Trade unions, employers and the Government are in serious disagreement over likely future pay increases under a proposed new national agreement, writes Martin Wall, Industry Correspondent.
Taoiseach Bertie Ahern will today trigger a new national pay round when he formally invites the social partners to participate in a review of the existing agreement, Towards 2016.
Trade unions are to seek increases significantly ahead of inflation in any new talks. However, employers have warned that "pay moderation is an urgent requirement in future".
It is understood that at a plenary meeting of social partners in Dublin Castle today, Minister for Finance Brian Cowen will also call for wage restraint.
The Minister is expected to say that while the public finances are sound, it is crucial that wage expectations are kept in line with rapidly changing economic developments.
Mr Cowen is expected to call for renewed focus to be placed on competitiveness and productivity.
It is understood that he will say that, in recent years, pay increases have exceeded productivity growth levels and that this has resulted in a loss of competitiveness.
Mr Cowen is also expected to argue that the forthcoming pay negotiations should take account of an anticipated reduction in inflation in the months ahead.
Unions have argued that the bulk of the 10 per cent increase awarded under the current phase of Towards 2016 has been effectively eroded as a result of higher than anticipated inflation.
However, employers' group Ibec has claimed that pay rates in Ireland have been growing at twice the pace of those in other euro zone countries.
It is expected that one of the first arguments in any talks on pay will be over how inflation is measured.
The director general of Ibec, Turlough O'Sullivan, said it was "wrong" to use the consumer price index - which includes mortgage interest - "as the Government has already compensated those facing higher mortgages through increased mortgage interest relief".
Public sector unions will also seek reforms of the method for determining public sector pay in the wake of the benchmarking report which awarded no special increases to the majority of civil and public servants. While the Taoiseach will today formally invite the parties to talks, the actual process is unlikely to get under way in earnest until April at the earliest.
Meanwhile, Father Seán Healy, the director of the Catholic Church group Cori Justice - one of the social partner organisations that signed the previous agreements - said the Government had failed to honour "a core commitment" to give economic and social development equal priority.
He said the Government had reneged on promises in Towards 2016 to provide funding for primary care teams, and to deliver the national carers' strategy in 2007. However, he acknowledged progress had been made in raising social welfare rates, and providing additional social housing units.
"While economic development has gone well, Government has not given sufficient priority to social policy during the first two years of this agreement," said Fr Healy.
The State's largest trade union, Siptu, will have to hold a special conference on whether to attend the new round of talks. Already it has signalled that a number of key employment rights measures agreed under the current deal have not been implemented.
The expected long run-in to the talks should allow the Government time to move on some of these issues, including the publication of the long-awaited employment rights compliance legislation.