The Emerging Transformation

There is an emerging transformation in the workplace.  Whether that transformation will be realised, even partially, cannot yet be determined. It is still early days. New trends, new demands, new expectations, many coming out of the pandemic experience, have the potential to significantly alter people’s relationship with and within the workplace, substantially improving life quality and opportunity.

There are at least five new trends and demands: 

• The Living Wage
• Remote working
• The 4-day working week,
• The social wage
• Collective bargaining

Let’s go through each of these to find out where they stand now.

Living Wage

The momentum towards a Living Wage appears irresistible.  During the pandemic, low-paid workers were popularly seen as the bulwark of the productive economy.  In the Programme for Government, the coalition parties committed to moving towards a Living Wage over the lifetime of the current Dail.  Recently, the Tánaiste reiterated this commitment:

‘The Irish Government will be among the early movers in adopting a national, mandatory living wage. I intend to honour the Programme for Government commitment that we should do so.’

He further announced that he had received recommendations from the Low Pay Commission regarding the implementation of the Living Wage and that he would bring specific proposals to government before the summer recess.

But before we assume that the national minimum wage will increase from €10.50 per hour to €12.90, in line with the Living Wage Technical Group’s estimate, there are some complexities in setting and implementing a Living Wage.

The Tánaiste recognised this when he outlined two approaches.  One is the basket of goods and services approach, similar to the Living Wage Technical Group’s, whereby necessary items are priced to ensure an agreed standard of living.  The second is the fixed threshold approach - setting a statutory floor as a percentage of the median wage.  And then there’s the issue of phasing in the new wage floor.  We should know what approach the Government intends to adopt in a few weeks.

But be prepared for considerable resistance from owner-management interests.  For a Living Wage challenges the exploitative business model that exists in many sectors.  This will require us to challenge assertions that ‘business can’t afford it’, that it will undermine competitiveness, or other such self-serving claims.  Progressives and trade unionists need to fully enter this debate – not just on the basis of rights and living standards, but on the increased business efficiency which a Living Wage would promote.

Remote Working

During the pandemic remote working was not only a necessity to keep sectors and enterprises functioning, it became hugely popular.  Prior to the pandemic only 8 percent worked remotely.  This increased to nearly 40 percent in 2020/21.  Unsurprisingly, over 90 percent of people working remotely – fully or in hybrid arrangements involving home, hub and office – claimed they were satisfied or very satisfied.

With workplaces re-opening, the issue is now asserting the right to hybrid working – partially working from home, from the workplace, and/or from a work hub.

However, the Government’s first attempt to introduce a statutory right to remote/hybrid working was widely ridiculed.  ICTU stated:

‘. . . the proposed legislation published by Government is fundamentally flawed and stacked in favour of the employer. It is in clear conflict with national policy to facilitate remote working and current labour market realities.’

A major sticking point is the numerous grounds on which employers can deny a request for remote working (13) and the lack of an appeals process.  Some called the government’s legislation ‘the right to be refused remote working’.  The Government beat a tactical retreat, stressing that it will be open to amendments and changes to the legislation. 

A set of proposals worth examining has come from Niamh Egleston and Alan Eustace of TCD.  They propose (here and here and here):

• Employees may request flexible working arrangements of any kind without penalisation nor discrimination

• In particular, employees are entitled to take up to 150 days working from home per annum, provided they give at least 48 hours’ notice

• Employers may refuse to allow an employee to work from home on any given day, provided they give the employee specified reasons for this refusal

• Employees are entitled to challenge the refusal to an independent statutory agency, in which circumstances the burden on justifying the refusal lies on the employer

This would give people an entitlement of approximately three days a week remote working with the burden of explaining their decision resting on the employer.

The 4-Day Working Week

There is growing interest in the 4-day working week.  In Ireland, a pilot of 17 companies is commencing while internationally the number of state or company-sponsored trials is increasing.  Every week there is news of a new and successful experiment in 4-day working.

The 4-day working week is shorthand for reduction in working hours without loss of pay.  More precisely, campaigners use the formulation 100:80:100:  100 percent of the pay for 80 percent of the hours with 100 percent of the output. There are two key points here.

