623 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 623 • let. 61, 3/2024 03 Marko HOČEVAR* INDUSTRIAL RELATIONS AND LABOUR MARKET POLICIES IN IRELAND, PORTUGAL AND SLOVENIA: FROM INSTITUTIONAL DIVERSITY TO POLICY SIMILARITY?** Abstract. The article explores three countries with different industrial re - lations institutions: Ireland, Portugal and Slovenia. It focuses on the tra- jectories these countries have taken since the mid/late 1980s and compares the developments in their respective industrial relations systems, the role of their tripartite social dialogue bodies, and labour market policies. The article reveals similarities among the countries in their pursuit of indus- trial relations liberalisation and greater labour market flexibility. How- ever, it also shows an opposite movement in these countries since 2015 and provides an explanation for these developments. The article thereby contributes to the different discussions in the field of comparative political economy dealing with the varieties of capitalism, institutional convergence and divergence, and the neoliberalisation of different industrial relations systems. Keywords: varieties of capitalism, industrial relations, labour market, politics, EU. INTRODUCTION The differences, similarities, changes and path dependency in capitalist eco- nomies have been among the most explored topics in the last few decades. A shift was seen in this field away from assuming that different histories and institutions lead to different policy outcomes (Iversen et al. 2000; Hall and Soskice 2001a; * Marko Hočevar, PhD, Assistant Professor and Postdoctoral Researcher, Faculty of Social Sciences, University of Ljubljana, Slovenia, e-mail: marko.hocevar@fdv.uni-lj.si. ** Research article. The article was written as part of the project: The Changing Role of the State: State and Emplo- yment Policy in the Context of the COVID-19 Crisis (Z5-3221), funded by the Slovenian Research and Innovation Agency. DOI: 10.51936/tip.61.3.623 624 TEORIJA IN PRAKSA • Marko HOČEVAR 624 TEORIJA IN PRAKSA Amable 2003; Coates 2005; Crouch 2005). Scholars have namely considered and explained the similarities between different countries and the institutional and/ or policy convergence between them within the broader neoliberalisation of the capitalist social formations (Streeck and Thelen 2005; Streeck 2009; Streeck 2010a; 2010b; Baccaro and Howel 2011; 2017). This article looks at three different, semi-peripheral EU member states: Ire- land, Portugal and Slovenia. Following the works of Streeck (2009), Baccaro (2014) and Baccaro and Howell (2011), we examine developments concerning industrial relations institutions as well as the specific labour market policies and policy outcomes in the three countries over the last 35–40 years. We argue that, despite important differences between the countries, we can observe consider- able similarities in their industrial relations systems’ trajectories from the late 1980s onwards, as well as in their labour market policies and policy outcomes. This certainly does not mean the institutions or policies in these countries have been the same, but that the policy goals and policy outcomes have often been very similar. We identify two different periods common to the countries under study: 1) since the mid/late 1980s until around 2015, one can identify some important policy similarities among the countries towards more liberalisation of industrial relations institutions, despite the notable differences in their institutional set- tings; and 2) the changes that have occurred since 2015 and during the COVID- 19 pandemic in the three countries demonstrate a shift in the policy goals and institutional arrangements. Within Polanyi’s framework (2001) of the double movement in capitalist societies – a movement for greater marketisation and lib- eralisation and the opposite movement for more pro-social policies, we explain the different internal and external factors that have led to more liberalisation in the industrial relations systems in these countries, while also detecting import- ant changes after 2015 which have at least temporarily halted or even reversed the liberalisation processes. Following the introduction, we situate our analysis within the comparative political economy literature and describe the theoretical and methodological framework. In the third section, we explore the OECD/AIAS database and provide a quantitative overview of changes regarding the industrial relations institutions in the three countries. The fourth section presents a more in-depth analysis of the industrial relations institutions and labour market policy changes in Ireland, Portugal and Slovenia over the last 35–40 years. In the discussion, we compare the three cases and identify the biggest structural forces that caused industrial relations institutions changes and the main rationale for the labour market policies implemented. The concluding section reflects on the identified policy and institutional trajectories relative to both the comparative political economy (CPE) literature and the changes witnessed since the outbreak of the COVID-19 pandemic. 625 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 625 • let. 61, 3/2024 THEORETICAL AND METHODOLOGICAL FRAMEWORK The publication of Andrew Schonfeld’s (1965) book Modern Capitalism, which analysed the differences between interventionist nation states, led to the focus on differences between nationally organised capitalist economies becom- ing dominant in the field of CPE. A similar work by Dore (1973) followed, while Katzenstein’s edited volume Between Power and Plenty (1976) considered different national strategies and responses to the oil shocks of the early 1970s. Schmitter’s work emphasised the importance of a different design of corporat- ist institutions (Schmitter 1974); Korpi and Cameron studied the importance of the strength of the working classes (Korpi 1978; 1983; Cameron 1984), Zys- man (1983) analysed the role of different financial institutions, while Soskice (1990) and Swenson (1991) explored the importance of employer institutions and their coordination; Piore and Sabel concentrated on flexible specialisation and post-Fordist production (Piore and Sabel 1984). Sorge and Streeck (1988) looked at the competitive advantages of German products and industrial output. A range of volumes appeared in the 1990s and early 2000s (Stallings 1995; Berger and Dore 1996; Crouch and Streeck 1997a; 1997b; Coates 1999; 2000), which analysed different countries and all pointed in the same direction – important