IBEC has threatened to "walk away from the national agreement and the partnership process" unless the Government reverses the changes to employers' PRSI announced in last week's Budget. The ultimatum was issued by Mr Turlough O'Sullivan, the director general of the employer's body, after a highly charged meeting yesterday of its ruling body - a 250-strong general council drawn from the bosses of the State's largest companies.
The council split over accepting the revised agreement, which will give workers an extra 2 per cent on top of wage increases agreed earlier this year, plus a 1 per cent lump sum payment. A majority approved the terms but their support was conditional on trade union good behaviour and the reversal of Budget changes on PRSI.
"It is the first time I can remember the general council not agreeing something unanimously," said Mr Brendan Butler, the director of social policy at the employers' lobby group.
Mr Butler refused to disclose how many council members voted against accepting the deal. "It was significant," he said.
Some IBEC members were unhappy with what they saw as a failure by the trade unions to deliver on the the terms of the original agreement. However, much of their anger was reserved for the Government, which announced the abolition of the ceiling on employers' PRSI last week, less than 48 hours after IBEC negotiators struck the deal with the unions to "save" the Programme for Prosperity and Fairness (PPF).
A delegation from IBEC met the Taoiseach, the Tanaiste and the Minister for Finance yesterday to seek a reversal of the Budget day changes. No tangible progress was made.
"They indicated that they wanted to continue talking. The door was not closed," said Mr Butler, who denied that the body had significantly weakened its hand with the Government by accepting the revised PPF terms.
In a statement issued last night, Mr O'Sullivan said he was "under no illusion that, unless the unions fully honoured all the terms of the revised PPF and the Government took action in respect of PRSI, IBEC would walk away from the national agreement and the partnership process".
The decision to abolish the ceiling on employers' PRSI contributions has significantly increased the cost to business of employing workers who earn more than £36,600 (€46,470). At present, employers' contributions are capped at 12 per cent of the first £36,600 of salary but, following the lifting of the cap, they will have to pay an additional £100 for every £1,000 paid to staff over the threshold.
The decision to do away with the cap has also been criticised by the American Chamber of Commerce Ireland.
