Despite the social partners likely success in sorting out the Garda pay deal, significant pressure is likely to come on the partnership arrangement as more public sector areas go into dispute and the private sector becomes more disillusioned.
Already, many observers now feel that when the time comes to negotiate the next pay agreement, the Government will have a hard job selling the deal to the private sector and indeed to some elements of the public sector who feel they have been left behind.
Ironically, the Government has been so anxious to ensure that the national agreements are adhered to and there is no risk of a return to the old system, that it may now have given too much away. The thinking was that special deals under the programme could be done under local bargaining clauses which would allow rises for some sectors and not start off a spiral of productivity claims within the public sector. This now appears to have been wishful thinking.
Many workers now believe that the social partners think almost any price is worth paying to avoid returning to the days of cycles of agreements which meant never-ending negotiations and industrial strife. "That had to be stopped or the public service would have become unmanageable and priced itself out of the market," one insider noted. But the problem is that although each successive special deal such as the nurses and the teachers has been supposedly "ringfenced" and thus unlikely to spark off further claims, each claim has been followed by others.
Each deal has been sold as being within the terms of various national agreements. But critics say there is a tendency to kick over the sand. For example, at the beginning of the Garda dispute the Irish Congress of Trade Unions warned the Government that any increase above the norms of other sectors could bring down the whole house of cards.
But since then both ICTU and the employers organisation IBEC have been brought on board. Any agreement which is now done with the Garda will have the social partners' stamp of approval. Indeed, after the Taoiseach's intervention into the dispute, the social partners met over the weekend and decided that a formula for allowing the Garda Representative Association into the next round of pay talks could be found.
The underlying problem for the Government is that the restructuring deals done under the previous national agreements PESP and PCW went badly wrong. The idea was to allow an extra 3 per cent in return for extra productivity. But in reality the pay increase was 7.5 per cent for most of the public sector, with some sections doing much better.
The Garda used that 3 per cent to consolidate their allowances into the pay deal rather than increasing their net pay per se. In effect this means that allowances have been taken into account for pension purposes. The younger gardai were unimpressed, broke away and are now keeping the old deal as well as getting another special increase.
But many observers fear the Garda pay deal will prove more damaging than earlier awards. Many private sector unions had sympathy for the nurses, but that level of sympathy has not been obvious for the Garda. On top of that, other elements of the public service, for example air traffic controllers or engineers, are likely to feel aggrieved. The lesson has now been well learnt those who kick up the most and refuse to play by the rules win.
The private sector, of course, has a more difficult job. Unions only represent up to 30 per cent of workers and it is difficult to threaten strike. As a result many unions are beginning to look askance at the deals that their public sector counterparts are winning. Although in certain sectors SIPTU is winning gain sharing agreements, it will be hard to convince many private sector workers to sign up for any new deal.
One problem for the Government is that each dispute has some validity. The Garda may have been left behind somewhat, for example, particularly when compared with prison officers who won a 15.3 per cent increase last year when overtime is taken into account. But compared with many private sector workers their increases have been significant. Even before the latest deal, the Garda has had a general round of pay increases of 26 per cent between 1988 and 1998. On top of that, it won a special increase of 6 per cent in 1990 and another 10 per cent in 1992. It now appears that a special increase of over 6 per cent will be paid in 1998, as well as 4.5 per cent due under Partnership 2000.
Altogether this is likely to add about £16 million a year to the public sector pay bill, while the settlement of the craftworkers dispute will cost the State about £20 million a year. While these amounts on their own will not do any major damage to the public purse, it is possible the knock-on effects of further demands could eventually undermine the economy. Already the public sector pay bill is running 5.4 per cent ahead in September 1997 of the same month last year.
Escalating pay demands as we enter the single currency next January could undermine the economy. The European Commission and European Central Bank have already warned that spending will have to be eased off or we risk overheating the economy and eventually heading for a bust.
It is generally agreed that we cannot go on increasing spending at the same rate and that the pressure will eventually have to lead to higher taxation, if not this year then when the economy does turn down.
More worrying for many is that this could be the beginning of the end for partnership. After all no workers are likely to be happy seeing their pay fall behind other groups who are not seen to be delivering productivity, but win because of brute strength.