differences could be found among politico-economic regulations in various countries around the world. Still, the book with the largest impact on the study of (institutional) similarities and differences between nationally organ- ised capitalist economies appeared in 2001, namely Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, edited by Hall and Soskice (2001a). In the introductory chapter, their “firm-centered” approach is presented, viewing companies and employers’ strategies as crucial for determining insti- tutional and national capitalist developments (Hall and Soskice 2001b, 6). Hall and Soskice claimed that employers focused on the comparative advantages and supported certain policies that helped sustain and enhance the comple- mentarity of different institutions so as to achieve greater efficiency. The differ - ences between countries thus exist due to the specific institutional structures and the consequent search for complementarity and efficiency within different national economies. The edited volume argued that differences can be estab- lished between “market economies” – instead of capitalism, they spoke about national market economies – with two main types: liberal market economies (LMEs) and coordinated market economies (CMEs). The prototype of LMEs was to be found in the USA and the UK, while the concept of CMEs was developed on the examples of Germany and Japan. Notably, some countries were referred to as a third type for being more ambiguous and not fitting the two ideal types, also labelled as the “Mediterranean” type. The apparent functionalism, a-historicism, neglect of the topic of class and power, and technocratic efficiency approach generated a lot of criticism (Blyth 2003; Becker 2007; Streeck 2010a; 2010b). The neoliberal transformation of 626 TEORIJA IN PRAKSA • Marko HOČEVAR 626 TEORIJA IN PRAKSA economies and societies, aimed at more workfare together with greater liber- alisation and flexibility in the labour market, were pushing scholars to analyse concrete policies and policy outcomes, as well as the specific trajectories of change in institutions. Thelen (2012; 2014) developed a more nuanced articulation of the institu- tional and policy framework of the Varieties of Capitalism (VoC), while arguing for “varieties of liberalisation”. Within the dualism of coordinated and allegedly egalitarian capitalism, and liberal and inegalitarian capitalism, she stressed that it is very difficult to grasp the possible differences and rising inequality within coordinated capitalism, and also some of the strategic coordination that exists in highly unequal societies. She argued that liberalisation “can take many forms and occur under the auspices of different kinds of social coalitions – with implic- ations for distributive and other outcomes” (Thelen 2012, 147). Streeck (2009; 2010a; 2010b) and Baccaro and Howell (2011; 2017) argued that if one were to understand capitalism as a dynamic, class-power-relation-based and profit-driven, inherently unstable mode of production, one would see that the neoliberal (r)evolution has been leading to very similar policy trajectories in very different countries with very different institutional settings. Institutional divergence is accordingly completely compatible with policy convergence. It can often happen that a “cross-sectional comparison, looking at different systems at the same point in time, may find lasting differences between them while in real- ity they are moving on the same historical trajectory but with a time lag keeping them apart” (Streeck 2009, 168). The converging path becomes more obvious if one focuses on policy outcomes in the areas of industrial relations, social policy, and giving more power to market actors in the liberalisation of economies, with such outcomes being produced by distinct institutional designs in various national settings. The liberalisation of industrial relations institutions, aimed at greater employment and labour market flexibility, has been a key feature of the neolib- eral revolution in industrial relations systems (Baccaro and Howell 2011; 2017). Yet, this does not mean that neoliberal policies became prevalent everywhere in a similar way or at the same time (Harvey 2005). The neoliberal revolution in the industrial relations field has been a “protean project, compatible with a wide range of institutional forms and achievable via a number of different causal paths” (Baccaro and Howell 2017, 17). This does not suggest that the rise of neoliberalism led to the complete abandoning of corporatist institutional designs and the rise of disorganised plur- alist policy networks. Baccaro (2014) argued that corporatist structures were not abolished during neoliberalism, but altered. Although this new corporatism was institutionally and structurally very similar to the old corporatist arrangements of the post-Second World War period, “[i]t no longer provided a fundamental alternative to mainstream liberal capitalism. If anything, it helped politically vulnerable governments to adjust to it” (Baccaro 2014, 224). Convergence in the 627 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 627 • let. 61, 3/2024 era of neoliberalism means a remaking of the existing institutions in a way that produces similar policy outcomes rather than setting up the same institutions everywhere (Baccaro and Howell 2011, 526). Methodological note Within the framework explained above, when one considers Ireland, Por- tugal and Slovenia important differences emerge. According to the ideal-typical definitions, Ireland has been a specific case of LME, Portugal a Mixed-Market Economy (Mediterranean type in the VoC terminology), while Slovenia has usually been viewed as an ideal-typical case of CME (Esping-Andersen 1990; Hall and Soskice 2001a; Boucher and Collins 2003; Kolarič 2012; Crowley and Stanojević 2011; Koukiadaki et al. 2016; Campos Lima 2019). Nevertheless, this article takes the VoC presumptions only as a starting point. In what follows, we show that the trajectory of the institutional and policy developments has, on one hand, been very similar among the three countries, while identifying two dif- ferent periods: 1) the period until 2015–2017, when there was a clear converging trajectory towards greater liberalisation and decentralisation in the industrial relations systems of the three countries aimed at employment and labour market flexibility; and 2) since 2015–2017, when a qualitatively different yet once again shared path may be observed, which has, at least temporarily, halted any further liberalisation and decentralisation of their industrial relations systems. ANALYSIS OF QUANTITATIVE DATA ON INDUSTRIAL RELATIONS INSTITUTIONAL CHANGE In this section, we present an overview of different data regarding industrial relations institutions in the three countries. The different institutional changes and shifts that occurred in these countries between the early 1980s and 2019 are investigated. 