No pay deal expected as talks go into overtime

PROLONGED negotiations between employers and trade unions continued last night in Government buildings, in a last-ditch effort to strike a new partnership deal.

However, going into talks yesterday, both sides were dampening down expectations that compromise could be reached on the pay elements of the talks — with the gap between them considered to be too wide.

Unions have sought a national pay agreement that would give PAYE employees an increase of ‘inflation plus a little’.

That is considered to be between 4.5%-5%, given that some forecasts are putting the average for inflation this year at in or around 4%.

However, IBEC and other employers representatives are pressing for a modest pay deals over fears that an over-generous deal could affect competitiveness, drive inflation and act as a disincentive for foreign direct investment.

The other two major issues on the pay side concern the question of introducing mandatory pensions as well as the Irish Congress of Trade Unions’ suggestion that the deal include some provision for local bargaining. This would allow unions at profitable companies to seek further increases, invoking an ‘ability to pay’ clause.

However, this proposal has been resisted by employers who want one agreed national figure for pay levels to be agreed.

The union has also suggested that Ireland adopts the Australian model, where pay increases have gone into funding pensions.

Sources close to the talks said yesterday that it was unlikely agreement would be reached last night.