Employers and unions agree that a new form of social partnership is needed, but their blueprints differ radically in key areas, writes Colm Ward

When the current round of collective bargaining began in the mid- 1980s, few could have imagined the progress that Ireland would make in the next 15 years.

At the time, the government, employers, unions and other groups within society came together to develop a social partnership that would pull Ireland out of the doldrums of unemployment and economic stagnation.

There is little doubt that Ireland has come a long way since and social partnership has played a huge role in that development. But as the current partnership agreement - the Programme for Prosperity and Fairness - comes to an end, questions are being asked about the future of collective bargaining. Industrial unrest, such as the teachers' dispute, combined with bad news about the public finances, has caused people to ask themselves if collective bargaining is dead.

"I would say that, on balance, the odds against an agreement being reached are quite considerable," says Mr Jack O'Connor, vice-president of the trade union, SIPTU.

The poor state of the public finances at present will make partnership negotiations difficult, according to Mr O'Connor.

Previous agreements, he says, were based on "pay moderation supported by alleviation of tax".

For example, if the unions sought a 6 per cent pay rise for workers, employers might agree to a 3 per cent rise, while the Government would commit to a 3 per cent reduction in income tax over a certain period of time. The net result was that workers took home 6 per cent more pay, while employers were not forced to pay excessively high wages.

Mr O'Connor believes income tax reductions are unlikely for the foreseeable future. As an alternative, he suggests certain reforms to the tax system such as the removal of all workers on the minimum wage from the tax net.

The main priorities for SIPTU are in the areas of take-home pay, healthcare, employment security, health and safety and increases in living standards.

SIPTU is also calling on the Government to increase the amount of redundancy payments employees are legally entitled to when they are laid off.

Demonstrations will be taking place around the State today to highlight this issue.

Mr O'Connor stresses that, if these issues can be addressed, his organisation would welcome a further partnership agreement.

For employers, any partnership talks should focus on "rewarding risk and supporting development", according to Mr Brendan McGinty, director of industrial relations and human resources at IBEC.

"Whether we enter another national agreement on pay and related matters is really quite secondary. What matters is that Ireland begins to claw back some of the competitive edge it has lost in recent years," he says.

The first priority if this is to be achieved will be to tackle inflation. Mr McGinty uses the term "the wages-chasing-inflation cycle" to describe the process whereby economic success pushes up prices, which leads to a demand for wage increases, which in turn serves to push prices up further, creating a vicious circle.

In light of this, he believes any pay increases must be in "low single figures".

"I think that, for most employers, a social partnership agreement without the pay element being determined would be of little interest," he says.

IBEC has set out several issues it sees as essential to the success of the next round of partnership. In addition to the pay and competitiveness, it highlights improvement in the quality and value for money of public services; the creation of a learning, knowledge-based society; and the provision of more childcare facilities.

Mr David Begg, general secretary of the Irish Congress of Trade Unions, is a veteran of social partnership talks, having been involved in negotiations for the first three agreements. He too believes a new model of social partnership is needed.

"From now on, we have to go about attempting to consolidate the economic progress, so it can't be the same model," he says.

Any new agreement must focus on tackling issues such as health, education and housing, he says.

"The broad social deficits that are there are affecting the quality of life for those who are working.There is a serious effort to be made at tackling the four or five main issues that are there at the moment."

Mr Begg believes the new agreement must also address issues that he sees emerging in the longer term such as care for the ageing population and immigration.

However, any new agreement must be more focused on these specific issues and must be less complex than previous agreements.

"One of the things that employers and ourselves do agree on is that, if we have an agreement, we should have a more focused agreement," he says.

The National Centre for Partnership and Performance has been working at the coalface of industrial partnership in recent years.

The centre's director, Ms Lucy Fallon-Byrne, believes that, for partnership to succeed in the future, all players will have to accept organisational change and flexibility in the workplace.

"There definitely is a need for an overall national framework," she says.

But she also believes that support for flexibility at local level must be built into any agreement reached at national level.

Negotiations are likely to begin later this year, following the publication of a report from the National Economic and Social Council, the group charged with advising the Government on the development of the national economy and the achievement of social justice.

The report, due for publication at the end of this month or the beginning of November, will form the basis for any new partnership talks.

The Business 2000 column provides information for business studies teachers and students on the current business climate.

It is intended to complement the Irish Times Business 2000 multimedia resource package developed by Woodgrange Technologies, which is sent to all second-level schools and selected third-level institutions.

Business 2000 is published every Friday in the Business This Week supplement. The teachers' support desk at Woodgrange Technologies can be reached at 01-4352514 or by e-mail at: business2000@woodgrange.com.

Companies participating in Business 2000 are: Irish League of Credit Unions, Bord Fáilte, Enterprise Ireland, Coca-Cola Ireland Ltd, Dell Ireland, Musgraves, The Pensions Board, NTR plc, AIB plc, Guinness UDV, Masterfoods Ireland Ltd, Health & Safety Authority, The Office of the Revenue Commissioners, Bus Éireann, Danone, National Centre for Partnership and Performance, CRH plc, Department of Health, InterTradeIreland, Beiersdorf, Department of Finance, National Development Plan, Cadburys Ireland, Irish Sports Council, GlaxoSmithKline, USIT and the Food Safety Promotion Board.