The Irish model in the Caribbean Part II
Jean-Paul Révauger
Université de Bordeaux
UMR CNRS 5222 Europe, Européanité, Européanisation.
Negotiation: The Irish way.
The demonstrations were peaceful, but very well attended and the atmosphere was tense. The negotiation process which started then was complex: on the one hand, the social partners and government, on the other hand the government and the IMF.
The strategy adopted at this point by the three partners, government, Unions and Employers, was akin to that chosen by Ireland a few years before, in 1987. Whether a symbolical or emotional link can be found between this influence and the significant contribution of Irishmen to the history of Barbados is open to question. At that time, the rise in the Irish inflation rate, the weakening of growth, the explosion of public deficits seemed very ominous signals. Rather than embark in a policy of retrenchment and austerity, the Irish social partners opened far reaching negotiations, which led to a series of national agreements. The first one, known as the Programme for National Recovery, covered the period from 1987 to 1990, the second one “the Programme for Economic and Social progress” from 1990 to 1994, and, every three years, a new agreement has been signed ever since. The Irish agreements combined advances in conditions of employment and consultation, reducing labour market flexibility, with wage moderation. The deals are one of the conditions for the success of the Celtic Tiger in the 1990’s, and similarities with Barbados are evident. In both cases, wage moderation went along with the improvement in the security of tenure. Both nations are quite small and have a strong sense of identity. Both nations adopted extremely liberal approaches, as far as regulation of the private sector and taxation are concerned, and social-democratic , protective practices towards their labour force. Cynics will also point out that there is indeed a large amount of labour market flexibility in both countries, but the brunt of it is taken by immigrants: Very large numbers of East Europeans flocked to Ireland throughout the decade, and Barbados has a large, more or less legal immigration from Caricom countries, especially Guyana, which is not totally covered by the tripartite agreements. The figure of 30 000 Guyanese has been repeatedly given, although this is unofficial.
Barbadian social partners chose the same way and opened negotiation, in the midst of a “national emergency”, and in a dramatic climate. There was also direct contact between the BWU and the IMF representative, “a German by birth” described by Le Roy Trotman as “a model of bureaucratic firmness and strict policy adherence”. The atmosphere must have been somewhat heavy, since the BWU “requested Barbados to see itself as being a country under invasion by the IMF and the World Bank”. Sir Trotman, in the great tradition of Trade Union leadership, is a master in rhetoric. In any case, the national issue and the social one, were, once again, undistinguishable, the BWU was fighting invaders.
The two negotiations went on simultaneously, the whole objective of the tripartite one being to influence the bilateral one with the IMF.
In practice, the tripartite negotiation was successful in two ways: it helped persuade the IMF that Barbadian social partners were seriously trying to embark on a new course on the one hand. On the other hand, it triggered a process which has since acquired an impetus of its own. The first protocol between employers, Unions and the government covered the period from April 1993 to March 1995. It was indeed followed by 4 others, the 5th one ending in 2007. Naturally, the protocol was welcomed and heralded by the ILO and the epistemic community of industrial relations specialists, as a victory of good sense and partnership over confrontation. The ILO did its utmost to spread the word and encourage other Caribbean countries to emulate the Barbados social partnership schemes, even though it is well aware of the different contexts. With hindsight, the leading participants in the process consider it as a major success.
It is significant the major decision of Protocol one should have been to maintain the exchange rate parity with the US dollar – a decision which was in fact taken by the IMF, not Barbadians. This symbolical commitment was nevertheless important, in the eyes of Barbadians: the protocol would be null and void if this was not implemented. The IMF relented, and the parity was maintained, to this day.
The provisions of protocol one included putting the stress on:
- tri partite procedures,
- the importance of competitiveness “to enhance national performance, so as to attract investors”
- the need to provide the right to employment, and to reduce the threat of social dislocation caused by an unacceptable high level of unemployment,
- the promotion of mechanisms which will achieve restraint in wages.
Practical commitments included:
- establishing a framework which protects workers’ security of tenure and seeks to reduce labour disputes
- any increase in wages to be made only in terms of profit sharing or productivity bonuses
- a general freeze on wages, except where they are substandard
-collective bargaining to continue on conditions of work
- the setting up of a productivity board.
