|
|
|
|
The system of corporate governance in Ireland is very similar to that of the United Kingdom. Its private sector companies operate with a single tier board structure and they are concerned exclusively to meet the interests of shareholders. There has been no tradition of employee representation at company board level. Nor are works councils part of the Irish industrial relations system in the private sector of the economy.
But the picture is different in the public sector. In 1977 the Worker Participation (State Enterprises) Act law was passed. This gave employees in seven state-sponsored commercial companies the right to elect up to a third of the members of their boards for periods of three years. Only employees of the company concerned are eligible. It was made clear that the work participation structure envisaged had to be based on existing trade union structures. But at the same time it was not envisaged there would be any move away from the single board system of corporate governance.
A review of the legislation ten years later led to the introduction of a further measure in 1988. This provided for the creation of sub-board consultative arrangements in a wider number of state agencies and companies. The new law was highly flexible in what form the proposed consultation mechanisms ought to take. But it did set out some basic provisions of their functions.
Trade unions, staff associations or other designated bodies, recognised for collective bargaining purposes, were given the exclusive right to nominate candidates for election as worker directors. All employees, including those who are working part-time, are entitled to vote in the election of these board-level representatives. Once elected the worker directors have the same rights and duties on the board as ordinary company directors, who are generally appointed by the government.
However, the government was reluctant to extend or impose participation legislation onto Ireland’s private sector if it proved impossible to stimulate such a development through encouragement and the negotiation of partnership arrangements.
There are now an estimated 54 employee representatives on over 20 state-controlled boards in Ireland. A few of the former state companies, which have been privatised, continue to have worker directors still sitting on their boards.
Initially, managers in the state-owned enterprises were hostile and suspicious at the creation of worker directors, who were often excluded from key decision-making and important company sub-committees such as finance. For their part, many worker directors felt uncomfortable in dealing with financial issues and called for more access to training. Originally there was some concern that worker directors could pose a challenge to existing collective bargaining and industrial relations structures. But with their sole right to nominate representatives to the board, the trade unions have been able to maintain a dominant role in the process.
The future of worker directors in Ireland’s state enterprises is now in some doubt. The privatisation of state assets has brought the whole system of employee board-level representation into question. As many as 4 out of the 11 original companies covered by the legislation have now moved into the private sector. As a result they have lost their worker representation system.
But a survey of worker directors in Ireland carried out in 2002 found
that as many as 96 per cent of respondents said they had a positive experience as worker directors. They believed their role gave them greater insights into the operations of the companies they work for. Over three quarters said the system had helped to improve industrial relations while 62 per cent added that it had helped in the development of the partnership approach in the company. On the other hand respondents were split half and half in their opinion as to whether they were ‘only tolerated’ or ‘fully accepted’ by management.
source: Robert Taylor (2004) in ETUI and Hans Böckler Foundation, The European Company - Prospects for board-level representation
DOCUMENTS: - BRIEF OVERVIEW: Company law and existing legislative provision for employee participation in Ireland (by A. Büggel).
(pdf)
 COUNTRY REPORT IRELAND: Workers' participation at board level
(by Kevin O'Kelly and Pat Compton)
prepared within the project "Prospects for participation and co-determination under the European Company Statute" - more about this project
download country report (pdf, 123 kb) download whole report (pdf, 1.3 MB)
↑top
|
|
|
There has been no specific national debate on the SE Regulation and Directive. The main focus of debate has been on the Information and Consultation Directive (2003/72/EC), which has the potential to have a greater impact on the employment relationship in Irish workplaces. Draft legislation has been published for the transposition of this latter Directive and is the subject of concern to the trade unions.
↑top
|
|
(3) Transposition process
|
Update: September 2005
It is the view of the Dept of Enterprise, Trade and Employment that this directive can be transposed through a regulation laid before the Oireachtas (Irish Parliament). However, to date this has not happened, so the deadline for transposition of the directive has not been met. The situation as of mid-September, 2005, is that the draft regulation is still in preparation before been sent to the Office of the Parliamentary Counsel. Only a draft legislation exists so far.
Updated report: October 2004
by Kevin P O’Kelly (University of Limerick)
Introduction
Resulting from the historical links, Ireland operates within, what is called, a ‘voluntarist’ system of industrial relations, i.e., the right to choose to join a trade union or an employer organisation, to bargain collectively or individually and to agree or not to agree on the issues in dispute and that the disputes between the parties should be resolved without the intervention of outside forces. A fundamental principle of this voluntarism is the absence of legally imposed structures and that the State takes a supportive role, through legislation and the provision of dispute settlement arrangements, rather than an interventionist role, in the employment relationship.
