AGREEMENT ON a significant pay pause for staff in the public sector will be sought by Taoiseach Brian Cowen in talks on a new national pay deal which resume today.
The talks take place against the background of a call yesterday by the European Central Bank (ECB) for employers, unions and governments across the EU to abolish any link between the rate of inflation and pay increases.
The bank president, Jean-Claude Trichet, said all parties in both the public and private sectors must live up to their responsibilities in this regard to contain inflation and preserve jobs.
Turlough O'Sullivan, the director general of employers' body Ibec, said last night the advice from the ECB was both timely and pertinent.
He said it was in line with Ibec's sentiments: failure to heed this advice would result in even more job losses in Ireland.
Talks on a new national pay deal broke down just over a month ago when unions rejected proposals for a 5 per cent increase over 21 months.
The deal would have included a six-month pay pause for most private sector workers, an 11-month pause in the public sector, and a 12-month freeze in the construction industry.
At that stage some of the unions were seeking increases of more than 5 per cent over a shorter 18-month period.
Sources close to the Irish Congress of Trade Unions (Ictu) said last night it would be looking for movement on the part of employers and the Government at today's talks.
Government sources, however, pointed to the rapid decline in tax revenue since July, coupled with a corresponding drop in consumer demand, and suggested that the original offer might be no longer on the table.
It still appears that the Government favours a deal that would give lower-paid workers a bigger percentage increase on the grounds of equity and also as a measure to boost consumer demand.
Last month Ictu general secretary David Begg also stressed the need to protect the lower paid.
He said unions would be prepared to accept increases of less than inflation for other workers in certain circumstances.
Last night the country's second-largest union, Unite, said any new deal would have to involve real cost-of-living increases for workers, as well as special provision for the lower paid. However, employers are adamant the terms of any new agreement must be "moderate", underpin job security and not worsen competitiveness.
On the non-pay side employers are opposed to demands for Government action on collective bargaining rights in non-union companies.
Ictu also is seeking Government action to tackle inflation. Last night it proposed that the Government should ensure that retailers pass on the sterling differential to customers and rescind recent increases in gas and electricity prices.
There has been some speculation that if a deal can be achieved on pay issues such as collective bargaining and other non-pay matters such as rights for agency workers and pensions could be addressed in new processes with tight terms of reference and strict deadlines.
Tanaiste and Minister for Enterprise and Employment Mary Coughlan said yesterday there were issues in relation to industrial relations support which she and Minister of State for Labour Billy Kelleher could deal with in the coming months, some of which could require legislation.
She said the Government was disappointed that the talks were not brought to a conclusion a month ago, but people had had time to reflect in the intervening period.