Private sector on course for 2.5%-3% pay rises

As the Irish Congress of Trade Unions pushes for private sector pay rises of 4% in 2017, employers say the figure could be 2.5% or 3% this year.

Last October, Ibec forecast that 71% of companies would award “modest” pay rises this year and that “the median pay increase for 2017 is expected to be 2%, similar to levels reported in the last three years”.

Despite the uncertainty caused by Brexit more recently, the employers’ body believes most of those employers will still press ahead with the increases.

Ibec’s director of employer relations, Maeve McElwee, says the average rise could be 2.5%, or even 3%, in exchange for measures, such as greater productivity.

Nonetheless, she says Ibec sees nervousness in sectors such as hospitality, retail, and domestic manufacturing, thanks to Brexit, and its consequences, such as the sterling differential.

According to a comprehensive survey of 2016 pay deals, carried out by Industrial Relations News (IRN), private sector pay settlements are increasing beyond the 2% mark, with some of the more prosperous sectors, such as pharmaceuticals and medical devices, exceeding 2.5%.

It found that, in the retail sector, too, the average settlement was relatively high, with an average of 2.66% per year — Dunnes Stores applied a 3% claim.

One of the highest increases, IRN has found, is in the pharmaceutical sphere, where Bausch and Lomb have secured 3.16% per annum over three years. The average, over 20 deals, was 2.5%.

The Irish Congress of Trade Unions has advised private sector unions to seek basic pay increases of 4%, or €1,000, this year, whichever is higher. Ictu’s private sector committee said the claim was based on its assessment of 2016 pay bargaining, as well as key measures that affect the living standards of workers.

That claim was dismissed at the time by Ibec chief executive, Danny McCoy, as “crude opportunism” and Ms McElwee again says that she does not see any employer considering 4%.

Meanwhile, in the face of criticism from staff union, Mandate, Tesco workers are to be given a 2% pay increase from this Friday.

The rise is to be backdated to April 2016, with the back payment to be made as a lump sum in early March.

The union had demanded 3%, as well as an equal, hourly pay rate for all, more hours, and full-time contracts.

Gerry Light of Mandate, told members: “In the near future, you and your fellow union members will be asked if you are prepared to be treated like this and ignored by your employer, or whether you are prepared to stand together and fight for the pay increases, recognition, and respect that you deserve.”

For its part, Tesco said that the 2% rise meant it had paid a 2% increase every year for the last four years in a row.

In the background is the prolonged issue of the pre-1996 staff, whom the company wants to move onto more modern contracts. While 700 of those workers have agreed voluntary redundancy terms with the company, 300 remain and are facing transferral onto the inferior terms and conditions.

In November, after 12 months of negotiations, the company accepted a Labour Court recommendation on the changes to the pre-1996 terms and conditions, but unions have rejected it.


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