A new national agreement seems likely this weekend. Talks on a successor to Partnership 2000 resume this morning after significant progress yesterday.
The Government is to propose a package on tax, child poverty and income adequacy to the voluntary sector. While the talks are on course to conclude successfully, major obstacles remain, especially in the area of low pay.
It is still possible that talks could break down on the overall shape of the pay deal, including the rate at which the National Minimum Wage (NMW) is set. The Irish Business and Employers' Confederation (IBEC) director, Mr Turlough O'Sullivan, said after yesterday's session that there was no point in having a deal at any price.
"We have to get the right environment for the Irish economy to move forward in the interests of all the people. We are not going to jeopardise what we have achieved. Our very success may prove the greatest obstacle to reaching agreement."
The priorities of the ICTU general secretary, Mr Peter Cassells, were different, but not opposed to Mr O'Sullivan's. He said: "We have to ensure we get an agreement which represents a reasonable balance between sharing the benefits of economic growth, especially for the lower paid, and ensuring we do not fuel inflation. That would undermine living standards and our economic competitiveness."
If consensus can be reached, pay increases worth at least 15 per cent are likely over three years for the State's 545,000 trade unionists, an increase of over £50 a week for the average worker, before local bargaining and gain-sharing agreements are taken into account.
The payments would be "frontloaded", with over 5 per cent paid in the first year to take account of the fact that the last phase of Partnership 2000 only provided a 1 per cent pay rise.
Social Welfare payments are likely to rise to a minimum of £85 a week and be pegged to 50 per cent of average household incomes. This should meet one of the main concerns of the voluntary and community sector. However, there is still no agreement over whether "family-friendly" measures should be through child-centred welfare payments to parents, or targeted at working parents.
While employers would welcome initiatives to improve the situation of the low-paid through tax cuts and the abolition of 4.5 per cent employee's PRSI for those on the NMW they are strongly resisting trade union pressure to raise the rate towards £5 an hour. Unless IBEC is prepared to offer something significantly over £4.50, the issue may go back to the Government.
IBEC is particularly concerned at the impact the NMW will have on small firms, especially those outside Dublin. However, the issue is equally critical to unions such as Mandate and SIPTU, which have large numbers of low-paid members.
More progress is understood to have been made on the need for a flat-rate increase to help the low-paid. IBEC has offered to pay up to £9 a week, and ICTU is looking for £15. A figure somewhere between £10 and £12 is likely.
Proposals to apply "a sliding scale" of percentage pay increases nationally weighted towards the low-paid appear to have been abandoned as too complicated. Instead there will be across-the-board payments worth at least 15 per cent.
ICTU will be looking for substantially more if IBEC insists on a three-year agreement, but a 33-month agreement now seems a distinct possibility. Such a time scale would cover the lifetime of the current Government.