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Union, Business and Government Bosses agree to screw Irish Workers

Joe Craig

28th January 2003

So, after a final session of ‘tortuous’ negotiations lasting for eight solid hours, which were described as being like ‘the battle of the Somme’ by one participant, in which ‘every centimetre was being conceded with the utmost reluctance on both sides’ (Irish Times) the leadership of Ireland’s trade unions agreed to a new social partnership deal after Bertie Ahern stopped in on his way to the airport and spoke to them for all of fifteen minutes!  What a guy!

So what did Bertie persuade the bureaucrats of ICTU to sign up to?  Well, a wage cut!  Now isn’t that a surprise.


The terms of the new deal offer private sector workers a separate deal from those in the public sector, something which no one has thought even to think needed explaining in itself.  But why are the needs of private sector workers any different from those in the public sector?  Of course the question isn’t asked because what workers actually need is not on anyone’s agenda in these discussions.  ICTU negotiators talk only about what they can ‘sell’ to their members.

The deal offers private sector workers a pay increase of 7 per cent over eighteen months while inflation is expected to run at 6 per cent over twelve.  In other words a cut in real pay.  The increase is to be paid in stages and weighted towards the end of the period.  An inability to pay clause will allow employers to refuse even these increases through binding arbitration on employer claims.   Public sector workers are to get a pay freeze for 6 months while inflation is the highest in the EU; then a rise of 3 per cent from beginning of 2004, 2 per cent from July 2004 and 2 per cent from December 2004.  As compensation they are also to get payment of the benchmarking awards decided in secret and which discriminate against both the low paid and women.   One quarter of this will be paid and backdated to December 2001 when the deal is agreed , fifty per cent will be paid in January 2004 and the remaining 25 per cent in June 2005.

Much media attention has focused on the so-called preferential increases to public sector workers arising from the benchmarking process.  Conveniently forgotten is that these payments are claims going back at least to problems existing in 2000 and which will now only be finally addressed in 2005!  From being a means of selling the last partnership deal it is now only going to be implemented if workers accept this one.  But this is not the main problem.


Socialist Democracy has always opposed the whole benchmarking process and some teachers in particular fought strongly against it.  It represents a transparent attempt to inflict on workers in the public sector changed terms and conditions that reflect increased exploitation suffered by workers in private employment. For some time now however many, even on the left, have demanded the quicker implementation of benchmarking.

As we write, the price for the benchmarking money is being negotiated by ICTU.  Things do not look good.  Peter McLoone of ICTU’s public services committee has declared that ‘people are not hostile to change.’  These include increased flexibility in working hours, limits to worker’s ability to strike and ‘a fuller range of sanctions’ in ‘serious cases of underperformance.’

Other provisions of the partnership deal include an increase in the minimum wage to €7 an hour but only from February next year; provision of 10,000 (?) ‘affordable’ houses with no apparent definition of just exactly what affordable means; changes to statutory redundancy terms and changes to the bureaucratic procedure by which workers might get union recognition.  These are all meagre enough, but just look again at the list.  Every item is so basic that anyone newly arrived might wonder if this is the same country that has had nearly a decade of an economic boom held up as an exemplar to the rest of the world.  Ten thousand ‘affordable’ houses when annual demand has been running at nearly 50,000?  A minimum wage of €7 when the per capita income of the country is supposed to be one of the highest in the EU?  The price of being sacked?  Renewed demands for union recognition when the unions are supposed to have been in a partnership with the bosses for nearly 15 years?

Hardly mentioned in reports has been continued ICTU agreement to privatisation: public private partnerships are to be ‘actively pursued.’  While this is being accepted SIPTU bureaucrats lead CIE and Dublin Bus workers up the garden path, calling a four hour strike to oppose privatisation, even while they declare openly to these workers that they seek only to be consulted and that any change has to be ‘orderly.’  What they seek is simply privatisation after it has been rubber-stamped in the Public Transport Partnership Forum set up under the last partnership deal.  The real objective of the union leaderships may not be opposition to partnership, speculates a business correspondent of the ‘Sunday Tribune’(19/01/03), but simply a slice of the cake, just like Telecom Eireann.  This same correspondent is under no illusions that privatisation will ultimately damage workers’ conditions no matter what promises are made by the management, government or union leaders.


Before the deal the ideological ground had been conceded in an NESC document agreed by ICTU that accepted the overwhelming priority of ‘competitiveness.’  But what is competitiveness?  Simply the priority of profitability over the needs of workers.

The ideological campaign always includes a wealth of economic statistics which are supposed to prove that workers are too well off.  EU data show, for example, that ‘compensation’ for Irish workers increased last year at the second highest rate of 16 countries surveyed.  The rise in the value of the Euro, from around 90 cents to $1.05 has further eroded the competitiveness of Irish products.  The benchmarking awards will, in addition, cost €1.1 billion.

These statistics explain nothing.  If wages did not rise during a boom there would be no boom.  Increasing wages is the only mechanism in a market economy to shift labour from low productivity to high productivity production.  The euro’s rise still leaves it 5 per cent below what it was at the beginning of 1999 when the economy was still booming, so why is its level a problem now?  When we look at relative unit labour costs adjusted for the countries the Irish State trades with, competitiveness improved by around 5 per cent in 2002. In any case all this is dwarfed by the effects of global demand, and the world capitalist recession and non-appearance of an upturn has nothing to do with the demands of Irish workers.  As for the benchmarking bill, it is dwarfed by the €8.5 billion in tax allowances given to the rich every year.  A recent Revenue study found that 51 of the top 400 earners paid less that 5 per cent of their income in tax and 29 paid none at all!


In the lead up to the final agreement there was the usual speculation that negotiations would fail and the situation would revert back to one of free collective bargaining.  As part of the negotiations some unions had put in claims of around 10 per cent over twelve months, which of course exceeds the amount in the new deal.  This will no doubt confirm some on the left that free collective bargaining is the alternative to social partnership, although what is claimed is not always what is delivered.  We in Socialist Democracy have always disagreed.

It is not obviously that we prefer partnership to free collective bargaining but the latter is not in itself a socialist alternative.  The possibility of reversion to it presented by failure to reach agreement over a new deal reveals it not as an alternative but really a default position.  The same firms that will claim inability to pay wage increases under the partnership deal would do so under free collective bargaining.  The partnership deals have certainly helped to put a cap on pay increases but even under these deals some workers in particularly profitable companies have had rises above the norms.  The real importance of the partnership deals has been recruitment of the whole trade union bureaucracy to implementation of political attacks on the whole working class.  These have  involved wage restraint; cuts in taxation that have benefited mainly the rich and left public services starved of necessary resources; privatisation of public services and agreement to the most right wing political agenda including globalisation through the EU.

The socialist alternative means first of all appreciating the importance of these partnership deals as involving the creation of a coalition of forces bent on screwing the working class.  Its really pernicious character is that it involves the very leaders on whom workers rely to fight back.  Right from the start, in any important struggle, they are doubly handicapped.  First by the terms of the partnership deal and secondly by their own leaders who support these terms.  Right from the start opposing the attacks involved in partnership means fighting the bureaucracy.  It means seeking broader unity that goes beyond ‘the every one for themselves’ approach that is usually the way free collective bargaining works.  Solidarity is more and more necessary when your enemy is united against you.  How to build this solidarity, around which programme, is the task of all socialists and militants both inside and outside Ireland’s biggest working class organisations.



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