Social partners clash over revised terms of national agreement

In March 2001, Ireland's largest trade union and its main employers' organisation clashed over the criteria to be used in paying the additional wage increases provided for by the recent revision of the national agreement, the Programme for Prosperity and Fairness.

Ireland's current national agreement, the Programme for Prosperity and Fairness (PPF) (IE0003149F), was "revised" in December 2000 (IE0012161F), in the light of rising inflation in 2000 and as an acknowledgement that wage expectations were not being fully met by the phased increases worth 15% over 33 months under the original terms of the PPF. As part of the revised terms, there is to be an additional 2% wage rise from April 2001, plus a lump-sum payment, worth 1%, made on a one-off basis in 2002. In March 2001, the Irish Business and Employers Confederation (IBEC) and Ireland's largest trade union, the 200,000-strong Services Industrial Professional and Technical Union (SIPTU), engaged in a public "war of words" over the additional 2% wage increase, due from 1 April 2002.

The row started when an IBEC spokesperson, Brendan McGinty, stated that all parties to the agreement revising the PPF had understood that the extra payment "must have particular regard for circumstances where competitiveness and employment are at risk". In doing so, Mr McGinty was merely reiterating the same terms which apply to the basic increases agreed under the PPF as a whole. SIPTU interpreted this as meaning that the employers believed that the 2% extra payment was not automatic. The union's reaction was swift. Its vice-president, Jack O'Connor, estimated that confirmation of willingness to pay the additional 2% had already been received by his union from companies representing 50,000 members in the private sector and from organisations employing 43,000 members in the public sector. Mr O'Connor accused IBEC of attempting to "stem the flow" of such settlements and suggested that the employers' body could fatally undermine the PPF.

The Prime Minister (Taoiseach), Bertie Ahern, entered the debate when he told parliament on 29 March that he understood that just four employers had pleaded inability to pay the 2%. He said that any employer that may have a problem meeting the terms of the PPF could make their case at the state dispute resolution agencies, the Labour Relations Commission and the Labour Court.

The dispute between IBEC and the unions was perhaps inevitable, given the fact that growth projections for the Irish economy have recently been revised downwards. The Irish Central Bank, in a report issued on 30 March, suggested that the annual growth rate would fall back from over 10% to between 6.5% to 7.5% in 2001.

A further problem is the as-yet-unknown impact of the current foot and mouth diseases crisis. Just one farm in the Republic (and one in Northern Ireland) had reported a case of the disease by 6 April. However, travel restrictions and the cancellation of various events have already affected tourism. Employers in sectors affected by the precautions being taken to prevent the spread of the disease may, therefore, seek to postpone payment of the extra 2%. This, in fact, may be why IBEC decided to remind trade unions of the strict terms of the PPF.