Industrial chaos looms as pay talks collapse

THE country faces a wave of bitter industrial disputes as hopes of a national wage deal were dealt a hammer blow last night.

Taoiseach Bertie Ahern made it clear that he will not try to bring employers and unions back to the negotiating table after two days of talks broke up in disarray, signalling an end to 15 years of central deals which delivered industrial peace.

Employers accused the unions of bad faith while the union leaders said the bosses were not interested in striking deals to replace the Programme for Prosperity and Fairness which expires shortly.

The outcome is a serious setback to Mr Ahern's efforts to put the economy back on an even keel by getting public spending back under control and curbing inflation.

However, the Taoiseach said he was not planning any intervention, at least before the upcoming holidays. "Further contacts do not suggest a basis for expecting a move by either side which would make a national agreement possible," a spokeswoman for Mr Ahern said last night.

For the employers, IBEC director general Turlough O'Sullivan said they had tabled an 18-month deal earlier this week which appeared to be a reasonable basis for talks. He argued that the unions had later increased demands on pay and sought to re-open other issues including procedures on union recognition: "The congress were not prepared to deliver along those lines and were not prepared to sign up to anything that would give us reasonable assurance that a flexible agreement could be negotiated."

However, Irish Congress of Trade Unions president Senator Joe O'Toole rejected this interpretation of events and warned that employers would rue their failure to keep faith with negotiations: "We were looking for a living wage that means an increase which could keep pace with inflation. They were talking about a smaller increase and a pay pause and then they refused to budge on fundamentals like recognising people's right to be in a trade union."

Union leaders said individual groups will begin filing pay claims with their relative employers in the coming days. This process makes it increasingly unlikely a new national pay deal can be struck as time goes on.

The government's most senior civil servant, Dermot McCarthy, had chaired marathon talks over two days to no avail.

"The prospect of political intervention does not arise unless there is a prospect of agreement," the spokeswoman said.

Both unions and employers have acknowledged special concessions on tax cuts and welfare rises were not available on this occasion to sweeten lower wage increases.