens et al. (2006) (IRN 9 & 20-2011), which found that high degree of unionization and existence of collective bargaining agreements “has been associated with less frequent wage adjustment”. (Sheehan, 2012).
Wages are tend to be more flexible in the countries where bargaining agreements exist, and less flexible where the firm employment protection legislation takes place.
“While a minimum wage can be seen as a social protection tool that protects the most vulnerable groups, it can reduce employment if set on a too high a level (OECD, 2012). Although lowering a high minimum wage could increase income inequality, the effect should be at least partially alleviated over time through higher total employment”, it argues. ( Sheehan, 2012). Currently minimum wage in Ireland is €8.65 per hour.

“800 business cases for the preservation of the €1.44 billion worth of allowances paid to public servants starkly demonstrates the negotiating and industrial relations that awaits Minister for Public Expenditure and Reform, Brendan Howlin and the public service unions next year”. Minister Howlin point out that last year he would get a 10% cut in the allowances, which will make around € 150 million next year. “Allowances have added to a strictly hierarchical grading structure...” ( Frawley, 2012).
To extend the Minister’s analogy that everybody seems to be obsessed with “one tree” while he tries to tackle “the forest”, perhaps it would be better to lop one branch off rather than painstakingly prune the tangled woods”. ( Frawley, 2012).

“The industry, still rankling at the minister’s raid on pensions with his 0.6 per cent annual levy on funds until at least 2016, is raising a storm at this renewed attack on retirement savings, with headlines warning of a cost to individual taxpayers of about €800”. ( Dominic Coyle).
“STATE-owned AIB has admitted that a €1.1bn bailout of its pension scheme is helping to pay retired executives as much as €500,000 a year.” ( Donal O’ Donovan)
What a huge impact that has on people’s retirement income, the industry and the money it makes from pensions scheme members!
Taking a look at the private sector, a lot of people did not suffer cuts in nominal pay but there was a big gain in wage competitiveness. Looking up to Roche comments in the case of public sector, he said that “Croke Park Agreement has provided a framework for managing fiscal consolidation and public service retrenchment, and so avoiding the industrial conflict, general strikes and chaos often observed in other bailout countries and indeed in non-bailout countries like Italy, Spain, France and the UK.” ( Brian Sheehan). Though the public servants have employment security regarding to their terms and conditions, the public service is not very big, compared to the standards of other European countries, looking at the OECD report (2008).
When comparing the Irish public salaries to the European public servants, they are indeed better paid. Teachers in Ireland, before, were very well paid before the number of cuts. People working in the health services, comparing to other European countries, are getting much higher wages..“no surprise there – but even before the pension levy and pay cuts, the pay of nurses appears not to have been greatly out of line, and was just above the UK nurses”. ( Brian Sheehan). Public service groups in Ireland get shorter hours than other countries in Europe. Also Roche on the IRN said that the best paid Irish servants at public sectors are those who engage most senior grades.( By Brian Sheehan).
According to Roche on IRN article, managers in the public sector struggled to manage change effectively and public service unions “showed considerable ability to drag change proposals to a slow crawl”. HR managers had “little skill, credibility or strategic capability”. ( Brian Sheehan). This is a modern economy, we need to be more innovative and reach up for a high quality to survive. Under a Croke Park 2 process, “”everything is likely to be on the table”, including increments, allowances, and working hours.”” ( Brian Sheehan) .
Social partnership is having a rough time at the moment, according to Ms Hanafin on the national news. She also spotted out a positive progress in ending a poverty in the country.
Also, Social and Family Affairs Minister Mary Hanafin commented "when all of the social partners stop to look at how much progress we have made in the last few years by working together that they will all realise the best progress in the interest of the wider community can actually be gained by working together again." ( Louise Hogan).

Conclusion
, Roche believes that a second agreement would provide the best means for addressing ongoing public service reform, fiscal consolidation and economic recovery.

Bibliography * Minihan, M. (2012) ‘Firms may get bonus to retain interns and recruit jobless’ The Irish Times. Available from: http://www.irishtimes.com/ [ Accessed on 30 October 2012]. * Coyle, D (2012) ‘ Report on pension charges throws light on expensive, opaque business’. The Irish Times. Available from : http://www.irishtimes.com/newspaper/finance/2012/1024/1224325626689.html ;Accesssed on 1 November 2012]. * The State of the Unions. Challenges facing organised labour in Ireland. Edited by Tim Hastings. (2008) * Wall, M.(2012) ‘ Unions plan Aer Lingus stoppage’. The Irish Times. Available from http://www.irishtimes.com/newspaper/breaking/2012/1030/breaking13.html [Accessed on 30 October 2012).

* Hancock, C. (2012) ‘Eircom to shed 2,000 jobs in effort to cut €100m per year’ The Irish Times. Available from: http://www.irishtimes.com/newspaper/frontpage/2012/1101/1224325981070.html [Accessed on 1 November 2012] * Frawley, M (2012) ‘The wider public service reform agenda gets re-boot’. News – IRN 33- 12/09/2012 * Frawley, M (2012) ‘Modernizing public service allowance is next minefield for Howlin’. News – IRN 35- 26/09/2012

* Sheehan, B (2012) ‘Modest private sector wage decline, but minimum wage hinders jobs- IMF’. * Finfacts Team 2012,Central Statistics Office, Available from :http://www.finfacts.ie/irishfinancenews/article_1025025.shtml [Accessed on 1/11/12].

* Louise Hogan (2010) “Hanafin calls for resurrection of abandoned social partnership talks” Independent News. Available from : http://www.independent.ie/national-news/hanafin-calls-for-resurrection-of-abandoned-social-partnership-talks-2071913.html Accessed on [ November 3 2012]. * Brian Sheehan, IRN ( Article from Moodle). * Coyle, D. (Report on pension charges throws light on expensive, opaque business). Available from http://www.irishtimes.com/newspaper/finance/2012/1024/1224325626689.html Accessed on [ 27 October 2012]. * Donal O’Donovan “AIB uses pension bailout to pay ex-chiefs up to €500K “ Available on :http://www.independent.ie/business/irish/aib-uses-pension-bailout-to-pay-exchiefs-up-to-500k-3279532.html [Accessed on November 1]. *