Ictu advises unions in private sector to seek pay rises of up to 7.5% next year

The Irish Congress of Trade Unions has advised affiliates with members in the private sector to seek pay rises of 4 per cent to 7.5 per cent during 2023.

The guidance, which follows a meeting of Ictu’s private sector committee this week, is up from the 2.5 per cent to 4.5 per cent figures issued this time last year for 2022. Those numbers were subsequently revised upwards as the scale of the growth in inflation became clear during the early part of this year.

About half of the roughly 700,000 union members in organisations affiliated to Ictu work in the private sector.

The majority of pay deals agreed in 2022 have come in below the rate of inflation, which stood at 9.2 per cent in October, according to the Central Statistics Office.

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The Central Bank found that wages in Ireland grew by 4.7 per cent during this time, compared with an average of 5.2 per cent across the euro zone and 5.2 per cent in the UK.

Pay settlements in the private sector in Ireland have varied widely with some workers suffering due to being tied into multiyear agreements when annual rises were on average just 1 per cent, but others, such as the staff at Vodafone’s retail operation who recently agreed a deal worth 16 per cent, getting substantial rises that took both the high rates of inflation and the tight labour market into account.

Information and communications technology is the only sector in Ireland believed to have returned above inflation average pay rises with increases there running at just over 10 per cent.

In many cases, the figures for pay rises in 2022 were blurred slightly due to the extensive use of the small benefit exemption scheme, which has been used by employers to give employees vouchers free of tax. The scheme had a ceiling of €500 per employee annually but this amount was doubled in the budget.

Unions have sought to make extensive use of the scheme to add value for their members to pay deals struck and it has become a common feature of negotiations. The vouchers are also a tax-efficient way of paying the money for companies.

The Nevin Economic Research Institute, which provides analysis to Ictu and influences its guidance on pay, is understood to have estimated inflation will fall to just over 6 per cent in 2023.