Address by Mr Billy Kelleher, Minister for Labour Affairs at the European Foundation for the Improvement of Living and Working Conditions

13 November 2007

I am very pleased to be here at the European Foundation to address this seminar being held to mark the visit of Ms Tarja Halonen, President of Finland, to Ireland.

Here in Ireland globalisation is a theme which dominates our economic and social policy making, both at national and EU level. Globalisation has elicited different responses across the world. It has stimulated competition and brought opportunities to the doorstep of nations. It has also brought fears that intense competition will widen the gap between rich and poor countries and create an increasingly difficult environment for Small and Medium sized Enterprises. Globalisation, therefore, brings both opportunities and challenges. Our task is to, as far as possible, ensure that economic reform and modernisation are combined with social justice and equity.

International Labour Organisation

I know President Halonen, that you are a passionate exponent of the work of the International Labour Organisation and that you were co-chairperson with the President of Tanzania of the World Commission on the Social Dimension of Globalisation which was created by the ILO in November 2001, and comprised nineteen eminent international experts. The World Commission met at a time of persistent concerns over the uneven impact of globalisation on people, the exclusion of many from its benefits and the failure to adequately realise its potential for good. The World Commission was an attempt to build consensus on the key issues to be addressed and the way forward across a range of wide perspectives, among key actors, including business and labour, governments and civil society and among the national and international communities.

The seminal Report of the World Commission was published in February 2004. Its core message called for reform in the governance of globalisation to make it fair and inclusive. It sought coordinated change across a broad front rather than a piecemeal approach. It called for the engagement of all major actors on both the national and international fronts in the implementation of policies and rules which could promote an equitable globalisation in open economies and open societies. It argued that fair globalisation begins at home with the need for effective action at the national and regional levels, that the rules of the global economy needed to be reformed to make them more equitable and inclusive and that ‘decent work’ should become a global goal. In this regard, it argued for greater coherence in economic and social policy and a more effective process of dialogue among actors.

Europe

If Europe is to be a winner in the global world we have to think how we can create a better future for individuals and, ultimately, European economies and society. If we give too much credence to those who are intolerant of globalisation we eventually become introverted, defeatist and ineffective. Individually, and collectively as the EU, we cannot ignore the enormous legacy that the history of opening our markets has bestowed on us in terms of knowledge, innovation and success. We in Ireland have also been winners in this process. The changes that swept through our legislation after we joined the old EEC helped in no uncertain terms to modernise both our society and economy. Having seen the changes and the undoubted benefits these changes brought to a new Ireland, I have no doubt that social Europe is entirely compatable with competitive Europe. Social reform and associated improvements have made the citizens of Europe better off and contributed to the vision of cohesion built into the European Treaty.

Job Creation

In my view, economic and social policy reforms, including labour market reforms, are not mutually exclusive pursuits. There are of course many factors which affect our progress towards these goals. However, in the context of the implementation of an appropriate agenda to meet the challenges of globalisation, I think that we are all aware that women and men throughout the world will see employment as the “litmus test” for the success of globalisation. As stated by the International Labour Office, work is the source of dignity, stability, peace and credibility of governments and the economic system. Since job creation goes hand in hand with enterprise development, it underpins private initiatives and investment.

Here in Ireland we have focussed attention on creating the environment in which employment is fostered and grows. This is the only way in which countries can optimise the benefits of globalisation. However, this is not a question of creating an environment in which growth alone is achieved and hoping that employment follows on from this economic growth. We are also fully aware that growing employment does not necessarily “lift all boats”. It is important, therefore, to ensure that we do not leave people behind in our push for growth.

Social Partnership

In Ireland we have had to strive to achieve outcomes which are fair to the wider society at large. A key aspect of our approach has been to foster, develop and ensure to the greatest extent possible, policy coordination and coherence across a wide policy remit in key cross-cutting areas of economic, employment and social policy. A core element of our approach has been to ground these developments within social dialogue. Social Partnership has become the fundamental element in the formulation and delivery of these core strands of policy in Ireland – a situation and approach which is present, I know, in Finland also. Social dialogue, with all stakeholders taking on their full responsibilities sets the scene for us to pursue and achieve the wider goals in society. In Ireland such principles are embedded in our social partnership model - a tripartite approach encompassing Government, Employer Bodies and Trade Unions - that mirrors that adopted on a wider international scale.

The goals of the Lisbon Agenda are closely reflected in the aims and objectives of the social partnership process in Ireland, not least in terms of economic growth and job creation. Our approach to social partnership has been a major contributor to the attainment of our societal goals. It is an inclusive process that gives a voice and role to many groups including employees, employers and community and voluntary groups.

The key to the success of the Irish partnership model is that it is flexible enough to recognise the wide diversity of situations in employments across the economy, while providing a framework of confidence that is effective in guiding not just wage setting, but all aspects of the employment relationship, in the right direction. For example, concerns were voiced last year about the potential for displacement in our labour market.   Even though the instances of concern about exploitation and unreasonable behaviour affected only a small number, we do need mechanisms which provide confidence about decent standards and fairness, without compromising flexibility or adding unreasonably to the burdens of regulation of the labour market.   That delicate balance requires the active engagement of all of the parties to our employment system. 

