IBEC proposes tax relief for profit sharing

The Irish Business and Employers Confederation is lobbying the Minister for Finance, Mr McCreevy, "to introduce special tax relief for a range of innovative reward systems in profit sharing", according to IBEC director general Mr John Dunne. Speaking at the annual conference of the National Centre for Partnership yesterday Mr Dunne said that tax relief on such schemes could help social partners reach a new national consensus based on "moderate pay agreements in an environment of dangerously high expectations and a tightening labour market". It would also provide employers with "the option of rewarding on the variable performance of the enterprise, without overloading the fixed cost and endangering competitiveness".

Special tax relief could "underpin competitiveness" and be a condition of the partnership achieving "an acceptable national agreement on pay". Systems that attracted relief should be based on agreements between employer and employees which were linked to company performance, or profits; that were available to all employees; were targeted at the private sector and were subject to upper limits.

SIPTU vice-president Mr Des Geraghty said that financial involvement of employees in their place of work was "the corner stone of partnership". His union had negotiated 263 partnership agreements so far, but in only 71 of these had companies conceded "any serious financial involvement".

Blame did not lie entirely with employers. Profit and gain sharing agreements were being "stymied by difficulties with the Department of Finance". These would have to be resolved as part of any new agreement.

The "very deep tradition of adversarial industrial relations" was still a major obstacle to partnership at local level, he added. There were few examples of shared goals between workers and management and a "serious disparity in power relations" in many companies. This showed itself in the withholding of information or refusing shop stewards time off to attend meetings.

The tendency for Irish people to believe in a form of "representative democracy where the TD, or union official or shop steward will do the job for you" was another barrier. And Mr Geraghty warned companies against using "overpriced consultants" to tell low-paid employees about partnership.

"There is a need for an absolutely visible buy-in by top management" into partnership, he said. Companies and unions had to invest in training workers on the ground to make the most of their input into firms.