Differences are emerging over pay strategy between unions representing low and high-paid workers.
On the eve of tomorrow's crucial meeting of the Irish Congress of Trade Unions executive, two unions representing over 50,000 low-paid workers in the private and public sectors have called for Congress to make flat rate pay increases its priority in any review of the Programme for Prosperity and Fairness. But MSF, which represents 20,000 mainly middle to high earners, wants a new local bargaining clause "annex" to the PPF instead.
SIPTU, which represents almost 40 per cent of ICTU's affiliated membership, favours a 5 per cent across-the-board pay rise plus "social wage" measures such as pension bonds.
The calls by Mandate and the Civil and Public Service Union for flat rate increases in any pay review of the PPF are being seen as a warning shot across the bows of unions such as MSF, which want a local bargaining clause.
The general secretary of the CPSU, Mr Blair Horan, who represents over 13,000 clerical workers in the civil service and private sector, said yesterday that any "PPF pay review due to rising inflation must concentrate on flat rate increases to compensate workers on lower incomes. There would be no justification for percentage increases. Lower paid workers have lost out and flat rate increases are a means to contain inflationary pressures."
Mr Horan said this was the third year in a row when general pay rounds had been less than inflation. "In an economy booming at the rate of 10 per cent a year, relying on tax cuts while inflation wipes out real pay gains is not sustainable. There is now a major fault-line in the Irish economy which, if it is not addressed, will break the PPF and burst the economy."
Any review must provide for a flat rate pay increase to compensate for inflation and "other gain-sharing measures both on pay and tax" to reward workers for moderation while "curbing inflationary pressures in the economy". Unlike SIPTU last week, which called for a 5 per cent pay rise, Mr Horan has avoided putting a percentage figure on any new pay claim.
A Mandate national official, Mr John Douglas, who represents 38,000 workers in the retail and bar sectors, called for "a substantial increase in the minimum £12 floor provided in the first phase of the PPF". He also wants the first phase of the PPF brought forward "for all workers" for immediate implementation. Most of his own members will not receive the first 5.5 per cent until next January.
Mandate voted against the PPF and Mr Douglas said subsequent events bore out the union's "analysis that the PPF had very little to offer low-paid workers". He estimated the net pay and tax gains combined from the PPF could be as low as 1 per cent, "which is much lower than any previous agreement". He felt further tax cuts were a less viable route for Mandate than flat rate pay rises, as cuts would benefit high income groups the most.
However, the national secretary of MSF, Mr Jerry Shanahan, who represents many higher-paid professional and technical workers in the private and public sectors, felt ICTU would be better off pursuing a local bargaining "annex" to the PPF. He said a "free-for-all across-the-board increase would be incompatible with the PPF". He also felt IBEC would strongly resist any general increase and there would then be "very little room to manoeuvre" between the two sides.