On the whole, the protocol was fairly balanced, and all three sides made significant concessions. For the Unions to accept wage cuts, a general wage freeze, redundancies, and the linkage between productivity gains and wage increases in the future represented a major effort. For employers, to commit themselves to security of tenure and profit sharing meant a lot. For the government, to let the social partners intervene in the field of macro economic policies, and to commit itself to the reduction of unemployment – in a post Keynesian context which no longer gave priority to this issue- was also very significant. Critics, on the government side, pointed out the fact that social partners were influencing government policy, and, to a certain extent, going beyond their normal functions, and exceeding their commission. Cynics might say that the most painful measures had been imposed by the IMF anyway, and the Unions had no choice. This might be the case, but the Unions had so far opposed such measures, and their about-turn was difficult to explain to their own rank and file.
The most salient features of the protocol were certainly the fact that all three signatories had reached a common position, and committed themselves to improve productivity. The text was a political one, even though the gist of it concerned social and economic issues. This is the reason why Protocol one, which was designed to mitigate the effects of a major economic crisis and somewhat circumvent the IMF, was followed by 4 others, which gradually institutionalized and broadened the social partnership. The momentum must not be lost, since both domestic agents and international institutions must maintain this positive image of Barbados, the land where social partners behave in reasonable ways, set aside their differences in times of national emergency, and strive to improve productivity.
One may naturally wonder whether the Unions, by accepting wage cuts and redundancies, did not go “too far” and forget their essential mission, the defence of workers’ interests. The Barbadian situation is in fact highly paradoxical. On the one hand, the BWU, which is by far the biggest union, and dominates the scene, embarks on communication campaigns on the theme of “productivity”, encouraging its members and other workers to improve their efficiency , using rhetoric one would expect in Japanese quality circles. This is the case for example during the “Week of Excellence”, a rhetorical exercise Barbados indulges in once a year. Such participation would send shivers down the spine of many foreign trade unionists, who are more accustomed to confrontational approaches, and the nitty-gritty of daily bargaining. On the other hand, the BWU remains a tough nut to crack when conflicts do arise, and it is even taken to task by some observers, who reproach it with not playing the card of social partnership, in practice, but indulging in confrontational tactics. Interestingly, the leader of the Employers organisation, when interviewed by the author on the subject, considered the BWU’s toughness, and even sometimes fiery rhetoric as quite normal, and part of the role play: “they have a constituency to serve”. There was no complaint at all on his part. The BWU is therefore straddling two roles at once, and is probably equally genuine in both. Needless to say, the fact it largely dominates the scene, and there is no competition between rival unions, as is the case in Trinidad, Martinique, indeed France, and Jamaica, enables the BWU to take such risks. This makes the replication of the Barbadian Protocols difficult.
Consolidating social partnership.
The following four Protocols were not different in substance from the first one, but institutionalized the process and broadened it to other areas, and, in some cases, went further than the first one in the areas already covered. The point was to keep the impetus, but also persuade observers and citizens that Protocol one would not be a flash in the pan, but that the efforts would be maintained in the long term. Stability is indeed one of the key assets of Barbados, and one of its comparative advantages in the region. The second protocol created a permanent secretariat, in charge of monitoring the implementation of the deal, whereas the first one only made provision for regular meetings of the signatories. The decisions on wages were less stringent, since wage “freeze” gave way to wage “restraint”, which made increases possible. Indeed, after 1996, wages started rising again, albeit moderately. Share ownership was introduced.
Protocol Three (1998-2000) was much more detailed. It introduced a reference to the private sector which amounts to a political endorsement of the market economy, and balances the more social democratic elements:
“The Social Partners accept that the success of the private sector is an important element in the continued economic growth of Barbados, and agree to the development of such strategies as would strengthen the potential for expansion by the entire private’ sector;” This is largely a rhetorical exercise, since Barbados is a free market economy anyway, and no significant political force advocates any other option. Nevertheless, this commitment was emphasized in the next protocols as well. A statement expressing the joint commitment to employment and harmony was balanced by a reassertion of managerial prerogatives (4.3). Very detailed procedures were introduced, for dismissals and the impact of new technologies.
Protocol 4, put forward by the government under the form of a glossy brochure, was even more detailed and broad. It introduced reflexions on globalization, which probably reflected both the original concern for IMF pressures, and a renewed interest in international negotiations. The emphasis was also laid on small and micro enterprises, i.e. self employment. The latter option is not just a common feature of the Caribbean. In the case of Barbados, resorting to self employed service providers is a way of solving one of the worst plagues the economy suffers from: absenteeism. Absenteeism is rife in large or medium size organisations, such as hotels, where employees can be off work without providing any justification, for 7 days in the year. Since many consider this as a right, productivity is affected, overtime must be paid and overstaffing is common, so as to compensate the absence of employees. Self-employed workers are only paid if they perform. Self employment is therefore a way of improving productivity. The protocol also dealt with health in the work place, disability, taxes, pensions and the environment.
