TALKS on a new national agreement have entered a critical phase. The employers last night responded to a 12.5 per cent pay claim from the Irish Congress of Trade Unions by saying they would not go beyond 4.5 per cent.
The ICTU tabled its 12.5 per cent claim yesterday at the request of the Irish Business and Employers' Confederation. After a two-hour adjournment both sides resumed talks at 8 p.m. and IBEC put its counter-proposals.
An ICTU spokesman said a 4.5 per cent increase over the life of the agreement would mean a cut in workers' living standards when set against expected inflation of nearly 7 per cent in the next three years.
Congress wants all workers to receive at least 2.5 per cent a year, plus a local bargaining clause that would allow unions to negotiate another 4.5 per cent for groups of workers.
But an IBEC spokesman described the union claim as "unrealistic, damaging to competitiveness and out of touch with the need to reduce current public expenditure".
Essentially, the employers want Congress to accept nominal pay increases and look for real income gains through tax reform. Congress is also seeking £1.1 billion in tax relief, which would be worth about 3 per cent annually to most PAYE workers.
It is unclear how employers want to implement the 4.5 per cent offer, or whether it provides for local bargaining. But Congress says it appears employers are moving back from their opening position in the pay talks, when they seemed to accept that pay rises must match inflation.
Meanwhile, the public sector unions have come under more pressure to minimise pay claims, with the publication of Central Statistics Office figures yesterday. These show most public sector workers received increases of around 50 per cent between March 1988 and June 1996.
The Government will use the figures as further ammunition in its battle to convince the public sector unions that there has been considerable "pay drift" in the public sector, well outside the PCW's parameters.