The social partnership process provides precisely that framework.   The outcome of recent partnership negotiations in respect of employment standards, which includes new legislation as well as the establishment of a National Employment Rights Authority, represents a very fair balance between the competing legitimate interests and objectives. It will provide confidence for the future in a very rapidly changing labour market, while also ensuring that Ireland continues to provide an excellent environment for business and job creation.

The social partnership process in Ireland has, therefore provided a good mechanism for balancing flexibility and security. This has been recognised by the Commission and has been given as an example of how “flexicurity” policies can work. There are different models of flexicurity and much has been achieved in Ireland under the heading of flexicurity without us actually calling it that. The Commission Communication emphasises the need for social dialogue in the development of flexicurity policies and the European Social Partners recently agreed joint recommendations on reconciling flexibility and security. Our experience here has shown that tripartite engagement is essential and the well-established partnership process will, I hope, continue to provide the appropriate mechanism in Ireland to achieve the balance between flexibility and security.

Innovation and Change

In an increasingly global world, innovation is essential to safeguard and deliver high-quality jobs, successful businesses and better products and services. The quality of Irish workplaces and their levels of innovation and change are, therefore, critical to Ireland’s ongoing transition to a more dynamic, highly skilled and knowledge-based economy. The Taoiseach launched The National Workplace Strategy in 2005 to focus on stimulating workplace change and innovation. The National Workplace Strategy is the Government's blueprint to transform Irish workplaces into 'Workplaces of the Future' with action currently being concentrated across five strategic priority areas - Commitment to Workplace Innovation; Capacity for Change; Developing Future Skills; Access to Opportunities; Quality of Working Life. The Strategy also recognizes the critical role that social partnership can play in this process.

The National Workplace Strategy identifies the need for greater innovation in products and processes but also the need for more organisational innovation and related improvements in internal workplace cultures. It also highlights the need for improvements in organisational culture that facilitate the delivery of higher quality services in private, public, community and voluntary sectors. The Taoiseach more recently announced the establishment of a Workplace Innovation Fund, accessible to individual companies and the social partners, which is being used to enhance the capacity for strategic change across Irish workplaces.

Labour Mobility

Mobilisation of skills across the EU has now become crucial as Europe aims to meet the goal of the Lisbon agenda and become the most dynamic and competitive knowledge-based economy within the new ‘global’ economy. The labour market in Ireland is currently buoyant, with the total numbers of people in employment in the State reaching over 2 million for the first time in our history. However, it is important that we are not complacent and continue to work to maintain and develop a dynamic economy that responds effectively to the evolving demands of international competitiveness. Ireland is fully committed to playing our part in managing the EU transition to knowledge-based investment. In May 2004 we, along with the UK and Sweden, opened our borders to the workers of the 10 new Member States. The success of this policy has been remarkable. Today, 240,000 in Ireland’s workforce are foreign nationals and almost half of those are from the new member states. The presence of these workers has made a significant contribution to our economy and society, helping to maintain economic growth at rates way above the European average and addressing labour and skills shortages. A continuing challenge for the Irish labour market is to bring in from outside the European Economic Area (EEA) those skills which we cannot source from within the EEA and which we need to progress our economy to one that is knowledge-based and innovation-driven. Our implementation, earlier this year, of a new green card system for high skilled non-EEA nationals was an important initiative in this regard.

There is no doubt, however, that with labour mobility comes responsibilities. I am talking here about areas such as, education, public services and housing. The current economic climate offers Ireland opportunities to not only reform its immigration programmes, but also a key challenge in implementing a robust integration strategy. Our positive early experience of migration does not automatically mean that migrants will integrate sufficiently into Irish society or the Irish economy. A vibrant civil society is pivotal to successful integration. Therefore, in working towards integration we should be adapting our mainstream policies and services, rather than creating separate services for migrant groups. How do we successfully adapt social policy to the needs of a growing and increasingly diverse population? This growing scale and diversity provide the overarching context for future policy making. Integration is a process that is multi-dimensional. We therefore need to deal with the economic and social issues which it raises in a way that is `joined up’. We also need to be flexible in the way that we respond to changes and issues as they arise

Ireland is now at an exciting moment of transformation which, if well managed, can bring better, more adaptable services, provided by people who feel increasingly confident in their ability to address the needs of a more diverse Ireland.

Conclusion

Reacting to the relentless pace of globalisation, we have to ensure that Ireland, together with our EU partners, work hard within the Union to deliver growth and jobs in a world where the competition is growing ever stronger. We must not turn our backs on the inevitable trend towards greater globalisation. Each country has to find its own pathway to success. I think conferences like today’s play an important role in helping us to find that pathway to success. 

Thank you all very much.