Pay talks – Intervention by Ahern may seal deal

The latest round of national pay talks is taking place under menacing circumstances.

The legislation for the break-up of Aer Rianta is due before the Cabinet next Tuesday and the executive of the National Bus and Railworkers Union will today consider industrial action.

Either of the issues involved in Aer Rianta or CIÉ could result in damaging stoppages if left to fester, which would obviously put a strain on the pay talks, considering that SIPTU had already withdrawn from the talks because of Aer Rianta.

Already some commentators were presaging a collapse of the talks by this weekend, but next Thursday’s deadline for progress to be made on the pay element is not crucial in itself.

In the absence of a dramatic intervention, the pay talks will continue over the weekend. The objective is to legislate terms for the next 18 months, the second part of the three-year Sustaining Progress agreement.

If the talks are not derailed, then time is not of the essence in the sense that there is provision for retrospection.

The talks were resumed, of course, against a backdrop of employers seeking to restrain increases to under the previous agreement of 7%, while trade unions are determined to make real inroads into tackling an ever-increasing cost of living which their members face.

Coinciding with the talks was the release yesterday of the latest inflation figures as measured by the Consumer Price Index (CPI), which showed that for the second month the rate of annual inflation has risen.

Last month it rose to 1.7%, obviously influenced by the rising oil prices which began to adversely hit the cost of transportation. Effectively, prices are higher now than they were this time 12 months ago, when the CPI measured a slight decrease.

In the course of the year, the most striking changes impacted on education, health and transport to varying degrees, all of which were felt in most households in the country.

Some unions are attempting to repeat the outcome of the previous negotiations under Sustaining Progress, which resulted in a 7% wage increase spread over 18 months.

At that time, the figure was considered excessive by the employers and IBEC now maintain that despite healthy forecasts for the economy, competitiveness must be maintained, and one of the ways is by pay restraint.

Their argument that increases less than achieved under the last round would be complemented by falling inflation, is rather dented by yesterday’s news from the CPI.

The key to a deal may lie in what the Government can bring to the table. As was the case 18 months ago, an intervention by Taoiseach Bertie Ahern may be required to push the process over the line.

At this stage, it looks unlikely that the unions will achieve their target of 7% which the employers are resisting, as they are a demand for a higher minimum wage, given that Ireland’s is already the fourth-highest in Europe.

Some unions also are insisting a better deal for the lower paid, possibly in the form of a lump sum, in addition to the minimum wage.

While there is a substantial gap between both sides at the moment, the national pay talks comprise more than just the direct pay element, such as social inclusion.

The Government could facilitate progress through bridging the divide with a combination of easing the tax burden and enhancing the social measure element.