1 We analyse data for the following indicators: 1) trade union density; 2) the density rate of employer associations; 3) adjusted collective bar- gaining coverage; 4) predominant level on which wage bargaining takes place; 5) the combination of levels on which collective bargaining over wages takes places; 6) the centralisation of collective bargaining; 7) the coordination of wage setting; and 8) the type of coordination of wage setting. 2 The data analysed in this section are from the Database on Institutional Characteristics of Trade Uni- ons, Wage Setting, State Intervention and Social Pacts (OECD/AIAS 2021a), as developed by Jelle Visser. Central elements for understanding particular national trajectories and changes in industrial relations institutions are the trade union density rate and employers’ association density rate. Namely, the post-Second World War Fordist 1 Here we follow the well-known studies and analyses of Wallerstein et al. (1997) and Baccaro and Howel (2017). 2 For the codes for all these variables, see the codebook for this dataset (OECD/AIAS 2021b). 628 TEORIJA IN PRAKSA • Marko HOČEVAR 628 TEORIJA IN PRAKSA compromise was primarily secured with the assistance of very strong trade uni- ons with high density rates, which served as a specific mobilisation capacity for the unions to negotiate and gain more rights and higher wages, while also influ- encing the strong push for higher coverage with collective agreements, spreading the gains and rights across the working class in general. Table 1: UNION DENSITY RATES (5-YEAR AVERAGE): IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland 57.0 51.66 50.44 42.8 34.9 31.48 29.62 24.46 Portugal 47.2 41.2 29.3 25.9 21.07 20.73 19.1 15.7 Slovenia 63.2 46.52 43.4 34.08 30.34 23.8 Source: OECD/AIAS 2021a. The data presented in Tables 3.1 and 3.2 reveal two very distinct trends: a sharp decline in trade union density rates and a much slower decrease, stag- nation or even increase in employer associations’ density rates. The slowest decline in union density occurred in Ireland, whereas the fastest decline may be observed in Slovenia. In Ireland, from 1980 until 1984 the average yearly density rate was 57% and remained above 50% until the 5-year period between 1990 and 1994. Since 2004, the three 5-year averages point to a much slower decline than before. In Portugal, the density rate was already below 50%, while over the next 5-year periods it continued to decline. Uniquely among the post-socialist coun- tries, Slovenia averaged very high density rates throughout the 1990s. Yet, after the country ended its transition and became an EU member state, the density rate began to fall steeply. 3 In contrast to the union density rate, the density rate of employer associations has not decreased as steeply. In Ireland, it even rose from the mid-1980s until the last 5-year period. The density rate in Portugal remained stable throughout the 40 years at around 50%. The density rate in Slovenia is also interesting – up until 2006, mandatory membership in employers’ associations was in force, while after that was abolished it dropped, but remains above 70%. 3 The density of the public sector remained much higher than in the private sector in the three countries (Stanojević et al. 2023; Maccarrone and Erne 2023; Campos Lima and Naumann 2023). 629 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 629 • let. 61, 3/2024 Table 2: DENSITY RATES OF EMPLOYER ASSOCIATIONS (5-YEAR AVERAGE): IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland / 48.7 49.55 52.0 59.7 67.7 / 71.2 Portugal / 53.0 51.2 52.2 53.3 / 50.03 / Slovenia / / 100 100 100 84.8 75.1 72.6 Source: OECD/AIAS 2021a. If we focus on the collective bargaining coverage rate (Table 3) in different 5-year periods, an important reduction in all three countries becomes apparent. Ireland has seen a large decrease from 70% to around 35% in the last decade. While Portugal initially experienced a rise in the coverage rate, it has been slowly declining over the last 15 years. In Slovenia, the situation was different since the obligatory membership in employers’ associations meant the initial coverage rate was close to 100%. However, after 2006 voluntary membership was introduced and the coverage rate started to drop, reaching below 80% in the last decade 4 . Table 3: ADJUSTED COLLECTIVE BARGAINING COVERAGE RATES (5-YEAR AVERAGE): IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland 70.0 70.0 62.8 57.8 44.2 41.1 / 34.0 Portugal 71.5 75.0 75.3 80.26 81.9 86.7 80.38 77.22 Slovenia / / 100 100 100 90.0 67.3 72.33 Source: OECD/AIAS 2021a. Data for the indicator concerning the predominant level on which wage bar- gaining takes place are presented in Table 4. The predominant level means that on this level at least two-thirds of the total bargaining takes place in a given year. The data presented in the table show that in all three countries an important decrease has happened in the last four decades. 4 The average between 2005 and 2009 for Slovenia is calculated as the average from 2005 until 2010 because in 2005 and 2006 the coverage rate was 100% due to the obligatory membership in employers’ confederations, but then before 2010 no data are available and thus we calculated the 2010 data, which was 70%, and divided it by three. 