THE social partners have failed to agree a common approach to pay bargaining at the National Economic and Social Council on any successor to Partnership 2000.
A formula that would provide parameters for negotiations in both the private and public sectors was drafted a month ago but was dropped from the final report published yesterday.
The report entitled "Opportunities, Challenges and Capacities for Choice" recommends an integrated approach to a new national agreement in which not only tax cuts but improvements in the quality of life would be offered in return for continuing pay restraint.
Measures to tackle the housing crisis, improve public transport and childcare facilities, index link social welfare payments to average household income and provide enhanced educational opportunities to the workforce and unemployed are among the proposals in the report.
However there are important changes compared with the penultimate draft of the report. In that draft a tentative increase of 16.4 per cent in social-welfare payments had been proposed, to bring rates up to 50 per cent of average incomes. The final version still recommends index linking but "recognises that this raises complex measurement issues, and policy choices including the possibility of a trade-off between changes in income adequacy criteria and employment incentives".
The final draft is also more vague on the parameters for pay negotiations. Employer representatives pressed for all pay increases to be productivity based, while union representatives wanted national pay increases topped up by local bargaining. Failure to agree a formula led to a delay of three weeks in finalising the report.
The council has now skirted the issue of mechanisms for agreeing pay increases, particularly in the private sector, and come down in favour of continuing the "virtuous circles" of competitiveness, employment growth and social inclusion. It says merely that it "would be a mistake to conceive social partnership so narrowly as to refer only to negotiation of centralised agreements or to assume there is one perfect model of partnership agreement at the national level".
On public sector pay, it says: "Some decentralisation of pay management and responsibilities to government departments and agencies is likely to be a necessary component of a more efficient pay determination system." References in the earlier draft to reform of the system of pay relativities have been dropped, as have proposals that public service pay should "be broadly in line with those in the private sector".
While the changes underline the failure of the social partners to agree ground rules for a new national pay agreement, they also provide greater flexibility in cutting a final deal.
The deputy chairman of the NESC, Mr Dermot McCarthy, said at the launch of the report yesterday that while centralised pay agreements remained the "glue" that held agreements together in the past, "quality of life" issues such as housing, childcare and public transport infrastructure were becoming increasingly important. He did not rule out a "payless" partnership agreement to succeed Partnership 2000, although he warned that loss of pay restraint would undermine the economy.
The general secretary of the Irish National Organisation of the Unemployed, Mr Mike Allen, said last night that "the prioritisation of social inclusion in the report, both in terms of equity and economic growth is a welcome direction".