Deal independent of new agreement

Analysis: Sustaining Progress, the current national pay deal, has a little over a week of life left in it. It's unlikely that anybody will mourn its passing, particularly if they work for AIB.

Staff in the Republic's biggest bank have voted to accept a generous pay deal that will add at least 2.5 per cent to their wage packets, and a bonus scheme that will increase them by a further 4 per cent on average, but which offers a maximum of over 7 per cent. Pay scales within the bank have also been boosted.

Not bad at all. But the relevance of the deal from the point of view of everyone else is that both the bank and the union, the Irish Bank Officials' Association (IBOA), happily admitted yesterday that the agreement was over and above the terms of Sustaining Progress.

And for good measure, the terms of any successor to the national deal will be paid as a matter of course to bank staff, in addition to the deal announced yesterday.

So, it is totally independent of any national pay deal, whatsoever.

What is significant is that the bank is an influential player in Ibec, which represents employers in the multi-sided horse trading officially called "social partnership talks".

Ibec will be arguing for pay restraint when negotiations on a successor to Sustaining Progress get under way in earnest. Its reasons are sane, and probably reasonable, as they relate to costs, competitiveness and growth.

But you could argue that the fact that one of its key members is displaying less restraint than it should actually weakens Ibec's case somewhat. Obviously, neither the bank nor Ibec would say that.

According to its spokesman, AIB is being generous because it wants to attract and keep good people, something that is difficult to do in the current climate.

One way of interpreting that is to say that if your services are in demand, and you've got a union that knows how to negotiate, then you too could get a better deal than the one agreed by the social partners.

Not only that, Son of Sustaining Progress looks set to take this into account. Along with an opening gambit of a 10 per cent pay rise over two years, the unions could also look for a local bargaining clause. This will give individual unions and branches liberty to pursue claims themselves.

The IBOA isn't waiting. Its general secretary, Larry Broderick, said it has begun looking for similar deals from the other banks in which it has members. Not only is social partnership in its grave, the IBOA-AIB pay agreement looks like the first shovel of earth to be dumped on its coffin.