Divisions may lead to pay free-for-all

TODAY is D-Day for a new national pay deal as talks between unions and employers enter their most crucial phase.

Both sides were still deeply divided last night and there was no sign of whether a breakthrough could be found.

ICTU president Joe O’Toole, who is seeking pay rises for workers in line with inflation, has said the situation will become irretrievable if a deal is not struck today.

But employers’ group IBEC, which wants a pay freeze as part of a partnership agreement, has dismissed the deadline and was pessimistic over the prospect of a deal.

While progress in today’s talks is crucial for an agreement, it is now likely negotiations could continue until the end of the week.

SIPTU’s vice president Jack O’Connor said they would need to have a rough outline of a potential deal in time for a meeting of union executives at 10 a.m. this morning.

“It will be D-Day if we’re not doing any business and if we haven’t reached a broad understanding over a number of key issues,” Mr O’Connor said.

Employers are insisting on a six-month pay freeze for firms who need it, followed by a pay rise of under 3%.

Unions are seeking a minimum of 5% rise, plus concessions on union recognition and improved statutory redundancy payments.

If the talks fail there will be a return to a wages free-for-all for the first time since 1987, when the first national pay deal was struck.

In the posturing on both sides surrounding a likely pay deal, both sides are claiming this outcome would be more acceptable than a flawed pay deal.

Speculation is also mounting that a pay deal will last just 18 months, compared to three years for previous wage agreements.

Uncertainty over the economic forecasts has led to the expectation that a short-term deal is the most likely outcome to the talks.

IBEC’s director general, Turlough O’Sullivan, said an inflexible and long-term approach to pay was now under stress because not all companies had the same ability to pay.

Progress was thought to have been made on issues such as union recognition, redundancy, but unions claimed that employers had stepped back from earlier pledges.

The big stumbling block still centres on pay with the unions continuing to hold out for increases of at least 5%, equivalent to inflation.

Last night’s talks at Government Buildings were chaired by the Secretary General of the Taoiseach’s Department, Dermot McCarthy.