Despite wage reductions at many firms across the country pay levels in Ireland remain up to 20 per cent higher than our main trading partners, according to Ibec.

The lobby group said that nominal wage levels have fallen by about 5 per cent since mid-2008 and that some companies are still cutting wages. However, a survey of its members reveals that most firms are more likely to freeze pay this year.

Speaking at a conference at UCD this morning, Ibec director of industrial relations Brendan McGinty said at least one in four firms have reduced nominal wage rates over the course of the recession. However, he added that as pay levels remain high companies should not entertain claims for increases from employees.

According to the Ibec survey, almost half of all companies surveyed expect no change to their pay bill in 2011, with nearly seven out of ten freezing basic wage rates. The average expected change to basic pay rates in 2011 is near flat at 0.4 per cent.

"For most companies, the necessity of a pay pause and, for about 10 per cent of companies, pay reductions remains," said Mr McGinty. "Ibec expects that the high degree of realism in 2010 concerning pay developments will remain in 2011. We recommend that, in light of the continuing weak economic conditions, employers should not entertain pay claims this year."

The survey shows that 39 per cent of member companies froze pay last year while a further 36 per cent reduced their pay bill. In 2011, over two-thirds of member companies intend to maintain current wage levels while 21 per cent expect to increase pay by up to 2 per cent.

Ibec also confirmed that the 2010 private sector protocol with the Irish Congress of Trade Unions (Ictu) for the orderly conduct of industrial relations had been extended into 2011. The protocol gives guidance on how to manage claims in unionised workplaces in the absence of a national pay agreement.

Ibec also announced that the groups would establish a tripartite structure with Government to deal with any difficulties that arise.

"Many employers are trying to stay in business and keep people in jobs. The renewal of the private sector protocol as agreed between Ibec and Ictu specifically recognises that protecting the maximum number of jobs is the most important objective," said Mr McGinty.

"The protocol will play an important role in ensuring industrial stability by promoting adherence to established collective agreements and the use of the State's industrial relations machinery to resolve disputes," he added.