Compulsory arbitration by the Labour Court and a national minimum wage are too high a price for social partnership, former Labour Court chairman Mr John Horgan has told the Institute of Personnel and Development conference in Galway. He also predicted that the new powers being given to the court could prove "a legal minefield".

He was speaking in a debate at the conference on "Do We Really Need More National Partnership?". But in response, the joint director of the National Centre for Partnership, Mr John O'Dowd, said that Ireland had made a strategic decision in the 1980s to use the partnership model.

"A specific combination of moderate pay increases and tax reliefs has helped sustain low inflation and economic growth," he said. "Nobody is offering any alternative to social partnership that has any credence or credibility."

Mr Horgan, who is now director of human resources for Analog Devices' European operations, argued that the exceptional economic growth rates of recent years are not due in any significant measure to social partnership or "sacrifices by trade unions".

The "most important cause of our prosperity is the enormous increase in inward investment by non-union companies into Ireland, that have found here a young, intelligent, educated and committed workforce that is happy to work in non-union environments".

He criticised strongly proposals agreed under Partnership 2000 for a national minimum wage and trade union recognition. "The threat of compulsory wage control on non-union companies would be a disaster," he said. "In today's competitive environment there may be some case for controlling increases in wages, but to introduce a law which will force employers to increase wages is daft. Faced with the threat of minimum age legislation and virtual compulsory trade union recognition, employers might be forgiven for concluding that the cost of continuing national partnership is too high."

Mr O'Dowd said that since the introduction of social partnership the economy had doubled in size, 400,000 extra people were at work and living standards were converging with the EU average.

He defended the new powers of the Labour Court as "sensible and reasonable". If IBEC and the ICTU had come up with a mutually acceptable means of resolving the problem, "it doesn't make a great deal of sense to second guess them". On the national minimum wage he said that the rate set "looks quite modest". Even "burger joints seem to have gone up from below £3 an hour to £4 for beginners, who are only teenagers".

Mr Horgan said that inflation, wage demand and industrial unrest had all been curbed during the period of the "free for all" between 1984 and 1987. "In other words social partnership did not bring low inflation, or wage moderation or industrial peace. These all arrived before we started national partnership."

He said that successive governments had failed to achieve the reductions in state expenditure promised in national agreements and questioned if it had created economic and social stability.

"During the period of social partnership we have experienced devaluation, the highest and lowest interest rates in the history of the State. No government has won an election and no party leader has survived the duration. Is this stability?"

Mr O'Dowd, who is a former general secretary of the Civil and Public Service Union, conceded that there was a serious problem with pay. "The problem is not just between public service unions and the Government but within the public service unions themselves.

"Traditional differences are beginning to surface and it is clear that within ICTU there is a need for a much more co-ordinated approach, instead of the competition we are seeing." If the 1970s had been an era when disputes over pay relativities had damaged the private sector, Mr O'Dowd said that the public service was now encountering similar problems that had to be resolved.

Turning to industrial relations trends, Mr Horgan said that increasing concentration of collective bargaining units had begun with the maintenance craftsmen's dispute in 1969. He warned that over-centralised systems could ultimately lead to total confrontation, such as last year's Danish national strike.

"There is good evidence to suggest that the alternative `free-for all' is not nearly as damaging as a national strike. But if we continue to regard `social partnership' as an absolute essential for economic management, `built into the fabric of our system of government', we might conceivably one day find ourselves in this situation."

Mr O'Dowd said that we were far removed from the highly centralised system of the Danes. National agreements had, and would continue to be, far more flexible in approach, with plenty of scope for local agreements.