630 TEORIJA IN PRAKSA • Marko HOČEVAR 630 TEORIJA IN PRAKSA Table 4: THE PREDOMINANT LEVEL ON WHICH WAGE BARGAINING TAKES PLACE (5-YEAR AVERAGE): IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland 1.8 3.4 5 5 5 4.2 1 1 Portugal 3 3.6 3.6 3.6 3 3 3 3 Slovenia / / 3.5 4.2 5 4 3 3.2 Source: OECD/AIAS 2021a. In Table 5, we provide data for the indicator regarding the combination of levels on which collective bargaining over wages takes place, which also reveals important changes. In this respect, we can see that an important decrease has occurred. In Ireland, the score declined from a stable 4 – cross-sectoral and com- pany, with company agreements that specify/deviate from central agreements – to the level of the company (1). In Portugal, an even steeper decrease may be observed. In Slovenia, the data also show that the combined levels of collective bargaining fell importantly. Hence, from the early 1990s until the outbreak of the 2008 crisis, Slovenia usually scored 5, indicating that most of the bargaining was taking place on the cross-sectoral, sectoral and company levels. Yet, since 2010 this level has decreased to the sectoral and company level. Table 5: THE COMBINATION OF LEVELS ON WHICH COLLECTIVE BARGAINING OVER WAGES TAKES PLACE (5-YEAR AVERAGE): IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland 1.6 2.8 4 4 4 3.4 1 1 Portugal 3 4.8 4.8 4.8 3 2.8 2 2 Slovenia / / 2 3.8 5 4.4 2 2.6 Source: OECD/AIAS 2021a. Centralisation of collective bargaining is a summary index of the degree to which collective bargaining processes are centralised. Table 6 shows that there was an important decline in the score of the three countries. Ireland had scores of 4.75 and 4.625 during the 1990s and up until 2008. After that, it declined dra- matically to 0.875. Portugal also recorded a considerable drop in its centralisation 631 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 631 • let. 61, 3/2024 score: in the mid-1990s, it was at 3.875, while after the crisis it fell to 2.5. For Slovenia, the decrease has also been significant: from the mid-1990s until 2004, Slovenia scored relatively high, reaching scores of around 4 or even 5, while this score decreased in the next decades to 2.625. Table 6: CENTRALISATION OF COLLECTIVE BARGAINING (5-YEAR AVERAGE): IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland 0.875 4.97 4.7 4.625 4.625 3.12 0.875 0.875 Portugal 2.875 3.47 3.47 3.47 2.875 2.875 2.55 2.5 Slovenia / / 3.25 3.95 4.7 3.625 2.625 2.825 Source: OECD/AIAS 2021a. Table 7 looks at trends in the coordination of wage setting. In Ireland, there has been a dramatic decrease in this score – from the 5-year average scores of either 4 or 5, the value dropped to 1 and later to 2. In Portugal, there has been a minor decrease in the score, while in Slovenia, similarly but not as dramatically as in Ireland, there has been an important decrease – from the 5-year average of 4 between 2000 and 2004, the score declined to 2.2 in the last 5-year period. Table 7: COORDINATION OF WAGE SETTING (5-YEAR AVERAGE): IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland 1.6 2.8 4.2 5 5 4.2 1 2 Portugal 2 2.4 2.4 2.8 2 2 2 2 Slovenia / / 3.5 2.8 4 3.2 2.4 2.2 Source: OECD/AIAS 2021a. The same holds for the indicator measuring the type of coordination of wage setting, as shown by the data in Table 8. In Ireland, the score fell from 5 to 1 after the outbreak of the 2008 crisis, before later rising to 2. In Portugal, the score went down from an average of 3.8 to 1, and later returned to 3. Slovenia’s score also declined from a stable 5 in the 1990s to 3. 632 TEORIJA IN PRAKSA • Marko HOČEVAR 632 TEORIJA IN PRAKSA Table 8: TYPE OF COORDINATION OF WAGE SETTING (5-YEAR AVERAGE), IRELAND, PORTUGAL AND SLOVENIA 1980– 1984 1985– 1989 1990– 1994 1995– 1999 2000– 2004 2005– 2009 2010– 2014 2015– 2019 Ireland 1 3 5 5 5 4.2 1 2 Portugal 1 3.4 3.8 3.4 1 1.8 1.4 3 Slovenia / / 4.5 3.4 5 3.8 1.8 3.4 Source: OECD/AIAS 2021a. *** Even though as indicated in the methodological note the VoC school treats the three countries as three different types of market economies: Ireland – a liberal market economy; Portugal – a mixed market economy; Slovenia – a coordinated market economy, the data presented in the tables paint a much more complex picture. We see that the density rate of employers’ associations has remained quite stable or even increased in all three countries, whereas the trade union dens- ity rate has declined significantly. Moreover, the indicators predominant level of wage bargaining, the combination of levels of collective bargaining, the cent- ralisation of collective bargaining, the coordination of wage setting, and type of coordination of wage setting show an important decrease in the scores in all three countries, indicating two things: the decentralisation and liberalisation of industrial relations. While this does not mean that the direction, spread or nature of the changes have been the same, there is an evident converging traject- ory in the three institutionally divergent cases. For a more precise understanding of the changes in industrial relations and labour market policies, we present an in-depth and concise overview of the changes in these countries. FROM THE CENTRALISATION OF INDUSTRIAL RELATIONS TO LIBERALISATION, AND BACK? In this section, we provide an overview of the central changes and trends in the tripartite bodies of industrial relations negotiations in the three countries as well as the main labour market policy changes and outcomes in the countries over the last 35 years. The intention is to complement and explain the data ana- lysed in the previous section while also giving a more in-depth understanding of the reasons for the changes. Ireland – from the social partnership process to the Labour Employer Economic Forum Ireland featured a very strong union movement during the 1980s. The pro- longed economic stagnation, high unemployment rates, massive emigration and 633 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 633 • let. 61, 3/2024 low GDP per capita fuelled massive industrial conflicts. However, the strong uni- ons and industrial conflict meant the specific FDI-led growth model pursued by Ireland could not be fully implemented (Regan 2012; 2014; Culppeper and Regan 2014; Maccarrone et al. 2019). In order to secure industrial peace, in 1987 the Fianna Fáil minority govern- ment launched the social partnership process so as to gain the trade unions’ sup- port for the austerity and neoliberal policies. The social partnership was based on 3-year agreements all aimed at limiting wage rises among workers. To secure the agreement of the unions, governments introduced successive income tax cuts (Regan 2012; 2014). The unions were strong and wanted to exchange their support for a seat at the policymaking table: “This process of institutionalized packing ended trade union militancy /…/ and provided unprecedented political legitimacy to a weak government pursuing fiscal retrenchment” (Culpepper and Regan 2014, 733). The social partnership was a voluntary process where unions and employers bargained about wages and working conditions. There were no legal obligations to extend the negotiated agreements to non-unionised workers, except for the registered employment agreements in the construction and elec- trical sectors, and the employment regulation orders in low-paid services (Mac- carrone et al. 2019). The Irish labour protection was lean during the