IBEC has called for the next round of partnership talks to focus on pay restraint as it claims Irish firms are losing their competitive edge because of higher wage costs.
At the launch of its quarterly economic trends report today, Mr Turlough O'Sullivan, IBEC's director general said: "We cannot give ourselves pay increases ahead of those countries with which we trade. Over recent years, pay increases in Ireland have been far ahead of those countries with which we compete."
Mr O'Sullivan added "The message is crystal clear. Business leaders are very worried about our lost competitiveness, caused by ever-tightening margins and cost and currency pressures. They believe the focus must be on protecting jobs. The mandate for IBEC is to ensure that the next phase of this agreement does not add to these pressures."
But SIPTU general president, Mr Jack O'Connor, responded to Mr O'Sullivan's claims by saying there is a "lot of nonsense coming from employers" in relation to the forthcoming pay negotiations for the second half of Sustaining Progress.
"By IBEC's own calculations, inflation - which is now running at an annual rate of 1.7 per cent - will rise to an annual rate of 2.7 per cent this December and continue to average 2.3 per cent next year," said Mr O'Connor.
"In these circumstances where the cost of living in Ireland - due to previous high rates of inflation - is now at the highest levels in Europe, to be suggesting that workers should not gain a fair share in the forthcoming wage negotiations from a rising rate of economic growth is utter nonsense," concluded Mr. O'Connor.