Employers and unions were last night inching towards agreement on a pay increase of more than 5 per cent for 18 months in talks at Government Buildings.
A 4 per cent rise offered by employers was being resisted by unions, who were holding out for an increase of at least 6 per cent, as well as a flat rate rise of €20 a week for workers on low pay.
The indications were that if a deal could be struck, it would be for a rise of between 5 and 6 per cent, to be paid in two phases.
A row over the future of Aer Rianta was resolved last night in parallel discussions between senior union negotiators and Government representatives. That cleared the path for a deal to be completed on pay increases for 500,000 workers.
A number of sticking points remained, however, with employers continuing to refuse the unions' demand of a flat rate rise for the lower paid. They argued that such an increase could put vulnerable companies at risk of going out of business. Unions pointed out that such employers could apply the "inability to pay" clause of the current partnership programme, Sustaining Progress.
Significant doubt about a deal had earlier emerged because of union concerns over the future of workers at Aer Rianta. In talks with Government representatives early yesterday, an agreement had been worked out which removed Aer Rianta as an obstacle to agreement.
The deal provided for the Government to proceed with the establishment of Cork and Shannon airports as separate companies, but initially with no assets or staff.
Their first task would be to produce business plans over the next year. If these proved satisfactory, the Government would then complete the break-up of Aer Rianta.
Legislation enabling the new structures to be put in place was to be published, possibly as early as today. This would also enshrine commitments given to the unions in January over the future job security and quality of employment of Aer Rianta workers. The agreement also included a commitment that, in the event of a second terminal being built at Dublin Airport, steps would be taken to ensure the pay and conditions of workers were not inferior to those in Aer Rianta.
When the parties returned to the talks yesterday, it appeared that that agreement was in danger of unravelling. A spokesman for the Tánaiste, Ms Harney, refused to comment on suggestions that she had blocked the deal.
It was learned last night, however, that she had objected to any notion that pay, conditions and work practices in Aer Rianta would necessarily have to apply to any future private terminal.
After further talks with Government officials last night, union negotiators were satisfied both sides had reached an understanding of each other's position, and that the agreement remained in place.
The first phase of a pay deal would come into effect for some private sector workers on July 1st. It was anticipated that public sector staff would receive the first phase next June, in tandem with the final payment of benchmarking. The deal was also expected to pave the way for a new benchmarking body to begin work next year, with a report to be issued about two years later.