Next week's 2 per cent pay increase for more than 550,000 trade unionists is not automatic, the Irish Business and Employers' Confederation has warned.
Its director of human resources, Mr Brendan McGinty, said in a statement last night that his members would not feel obliged to pay the increase where they had already given more than the basic terms of the Programme for Prosperity and Fairness, or their company was vulnerable to competitive and other pressures.
IBEC's stance has been condemned by SIPTU vice-president, Mr Jack O'Connor, who described it as "a frantic rearguard action to try and stem the flow of settlements reached with employers over the past few weeks". He warned that "if this initiative by IBEC succeeds, the PPF will collapse".
Mr O'Connor is responsible for the industrial relations strategy in the 210,000-strong union. He said that up until 10 days ago confirmation had been received from 274 employers, employing 75,373 members, that the 2 per cent would be paid on time.
He estimated that confirmation had now been given by enterprises employing 50,000 SIPTU members in the private sector and 43,000 in the public service that they would honour the rise. About 8,000 members had received the increase early.
Mr McGinty said last night that trade union leaders and their members "need to face up to the reality of what they signed". "There appears to us, at shop steward and rank-and-file level, to be very little awareness of the conditionality of the increase," he said, and cited continuing disputes, particularly in the public sector, to support his case. People should be aware there had been 3,000 redundancies since last autumn "and a steady stream of profit warnings" as well as "clear signs of a slowdown in the US and EU economies", he said.
"Ireland can weather any economic storms if we accept the reality that we must sell our goods and services to other countries at competitive prices. "The trade union movement committed its members to change, flexibility in the workplace, increased productivity and to keeping an eye for competitiveness and employment as well as delivering on industrial peace.
"It was only with these conditions clearly set down in print that the employers agreed to revise upwards the pay terms of the Programme for Prosperity and Fairness."
However, Mr O'Connor said IBEC was misinterpreting the agreement reached between the social partners on December 4th, 2000. He said "inability to pay employments" were not widened by the terms of the review. The 2 per cent was compensation for inflation. Companies that had already paid more than the terms of the PPF were clearly not in this category. The "change" employers could seek was "ongoing change, as distinct from major changes in the workplace".