The EU recovery plan must link company bailouts to enforcement  of collective-bargaining rights.

Late last month Micheál Martin was hailed taoiseach (prime minister) of the Republic of Ireland in a an unprecedented power-share. If this delicate government is to survive, it must among other things redress the power imbalance between workers and multinational corporations. The European Union must seize the opportunity of the recovery to help Ireland address its woeful track record on collective bargaining.

The need for decisive government intervention is stark. As working families face a historic housing crisis across the country—linked to a severe under-supply of social housing—Ireland has the second highest incidence of low pay in the EU, affecting 23 per cent of workers in 2019. By contrast, last year also saw Ireland register the highest growth in gross domestic product in the union, for the third year in a row. Recent research by Oxfam indicates that Ireland also has the fifth largest number of billionaires per capita in the world.

Distorted distribution

Why are so many people excluded from the benefits of such exceptional economic growth? While the tax-haven opportunities Ireland offers multinationals inflate its GDP, an important driver for this distorted, unequal distribution has been the active suppression of wages and conditions at work.

Ireland stands out as the only western-European EU member that does not have binding collective-bargaining legislation. While in other EU countries workers have a real say over decisions that affect them, in Ireland these rights are consistently disregarded by corporations with impunity.

Irish laws leave it entirely up to employers whether or not to recognise and negotiate with workers’ trade unions. Removing the setting through which workers have a say gives the green light to corporations to treat the interests of the workers they rely on as an afterthought.

A few days before the new government was finally formed, after months of negotiation, minimal legislation to set minimum-wage floors across sectors was struck down in court. This has left the poorest and most vulnerable workers even more exposed, at a time when they need protection most.

Left with nothing

The light at the end of the Covid-19 tunnel was recently extinguished for a thousand retail workers. Their employer, the UK-based department-store chain Debenhams, announced it would not reopen its shops in the republic after the crisis, leaving workers with a combined 10,000 years of service to the corporation with nothing.

Workers and their union, Mandate, are leading efforts to hold the corporation to its commitment on redundancy pay. The fact that workers are stripped of any rights to enforce such commitments—allowing liquidators to prioritise payments to other parties over payments to workers—is an aberration the incoming government must urgently address.

This systematic undermining of workers’ rights is part of the appealing package with which Ireland has been attracting the predominantly US-based transnational corporations which have located Europe offices there over the past decade and more. Many have brought highly sophisticated union-busting practices.

Shared prosperity

Collective bargaining is the backbone of the European social model. It lays the foundation for shared prosperity and keeps inequality at bay. From the workplace to sector-wide, it ensures working people have a say in decisions that shape their lives, embedding democracy in everyday decision-making. It redresses the balance of power between the great majority of people who work for a living and the powerful minority who reap vast wealth from what they own.

This balance was achieved through sweat and blood—out of the widely abusive conditions in the industrial revolution and the ensuing great social upheavals, collective-bargaining rights were born. We are at a crossroads: either the EU allows a descent back into widespread industrial injustice and conflict or it steps in to restore our common European social heritage.

Other EU countries must call time on Ireland leading the race to the bottom on workers’ rights and tax justice. One early test will be the outcome of the Eurogroup’s current presidency campaign, in which Ireland’s minister for finance, Paschal Donohoe, is a major contender. In a remarkable commitment to Ireland’s role as a tax haven, Donohoe infamously led the campaign against the European Commission seeking to cancel its ruling that Apple should pay Ireland €13 billion in uncollected tax.

Instead of rewarding such destructive behaviour, the EU must work with the new government to change the country’s course. The commission’s recovery package is an ideal opportunity to do so. By making bailout funds to private companies conditional on the signing of collective-bargaining agreements with workers, it can restore faith in the European project and improve conditions for millions of working people.

While social dumping is unravelling working people’s hard-won rights, fiscal dumping is draining the public purses of countries across the union. EU leaders must seize the moment and act decisively to help Ireland find its way at this crucial time.