Companies sign up to pay deal despite doubt over its viability

A NUMBER of private sector companies have already signed up to the first phase of the new national wage agreement, even though the future of the deal still hangs in the balance.

The 21-month agreement sees workers in the private sector endure a three-month pay pause, followed by two increases of 3.5% and 2.5%.

In the public sector the pay increases are prefaced by an 11-month pay pause.

According to Industrial Relations News (IRN), a number of companies, including pharmaceutical giant Proctor & Gamble, have agreed to pay the first phase of the deal, along with retrospection where it is due.

That is in spite of the fact hundreds of thousands of private sector workers look unlikely to get the contents of the deal, not least because the Construction Industry Federation, whose members employ 200,000 in the sector, are not only looking for the agreement to be scrapped but also for staff to take a 10% pay cut.

Furthermore, given the tight economic circumstances, employers in a range of other industries are expected to claim inability to pay as allowed for under the terms of the new national wage agreement.

The Irish Aviation Authority has written to its main staff union, IMPACT, proposing a postponement of rises for staff on salaries higher than €50,000.

The Irish Co-operative Organisation Society (ICOS), which represents dairy processors, has called for a pay freeze among its member co-ops and companies — or what it described as “arrangements which will defray the cost” of the pay increases in the deal.

Meanwhile, in the public sector, IRN has predicted that an extension of the 11-month pay pause for public employees is likely to be announced as part of a wider Government plan to deal with the economic crisis. It has been speculated there could be a summit on the wage deal early next year and, as part of that, the social partners might sign up to a process similar to the Programme for National Recovery in 1987.

Last week, the Taoiseach appeared to open the way for changes in the deal when he said: “[We will] look at our options for our pay agreement... I recently had discussions with IBEC and the Irish Congress of Trade Unions, ICTU. Collectively, we will bring forward an approach that will best guarantee our way through this problem.”

While afterward he clarified his comments, saying a review of the national wage deal had not arisen at the meeting and its purpose was to establish a basis for co-operation around the development of a strategy focused on economic recovery, the spectre of a Government U-turn had entered the political arena and has still not been exorcised.