social partnership period. Ireland had one of the lowest scores in the OECD EPL index. There was a clear trend of employment flexibility in Ireland prior to the rise of the Celtic Tiger, while during the Celtic Tiger period changes occurred – the minimum wage was introduced, yet employment flexibility was maintained (Murphy and Loftus 2015, 106). There was an increase in spending on ALMPs, whereas stricter cri- teria for becoming eligible for unemployment benefits were introduced (Walsh 2003; Kirby 2010). The trade unions hoped the institutionalisation of their role in the policy- making processes would halt the neoliberal policies in Ireland and stop the declining union density (Allen 1997, 170). However, the strong wage bargaining centralisation was accompanied by labour market flexibility, low corporate and income taxes, which prevented the welfare security from expanding (Allen 2000; 2007; Kirby 2002; 2010; Kitchin et al. 2012). This led Regan to claim that the social partnership “was a strategy of the state to adjust to the constraints of being a small open economy in a euro-global market” (Regan 2012, 488). Still, once the crisis of 2008 broke out in Ireland, the social partnership process collapsed. Despite the unions having initially agreed to a lowering of wages, the government introduced unilateral measures after being unable to obtain the uni- ons’ consent for additional cuts in 2009. The government chose to act unilaterally, abolished the tripartite committees, which also meant that the social partnership process came to an end (O’Donnell et al. 2011; Culpepper and Regan 2014). The government initially introduced strict austerity measures aimed at redu- cing salaries and the number of jobs in the public sector. The scope of welfare 634 TEORIJA IN PRAKSA • Marko HOČEVAR 634 TEORIJA IN PRAKSA benefits was also reduced (Child benefit, Jobseeker Allowance). A Memorandum of Understanding was then signed with the Troika, which pushed the govern- ment to introduce even more flexibility and insecurity (Regan 2012; Murphy and Loftus 2015; Murphy and Dukelow 2016). Since the downfall of the social partnership, there has been no centralised wage bargaining in the private sector, whereas in the public sector it has been reduced to concessions and accepting or forcing unions to accept the austerity and cuts. The Croke Park Agreement signed in 2010 and the Haddington Road Agreement signed in 2013 were based on wage cuts and austerity measures. In the private sector, there was a complete decentralisation of bargaining. Nonethe- less, there was some sort of pattern bargaining in the private sector where the SIPTU managed to negotiate 2% pay increases in 2011, which thereafter was also followed by other unions and employers (Maccarrone et al. 2019). After the recovery period and faced with Brexit, the employers and unions both wished to establish more formal, yet still voluntary cooperation. This led to the creation of the Labour Employer Economic Forum (LEEF) in 2016. It has been a voluntary, non-binding body without any real competence – wage bargaining was excluded from the LEEF. Prior to the COVID-19 pandemic, it seemed that due to its very limited capacity the LEEF would come to a standstill. However, during the pandemic the LEEF proved to be an effective tool for policy coordination, especially for the safety and health protocols, but also for dis- cussing job retention schemes (JRSs). Although its role changed and it became stronger, its formal capacities remain very limited (Hočevar 2024). It is therefore true that the unions became stronger and certainly regained some sort of legitimacy among the political actors during the pandemic while also broadening their appeal to their (potential) base. Still, it would be an over- statement to claim that the government adopted these counter-cyclical policies due to the rising strength of the unions. A vital element in the more prosocial policies has been the growing strength of Sinn Féin, while the demise in support for Fiana Fáil and Fine Gael led the two neoliberal centrist parties to support the LEEF process (Hočevar 2024). During the recovery and the COVID-19 pandemic, three public sector col- lective agreements were signed: in 2015, the Lansdowne Road Agreement and in 2018 the Public Service Stability agreement, at the end of 2020 a new “Trans- itional agreement” between the public sector unions and the government; in 2022, a new collective wage agreement with the public sector unions that granted employees a 6.5% pay rise over the next 2 years. Further, the Irish government also decided to introduce a pay-related jobseeker’s benefit instead of flat rates, while also implementing broad JRSs to protect employment and income during the pandemic (Gibbons 2021; Prendergast 2021). 635 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 635 • let. 61, 3/2024 Portugal – the persistence of the institutional setting, changes in policies? Following the Carnation Revolution in 1974, Portugal entered a period of political stability, while also having the goal of joining the EEC. In this period, the unions were extremely strong and demonstrated their capabilities to mobil- ise workers during the late 1970s and early 1980s in the face of two IMF bailout programmes targeting fiscal consolidation and austerity. In response to these policies, a large and widespread wave of strikes flooded Portugal. In order to pacify the labour movement, and in recognition of their strength, the joint gov- ernment of PS and PSD established the Social Concertation Standing Commit- tee (CPCS). Still, the first social pacts were already showing signs of concessions and wage moderation. Thus, the tripartite negotiations did not lead to strong employment protection but to incremental liberalisation of industrial relations (Barreto and Naumann 1998, 396). During the 1980s and 1990s, several attempts were made to introduce important changes in both the institutional arrangements and labour mar- ket. Glatzer’s study concluded that between 1981 and 1996 there were several attempts to introduce greater liberalisation in the labour market regulation, but they generally failed. The unions managed to block the push towards flexibility in the laying off of employees, yet accepted the possibility of introducing more temporary contracts. According to data gathered by Stoleroff, in 1985 67% of all new contracts were actually temporary contracts, while by the late 1990s the “so-called atypical employment (including part-time work, limited-term con- tracts, self-employment, and nonremunerated