National pay deal - A triumph of common sense

The outline agreement reached on the national pay talks is to be warmly welcomed, especially in the midst of the current upheaval in the international markets. The agreement should help generate a vital period of necessary economic stability.

It provides for a pay hike of 6% for all workers over a 21-month period as a replacement for the expiring agreement — Towards 2016. It is a short-term agreement, but that should cover the uncertain period ahead.

There will be a three-month pay pause for all private sector employees, followed by a 3.5% raise in the following six months, and a 2.5% increase over the following year. The agreement also envisages an extra 0.5% rise for lower-paid workers at the end of the period. It should be stressed, of course, that the minimum wage in Ireland is already the second highest in the EU.

The draft agreement includes an 11-month pay pause for public sector employees, followed by a 3.5% increase during the ensuing nine months, and a 2.5% increase in the final month of the agreement.

The whole thing is obviously packaged to win the support of those involved. The 6% rise over the 21 months really works out at an annual rate of 4.43%, which is essentially in line with current inflation.

A significant element of the increase — for instance the 2.5% final month hike for private sector workers — is built in at the very end of the agreement.

The draft agreement, which has been concluded by representatives of the various social partners, must still be ratified by members of the different sectors. Many people will have their own ideas about the draft.

The economy has always had its ups and downs, but this is clearly a difficult period. All sides admitted the recent gyrations in the international markets focused their minds on the necessity for the talks to succeed.

Social partnership has served this country well. It provided the foundation for the economic recovery from the deep recession of the 1980s, so the provisional decision to extend social partnership for another 21 months affords a breathing space to tackle the current problems.

Industrial action in one sector frequently has ramifications for others. Transport or power strikes, for instance, can have the most serious implications for a wide range of sectors even where industrial harmony exists.

The agreement was not a victory for any one side; it is an overall triumph of common sense.

The labour unions have secured promises for the introduction of legislation to prevent the victimisation of employees on the basis of membership or non-membership activity. This will include provisions to prevent employers using temporary agency workers to break strikes, which should be kept to a minimum once the pay element is agreed.

A bargaining free-for-all in the midst of the worldwide financial crisis would be a recipe for economic disaster, especially with extra competition from the much-expanded EU.

Thus the real significance of the agreement is the economic stability it should generate.