It was Noel Dempsey's visit to the Newgrange Hotel in Navan about 7 p.m. last Friday that gave the first indication a deal could be struck at Tara Mines.
This meant that the 20 per cent cut in earnings which Outokompu was demanding from the miners could be softened by a massive hike in tax relief on those earnings.
In 1997, the Government introduced legislation which allowed lump sums of up to £10,000 to be paid to workers tax-free in situations where they were facing cuts of up to 10 per cent in pay. The trouble was that the Tara miners were being asked to take cuts of more than 20 per cent, for about half of those affected.
In an attempt to break the impasse, the chief SIPTU negotiator, Mr Jack O'Connor, and his colleagues suggested on Thursday that the Act be changed. The suggestion fell on fertile ground, as far as the company and the talks' facilitators were concerned.
One of those was IBEC director Mr Turlough O'Sullivan, whose own organisation had been campaigning for years for tax relief in such situations.
The Minister for the Environment and Local Government, Mr Dempsey, who is a local TD, was approached immediately. It took him just over 24 hours to report back that he had Cabinet confirmation for the necessary amendment to the 1997 Finance Act.
The new legislation will operate retrospectively to cover the lump-sum payments, which will be made to miners on August 3rd. Even the publicans' lobby would be hard-pressed to produce results with greater alacrity.
The deal means that miners, with projected pay cuts of £6,000 to £8,000 a year over the next five years, will be able to avail of compensation sums ranging from £6,200 to £20,000 tax free.
The 1997 Act provides for a basic lump sum of £6,000, plus £200 for each year of service up to 20 years. While the exact provisions of the amendment have still to be decided, such was the speed with which Cabinet approval was secured in principle, it appears the basic lump sum will be increased to £8,000 for workers losing more than 20 per cent of basic pay and that the amount payable, tax-free, for years of service will be increased to £600 per annum.
Asked if the amendment amounted to a tax subsidy for employers imposing wage cuts on their workers, Mr O'Sullivan said the cost to the Exchequer remained far less than if Tara Mines closed down, with the loss of 625 jobs and £25 million a year to the local economy.
He added that situations "of that depth and seriousness are rare enough". Only companies facing the alternative of closure or a long-term cut in pay to employees could avail of the scheme. He did not see it as a viable strategic option for companies seeking to compete in low-wage sectors, such as textiles.
The Revenue Commissioners said few employers had availed of the 1997 Act.
Whether it assists weak employers is questionable. Fruit of the Loom, for instance, did not seek to avail of the legislation as an alternative to mass redundancies in Donegal.
Outokompu is by far the largest company to use the Act and it is hardly weak or poor. It employs 40,000 people worldwide and, according to the latest issue of Finnfacts, journal of the Confederation of Finnish Industry and Employers, it is the ninth largest company in the country and expected to report record profits this year.
