The shadow boxing has already started on a new agenda for the next national agreement to replace Partnership 2000. But what will it mean for the pockets - and the welfare - of employees?

There are clear tensions emerging over who benefits from the booming economy. The last few national agreements have meant that those on the basic terms have received pay rises of around 3 per cent a year. However, others have done substantially better - company profits have soared, highly-paid directors have cashed in and skilled employees in areas such as information technology have been able to command premium salaries. How to share company profits in some form with employees is the crunch issue in the new deal.

The issue for the social partners now is how to strike a new agreement which rewards employees, without undermining our economic success. The main agenda for the talks is how to ensure our prosperity continues and how to share it more fairly, according to Mr Peter Cassells, general secretary of the Irish Congress of Trade Unions (ICTU).

If there is to be a deal the signs are taxpayers are likely to not only end up with substantially more in their pockets but also with a new deal on childcare, education and training, as well as "family friendly" policies.

No formal negotiations are taking place at present, but these are likely to start in November after the ICTU's special conference. In the meantime a lot of work is going on in the background, particularly in the Taoiseach's office, in the National Centre for Partnership and in the public sector union talks with the Department of Finance.

There are already some initial discussions taking place around the contents of the next Budget which will be a key plank in the upcoming negotiations and the partners will also be entering into talks on the national plan - for Government and EU-supported investment - over the coming months. However, the key area is, of course, the upcoming negotiations on the next agreement and this will make the most difference to people's working lives and to their pockets.

There is enough money in the Government's coffers to make much progress in delivering the rest of the Government's promises from the Programme for Government. This would mean substantial cuts in the standard income tax rate and probably the higher rate, as well as a significant broadening of the band. In fact there is now so much in the kitty that Mr McCreevy could actually afford to meet all his commitments in the Programme for Government in this Budget. For £1 billion he could ensure that 80 per cent of workers are only taxed at the standard rate, bring that rate down to 20 per cent and cut the top rate to 40 per cent. However, it is probably unlikely that he will go that far in one step.

There are difficulties with pursuing this option, as it would mean people on very high salaries will gain proportionately more than those on lower salaries. Thus a compromise proposed by the unions is now on the starting blocks.

This would involve a new third rate of tax set between the two levels. This would allow the Government to cap large-scale gains to individual wealthy taxpayers.

That nothwithstanding, the tax reductions in the Budget are likely to be the biggest boost to average take-home salaries seen in many years.

The Budget is also likely to be the start of the good news for families with children. While discussions are still ongoing, it is now looking as if the Government will opt to increase child benefit by a large amount - and then tax it. The revenue this generates could then be used to increase the benefit again. Families could then choose whether to spend the money on childcare or elsewhere in the family budget.

On top of that, according to Mr Cassells, there will be a renewed emphasis on family friendly polices in any new agreement. This could mean greater availability of term-time working, flexi-working or other arrangements negotiated at company level. Needless to say, the employers are yet to be fully convinced about this.

Pressure is also building on the Government to meet its £100-a-week (€127-a-week) commitment on the old age pension and the unions are also keen to see a variety of moves on disability payments.

Of course the really big change for employees will be the degree of success the unions have in negotiating new gain or profit-sharing arrangements in any agreement. With companies making record profits, their employees need to be able to share in that without allowing it to feed through into inflation and driving up bottom-line wages.

Not all the extra benefits to employees will be hard cash. New commitments by employers to invest in education and training and in the future development of staff are expected to feature.

What about employees getting their hands on some of the profits being generated at the moment? The trade unions are arguing for a much higher level of workplace-negotiations than has been seen in the past. However, IBEC has a problem with this. Director Mr Gerry Dempsey says they want the next agreement to be similar to the current one and they will not be able to prescribe to member companies how they should get involved in any gain or profit-sharing.

IBEC has already undertaken a survey identifying the various enterprise partnership initiatives already in existence - for example, bonus or share options, as well as non-monetary schemes including improvements in facilities, team building and work reorganisation.

According to a recent IBEC survey about 58 per cent of companies survey operate some form of profit or gain-sharing, from cash-profits sharing to gain-sharing to save-as-you-earn schemes. At the moment about 200,000 employees have access to some form of sharing in this manner, they say.

These include most of the main financial service companies such as Bank of Ireland, AIB, First Active, Irish Life as well as other big companies such as Carrolls, Irish Distillers, Musgraves, Grafton, Heiton, Cadbury and Gallaghers. But the unions and the Government would be keen to see this extended to a much wider range of workers.

Observers say that there are real difficulties in achieving highly-specific arrangements on this issue. Equally, employers fear a free-forall if no central guidelines are put in place. Their worry is that profit-sharing through bonus payments can simply be turned into another wage increase, not genuinely reliant on the fortunes of the enterprise. Nevertheless, a serious move in this direction is likely and many more employees should be able to look forward to some form of gain-sharing next year.

What will this mean for the public sector, where productivity gains are not as easily measured and there are no profits to share. There is already an agreed agenda in this area which includes looking at the pay determination system, traditional relativity, pay and performance, links between the public and private sectors, recruitment, change and modernisation and management of pay costs, as well as common pay and grading conditions.

The main focus from the Government side is to get rid of what they call rigid relativities - which lead to increases for one group knocking on to demands from others - and without this they insist there will be no new agreement. As a result, public sector workers are likely to find that the old relativities are broken down. Firemen will no longer be linked to the Garda or careworkers to nurses.

The new agreement is likely to specify that additional pay be linked to delivery of services. Acquiring additional skills could also pay off for individuals.

If a deal is struck most workers - whether in the public or private sector - should find that not only will their work arrangements become somewhat more flexible, but they should end up with more money in their pocket in the first year of the new millennium.