• First, the reduction of hours should not result in a loss of productivity. To date, studies have shown that reduced hours have led to an increase in ‘per-unit’ productivity.  However, this doesn’t mean that enterprises can maintain the overall level of productivity with hours being reduced by 20 percent.

• Second, a reduction of working hours will impact companies and sectors in different ways. A ‘4-day working week’ does not necessarily mean a three-day weekend for every worker.  It could mean reducing full-time hours from eight to six hours a day; longer holidays; flexible rota and shift work.

However, the results are coming in.  The ILO states:

‘. . . shorter working hours are positively associated with higher labour productivity per hour due to reduced fatigue, increased worker motivation, decreased absenteeism, lower risks of mistakes and accidents at work, and reduced employee turnover. Shorter working hours are also likely to reduce occupational health problems and associated health-care costs and to improve workers’ work–life balance, especially for those workers working excessively long hours. A reduction in working hours, such as a shorter full-time workweek, would also directly address the issue of “time poverty” . . . ‘

A shorter working week could make a significant contribution to reducing the impact of climate change.  The Guardian reported a study in the UK that estimated that

‘. . . moving to a four-day week by 2025 would shrink the UK’s emissions by 127m tonnes, a reduction of more than 20% and equivalent to taking the country’s entire private car fleet off the road.’

The Government has made a minimal contribution to the debate over a reduced working week.  The Department of the Environment is seeking proposals on the feasibility and implications of moving its staff to a four-day working week.  Along with the Department of Enterprise it will fund research into the economic, social and environmental impact of a four-day working week in the Irish economy. 

What is needed is a clear policy objective of reducing working hours consistent with the campaign’s 100:80:100.  This needs to be followed up by a significant state-sponsored trial of how this might work in all the sectors of the economy, with a post-trial assessment of productivity, firm performance, employee health and life satisfaction, carbon reduction and all the elements that a four-day working week would impact.

The Social Wage

The Social Wage refers to the in-work benefits that employees receive; namely, PRSI benefits.  In many instances, employees will receive company- specific benefits (sick pay scheme, maternity pay top-ups, etc.).  However, these are usually associated with high-income companies in the ICT, financial, professional and modern manufacturing sectors.  For example, some companies offer a sick-pay scheme, but most private sector employees don’t have access to such a scheme.    The Social Wage refers to benefits that all employees receive arising from their PRSI contributions. 

 A comprehensive reform of the Social Wage would see a range of in-work benefits converted to pay-related benefits.  In its submission to the Commission on Taxation and Social Welfare SIPTU put forward a range of proposals:

• Jobseekers’ Benefit to become pay-related - 70 per cent of previous earnings

• The Government is introducing pay-related sick-pay but only for 10 days per year and at 70 percent of earnings. This should be extended, in line with other EU countries to 100 per cent of earnings for four weeks within each year. Following the first four weeks, Illness Benefit should be 70 per cent of earnings for up to one year.

• Maternity and Paternity Benefit to be paid at 100 per cent of earnings. A First Year Benefit would allow a parent to take leave for the remainder of the year at 50 per cent of previous earnings. Parent’s Benefit to be paid at 50 per cent of previous earnings for the entire period of leave for Parents’ and Parental Leave.

• All benefits for those unable to work (e.g. Invalidity Pension), should be paid at 70 per cent of previous earnings.

This would provide security for employees during periods of temporary unemployment, illness, family formation, and disability and injury.  There is already movement in some of these areas:  the Government’s new sick-pay scheme referred to above; moves to introduce some type of pay-related element to unemployment benefit; and additional days of parental leave (but unpaid). 

A more comprehensive reform would strengthen the safety net in the workplace and provide security for people in-work.

Collective Bargaining

Last, but certainly not least, is collective bargaining.  Indeed, collective bargaining is the foundation for all the trends and proposals above.  It would help protect the low-paid from work intensification and loss of benefits during the drive to a Living Wage and help prevent employers from issuing frivolous rejections of remote working.  Further, through negotiations, collective bargaining can help ensure that the transition to a 4-day working week and a higher social wage is phased in as efficiently and equitably as possible with the least disruption. 