family labour) continued to rise as a percentage of the active labour force” (Stoleroff 2001, 184). Even though the establishment of the CPCS did lead to the strength of the trade unions becoming institutionalised, this did not result in strong pro-social or pro-labour policies (Campos Lima 2019). Wage moderation and working time flexibility were central during the 1990s within the tripartite concertation, but until the early 2000s the unions held the exclusive right to negotiate agreements, the favourability principle was established and collective agreements had to follow legal norms, the collective agreements could not be suspended unilaterally but only through the joint decision of the signatories or by adopting a new agreement; collective agreements were extended to all employees and employers (Campos Lima and Naumann 2000; 2011; Campos Lima 2019, 484–85). However, in the late 1990s and early 2000s, new pressures emerged on Portugal’s industrial relations institutions. Facing strong de-union- isation and lower membership, the trade unions lost their power to secure or maintain the rights gained thus far, while the unemployment following the pro- longed stagnation of the economy led to serious social problems. The cause of the rise in unemployment was declared to be the too strong protection of workers. In 2003, the newly adopted Labour Code suspended the favourability prin- ciple by allowing collective agreements to deviate from legal norms. It also 636 TEORIJA IN PRAKSA • Marko HOČEVAR 636 TEORIJA IN PRAKSA introduced the possibility of one party unilaterally ending a collective agreement after it expired if negotiations would not result in a new agreement being negoti- ated. This led to a serious crisis in 2004 when the government did not publish the ordinance that would have extended the collective agreements’ validity. In 2006, a Green Paper on labour relations was adopted which followed the EU-promoted flexicurity principle, while in 2007 a White Paper concluded that greater adapt- ability was needed in the labour market. In 2008, a new Labour Code was thus adopted that led to lower protection for workers (Campos Lima and Nauman 2011; Campos Lima 2019). The outbreak of the 2008 crisis triggered important changes in the Portuguese industrial relations system. In 2009, a new Labour Code was adopted that did not re-establish the favourability principle, but did bring some new provisions, which supported the previous clauses regarding the expiry of the collective agreements. Even prior to the arrival of the Troika in Portugal, the PS-led government had introduced a series of austerity measures: initially a pay freeze, followed by a reduction of public sector wages, a freeze on public investment, a cut in social spending, decreased pensions, strict conditionally for unemployment benefits, and limited unemployment benefits. Elected in the summer of 2011 after the MoU with the Troika had already been signed, the PSD-government introduced even more austerity measures. It cut pensions and salaries, reduced severance payments, introduced new taxes for pensions and abolished public holidays. This all culminated in 2013 when the PSD-PP government amended the Labour Code introducing stricter criteria for extending collective agreements in relation to the representativeness of the employers’ association, while opening clauses were introduced due to the crisis, working time flexibility was allowed, shortening the expired agreements’ validity and also allowing collective agreements to be sus- pended during periods of crisis. These new provisions caused a crisis in collect- ive agreements in the following year because very few agreements were renewed (Campos Lima 2019; Campos Lima et al. 2021). Considerable changes occurred only after 2015 when a new socialist gov- ernment was elected with the help of the Left Block, the Communists, and the Green party. The new coalition – the Geringonça – increased the minimum wage substantially, halted the measures that had allowed the expansion of temporary employments, but did not fully reverse the cuts in severance payments, unem- ployment benefits and the possibilities for dismissal (Campos Lima 2019; 2020; Campos Lima et al. 2021). During the pandemic, the government implemented the ‘simplified layoff scheme’ and a specific short-time work (STW) scheme, which led to a decrease in unemployment at the time. Critically, in May 2020 a joint declaration was signed by the social partners, while in November 2022 a new collective agreement was concluded that foresees important rises in wages until 2026 (Campos Lima 2021; Campos Lima and Carrilho 2021; 2022; Campos Lima and Nauman 2023). 637 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 637 • let. 61, 3/2024 Slovenia – incremental liberalisation of industrial relations The history of Slovenian industrial relations changes also shows ambival- ence. In 1991, when the country became independent from Yugoslavia, and in the subsequent years, there was a very strong trade union movement. The density rate reached well above 60%, while the unions’ mobilisation capacity was clearly demonstrated in the early years of independence during a large wave of strikes. The government then adopted a privatisation law under which employees also gained shares in their companies, which was characterised as a “large-scale political exchange – the first and a most important one in the new, independent Slovenia” (Stanojević and Krašovec 2011, 236). Due to the high inflation and economy’s export orientation, successive gov- ernments sought to introduce a wage freeze or at least wage moderation. The unions initially fought against these policies, although accepted the political exchange with the new liberal government in 1994 when a neo-corporatist tri- partite body was set up: the Economic Social Council (ESC). In exchange for accepting wage moderation and limited wage rises, the government agreed to establish the ESC via which organised labour gained a direct political influence and an important role in policymaking processes (Stanojević 2004a; 2004b; Stanojević and Krašovec 2011; 2022). The role of the trade unions in this period was dubious. While they managed to ensure important worker rights or to maintain them, especially during the recession period, they also collaborated on implementing the wage moderation. This was described by Stanojević as constructing the “surviving coalitions” in the export-oriented companies where the unions were actively pursuing this strategy in order to make the companies more competitive. However, this