Few would question the unique and important role played by social partnership in the Republic's economic transformation. However, as talks on the new agreement illustrated, its future as a policy instrument depends on constant redefinition as well as some hard bargaining.

The European experience of partnership offers support but little detailed guidance. With the exception of the Netherlands, most experiments with wages policy have either collapsed or run out of steam. This has left the Irish social partners to find their own way forward, which they have done with some ingenuity.

The essence of the new agreement is a wage-tax deal, combining voluntary pay limits with special measures for the low paid. How robust is the agreement? Will it respond effectively to the pressures of globalisation which results in the emphasis on flexible labour markets decoupling well-paid, high-skill workers from those in the low-skill casualised sector?

Some interesting clues are provided by the evolution of the Australian Labor government's accord with the trade unions from 1983 to 1996. This began as a formal pay policy administered by the Australian Industrial Relations Commission, including a "social wage" component of tax cuts, family allowances, superannuation and universal health cover. The tensions in the accord, which led eventually to its disintegration, had their source in two separate but related areas of policy failure. The first was the inability to reconcile the demands of employers and strongly organised bargaining groups for decentralised, productivity-based pay settlements with the traditional attachment of Australia's compulsory arbitration system to the principle of "comparative wage justice".

The result was that while workers in some firms, especially those in the global growth sectors, were able to secure their share of productivity gains, others were instead subjected to downsizing, work intensification and low wage competition. The second area of failure lay in neglect of the need for a new workplace "infrastructure" to support local bargaining on the introduction of new technologies, skills and work organisation. For example, little was done to extend workers' rights to information and consultation on these issues.

The only major policy initiative to make a positive impact in this area was the Australian Best Practice Program. Essentially, this funded joint efforts by employers, workers and unions to undertake structured programmes of organisational change, including multi-skilling, "broadbanding" of job classifications and the devolution of decision-making to self-managed work teams.

Again, the programme prefigures the Republic's current interest in "enterprise-level partnership", which may derive a further impetus from measures announced in the latest agreement.

However, a recent evaluation of the Australian initiative concluded that while there was perceptible change, even transformation, of some workplaces covered by the programme, it was business as usual for the vast majority.

Can any lessons be drawn from this very mixed Australian experience?

One lesson which may have resonance here is the need to retain an effective system of conciliation and arbitration not only to resolve disputes, but also to ensure fairness and comparability in pay-setting arrangements. A further lesson is the importance of measures to promote enterprise-level partnership as an adjunct to wage bargaining. While no single model of partnership can or should be imposed, there is still a need for central co-ordination to ensure diffusion of best practice, training for managers and workplace representatives and research into and evaluation of local initiatives.

There is nothing inherent in national agreements that predisposes them to unravel or self-destruct.

The Republic's own partnership has already outlasted the Australian accord, not to mention Britain's ill-fated Social Contract of the 1970s. Ultimately, long-term success will depend on the approach to fair pay, job security and workers' involvement in the decisions affecting them. This is the challenge for the new agreement.

Roy Green is professor of management at NUI Galway. He was previously at the University of Newcastle, Australia and was a senior adviser to the Australian government.