With the pay talks nearly at an end, IBEC, in the form of its representative here on earth – our friend Turlough – is warning of the gravest reperscussions if Irish employees are granted the right to collective bargaining. Now, this is a right by law that employees in almost every industrialised country enjoy. And let's not forget that little ILO Convention on Labour Rights that Ireland signed up to back in the 1950s. No, plagues and locusts will descend on our garden economy if any single employee in Ireland is granted this right. Why? Because multi-nationals, especially US multi-nationals, won't come here. You see, denying Irish workers the right to collective bargaining gives us a competitive advantage. Take away that advantage and the economy goes down the tube.
Yeah, we gotta keep those foreign capital fixes coming or we'll all go into collective withdrawal. Long-term readers of this blog will be aware I do not favour increasing the corporate tax rate in the short-term. You can read the arguments here, but it all boils down to this: if we do anything to undermine the stream of foreign capital coming into this country we will be forced to rely on indigenous enterprise and that means going back to the plough. That is not an ideological statement, merely a pragmatic one. It is an absolutely unsatisfactory situation: our tax-regime (which is ultimately a tax-laundering regime) is a drain on other countries and peoples who have to engage in a 'race-to-the-bottom' on corporate tax rates, to the detriment of social and economic investment and higher taxes on labour; it is part of an international regime that has facilitated the loose money and practices that delivered us the international credit crunch; it is also implicated in a world-wide system of screwing developing economies. On every level, it is wrong.
However, jacking up the rate in the short-term will only plummet this economy for we have nothing to fall back on. A progressive strategy would see over the next decade a massive investment and structural focus on developing indigenous enterprise, with the target after that of beginning to increase the corporate tax rate with a view to supporting the EU's consolidated corporate taxation proposals. The ultimate goal would be to work within Europe to ensure a system that foreign capital cannot manipulate, playing off countries against each other to their disadvantage. Raising the corporate tax rate is the endgame, not the opening gambit.
But to suggest that vindicating the right to collective bargaining is a bar to continued foreign investment is laughable. That IBEC uses this argument shows just how cynical they can be when pursuing their agenda. For they know that the majority of multi-national companies, including a substantial number from the US, already engage with trade unions.
In a study by Jonathan Lavelle, Patrick Gunnigle and Anthony McDonnell, from the University of Limerick, entitled ‘Charting the contours of employment relations in foreign-owned MNCs: survey evidence from the Republic of Ireland',they found that:
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61 percent of all multi-nationals engage, in one form or another, with trade unions
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83 percent of all Irish and UK multi-nationals engage
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72 percent of multi-nationals from the rest of Europe engage
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Even 41 percent of US-based multi-nationals engage
So the picture is not so cut-and-dried. When one considers that labour relations in many MNCs are such that employees don't require (or believe they require) trade union representation, the number of enterprises that actively deny recognition of collective bargaining rights is even less.
So why the IBEC hostility? It's certainly not out of concern over competitive advantage. It has to do with their own indigenous members, many of whom whom refuse to acknowledge the right to collective bargaining, refusing to act in a progressive manner. It's not an economic issue, it's about power-relations within enterprises. The foreign capital argument is just a ruse.
But that's the current logic of social partnership. Employers accept it on their terms – a dialogue in the 'political' sphere but a refusal to accept the imperatives of partnership at the local level, in the workplaces throughout the economy.
Trade unions shouldn't be bullied. They should call IBEC's bluff. And if IBEC does walk away from the table, then the economy will be all the better for it. For then we can start from the bottom up – building sustainable productive enterprises of which participation and recognition of trade unions is an indispensable part.
Notes on the Front 
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