An all-out effort to conclude the pay elements of a national agreement to succeed Partnership 2000 will be made at Government Buildings this morning.
In an effort to break the deadlock over low pay and new pay structures in the public service, the Government told trade union leaders last night that a tax package was available to increase average earnings by 10 per cent in the lifetime of the new agreement.
Sources said £1.5 billion in tax cuts would be implemented, of which £1 billion would go to those on less than £200 a week.
A Government spokesman said: "Good progress was made in dealing with difficult issues in formulating a new pay agreement. We will proceed to finalise it in the morning and then deal with social exclusion, agriculture and other aspects of a new partnership agreement."
He ascribed the length of time it was taking to broker a deal to the need to develop a new approach to public-service pay determination and its repercussions across various grades, "which is very complex".
The three most contentious issues are public-service "bench marking", flat-rate increases for the low-paid and agreeing a figure for the national minimum wage. The Department of Finance wants a benchmarking system to replace pay relativities with a more cost-effective means of measuring productivity.
This would allow management to seek more rapid change in line with private-sector practice, but it would also allow unions to put in pay claims based on private-sector rates. The Department also wants to link concession of a 3 per cent pay increase to "early settlers" such as teachers and civil servants to acceptance of the new system.
Although the Irish Business and Employers' Confederation had indicated that it would make a significant offer on flat-rate increases for the low-paid, the figures which emerged, of £12 a week in the first year, £11 a week in the second and £9 a week in the third year of the agreement, disappointed the unions. The employers were only willing to pay the increases to those earning less than £200 a week.
Unions representing the low-paid, such as Mandate and SIPTU, are understood to have argued that these figures represented a floor that did nothing to close the gap between the low-paid and other workers. Translated into percentage terms, the cumulative value of the three payments over 33 months is 16.2 per cent, compared with 15.75 per cent for the rest of the workforce. The unions were preparing to mount a counterclaim as talks resumed at 8 p.m.
The phasing in of a national minimum wage was also the subject of dispute. Again, IBEC initially indicated a willingness to accept the union figure of £5 an hour, but only in the last year of the new agreement, 2002.
"Getting agreement is difficult because these negotiations are taking place against the background of totally new challenges and opportunities for Irish society", the general secretary of ICTU, Mr Peter Cassells, said. Congress would do its utmost to achieve its vision of a fairer society through the talks.
Last night representatives from the community and voluntary sector and the farming organisations were sent home early to allow key Government negotiators to concentrate on resolving the pay issue.
While there were signs yesterday that adequate resources will be available to tackle social inclusion, these measures cannot be finalised until the implications of the pay deal for public-service pay and taxation are clear. There are serious differences in areas such as measures to tackle long-term unemployment.
The community and voluntary sector has demanded guarantees that the number of people on Community Employment schemes is not reduced below 28,000 and that services such as unemployment centres, meals on wheels and women's refuges do not lose access to CE placements.