Pay freezes to be the norm in 2011, says IBEC

EMPLOYERS should not entertain requests for pay increases this year, according to IBEC.

The employers’ body said pay levels in Ireland remain up to 20% higher than its main trading partners.

According to a survey of members, pay freezes are going to be the norm for 2011 and some firms are still reducing wages.

At a conference hosted by Industrial Relations News, IBEC director of industrial relations Brendan McGinty said there have been few pay claims so far in 2011.

“At least one-in-four firms reduced nominal wage rates over the course of the recession and the vast majority of firms had wage freezes in 2009 and 2010.

“Nominal wage levels have fallen by about 5% since mid-2008 but they remain up to 20% higher than those of our main trading partners. To close the gap wage growth in Ireland needs to remain below the EU average for some years to come.”

Almost half of companies surveyed expect no change to their pay bill in 2011, with nearly 70% freezing basic wage rates. The average expected change to basic pay rates in 2011 is near flat at 0.4%.

“For most companies, the necessity of a pay pause and for about 10% of companies, pay reductions remains. IBEC expects that the high degree of realism in 2010 concerning pay developments will remain in 2011,” said Mr McGinty.

“We recommend that, in light of the continuing weak economic conditions, employers should not entertain pay claims this year.”

IBEC also said the 2010 IBEC/ICTU private sector protocol for the orderly conduct of industrial relations had been extended into 2011. The protocol gives guidance to the state’s industrial relations machinery on how to manage claims in unionised workplaces, in the absence of a national pay agreement.

“Many employers are trying to stay in business and keep people in jobs. The renewal of the private sector protocol as agreed between IBEC and ICTU specifically recognises that protecting the maximum number of jobs is the most important objective. The protocol will play an important role in ensuring industrial stability by promoting adherence to established collective agreements and the use of the state’s industrial relations machinery to resolve disputes,” said Mr McGinty.

He said that from an employer’s perspective, the protocol recognises that the economic and commercial circumstances of the employer are legitimate considerations in any discussion of changes to pay or terms and conditions of employment.