PAY TALKS:EMPLOYERS' GROUP Ibec has called for the introduction of a pay pause for employees in the public service.
In an article for The Irish Timesin the wake of the ESRI forecast on the economy, Ibec director of policy, Danny McCoy, said the increase in unemployment was already giving rise to a greater degree of wage restraint in the private sector through market forces.
"This pay restraint must also be reflected in the job-secure public sector. The private sector will not be prepared to pay for higher public-sector pay growth by the loss of their jobs or businesses. The rapid deterioration in the public finances has to be addressed. The only way of doing this, while sustaining Ireland's long-term prosperity, is by reining in current expenditure growth, whilst preserving much of the capital expenditure committed under the National Development Plan", he said.
Mr McCoy said that given the scale of the public-sector wage and pensions bill, a pay pause in the public sector needed to be given serious consideration by the Government in the national interest.
In the current talks on the next phase of the social partnership agreement, Ibec has strongly argued in favour of measures aimed at improving competitiveness. However this is the first occasion that it has publicly sought a pay pause in the public sector.
However, the general secretary of the country's largest public-sector union has said calls for a pay pause for public servants was "neither sensible nor acceptable".
Peter McLoone of Impact said there were 40,000 public servants in clerical grades with starting salaries of €20,000 per year, rising to €36,000 after 17 years. He said that the cost of their shopping baskets was also continuing to rise.
Mr McLoone said a "vacuum" had developed in relation to the current partnership talks in recent weeks with the Government's concentration on the Lisbon Treaty referendum and its aftermath.
He said that in this vacuum, dangerous territory had been reached where parties could engage in posturing while the process was still live. Mr McLoone said the Government needed to set out its analysis and say how it intended the economic challenges be addressed and whether or not it believed that these should be addressed within the social partnership framework.
Jack O'Connor, president of Siptu, the country's largest union,said negotiators in the pay talks would take into account the state of the economy as they always did.
However, he said the reaction to the ESRI report had been "over-the-top and alarmist" in some quarters. Mr O'Connor said that the country was not facing a 1980s-style situation.
"We are emerging from an unsustainable economic bubble, based on cheap credit and accelerating property values."
"The situation calls for steady hands and cool heads. We will emerge from this as well as other capitalist economies," he said.
Larry Broderick, general secretary of finance union IBOA, said that if employers were to seek an across-the-board pay pause, it would represent the end of social partnership and the start of direct negotiations in companies. He said workers needed compensation to take account of rising inflation.
