Unions throw down gauntlet on new PPF

TRADE union leaders last night threw down the gauntlet to the Government and employers, challenging them to prove whether they are interested in a new national wage agreement.

The challenge came as talks on a new deal enter a crucial phase with sources on all sides conceding they will know by this weekend whether an agreement to replace the Programme for Prosperity & Fairness is possible.

Finance Minister Charlie McCreevy yesterday said he will not pay the first instalment of the benchmarking public service pay rises, including 12 months back-money, until all the unions involved agree to the report on overhauling the public sector.

Most of the bigger unions are on side but several smaller crucial unions including nurses, secondary teachers, gardaí, prison officers and lower-paid civil service staff are opposed to the arrangement.

If it is not accepted by everybody, there's no deal, Mr McCreevy told RTÉ radio yesterday.

Union leaders privately conceded there is some disarray within the movement on the benchmarking issue. But some suggested the smaller unions would be out-voted within the Irish Congress of Trade Unions, allowing the process to move ahead.

Mr McCreevy also said it would not be realistic for the Government to seek a pay freeze in the bigger national negotiations for a new national agreement which he believed had to be wrapped up before Christmas. But he said in general people would have to become accustomed to modest pay rises and that every 1% increase in public service pay costs taxpayers 130 million per year. The finance minister said he could not predict whether a new national wage agreement can be struck and he hinted that a deal confined to public sector workers only was one possibility.

The main employer organisation, IBEC, warned as early as this summer that they were deeply sceptical of the value of a new deal. This week they again signalled it would only be possible with wage increases below the rate of inflation.

But last night SIPTU vice-president Jack O'Connor said he feared the Government is not interested in a new national agreement. All the evidence so far has shown they have no interest in improving the lot of ordinary working people, he said.

ICTU president Senator Joe O'Toole said failure to reach a deal risked industrial relations chaos. which would send the worst possible signal to overseas investors.