The past two months have not been good for social partnership in Ireland. First we had the Budget, which gave the biggest PAYE cuts to the well-paid and reduced Capital Gains Tax and Corporation Tax. Then there was the recognition dispute at Ryanair and fears that inflation will erode the value of this year's pay rises, the biggest in the lifetime of Partnership 2000.

Unions began to feel taken for granted and cited the unwillingness of the Irish Business and Employers' Confederation to criticise Ryanair as proof that they were not being paranoid.

The Labour Court has recommended that the company recognise SIPTU but so far Ryanair has failed to respond. By an unfortunate coincidence, a Supreme Court hearing into the 1994 recognition dispute at Nolan Transport (Oaklands) Ltd has recently begun. SIPTU already faces costs and damages of £1.3 million over the "unofficial" strike by members at Nolans. If it loses the appeal, it will face a bill of over £2 million. That's a lot of money, even for the State's largest union.

Meanwhile, the Building and Allied Trades' Union has had three High Court injunctions served on it in as many months over what it sees as union recognition problems in the construction industry. A pressure group calling itself Building Workers Against the Black Economy, which draws its membership mainly from BATU and SIPTU, has begun a series of pickets in defiance of the injunctions.

In this atmosphere, IMPACT's general secretary, Mr Peter McLoone, is right in saying that union recognition is the "banana skin" on which Partnership 2000 could suffer a fatal slip.

The Irish Congress of Trade Unions has now referred the issue back to the Government's high-level group on trade union recognition after failing to agree a voluntary code with IBEC. If the deadlock continues, both sides could do worse than consider a licensing system for employers; one already exists for trade unions.

It is widely accepted that the alternative of forcing employers to recognise unions would not just be unpalatable to IBEC, but possibly unconstitutional. Although Article 40 of the Constitution provides for freedom of association, including the right to form trade unions, the courts have interpreted that right very narrowly in the past.

A licensing system could provide an alternative that simply requires an amendment to company law. Under existing legislation, companies are already accountable to the State on how they conduct other aspects of their business. This is in order to protect the interests of shareholders, customers and creditors - including staff. In return, firms are given the protection of limited liability in the courts.

Companies must also comply with a range of legislation governing human resource management (HRM), like minimum notice, equality in the workplace, redundancies, working hours and health and safety.

Most large companies are also required under EU law to have works councils and the European Commissioner is considering making works councils mandatory for smaller enterprises.

The Registrar of Friendly Societies already oversees how unions conduct their business. Failure to provide up-to-date returns can lead to unions losing their negotiating licence. With so many precedents at both EU and national level for regulating the HRM area, a licensing system for employers would hardly be out of place.

It would simply require employers to put in place adequate consultation and negotiation procedures with workers and lodge these with the Companies Office. The criteria could be drawn up by the Labour Relations Commission, much on the lines of the proposed voluntary code. The Labour Court could oversee the renewal of licences, much as the District Court oversees the licensed trade.

Such a system would provide no great problem for the vast majority of firms, which already have procedural agreements with staff. Nor need it impose union recognition on employers, as in-house procedural agreements with staff associations, which met the requisite criteria, could be accepted.

However, employees in such companies should be given the right of appeal to the Labour Court in situations where in-house agreements broke down or were not being honoured. Such a system would provide firms which wanted to keep unions out of the workplace with a fully legitimate alternative.

Most importantly, such a system of licensing would introduce a proactive method of encouraging social partnership in the workplace. And it would do so without putting even the most recalcitrant employers out of business because even if they lost their licence another licensed operator could carry out some of their employment functions.

Such a system would also help the Department of Enterprise, Trade and Employment to police the growing army of employment agencies and sub-contractors who are effectively outside existing legislation. In sectors like construction, people are often forced to work without any protection and at risk to their health or even life.

To paraphrase Marx, by embracing such a system, firms have nothing to lose but their licences.