A key issue is the treatment of gig, or platform, workers along with bogus self-employed.  Though legislation will be necessary, there is much that collective bargaining – especially at the sectoral level – can achieve in promoting the rights, income certainty and living standards of these workers.

We have already seen the benefits of campaigning trade unionism in the example of the Financial Services Union demands for the ‘right to disconnect’.  It led to the introduction of a Code of Practice.  However, it also shows the need for collective representation and agreements to ensure that the code is properly implemented in the workplace.

An overwhelming majority of people believe employees should have the right to collective bargaining.  In a poll commissioned by the Financial Services Union and carried out by Ireland Thinks, the following question was put:

‘Currently employers are not legally obliged to negotiate with the trade unions of their employees. Should employers be legally required to negotiate with their trade unions if employees wish them to do so?’

74 percent agreed that employers should be legally required to negotiate with employees with only 17 percent disagreeing.  This is a substantial majority.

In a recent UCD survey of attitudes towards trade unions in the workplace, people who were not members of a trade union were asked if a vote to establish a union was held in their organisation, would they vote to establish a union.  44 percent said yes.  That’s in addition to the 28 percent who are already members of a union and 16 percent who used to be. 

What was interesting in this survey is that 51 percent of women non-members would vote to establish a union.  More interesting, two-thirds of young people (16-24 years) would support a union in their workplace.

The recent Citizen’s Assembly on Gender Equality called on the Government to establish:

‘. . . a legal right to collective bargaining to improve wages, working conditions and rights in all sectors.’

And the EU Directive on Minimum Wages will require governments to develop specific and concrete policies to raise collective bargaining coverage to between 70 and 80 percent of all employees (only 30 percent of employees are currently covered by a collective agreement).

Not only is there a clear majority for a statutory right to collective bargaining; there is also a desire among people to be represented by unions in their workplace.  The question is whether this government will vindicate that right or whether we will have to wait for another, progressive government to do this

 ***

Were the above reforms implemented in full, it would transform the workplace:  the elimination of low pay, greater work-life balance through remote working and the 4-day working week, greater security through a robust social wage, and greater power to influence decisions in the workplace through collective bargaining.

To realise this transformation, we need three things:

• First, a road map: if we are to achieve these demands, we need a roadmap of action over the next few years to show how they can be implemented. Any one reform would test the adaptability of our enterprise base; implementing them all together would be even more challenging.  All stakeholders – employees, employers and the government – will need to know what to expect and how, together, the reforms can be embedded into a new model of work.

• Second, we need to show how each of these reforms will actually boost economic and enterprise performance. For instance, the National Competitiveness and Productivity Council referred to studies showing that remote working improves productivity in the right policy context. A Living Wage can reduce staff-turnover, recruitment and retention costs while promoting output per the Fair Wage-Effort thesis.  The National Centre for Partnership and Performance shows the productivity enhancements of collective bargaining and greater employee participation in decision-making at firm level.

• Third, we need a new and inclusive narrative. Some of the reforms will appeal to different employees:  Living Wage for low-paid workers; remote working for those whose work can facilitate that; a 4-day working week for full-time employees with many part-time workers wanting more hours (nearly 80,000 part-time workers are under-employed, while over 200,000 would like to work but are not counted in our unemployment stats).

The trade union movement should lead this new narrative as it can develop a platform of different demands that can appeal to the widest alliance of workers.

This is one of the key challenges of the decade – to transform the workplace into a space that provides a decent living standard, greater work-life balance and more personal time; ensures a higher level of security; and empowers employees to exert more influence over what happens in the workplace.

But let’s not assume that ‘common sense’ will propel these transformations.  We can marshal all the arguments but ultimately this is about power in the workplace.  Owners and management have historically shown that they are willing to sacrifice the interests of the enterprise in order to maintain their power.

The momentum is with us – for the time being.   While history can, from time to time, open up windows, these openings may not last long before inertia or powerful antagonistic forces close them again. So we need to act now and climb through the windows before the shutters come down.