Labour Market Adjustment under the Employment Contracts Act

Abstract

The Employment Contracts Act was introduced primarily in response to a perceived lack of progress in the rate of adjustment in the labour market. While product and financial markets had been reformed, the labour market was still regulated by relatively prescriptive legislation. In order to measure adjustment since the Act was introduced, the Heylen Research Centre and Teesdale Meuli & Co. were contracted by the Department of Labour to survey labour market adjustment under the Employment Contracts Act. This report on that survey indicates that various adjustments have occu"ed, particularly in terms of employment contract structures and several important bargaining issues. Enterprises can be categorise4 according to the type of changes they and their employees have undertaken, and their size. Three particularly important outcomes emerge. Enterprise bargaining is now far more widespread. Some enterprises have taken the opportunity to begin or speed up strategic industrial relations reforms, while others seem to have simply removed union rights and cut labour costs in the short term. Finally, while the overall rate of labour market adjustment has increased, adjustment has generally been concentrated amongst larger enterprises.