Finally, Protocol Five, 54 pages long, available on the Internet, covered the period 2005-2007. It expands the previous provisions, stating for example its commitment to the success of the Caricom Single Market and Economy, and welcoming the creation of a Caribbean Court of Justice. Typically, it states: “the Social Partners support current measures to improve the regulatory framework in which business in both the private and the public sectors is conducted in Barbados. The Partners recognise that while fair and balanced regulations are necessary, every effort should be made to ensure that these regulations support a culture of entrepreneurship”. This is a vibrant plea in favour of what Germans would have called the “social market economy”, and what some Europeans consider as the political compromise at the heart of the European models.
The most extraordinary provision is probably article 4.4, stating that national employment policy “should provide adequate safeguards against recourse to contracts for a specific period of time, whose effects are designed to run counter to the purpose of such a policy and so negate the intended protection of workers’ security of tenure” This amounts to a rejection of fixed terms contracts, the French CDD, which has become the norm in France, and in the French DOMs. It is the most dramatic consequence of the introduction of flexibility in this country, and it has destroyed security of tenure for millions of workers. In practice, fixed term contracts are not the norm in the UK either, where flexibility has mostly taken the form of part time work. Barbados can obviously do without fixed term contracts, and flexibility takes again other shapes, probably thanks to the 30 000 semi legal Guyanese workers working in the country (over 10% of the population).
Conclusion.
The significance of the Protocols in terms of domestic policy is self evident. Social partnership is now part of the Barbadian model. Social regulation is successfully managed even though some issues, in particular equal access to health care, have not been totally solved. In regional and international terms, the Barbadian way enables us to classify Barbados in a special category, that of countries adopting on the one hand extremely liberal approaches in one, or several areas, and absolutely social democratic, “European” ones in others. It is a hybrid: a liberal economy, and well regulated industrial relations and labour markets. In the same way, Hong Kong has a 100% liberal approach to the economy, but regulates land ownership and property in a way more akin to socialism. Ireland, like Barbados, has gone very far in following the recommendations of the ILO in terms of industrial relations and social partnership, but is more liberal than many other European countries in more ways than one, and is obviously keen on preserving its identity within Europe. The cultural framework for industrial relations in Barbados might be originally British –a feature it shares with Ireland and Hong Kong- the current policy mix is undoubtedly very novel.
Whether the experience of Barbados can be replicated in the Caribbean is open to question. The ILO, experts, and men of goodwill have tried, and are still trying to spread the word, and draw on the experience of Barbados – and Ireland- to improve industrial relations in their own countries, and develop the practice of social negotiation. Indeed, an Irish expert will be touring Jamaïca in 2009 , and a Jamaican Think Tank is currently working on the experience of social partnership. In Martinique, the authorities have tried to change the climate of industrial relations, and encourage mutual respect between the social partners. This was the objective of the Rencontres de Madiana, initiated by the Direction Départementale du Travail, in 2000. In Trinidad, a place where industrial relations are traditionally robust, employers are culturally closer to the Texan model than the Swedish one, and Unions are divided. It has attempted to work on a protocol, only signed by a small fraction of Unions. There is naturally a political and ethnic dimension in this, both domestic and international. The old Oil Workers Trade Union was traditionally influenced by “class struggle” unionism, and associated with the opposition to the PNM, and with Indians. The context of Jamaica is again very different. The prospects for a mechanical replication of the protocols are therefore not very good. However, the core of the problem is elsewhere. The Protocols were and are a method for improving social regulation, and for combining economic success and social concerns, in a way which safeguards and extends the country’s leeway and national independence. The whole of the Caribbean shares this “emancipatory” objective, but other countries might use other methods, such as mixing private enterprise and a major state sector, or establishing good quality universal public services alongside a thriving private sector. Regional organizations, such as Caricom or indeed the EU, have become accustomed to adopting targets and objectives, but leaving a large degree of flexibility in their implementation and the methods national governments will use. Even in the era of globalization, and regional integration, national contexts must be accounted for, and policies only succeed when they are rooted in them. Barbados is a case in point.
Programme for National Recovery: http://www.taoiseach.gov.ie/attached_files/Pdf%20files/Program%20for%20Nat%20Recovery.pdf
Programme for Economic and Social Progress: http://www.taoiseach.gov.ie/attached_files/Pdf%20files/ProgramForEconomicandSocialProgress.pdf
See: National Centre for Partnership and Performance. http://www.ncpp.ie/
The International Labour Organization has been very positive about the Irish way. See Paul Teague, Mary C. Murphy Social Partnership and Local Development in Ireland: the Limits to Deliberation. ILO, Geneva, 2004.