Next week the Irish Congress old Trade Unions will decide whether or not to enter into negotiations on a new national pay agreement. It is almost certain that ICTU wilt get a mandate to open negotiations. The employers, broadly speaking, want a new agreement and the Government most certainly does. And yet a new agreement is anything but a foregone conclusion. SIPTU, the largest trade union, sanctioned talks "reluctantly". The largest public service union, IMPACT, also endorsed talks but with little enthusiasm and much scepticism that any agreement will be approved.
Union members argue that the Programme for Competitiveness and Work was flawed from the outset and did not deliver the goods, especially on relieving the PAYE tax burden on the lower paid. This is a charge that has much merit. It is assumed now that the Government's next Budget will deliver tax but there is a big gap between what the Government feels it can afford and what the trade unions will be looking for. Most economists reckon that the Minister for Finance, Mr Quinn, will have no more than £209 million to hand back in tax cuts but the SIPTU president, Mr Ed Browne, is on record as saying that the cuts should be worth £400 million. What's more, the feeling is that there should be a commitment from Government of £850 million worth of cuts over the next three years - even if there is a change in Government. These are tall orders.
Despite appearances however, tax is not likely to be a stumbling block. Trade union recognition and local bargaining will be. The unions are becoming increasingly disturbed by the number of foreign firms which set up here and refuse to recognise trade unions. That they will not be forced to recognise trade unions is, of course, a significant factor in attracting the companies here in the first place. The unions will want legislation to enforce the rights of workers to union recognition but it is far from certain that the Government can deliver. The Constitution allows individuals to join a trade union but it also, arguably, allows employers to refuse to recognise a union and insist on direct dialogue with the employee.
Local bargaining is an issue on which there could be great difficulty. The productivity based increases of up to 3 per cent in the PCW were a nonsense. Productivity claims were often completely bogus companies paid the increase if they could afford it and did not if they could not. As Mr Browne commented last week, "it was a fudged version of local bargaining that brought the process into disrepute". The next PCW must contain the possibility of real productivity gains being easily evaluated and duly rewarded. The employers will resist. They would prefer the certainty of paying more of an increase up front instead of having to face unpredictable demands down the road.
The pay offer itself will capture most of the attention. There will need to be a great degree of flexibility attaching to any norm. Some sectors have flourished, some have not. Banking and construction, for example, have experienced a boom the benefits of which have not been shared equitably with most of their workforce. And at the same time, a new accord must contain the flexibility required of single currency membership; especially if the United Kingdom stays out. A depreciation by sterling against the pound could put margin pressures on Irish business that will require the utmost flexibility. Agreement on a new pay accord, which is vital for continued growth and job creation, will sap the resources and stamina of both sides like never before. It behoves the Government to do all that it can to assist the talks through to success.