Social partnership deal will not be renewed, say Ibec and ICTU leaders

There is no prospect of social partnership being revived as the economy continues its recovery, according to the leaders of employers group Ibec and the Irish Congress of Trade Unions.

However, David Begg, general secretary of ICTU, said years of pent-up pressure on incomes could lead to a wage explosion in the next few years.

On the The Irish Times business podcast yesterday Larry Murrin, president of Ibec, said there is little appetite among employers for a renewal of social partnership, which is credited with helping to get the economy moving in the late 1980s while failing to put the brakes on during the property bubble.

“I think social partnership has had its time,” Mr Murrin said. “I don’t see one solution as fitting or curing everybody’s ills. I think solutions around pay over the next couple of years are going to be done or found on a company-by-company or sector-by-sector basis.

“I don’t think you can overlay the same tools that we used predominantly in the 1990s and . . . [early 2000s] in the environment we are working in today. We have got to focus on the competitiveness metrics and productivity.”

Mr Murrin, chief executive of Dawn Farm Foods in Naas, said national wage deals over the years had pushed his company's competitiveness "out of line".

“We employ people in the UK and here and there’s a significant cost difference in labour terms of 25 to 30 per cent,” he said. “That’s never going to change. Nobody is talking about a reduction in the minimum pay rate. Ireland has to be smarter than that in how to deal with those competitive differences.”

Mr Begg agreed that a renewal of social partnership was not on the cards. However, he said pent-up wage demands were inevitable given that €40 billion in earnings has been lost in the downturn and a framework to guard against this may be desirable.