A renewed attempt to achieve a national pay deal is to be made this weekend after the parties failed to make progress in talks at Government Buildings last night, write Chris Dooley and Mark Brennock.
The negotiations appeared to be in difficulty after the Government suggested the current gap between employers and unions was too wide to bridge.
The parties were unwilling to allow the talks to collapse, however, and a fresh attempt to forge a deal is to be made on Sunday. The talks were adjourned at 10.30pm.
Negotiations at Government Buildings had been due to begin from about 7pm, in the hope a deal on pay increases for 600,000 union members might be achieved by today.
However, senior Government official Dermot McCarthy, who is chairing the talks, separately told both sides that in his assessment the gap was too wide for him to attempt to broker an agreement. His comments followed an equally downbeat evaluation by Taoiseach Bertie Ahern, who told the Dáil he was "pessimistic" about the prospects of a deal.
The parties had spent the past few days attempting to finalise agreement on measures to underpin employment standards and prevent exploitation of workers.
With a number of key issues still to be resolved, it was expected the employment standards issue would temporarily be put aside to allow talks on pay to begin. After speaking to both sides, however, Mr McCarthy delivered his assessment that a pay deal at present appeared to be out of reach.
It is understood the employers' body, Ibec, was holding out for a three-year deal involving pay increases in "low single figures".
It is also resolutely opposed to union demands for a local bargaining clause that would allow workers to pursue "top-up" increases from highly-profitable employers. Unions favour a shorter deal due to uncertainty over inflation, and annual increases well in excess of the most recent inflation figure of 3.8 per cent.There were indications last night that, if a deal can be agreed, it is likely to be of a two-year duration. A special "flat rate" increase for the low-paid was also being insisted upon as a "must" by the union side.
Uncertainty over whether a deal could be done at all, however, was putting the prospect of an overall social partnership agreement in doubt.
A source at the talks said there was no point in trying to complete the employment standards agenda if there was not going to be agreement on pay.
Today had been a target date for completion of a pay deal given that the State's biggest public sector union, Impact, begins its biennial conference in Killarney, Co Kerry, tonight. Impact general secretary Peter McLoone is a key figure at the talks, in his role as the current president of the Irish Congress of Trade Unions.
Mr Ahern told the Dáil he believed the parties could agree measures to "provide the necessary strong protection for employment standards while ensuring Ireland continues to offer an excellent environment for business and job creation".
"However, I have been advised that there is a considerable difference between the sides on the parameters of a pay agreement, as well as on some significant non-pay items. It is far from clear that an agreement can be reached."
He said while he would "greatly regret" any failure to reach a deal, he had "always believed that no agreement is better than one which is wrong in terms of the sustainability of jobs and living standards".
In response to questions from the Labour Party leader Pat Rabbitte, Mr Ahern said it was true he was putting forward a pessimistic view of the prospects for agreement. "I do not see two sides engaged to find a resolution right now."
As reported in The Irish Times yesterday, the employment issues still to be finalised include measures needed to ensure all companies involved in public sector contracts are in full compliance with labour laws.
Measures to stamp out the use of bogus sub-contractors, who are in reality employees, for the purpose of avoiding tax and other liabilities, have also to be agreed.