A BREAKTHROUGH in talks on new pay deal for the private sector may take place later today. It now looks like increases in take pay of about 18 per cent will be agreed over the three years of a new agreement.
The terms of a public sector pay deal have still to be discussed. But if pay negotiations for the private sector are finalised today, it would clear the way for the resolution of outstanding issues like public sector pay, measures to combat unemployment and tax reform.
It is understood that the Irish Business Employers Confederation (IBEC) agreed yesterday to improve its pay offer to more than 7 per cent over the next three years. Earlier, IBEC negotiators had been insisting that increases could not exceed 4.5 per cent.
The Irish Congress of Trade Unions negotiators have to reduce their pay claim below 10 per cent. Previously the ICTU had been holding out for cumulative increases of 12.5 per cent in any new agreement.
Taken in conjunction with proposed tax cuts of £1 billion over the next three years, this would mean a pay rise of around 18 per cent for PAYE workers earning between £15,000 and £25,000 a year.
After talks adjourned at 11 p.m., the chairman, Mr Paddy Teahon, said in a statement: "Both sides showed flexibility on [their previous positions but, unfortunately, not enough to bridge the gap. Further efforts will be made tomorrow evening and on Friday, to achieve progress.
Neither side was willing to comment on how talks had progressed last night. This silence is a strong indicator that they are near to agreement, but that difficult negotiations lie ahead. ICTU and IBEC do not wish to say anything that could add to those difficulties, or compromise their negotiating positions.
It is likely that the 2 to 2.5 per cent gap that now divides them will be bridged by some form of local bargaining clause. The ICTU will be pushing for a clause with the widest possible application, while IBEC will seek to make it restrictive and tie any increases firmly to productivity.
If this evening's discussions achieve a breakthrough on pay in the private sector, detailed negotiations on public sector pay are expected to begin on Friday.
The ICTU is still hoping to achieve an outline agreement on pay and tax reform by Friday night. It would then be possible for affiliated unions, representing over 500,000 workers, to convened special delegate conferences to vote on the proposals before the January Budget is finalised.
Meanwhile talks with the second tier of social partners on the wider social end economic issues involved in any new agreement could be finalised.