A Roadmap to decent work and inclusive growth

December 16, 2019

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by Patricia King, Irish Congress of Trade Unions

The Carnegie UK Trust-TASC Ensuring Good Future Jobs essay collection describes many of the key challenges faced by workers in Ireland today, and proposes a series of policy and practice changes to ensure good future jobs. First published on 28 November, as a coordinated response to the Irish Government’s first Future Jobs Strategy, this blog series showcases the contributions by key social partners in Ireland to the collection.

The term “decent work” was originally coined by the International Labour Organisation in making clear that the level of employment (quantity) cannot be divorced from its quality. The ILO, as well as a series of international conventions and treaties that Ireland has signed and ratified, are unequivocal that a worker’s right to have their union recognised as their representative and collectively bargain the terms and conditions of their employment is a defining feature of decent work.

Today, the number of people in work in Ireland is at an all-time record high [1]. But against this backdrop, the economy is not working for far too many working people. Quantity and quality of employment do not go hand in hand. The creeping casualisation of work and the erosion of employment rights, synonymous with the army of riders delivering food around our cities, is not limited to platform work, where “gigs” have replaced jobs. Decent jobs are fast becoming a relic of the past in certain trades and professions due to the practice of rogue bosses wilfully misclassifying their workers as self-employed subcontractors to evade employer’s social insurance contributions, established pay rates, and employment law. In sharp contrast to the considerable gains for employers, there are serious financial consequences for workers and the public purse from bogus self-employment. Occupational pensions, a hallmark of decent work, are in decline in general and among young workers in particular with just one in six (16.3%) of those aged 20 to 24 years and two in five (41.5%) aged 25 to 34 years with pension coverage (CSO, 2018). Workers without a supplementary pension face a significant drop in living standards in their old-age. Wage theft and breaches of workers’ rights are on the rise [2]. The €3.1m recouped in unpaid wages and the 45% non-compliance rate among the 5,753 workplaces inspected by the Workplace Relations Commission in 2018 are likely to be only the tip of the iceberg.

Low-pay is endemic. Almost one in four (23%) full-time workers earn less than two-thirds of median earnings, the third highest incidence of low-pay across the 36 member countries of the Organisation for Economic Cooperation and Development (OECD). Only the United States and Latvia are higher (OECD, 2019). Were it not for the half a billion euros spent annually on welfare top-ups to the poverty wages of 53,000 working families, the rates of in-work poverty and deprivation would be considerably higher. Wage inequality is unacceptably wide and growing. The Irish Congress of Trade Unions has published an annual “Fat Cat” report for the past four years (For example, see ICTU, 2017). Our analysis shows that the average salary for chief executives in Ireland’s top 20 companies increased by 6pc between 2016 and 2017, as opposed to full-time employees who netted a meagre pay rise of just 1.7%. Even more alarming, it would take the average worker over two centuries (230 years) to earn what one top paid boss earns in a single year. This wage gap between the top and the rest is fuelling the inequality crisis in advanced economies.

The challenges we now face as a country in terms of wages and conditions, and inequality will not be resolved without fundamental reform of labour law. Earlier this year, Congress published a roadmap for reversing the decline in decent work and workers share of the growth they contribute to each day [3]. A cornerstone of our plan – The Route to Reform – is to secure collective bargaining rights for all workers in Irish law (ICTU, 2019). In short, collective bargaining is the official process by which trade unions negotiate with employers to determine terms and conditions of employment, including pay, hours of work, pensions and other benefits, on behalf of their members. Collective bargaining addresses the inherent power imbalance in the employment relationship by giving added weight to the expression of worker interest than can be achieved individually.

While the Constitution guarantees the right to join a union, there is no legal obligation on employers to recognise a worker’s union or to engage in collective bargaining negotiations. In practice, almost half of all workers are covered by collective agreements given that many good employers recognise the benefits that come from voluntary union recognition, such as being able to negotiate wages collectively for large groups of workers at the same time, increased productivity and reduced staff turnover [4]. But, in the absence of trade union legislation the other half of the workforce, many of whom are the workers most vulnerable to exploitation, are denied the right to come together and collectively bargain their wages, benefits and working conditions.

While Ireland is committed to upholding the right to collectively bargain under a number of international conventions and treaties, we have failed to legislate.

In addition to securing a legal right to bargain, our reform plan calls for a series of additional rights for trade union members to be placed on a statutory basis through a new Trade Union Rights Act, including the right to:

  • participate in trade union activities in the workplace;
  • organise within the workplace;
  • reasonable time off to engage in trade union training and activities;
  • access for trade union officials to workplaces for the purpose of communicating with members;
  • protection against penalisation on the grounds of trade union membership or activities in line with the Protected Disclosures Act.

The positive role played by trade unions and the benefits of collective bargaining are increasingly recognised by the World Bank, the IMF and the OECD – institutions not known to be natural bedfellows of trade unions. Their conclusions that collective bargaining is: “associated with higher employment, lower unemployment, a better integration of vulnerable groups and less wage inequality [and] help strengthen the resilience of the economy against business-cycle downturns” are wholly evidenced-based (OECD, 2018).

Until meaningful action is taken to strengthen unions and guarantee bargaining power to all workers, we, as a country, will continue to fail to tackle inequality, poverty pay and insecure work.

 

References

Central Statistics Office (2018) ‘Labour Force Survey Q3 2018’. Available at: https://pdf.cso.ie/www/pdf/20181120082510_Labour_Force_Survey_Quarter_3_2018_full.pdf

Central Statistics Office (2019a) ‘Press Statement Labour Force Survey Q2 2019’. Available at: https://pdf.cso.ie/www/pdf/20190827100449_Press_Statement_Labour_Force_Survey_Q2_2019_full.pdf

Central Statistics Office (2019b) ‘Gross Value Added for Foreign Owned Multinational Enterprises and Other Sectors Annual Results’. Available at: https://www.cso.ie/en/statistics/nationalaccounts/grossvalueaddedforforeign-ownedmultinationalenterprisesandothersectorsannualresults/

ICTU (2017) ‘Because We’re Worth it: The Truth about CEO Pay in Ireland’. Available at: https://www.ictu.ie/download/pdf/because_were_worth_it.pdf

ICTU (2019) ‘Route to Reform: Realising the transformative effect of social dialogue and collective bargaining in Ireland’. Available at: https://www.ictu.ie/publications/

Organisation for Economic Cooperation and Development (2018) ‘OECD Employment Outlook 2018: the role of collective bargaining systems for good labour market performance’. Available at: https://www.oecd.org/els/emp/WEBINAR_EMO_CollectiveBargaining.pdf

Organisation for Economic Cooperation and Development (2019) ‘The Future of Work: OECD Employment Outlook 2019’. Available at: https://www.oecd.org/employment/Employment-Outlook-2019-Highlight-EN.pdf

Workplace Relations Commission (2018) ‘Annual Report 2018’. Available at: https://www.workplacerelations.ie/en/news-media/workplace_relations_notices/annual-report-2018.pdf

 

[1] 2.3 million people are in employment, Labour Force Survey, Q2 (CSO, 2019)

[2] In 2018, €3.1m in unpaid wages was recovered by WRC inspectors, 75pc more than in 2017, up from €1.77m, and twice that recovered in 2016 (WRC, 2018)

[3] Just under €300 billion was added to economic output in 2018, an overall rise of 7.9pc on the previous year. When the activity of multinationals is stripped out of the measure, the economy grew by €172 billion or 3.9pc. (CSO, 2019)

[4] The OECD estimates total collective bargaining coverage in Ireland to be between 40-50pc.