With a new national agreement on the agenda, the incoming governmentmust solve the conflict between competitiveness and community, writesPadraig Yeates, Industry and Employment Correspondent

Even before the new government is formed, public sector workers are locked in combat with management at Aer Lingus and An Post. Other semi-state enterprises could erupt if, as expected, Fianna Fáil and the Progressive Democrats renew their political vows and the Tánaiste, Ms Harney, becomes Minister for Public Enterprise.

Benchmarking will be the other immediate test for the new government, and the feeling among unions and employers is that a government with the PDs in it is likely to take a tougher line with public sector unions on this issue. For one thing, the PDs are committed to keeping taxes down and that must mean containing public sector pay, which accounts for 60 per cent of current expenditure.

Public service unions will be quick to highlight the implications for the quality of service delivery and no doubt the PDs will respond by saying the electorate has spoken.

Nurses and teachers are likely to be the storm troopers in any battle that develops out of the benchmarking report. They have both put price tags of 30 per cent on the acceptability of any pay awards from the Public Service Benchmarking Body (PSBB), despite the fact that other observers - and Exchequer provision for one-quarter of the award to be backdated to last December - suggest increases averaging no more than 14 per cent.

It is possible that the benchmarking body could award nurses and teachers 30 per cent and stay within projected limits by paying the rest of the public service nothing. It is also possible Ireland could win the World Cup. The big difference is that, if nurses and teachers walk off with the prize, the also-rans have already used their annual conferences to warn the outgoing Government that serious industrial action will follow.

Benchmarking may be about abandoning what has been described as the "arid land of relativity claims for the promised land of productivity and performance related pay", but the reality is that the PSBB was set up to avert the collapse of talks on a new national agreement over the thorny issue of public sector pay in 2000. Its report simply means the chickens are finally coming home to roost.

The new government has little option but to honour the outcome while ensuring no individual group of public service workers receives special treatment, however powerful that group may be.

Ironically, some union leaders believe such an outcome is more likely if the PDs are in office to give a bit more backbone to the government. Without a satisfactory outcome to the benchmarking process there could be a public service "free for all" before the Programme for Prosperity and Fairness (PPF) is in its grave and the chances of a successor will be slim to non-existent.

The other side of the equation is that having the PDs in office will probably make the conclusion of a new agreement more difficult. The party's 90-page election manifesto had just three sentences on "expanding social partnership", considerably less space than was devoted to overseas development aid.

The actual proposal to expand social partnership by admitting "representatives of pensioners and carers to formal participation in the process" is a good one. So is the proposal to reform the tax treatment of share options for "all the staff in any firm" and not just the key management personnel who have been the main beneficiaries of the recent budgets.

The real worry for unions, as well as for the voluntary and community pillar to the partnership process, is the dominance of what ICTU general secretary Mr David Begg has described as "competitiveness-speak" in the PD programme.

The party believes, "it is only through economic growth that we can deliver a more just society with a higher standard of living and the chance of a better quality of life for all our people".

It is almost identical to the exhortation issued by IBEC's director general Mr Turlough O'Sullivan at the start of the election campaign that everything depends on creating an ever more competitive and more productive economy.

The other big worry for many unions is what the PDs euphemistically refer to as plans to "restructure the State's portfolio of commercial assets". The party's assurances that it simply wants "to secure the future of the commercial State companies and of those who work in them", as well as "to release funds to finance investment in the area of social and economic infrastructure", fools nobody.

At the best of times, unions have been ambivalent to privatisation and the Eircom experience has seen feelings harden. They also reflect the wider public scepticism about the EU, including the relentless drive to deregulate public utilities.

Several senior union leaders have already made it clear they expect the Taoiseach to keep the PDs in line. In fact, as both PD and Fianna Fáil sources are quick to point out, the Tánaiste did deliver on commitments in the PPF as Minister for Enterprise, Trade and Employment.

Her lack of interest in industrial relations and poor contacts within the trade union movement was probably a plus, as most of the housekeeping, including the belated transposition of EU law on issues such as part-time workers' rights and parental leave, were left to the Fianna Fáil Minister of State, Mr Kitt. When serious crises occurred, it was the Taoiseach who sorted them out.

That arm's length approach will not work if, as is widely rumoured, Ms Harney moves to Public Enterprise in order to push through the PDs' privatisation programme.

But, wherever Ms Harney goes, the perception will remain that a new Fianna Fáil-PD government is less committed to national agreements and partnership than any of its predecessors since 1987, when Mr Charles Haughey initiated the process with the Programme for National Recovery.

On that occasion, Mr Haughey leaned heavily on the employers to buy into the process and such was its success that all the main social partners have entered talks on successive agreements very positively.

This time around could be different and a lot will depend on how events unfold in the public sector over the next few weeks.