That face was Frank Cluskey, who had been parliamentary secretary to Corish as Minister for Social Welfare in the previous government. Cluskey led the party in Opposition for four years before the next general election saw him unexpectedly lose his seat in Dublin South Central. He was in turn replaced by Michael O'Leary of Dublin North Central, who had been Minister for Labour in the coalition government. O'Leary's assumption of the role coincided with Labour's return to coalition with Fine Gael. He became Tánaiste and Minister for Energy. This coalition lasted only a year before Fianna Fáil were returned to power. In the aftermath, O'Leary attempted to pass an internal party motion that would give him a free hand in all future coalition negotiations. This was defeated, and O'Leary made a surprise defection to Fine Gael. Labour were leaderless and defeated once more.
A leadership contest saw party heavyweights Barry Desmond and Michael D. Higgins defeated by a new face who had only been TD for a year: Dick Spring of Kerry North. Spring assumed the leadership with new ideas for Labour, far removed from Corish's socialist rhetoric of the previous decade. He sought to bring the party closer to the centre and to make it more open to coalition deals. His actions in this regard spanned the entire decade, culminating in the expulsion of the Militant Tendency wing of the Labour Party in 1989. In a third successive general election in 1982, Labour and Fine Gael were returned to government once more with an increased number of seats. Spring served as Tánaiste and Minister for the Environment in this government, which lasted for five years before Fianna Fáil won the 1987 general election. In contrast to Labour's previous defeats however, this setback did not see Spring resign - rather, he remained as Labour leader until 1997. Despite the poor showing in 1987, Spring's leadership would see Labour reach some new heights in the years ahead.
As is typical for Labour, their most consistant support was in the east and south east of the state. Kerry and Tipperary were particularly strong areas of support, with Michael Moynihan's strong vote in Kerry South accompanied by an even stronger vote for Spring in Kerry North upon his assumption of the leadership. Tipperary North and South were represented by John J. Ryan and Seán Tracey respectively, both men securing consistantly strong support in elections until 1987. The party made a rare step forward in Connacht with the election of Michael D. Higgins in 1981. Though he lost his seat in the November 1981 election, he won it back five years later and held it until his retirement in 2011.
The strong vote awarded to Labour in November 1982 aligned with the similar increase in Fine Gael's vote in that election. The party's performance in Dublin's neighbouring counties was particularly impressive. The Labour vote dropped dramatically across all constituencies in 1987 (9.4% in 1982 to 6.5% in 1987), an election which saw Labour displaced as the third largest party by the newly formed Progressive Democrats. Nevertheless, in contrast to their often defeated status in the late 1970s, Labour were now ready for a fightback, which duly occurred in the following years.