The Irish Ferries controversy should not and will not prevent a new social partnership deal being agreed, the director general of employers' group Ibec said yesterday.

Speaking at the publication of the group's pre-Budget submission, Turlough O'Sullivan said the difficulties at Irish Ferries had to be seen in the context of developments in international shipping. They would have no knock-on effect on the rest of the economy.

"None of us like it, we would all like that it was otherwise, but Irish Ferries are doing what they're doing for competition reasons."

He said the company had been trying for years to engage with the trade unions to address the issue, but the unions had "steadfastly refused to engage". The unions had to face up to the fact that they had "a case to answer".

He said the partnership model was a robust one that had weathered many crises before.

In its submission to the Government, Ibec said corrective measures needed to be taken or Ireland would undermine its ability to compete internationally.

"The task now is to curtail our costs, raise productivity in both the private and public sectors, and so bring back to Ireland the competitive edge that delivered prosperity in recent years."

Referring to figures for the first three quarters of the year, published by the Department of Finance on Tuesday, Mr O'Sullivan said the reduced take in corporation tax was a symptom of the difficulties businesses were encountering. "You are seeing in concrete terms what we have been saying for years," he said.

Ibec economist Danny McCoy said pay and non-pay costs to business were rising well ahead of the State's main trading partners, creating a significant loss in competitiveness.

Economic growth was "unbalanced", with consumer spending and construction forging ahead, but with job losses occurring in manufacturing.

"There may be a poor to negative performance under way in the Irish economy," he said.

The Budget should not add to inflation at a time when new partnership talks were about to commence.

There would have to be control of the cost of public services to business, such as waste and rates, he said.

The Ibec submission also focused on pensions and included proposals for incentives to encourage the lower paid to put money into pension schemes.

People on the top rate of tax can avail of 42 per cent tax relief on pension contributions but workers on the standard tax rate, or those who don't pay tax at all because their wages are so low, have a lesser incentive or no incentive at all.

Ibec suggested that the same 42 per cent credit should apply to all workers. The State would pay €1 for every €5 invested by people on the standard rate, and €2 for every €5 invested by people who do not pay tax.

Ibec has also called for the lifting of the cap on pension contributions for one year to allow those on low incomes to invest their SSIA funds while maintaining more regular pension contributions.

A temporary injunction preventing Irish Ferries terminating any jobs at the company was lifted by the High Court yesterday with the consent of Siptu and the company.

On Friday last, the court granted a temporary order to Siptu restraining the company terminating any jobs as part of its controversial cost-cutting exercise.

The President of the High Court, Mr Justice Joseph Finnegan, was told by counsel for Siptu yesterday that the proceedings had been resolved.

Over the weekend, the company agreed to enter new talks with Siptu but said it remained committed to its cost-cutting plan.