Since joining the European Community in 1973, in Ireland there has been a growing interest in shifting industrial relations from the traditional adversarial approach to a more consensus way of addressing workplace problems. This was not out of character with the Irish system of industrial relations as, since 1946, there had been a series of national wage rounds and, during the 1960s, on a number of occasions agreement on a Wage Round was negotiated centrally by the ICTU and the employers’ organisations. However, these experiments never lasted longer than a single Wage Round, until 1970 when, under the threat of legislation to control incomes and prices, the employers’ organisations and trade unions negotiated the first National Wage Agreement. These agreements eventually lead to the negotiation of two tripartite National Understandings between 1979 and 1981. They covered, not just pay levels in the Public and Private Sectors, but also a wide range of national economic and social policies, such as taxation, social welfare and health, education and training, labour law, housing and a commitment from the three parties to work together to achieve significant increases in employment. These agreements were the forerunner of the present series of National Programmes, agreed between the social partners and successive Governments, which have become the basis of Irish industrial relations since 1987.
Worker Participation Policy in Ireland
With the emergence of consensus at national level in the early 1970s there was recognition of the need to supplement this with limited forms of workers' participation. In 1973 a draft agreement was drawn up, for inclusion in the third National Wage Agreement, which would provide for the establishment of works councils in Irish enterprises. While the ensuing discussion on this draft agreement accepted that the proposed approach was in keeping with the practice and traditions of Irish industrial relations it was never ratified as events, such as the first OPEC oil crisis and resulting global recession, changed the priorities of both employers and the trade unions.
The Government, therefore, took the view that if anything was to happen regarding workers' participation that it would have to provide the stimulus. Consequently, in 1977 legislation was enacted giving employees in seven State?sponsored commercial companies the right to elect a third of the directors to the boards of these organisations, for a period of three years. (Worker Participation (State Enterprises) Act, 1977)
Based, in part, on the report of the Workers’ Participation Advisory Committee the original 1977 legislation was amended in 1988. This new law extended the worker director system further and increases the term for elected directors from three to four years.
Recognising that the 1977 Act failed to provide any guidance on how worker directors should link with the workers who had elected them through some sort of reporting back process, the legislation also provides for the establishment of sub?board consultative arrangements, not just in companies and agencies with worker directors, but also in other organisations. In total thirty?six State companies and agencies were covered by this aspect of the legislation. The approach adopted in the new Act was very flexible on the type of consultative forum which should be set up within each organisation, as the structure needed to reflect the objectives of the organisation, the size and location of its workforce, the employee/management relations, its culture, its national role or the business environment in which it functioned.
As regards the Private Sector, in keeping with the 'voluntarist' nature of Irish employment relations, the Government showed a reluctance to impose any form of employee participation if it was not acceptable to employers and managers. Its preference was for the social partners to reach a voluntary agreement. However, such agreement was never reached and the introduction of EU legislation for the establishment of European Works Councils brought a new concept to the Irish labour market by introducing, for the first time, statutory information and consultation rights into Private Sector employment. An estimated 300 transnational enterprises with subsidiaries based in Ireland are covered by the Directive. Many of these have already established EWCs with members representing Irish workers at European-level meetings.
The Framework Directive to introduce information and consultation arrangements for any enterprise operating within the EU (2002/14/EC) will extent this process further and employee involvement will have been achieved through the EU route rather than domestically, something the unions have advocated for decades, but without success.
The Government launched a consultation process, with the publication of a Consultation Paper, on how this Directive should be transposed into Irish legislation and both the trade unions and employers have made submissions in response to this paper.
European Company Statute Directive
While dealing specifically with the Framework Information and Consultation Directive, the Irish Government’s Consultation Paper notes that the ECS Directive must be transposed into Irish law by 8 October, 2004. However, in its response to the paper the Irish Congress of Trade Unions (ICTU) has sought the transposition of both Directives at the same time and through a single consultation process.
Turning to the specific provisions of the Directive the ICTU made two general comments in a letter the Dept of Enterprise, Trade and Employment (which is the responsible ministry for the implementation of the two Directives),:
"First, Congress noted that Article 3 of the Directive specifies arrangements for the establishment of a special negotiating body (SNB) and the arrangements for the selection of employee representatives on SNBs. The relevant subsection provides that Member States may make provisions that would permit representatives of trade unions to participate in SNBs whether or not they were employees of a participating company, concerned subsidiary or establishment. It is the view of the ICTU that the legislation transposing the Directive should provide that, if employees choose to be represented by a trade union on a SNB, the employer concerned must facilitate that union's participation.
Second, the submission argued that the standard rules set out in the annex to the ECS Directive and which will apply in certain circumstances, most notably in the event of the parties failing to agree on procedures for employee involvement by way of an SNB, should be consistent with the basic rules which may emerge from the transposition of Directive 2002/14/EC and should be reflected in the standard rules which will be specified in legislation transposing this Directive. In other words, there should be consistency and continuity across the two Directives.
Transposition of the Directive into Irish Law
It is the view of the Dept of Enterprise, Trade and Employment that this directive can be transposed through a regulation laid before the Oireachtas (Irish Parliament). However, to date this has not happened, so the deadline for transposition of the directive has not been met. The regulation is been finalised by the Department and it is hoped to have the transposition completed before the end of 2004.
↑top
|
|
|
Neither the employers or the trade unions or the National Centre for Participation and Performance (NCPP) are undertaking any research into the implications of the SE Regulation and/or Directive on the Irish system of industrial relations.
↑top
|
|
(5) Other relevant information (Info-Box)
|
↑top
|
|
|