also led the unions to become “actively involved in achieving a common higher goal: in overcoming competition and fighting for the survival of the organization. Not only did they support the regime of work intensification, but with their mechan- isms – by activating their mobilization capacity – they ensured additional work mobilization of employees” (Stanojević 2004b, 126). Still, after having agreed to wage moderation, in 1995 the unions managed to push the government to adopt a law that introduced the statutory minimum wage. On the other hand, from the late 1990s onwards, successive governments aimed to introduce greater flexibility in the labour market by slowly increasing the conditionality of the different benefits, while there was also a strong push to introduce active labour market policies (ALMPs). Especially the 1998 reform was an important step in extending the reach of ALMPs (Bembič 2018; 2019; Bembič and Simonazzi 2019). EU accession created new structural pressures for the entire economy. Ini- tially, the newly elected government sought to introduce a 20% flat-tax rate in 2005. Yet, the unions managed to prevent this by mass mobilisation and a large strike. Nevertheless, since 2005 no more general national wage bargaining has taken place in the private sector. The biggest and most important employers’ 638 TEORIJA IN PRAKSA • Marko HOČEVAR 638 TEORIJA IN PRAKSA association namely did not want to sign a new national-level wage agreement. This however was not surprising and a coordinated shift towards sectoral-level wage bargaining was introduced. On the other hand, the centralised public sec- tor wage bargaining was maintained (Bembič and Stanojević 2016; Bembič 2018; 2019). The conservative government implemented a new labour law that introduced greater flexibility in the labour market, particularly in terms of lowering the costs of dismissal. After 2006, membership in the Chamber of Commerce was made voluntary, which brought important changes. The employers’ side became more assertive in focusing on the immediate interests of its membership in order not to lose too many of its members; the coverage rate of the collective agree- ments declined from the previous almost 100% (Stanojević and Poje 2019; Bem- bič 2019). During the 2008 crisis, considerable changes occurred. Austerity measures, wage cuts, pensions cuts and further liberalisation of industrial relations became the key policies for tackling the crisis. Initially, the trade unions managed to block some of these measures with successful referendums, yet from 2012 onwards the policy direction became very clear – more austerity. The largest and most important was the Fiscal Balance Act, which led to an 8% reduction in wages, but also prior to it important cuts in social spending and benefit entitle- ments had been introduced (Stanojević and Kanjuo-Mrčela 2016; Stanojević et al. 2016; Bembič 2018; 2019). In 2013, a new Labour Law was enforced, marking a substantial shift in the logic of the unions. This law introduced greater security for those on non-stand- ard contracts while introducing more flexibility for those employed under permanent contracts (Bembič and Simonazzi 2019). Yet, after the regulation of non-standard employment employers managed to sustain the flexibility by increasing agency work and the ‘employment’ of self-employed persons (Stano- jević and Furlan 2018). Important changes occurred around 2015 and especially after 2017. First, stu- dent work was reregulated and included in the social security system, whereas from 2017 the labour inspectorate gained greater authority to punish those using temporary and self-employment instead of employing people on permanent con- tracts. Moreover, a new minority government, supported by The Left, introduced considerable changes in the minimum wage by excluding all the supplements and thereby importantly increasing the minimum wage (Bembič 2019; Poje 2019). During the pandemic, the minority government resigned, while a third gov- ernment led by Janša once again took office. Although the expectedly neoliberal government introduced tax cuts for the richest, it also implemented a typical STW and lay-off schemes whereby the government helped companies and work- ers to sustain their employment and income levels. Slovenia recorded its low- est levels of unemployment since independence during and after the pandemic. Crucially, the unions were more or less excluded from the policymaking process 639 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 639 • let. 61, 3/2024 and even blocked the working of the ESC (Breznik and Lužar 2021; Breznik et al. 2022; Hočevar 2023). SIMILARITIES AND DIFFERENCES AMONG THE THREE COUNTRIES The above two sections provided an overview of the trends, similarities and differences among the three countries. We showed how their tripartite institu- tions were working and changed over time. Nonetheless, a more precise compar- ison is required to explain the trajectories taken by the countries. The first aspect one can see is that in these countries specific tripartite bodies were established amid serious strike waves when the trade unions were extremely strong and had high density rates. On the other hand, minority governments or only weak governments wanted to secure industrial peace and obtain the unions’ active consent within the tripartite bodies and the newly created elitist policy networks. Second, somewhat different trends before the 2008 crisis may be observed. In Ireland, from 1987 until 2008 there was a very strong centralised national-level social partnership system in place that guaranteed a high level of coordination of wage bargaining. In Portugal, the establishment of the CPCS in 1984 was fol- lowed by relative stability and a high degree of centralisation and coordination of collective agreements until the early 2000s when the first cracks and stronger pushes towards liberalisation were visible. In Slovenia, the establishment of the ESC was followed by a strong degree of centralisation, which in the private sector had decreased to sectoral agreements after joining the EU, while the pressures of EU competition and eurozone membership proved to be a big problem for Slovenia’s institutional system. In all three countries, the specific institutional system led to increased labour market flexibility, a lowering of labour protection, and a sharp decline in trade union density levels. The 2008 crisis again triggered somewhat different changes. In Ireland, there was a complete shutdown of the social partnership process, wage bargaining