Union and employer representatives have been placed on standby to resume talks today on a possible new national partnership deal.
The prospect of a renewed push to secure a deal, to succeed the Programme for Prosperity and Fairness, increased last night following intensive contacts between Government, employer and union representatives.
Meanwhile, the European Central Bank (ECB) yesterday highlighted the inflationary dangers attached to rising wages, urging wage moderation across the 12-nation euro zone. The warning came as it emerged that more people in the State were made redundant in 2002 than in any year since the 1980s.
Negotiations on the partnership stalled before Christmas when the two sides failed to reach agreement on pay, union recognition and measures to ensure compliance with any new agreement.
Last night a source involved in the talks put the chances of resumption today at 60-40. It is understood no new formula has emerged, however, that might bridge the gap between the two sides.
If talks do resume they are expected to continue through the weekend in a last-ditch effort to save the social partnership process.
"My judgment would be that if they do start again, they will go until they burst," said the source. The talks would again be chaired at Government Buildings by the secretary general of the Department of the Taoiseach, Mr Dermot McCarthy.
Failure to secure an agreement would bring about a return to free collective pay bargaining for the first time since the 1980s. Yesterday the country's biggest craft union, the TEEU, decided to seek a 10 per cent pay increase from major manufacturing companies. The Irish Bank Officials' Association has already prepared a claim for a seven per cent increase plus other concessions
Other private-sector unions are also proceeding with claims, and a series of rolling two-day general strikes has been threatened if employers insist on a pay pause.
In a statement yesterday the employers' body, IBEC, said the unions had failed to take account of the fact that enterprises would only be able to consider pay adjustments in low single figures.
"For many employers, a significant pay pause will be deemed necessary, to protect competitiveness and employment."
IBEC said "comprehensive guidelines" for the conduct of enterprise-level bargaining had been prepared, and these would be immediately available to members in the event of an "irretrievable breakdown" in the partnership talks.
In the talks which broke down last month, IBEC had sought a six-month pay pause, followed by an increase of five per cent in phases over 18 months. Unions are seeking an increase to match an expected inflation rate of five to six per cent, over 12 months. Employers will be faced with much higher "headline-setting" claims at local level if partnership breaks down.
Department of Enterprise, Trade and Employment figures show that slightly more than 25,000 redundancies were registered during the year, an increase of close to 30 per cent on 2001, and almost double the levels recorded in 2000.
Mr Austin Hughes, chief economist with IIB Bank, said that while the numbers were not promising, they must be viewed against a backdrop of overall employment levels, which continued to grow in 2002, albeit at a slower pace than in the late 1990s.
"This is not an indication of economic catastrophe," said Mr Hughes, who believes the latest redundancy figures "exaggerate" deterioration in the jobs market. Unemployment is running at less than five per cent, compared to more than 15 per cent in 1988.
The manufacturing sector was the worst-hit last year, contributing about 10,000 redundancies to the total. The retail and banking sectors combined to account for 6,500 notified redundancies.
Meanwhile in a cautious statement about the euro-zone economy, the ECB said wage moderation would help to improve the prospects for employment growth in euro-zone states. The bank, which maintains a targeted ceiling for inflation of just two per cent, also said slower wage growth was "crucial" for maintaining price stability in the euro zone. Inflation in the Republic, at close to five per cent, is running at more than twice the euro-zone average.