Employers have warned that future investment by multi-national companies would be lost if they were forced by law to recognise trade unions.
Speaking on his way into talks on a new national pay deal this afternoon, Ibec director general Turlough O'Sullivan said the current position – whereby companies are not obliged to negotiate with unions – was "the only competitive advantage we have."
"We have a huge constituency of multi national companies and we need to hold on to it. It is the only competitive advantage we have. If we give that away we are effectively saying goodbye to new investment in that sector so we will not be agreeing to anything significant", Mr O'Sullivan said.
Earlier, entering Government Buildings, the chairman of the private sector committee of the Irish Congress of Trade Unions (Ictu) said that legislation on collective bargaining rights in non-union companies could be "a deal-breaker" in the current talks.
Jerry Shanahan of the trade union Unite said that this was a "critical issue". He said that there had been a process in place in relation to collective bargaining but this had been rendered inoperable by the Supreme Court.
He said that the issue had been part of previous agreements and a replacement would have to be found. "We cannot continue without a legislative framework for collective bargaining," he said.
He said that unless the Government tabled proposals on the issue at some stage this week he would not be hopeful of success in the talks.
The talks are currently dealing wit non-pay issues. Employers and unions are receiving a briefing on the economy from the Department of Finance this afternoon.
The sides are deadlocked on wage increases and observers predicted that the talks could go down to the wire later in the week and into the weekend. Taoiseach Brian Cowen yesterday said that pressures on the economy were impacting negatively on jobs.
Figures released last week showed a record 74,000 increase in the dole queues during August - the highest in 10 years.
Mr Cowen said: “There are areas of the economy that are competing, and there are other areas which have severe difficulties.
“We need to see if it is possible to come up with a solution that is affordable in the immediate term, to find some space to bring about changes for the better, against a very challenging international environment.”
Minister for Finance Brian Lenihan is currently compiling his Budget which has been fast-forwarded by almost two months to October 14th as a €5 billion deficit opens up in the public finances.
Ibec have insisted the current economic downturn offers no scope for pay rises but unions have demanded that wage packets reflect cost of living increases.
The Civil and Public Service Union and the Irish Bank Officials Association both categorically ruled out the pay pause proposed by employers. Siptu, Impact and Mandate also insisted that low paid workers must be protected.
Talks ended without agreement last month after failing to meet the August 1st deadline. The sides returned to Government Buildings for separate meetings with the Taoiseach last Friday and it was decided to meet this week in a last-ditch bid to broker consensus.
The Taoiseach has told the social partners that he is ready to intervene in the negotiations if he is needed.