The Durability of Coordinated Bargaining: Crisis, Recovery and Pay Fixing in Ireland

Research questionWhat factors might explain the pattern in pay determination observed as unions and employers in Ireland responded to and emerged from the Great Recession?Background and rationaleThe international literature on... [ view full abstract ]

Research question
What factors might explain the pattern in pay determination observed as unions and employers in Ireland responded to and emerged from the Great Recession?
Background and rationale
The international literature on the economic and fiscal crisis that heralded the Great Recession emphasizes the negative effects of ‘disorganized decentralization’ on unions’ capacities for pay coordination and ultimately on their effectiveness in representing their members. In Europe, these effects are seen as particularly pronounced in countries which received financial assistance from the Troika (the EU Commission, the International Monetary Fund and the European Central Bank). Indeed, the trend towards disorganized decentralization is considered in much of this literature to have been accelerated by the actions of the Troika and the EU Governance Regime.
Irish social partnership collapsed in 2009, a casualty of the Great Recession, and with that collapse went the nationally centralized collective bargaining that had been in place for the previous 22 years. Nevertheless, outcomes from private and public sector collective bargaining processes that emerged in the years following that collapse display characteristics suggestive of a high level of coordination.
In this study we seek to analyze those outcomes and to identify factors which might help to explain the regular pattern observed.
Methodology
The study deploys qualitative and quantitative methods to examine the impact of the crisis and recovery on pay coordination in Ireland. Our examination of post-recession collective bargaining draws on four sources of data: a specialist weekly periodical; interviews with senior trade union officials centrally involved in pay bargaining; a dataset compiled by the authors covering 652 pay deals between 2011 and 2016; and data collected by the Central Statistics Office (CSO) and by Ireland’s main employer body, the Irish Business and Employers Confederation (IBEC).
Key results
This paper shows that the collapse of centralized bargaining in 2009 was soon followed by a new form of coordinated, albeit decentralized, bargaining. Multiple private sector pay agreements at industry and sectoral levels over a period of six years conform closely to a pattern deliberately set by a small number of actors and observed by both the specialist press and the industrial relations bodies. Parallel processes were to be observed in the public sector. The durability of pay coordination despite the collapse of centralized bargaining is attributed to the strategic postures of unions combined with embedded features of industrial relations institutions. 
Contributions 
This paper demonstrates that the import of the Irish case arises less from ‘disorganized decentralization’ than from the resilience of coordination following one of the most severe economic and fiscal shocks experienced by any advanced economy. Where the prior literature would lead to the expectation of the collapse of coordination and the reduced effectiveness of unions in representing their members, the extensive data analyzed in this study demonstrate a level of coordination without precedent in previous cycles of decentralized pay bargaining in Ireland.