Social partners ratify new national agreement

In March 2003, the main Irish social partner organisations ratified the country's latest national partnership agreement, 'Sustaining progress'. The accord includes an 18-month pay deal, providing for increases of 7%, along with measures in areas such as compliance procedures and statutory redundancy pay.

On 26 March 2003, the Irish Congress of Trade Unions (ICTU) and the Irish Business and Employers Confederation (IBEC) formally ratified Ireland latest national partnership agreement, Sustaining progress, which covers 2003-5. A draft agreement had been reached in January 2003 (IE0301209F), overcoming a series of obstacles that had threatened at least a temporary pause in the social partners' 15 years of national partnership deals. Sustaining progress is the sixth successive accord of its type since the negotiation of the Programme for National Recovery (PNR) in 1987.

On this occasion, however, the pay agreement runs for just 18 months, which means that the social partners must negotiate the final 18 months of the three-year programme in 2004. This interim 18-month pay deal involves a total pay increase of 7%, to be paid in three phases of 3%, 2% and 2%. In the public sector there is to be a six-month pay pause before the first phase is applied. However, public sector workers are also to receive a series of deferred pay awards made by the Public Service Benchmarking Body (PSBB) in 2002 (IE0207203N). These awards, which also come in three phases, are contingent on the delivery of an agreed modernisation programme across the public sector.

The key industrial relations feature of the new agreement concerns a new set of compliance measures, which will involve the Labour Relations Commission (LRC) and/or the Labour Court intervening where disputes arise in relation to the national pay agreement. Ultimately, the Labour Court can issue binding recommendations on the pay agreement, although these are not legally enforceable. Meanwhile, the National Implementation Body (NIB), a group composed of key government, ICTU and IBEC leaders (IE0103233N), is to assume a more enhanced role and can be expected to intervene in any high-profile disputes.

Sustaining progress also contains a number of other specific commitments in the industrial relations area, such as: improved statutory redundancy pay provisions; an increase in the minimum wage in 2004; and changes to existing provisions that cover the right of workers to representation on workplace issues under the Industrial Relations (Amendment) Act 2001 (IE0209203F).

A new anti-inflation initiative in the agreement includes a commitment that 'investigations' will be undertaken in industry sectors 'where price increases do not appear justified by market conditions'. Where such investigations reveal evidence of excessive price levels, the government will be asked to give 'detailed consideration' to introducing measures, 'including temporary prices controls where appropriate, pending realisation of more acceptable markets and real competition'.

A key difference between the new programme and all of its five predecessors is the fact that there is no formal commitment on further tax reductions. This omission is a tacit acknowledgement of the quite limited scope for further tax relief in an economy that now has one of the lowest tax rates in the EU.

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