Collective bargaining

16 April 2019

Unlike many EU jurisdictions, employers in Ireland aren’t legally obliged to engage with trade unions to negotiate pay agreements or other conditions of employment.

After coming under increasing political pressure from trade unions, the government enacted the Industrial Relations (Amendment) Act 2015 (the 2015 Act).

This encourages more employers and employee bodies to consider entering into a negotiation process in collective bargaining.

Voluntary system of collective bargaining

When it comes to collective bargaining, Ireland has a long history of maintaining a voluntary system of industrial relations.

Ireland has relatively low levels of collective bargaining as a result.

Following a campaign by the trade union movement highlighting why it’s essential for their members, the government enacted the 2015 Act.

The law sets out that the Labour Court is authorised in certain circumstances to make binding rulings in relation to employee pay and conditions on behalf of trade union members working in non-unionised companies.

What is the collective bargaining process?

It’s a process where employees come together. And through their trade union they seek to negotiate terms and conditions of employment. This includes better:

  • Working conditions.
  • Wages. 
  • Benefits packages.

Union members typically choose a representative to negotiate on their behalf in bargaining sessions with you.

The employees then have an opportunity to vote on whether to accept or reject the terms.

If approved, the terms of the collective bargaining agreement effectively become the terms of the employment contract and the employer will be legally bound to comply with the agreed contract terms.

The difference between collective bargaining and negotiation is simple. The former refers to the process of discussion. The latter is a process where two or more parties discuss a specific situation—such as an offer, with the aim to reach an agreement.

How collective bargaining laws work

As Irish industrial relations law doesn’t require you to recognise trade unions or engage in collective bargaining.

The 2015 Act looks to provide employees with an opportunity to engage in it with a non-unionised employer.

It provides workers with a legal mechanism to improve their terms and conditions in circumstances where you don’t recognise collective bargaining.

Since 2015, trade unions or ‘excepted bodies’ may seek, on behalf of their members, to have disputes regarding pay rates and other terms and conditions of employment determined by the Labour Court.

The effect of the 2015 Act is you’re more likely to consider engaging in trade union collective bargaining or ‘excepted bodies’ to avoid a Labour Court ruling over which they will have little control of the outcome.

What is an excepted body?

An ‘excepted body’ is essentially an internal employee forum that negotiates terms of employment with an employer.

You can avoid an employee referral to the Labour Court if they can show that they are already engaged in collective bargaining with an ‘excepted body’ of employees.

Powers of the Labour Court

The Labour Court enjoys wide discretion to review the terms and conditions of employment.

When making a determination, the Labour Court undertakes a benchmarking type exercise against comparators, unionised and non-unionised, to assess workers’ terms and conditions and to make a fair recommendation.

Advantages of collective bargaining

Many of the benefits are for employees, but some can ultimately be advantageous for your business:

  • Workers get a larger voice, ensuring they have better working standards.
  • Quality of life can improve for a workforce.
  • It encourages cooperation, which can improve working relationships.
  • There’s a binding result at the end of the process.

Ultimately, the importance of collective bargaining is it provides employees with a chance to negotiate a better deal.

This can improve their work-life balance and overall standard of living.

For your business, it’s a chance to improve relations with your employees—this can lead to productivity boosts and an improvement in retention rates.

Need our help?

For more information on this technical area of Irish employment law, get in touch for guidance: 1890 252 923.

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