ICT Ireland, the lobby group for the technology sector, confirmed similar wage freezes were operating at a host of other firms due to the poor economic climate.
Intel Ireland has frozen the wages of its 3,200 staff, blaming the ongoing recession in the technology industry. The firm - which was last week named as one of the best companies to work for in Europe by Fortune magazine - told its employees that only a few key technical staff would have their salaries reviewed during 2003.
The cost-saving measure should save the chip manufacturer millions of euro at a time when the proposed new national wage agreement will award rises of 7 per cent over 18 months. Intel Ireland does not allow its staff negotiate collectively through trade unions and is not bound by national wage agreements.
An Intel spokeswoman said costs had to be controlled to enable the firm to continue to invest in research and capital expenditure.
But she said staff would still receive stock options and a performance-related bonus if certain targets were met during the year.
Mr Brendan Butler, director of ICT Ireland, said companies had found that cutting bonuses and overtime had only had a limited effect. Because of the severity of the downturn, many companies were now freezing wages, he said.
Mr Butler would not disclose the names of other firms that had implemented wage freezes.
The decision by Intel to implement a wage freeze was taken last week - at the same time that employer representative groups and the trade unions were negotiating the proposed national pay deal that will offer workers a 7 per cent increase over 18 months.
Intel, like most multinational technology firms, is non-unionised and does not follow national pay agreements.
However, some technology firms use the national pay agreement as a benchmark for their own pay agreements.
But even if tech firms signed up to the agreement, they may not have to implement salary increases in the current climate.
The "ability to pay" clause that is contained within the proposed national agreement could enable some technology firms to justify wage freezes.
Under this clause in the agreement, the Labour Court would have the authority to justify or reject an employer's decision to implement a wage freeze.
Ironically, Intel's decision to implement a wage freeze occurs in the same month that its Leixlip operation has been named one of the 10 great companies to work for in Europe by the magazine Fortune.
In its January edition, Fortune wrote: "Employees raved about the opportunities open to them. They liked that they could move around to different jobs and further their education at Intel's expense."
