ANALYSISAs the social partners sign a deal that seemed to be slipping away, their task now is to sell it, writes Martin Wall
THE NEW draft national pay agreement, reached yesterday between trade unions, employers and the Government, represents a better deal for workers than that which was on offer in the failed talks last July.
Workers in both the public and private sectors will receive a 6 per cent rise in wages to be phased over a 21-month period.
The proposals in July, which were rejected by unions, involved increases of 5 per cent.
In addition, for private sector workers, the duration of the pay pause before these increases come on stream has been significantly reduced, from six months and 12 months in some cases to three months under the new agreement.
However for 300,000 staff in the public service the 11-month pay pause put on the table in the July talks remains in place.
Employers have also gained to some degree in the new deal. In July, the unions rejected proposals to expand the provisions for employers to claim "inability to pay".
The new agreement allows employers to seek some cost off-setting measures in relation to paying rises or to claim inability to pay in circumstances where this would result in serious loss of competitiveness and employment.
However, none of the social partners got everything they wanted in the new agreement reached yesterday morning. A number of key issues in the various wish lists have, in effect, been "parked" for the moment.
In the course of the negotiations - where for long periods the parties seemed to be divided by chasms - a spirit of compromise and a regard for the importance of stability appeared to have developed as the scale of the worsening economic climate became known.
The news of the collapse of Lehman Brothers, coming just as the social partners were concluding a late-night session over the weekend, did genuinely appear to trouble some of the participants.
The key test for the parties will be now whether the various union and employer leaders can "sell" the draft deal they have agreed to their members, who may be unhappy about the inclusion or exclusion of specific measures.
For although the deal has now been agreed by the social partners, it will not come into effect until it is approved by the various employer bodies and by trade union members in local ballots, conferences and meetings.
And such ratification may not be an easy process for the various unions and employer bodies.
Last April, for example, when they agreed to enter talks, unions set the objective of securing pay increases that protected against rises in the cost of living.
However, in reality, unless there is a significant reduction in inflation over the coming year, the new deal - involving annualised increases of about 3.5 per cent - will see workers receiving increases that do not keep pace with the cost of living. This would represent a pay cut in real terms.
Second, unions argued strongly for a new legislative framework for trade union recognition and representation.
They maintained that this was needed following a Supreme Court ruling that effectively, in their view, emasculated earlier compromise legislation in this regard introduced in 2001 and 2004.
Unions had maintained that this issue was a "deal breaker" but in reality this whole issue has been passed on to a review process to be completed next year. There will, however, be legislation to ban victimisation of workers for trade union membership.
On the other hand, employers' group Ibec wanted a six-month pay pause in the private sector which has been reduced to three months in the new deal.
It is also no secret that the Construction Industry Federation (CIF) was deeply unhappy at having to compromise on its demands for a 12-month pay pause for workers in the building industry.
CIF director general Tom Parlon yesterday declined to say whether he would be recommending the deal to members. He simply said that he would be outlining the terms of the document and it would be up to the organisation to decide on the issue.
For Taoiseach Brian Cowen, securing the new draft pay agreement represents an important milestone.
Every one of his predecessors going back to Charles Haughey more than 20 years ago had concluded social partnership agreements and, inevitably, he would have been loudly criticised by the Opposition if the round of talks this week had failed in the same manner as the process in July and early August.
Mr Cowen was in Government Buildings throughout the night and played an important role in the meeting with the CIF around breakfast time yesterday when some on the Government side were nervous that its opposition to the three-month pay pause proposal could potentially unravel the entire deal.
The Taoiseach said that there were no explicit assurances given to the social partners in relation to matters in the forthcoming Budget.
However, the social partners will be watching carefully to see whether anything in the budget could unsettle their members before they decide on the draft agreement.
The unions, employers and the Government successfully clinched a new social partnership deal which had appeared to be slipping away from them.
After concluding what unions and employers agree was the most difficult set of negotiations ever, both sides now have to get out and sell the deal if it is to stick.
• Martin Wall is Industry Correspondent of The Irish Times