in the private sector collapsed while it was maintained in the public sector, albeit only in the form of austerity and wage cuts. In Portugal, there was a blockade of the CPCS, whereas successive governments resorted to unilateral policymaking. However, the CPCS did not collapse and its role as a social partnership body resumed after the crisis. In Slovenia, the ESC entered into blockade already in late 2010/early 2011 due to the proposed austerity and welfare changes. Despite the non-functioning of the ECS, the institutional arrangement did not collapse, although greater liberalisation was introduced with employers gaining more power. Although Ireland and Portugal were put under the supervision of the Troika and Slovenia was not, this really did not play a big part in their policy choices since all three countries followed strict austerity measures while also increasing their industrial relations system’s liberalisation and labour market flexibility. In 640 TEORIJA IN PRAKSA • Marko HOČEVAR 640 TEORIJA IN PRAKSA all three countries, there was an important rise in labour market and employ- ment flexibility and an increase in non-standard forms of employment; the uni- ons were side-lined, with the public sector unions agreeing to austerity measures. In the period following the 2008 crisis, important changes occurred in all three countries. In Ireland, while the general centralised wage bargaining never returned, the establishment of the LEEF in the light of Brexit did bring a higher degree of (voluntary) coordination between employers and trade unions. In Por- tugal, the CPCS regained its status and importance and while many crisis-related measures were overturned some remain in place. In Slovenia, the ESC continued to play a vital role in the industrial relations system, while the governments from 2017 and 2018 onwards also encouraged less labour market flexibility. Even though all three countries implemented strong JRSs and pro-social policies during the pandemic, there were important differences with respect to the role of different actors and the rationale behind those measures. In Ireland, the unions played an important role while the LEEF also grew much stronger, although still as a voluntary forum. In Portugal, the CPCS played an important role primarily in the health and safety measures, while employers held a stronger influence on policymaking. In Slovenia, after the initial months the unions were almost completely excluded from policymaking while from May 2021 onwards they stepped away from the ESC, although this did not influence the employ- ment and labour market policies. We can thus identify a break – a Polanyian counter-movement – that occurred in the period 2015–2017 when the respective governments began to introduce less liberalisation coupled with less decentralised wage bargaining. It is import- ant to note that the identified change in the three countries had little to do with the strength and mobilisation capacity of the trade unions. On the contrary, the union density rate has been at a record low in these countries. However, because of the minority governments in Portugal and Slovenia and the necessary support from left parties – in Portugal of the Left Block and the Communists and in Slo- venia of The Left – there was a change in the political power relations. In Ireland, there was the important rise of Sinn Féin as a left alternative to the neoliberal consensus of the Fianna Fáil, and Fine Gael-led governments. Yet, just as important in this counter-movement as the domestic political power relations have been the changes on the EU level. In the years before the COVID-19 pandemic, the EU had adopted several directives, the European Pil- lar of Social Rights and different recommendations, that were pursuing more pro-social policies (Sabato and Corti 2018; Zeitlin and Vanharcke 2017; Vanhar- cke et al. 2023). Equally, the EU played a very important role in subsidising the JRSs through the SURE mechanism in its member states, suspended the fiscal rules, while also creating two completely new schemes to finance the recovery: the RRF and the NextGenEu (Pochet 2022; Boin and Rhinard 2023; Quaglia and Verdun 2023a; 2023b; Kassim 2023). 641 • let. 61, 3/2024 • Industrial Relations and Labour Market Policies in Ireland, Portugal and Slovenia 641 • let. 61, 3/2024 CONCLUSION In this article, we focused on particular changes in the industrial relations institutions and related labour market policies in three countries: Ireland, Por- tugal and Slovenia. The overriding finding of the article is that in each country one can identify a counter-liberalisation movement in the last few years. Still, this counter movement is different from that seen after the end of the Second World War because today the unions are historically weak and have very low density rates. The counter-movement we identified had very little to do with their capacity to mobilise, propose and/or block governmental policies, but has been the outcome of the rise of left-wing political parties in the three countries and either the need for their support for minority governments or as a threat to the prevailing neoliberal consensus in Ireland, while to understand the structural conditions that enabled this shift the influence of the EU-established framework must be considered. In this sense, while the establishment of the centralised industrial relations systems in the three countries was especially due to very strong unions, which was followed by the neoliberalisation of the respective political arenas and declining strength of the unions, the counter-movement arrived in the form of stronger left parties and historically weak unions. The durability of this change has yet to be seen. 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Osredotoča se na poti, ki so jih te države ubrale od sredine do poznih 80. let prejšnjega stoletja, in primerja razvoj njihovih sistemov industrijskih odnosov, vlogo njihovih tripartitnih organov za socialni di- alog in politik trga dela. Članek razkriva razlike in podobnosti med državami v prizadevanjih za liberalizacijo industrijskih odnosov in večjo prožnost trga dela. Vendar pa pokaže tudi nasprotno gibanje v teh državah od leta 2015 ter ponudi razlago teh procesov. Članek s tem prispeva k različnim razpravam na področju primerjalne politične ekonomije, ki obravnavajo različice kapitalizma, institucio- nalno konvergenco in divergenco ter neoliberalizacijo različnih sistemov industrij- skih odnosov. Ključni pojmi: različice kapitalizma, industrijski odnosi, trg dela, politika, EU.