UNIONS are expected to begin balloting members this week on the pay terms of a new agreement to succeed the Programme for Competitiveness and Work.
Senior negotiators representing the Government, employers and the Irish Congress of Trade Unions are to meet this morning to finalise details on the non pay aspects of the deal.
A breakthrough, on the thorny issue of public service pay, was achieved shortly after 10 o'clock last night.
Under the terms of the new agreement, public service workers will receive a 2.5 per cent increase on the first £200 of their weekly pay from July 1st, 1997 and a further 2.5 per cent on the balance from April 1st, 1998.
The Government had hoped to defer any increase in public service pay until 1998, while the ICTU had been seeking the same increase as that achieved in the private sector talks last week, of 2.5 per cent on all basic pay from July 1st, 1997.
The final arrangement means that lower paid public service workers will not have to endure a freeze, while deferring some of the cost to the Exchequer until 1998.
Workers in the public service are to receive a further 2.25 per cent increase from July 1st, 1998. Most workers in the private sector will receive the 2.25 per cent from January 1998.
The local bargaining clause for public service workers does not come into play until July 1999, 12 months after the private sector and it will be subject to new criteria based on a modernisation programme for the public service.
The final phases of the agreement are for a further 1.5 per cent increase from July 1st, 1999 and 1 per cent from April 1st, 2000.
The private sector increases for the last phase of the new agreement come into effect on January 1st 1999 and September 1st, 1999, respectively.
The way is now cleared for the Government to begin introducing a package of £900 million in tax and PRSI relief for PAYE workers in next month's budget. This will ensure an increase in take home pay of at least 12 per cent over the life of the agreement.
Today the negotiators will meet to consider other aspects of the new agreement such as partnership, social inclusion and union recognition.
The new agreement is likely to be concluded by Thursday or Friday, at the latest.
These are the speediest negotiations ever for a national agreement and it was the ICTU which set the momentum with its determination to conclude negotiations well ahead of the next budget.
Union leaders will be arguing that, for the first time, trade unionists will be able to vote on a pay agreement in the knowledge that any increases will be supplemented by substantial and quantifiable tax cuts.