One of the State's most senior trade union leaders has accused employers' body Ibec of seeking to cut wage levels right across the economy and of attempting to make "ordinary working people" shoulder the burden of economic recovery.
General secretary of the Irish Congress of Trade Unions David Begg was responding to Ibec's call today for an immediate and lengthy deferral of pay increases due to workers under the new national agreement reached last September.
Speaking at Government Buildings this morning, Ibec director general Turlough O’Sullivan said that the dramatic economic deterioration in recent months had left it with no alternative but to seek the postponement of the deal.
He was speaking as the Government began its consultations with employer and trade union groups on its package to tackle the crisis in the public finances. Mr O'Sullivan said it was no longer credible to have an agreement which the majority of firms could no implement.
He said the pay deal – which provided for increases of 6 per cent over 21 months – would be “honoured more in the breach than in the observance”.
“The competitive pressures being faced by all businesses are unprecedented. Employers are no longer in a position to implement the increases in the pay agreement," Mr O'Sullivan said. "The serious deterioration in economic conditions since the agreement was signed . . . has now made paying the terms of the agreement impossible for our members.
“In truth, the whole cost burden of the economy has increased very much over the past 10 years and this cost burden needs to be cut significantly," he said.
Mr O’Sullivan said the position of the deal should be reviewed again after 12 months.
Responding to Ibec's call this afternoon, Mr Begg said that the Ibec decision showed that the real objective of business was to reduce wage levels right across the economy.
Speaking as he went into talks at Government Buidlings, Mr Begg said his reaction to the move was that the “mask has slipped” in terms of the employers' intentions. “This was never about public sector workers on their own. It was a whole-economy approach and very clearly the objective is to try an assure wage reductions right across the economy.”
Mr Begg said the Ibec proposal had also made no mention of any other groups “helping to get us out of this hole”.
“There is one thing the ordinary people of Ireland know and feel. They have a real willingness to deal with the problem. They take it seriously but they do not want to be made fools of and they have no intention of carrying this burden on their own. They want to see fairness in it and in any of the dialogue so far, fairness has not entered into it at all.”
Mr Begg said it was extraordinary the Ibec proposal had emerged on the morning of meetings between the Government and social partners on an economic recovery programme.
“It suggests there is a great measure of agreement between the Government and the employer bodies about how things should be done, and we do not fit into this," he claimed. "Certainly, the only way we have is being the donkeys to carry the burden on behalf of ordinary working people in the country and that is not fair.”
Earlier, Mr Begg said unions had presented a "far-ranging" paper to Government that took a longer-term, strategic and holistic look at the economy. "The only thing we have ruled out is we won't contemplate pay cuts." He warned such cuts would spill out into the private sector and lead to a "deflationary spiral".
"Our view is that the solution to this problem has to be some combination of pay and pensions and taxation and public expenditure and borrowing and time," he said.
The union leader told RTÉ's Morning Irelandthere was no alternative but to deal with the economic crisis and expressed the hope that an package to deal with the State's financial problems could be sorted out "reasonably quickly."
"I would hope that in the paper we submitted to Government several days ago that that is of serious intent and would be recognised by them as a real and genuine willingness to deal with these problems," he added.
Mr Begg also called on the Government to address problems in private pension plans that were hit by the financial crisis.
The Government gave no details of its specific proposals for dealing with economic recovery at a meeting with employers this morning, according to those at the talks.
Jackie Cahill of the Irish Creamery Milk Suppliers' Association (ICMSA) said no specifics of the Government's plan for economic recovery had been given to his organisation. He said the ICMSA had been told that political decisions would be taken over the weekend. Mr Cahill described the process today as "a bit of shadow boxing " to see the views of his sector.
IFA president Padraig Walshe also said that his organisation had been expecting to receive proposals from the Government today but that this had not happened. He said the IFA had been told to expect a call over the weekend. Mr Walshe said he had told Government officials that agriculture had taken its fair share of cuts already and that there ahd to be some proportionalities involved in the current process.
Fr Sean Healy of Cori Justice was also in talks this afternoon.
The consultations on achieving spending cuts of €2 billion are expected to continue over the weekend, and Ministers hope to make a final decision on a national rescue package by next Tuesday, when the Cabinet is set to meet again.
Trade unions have rejected the concept of pay cuts, and some unions have said they will refuse to take part in any process in which pay cuts in any form are on the agenda.
Minister for Transport Noel Dempsey yesterday said all options were looked at, discussed and argued about and at the end, Taoiseach Brian Cowen gave a synopsis of the position and would be engaging with the social partners.
Siptu, the State's biggest union, has warned of likely strikes and civil disruption if the Government imposes cuts in public sector pay and social benefits.
The Irish Nurses' Organisation has said its legal advice is that the Government could not introduce cuts in pay for nurses.