Unions likely to seek pay increases as economy improves

In the run-up to Christmas last year, the chief executive of the Labour Relations Commission, Kieran Mulvey, forecast that pent-up pressures for income increases could be unleashed as the economy improved.

Mulvey pointed out that “with recovery comes expectation”.

In the intervening months, there has been a trickle of announcements of pay increases negotiated by unions for workers in specific private sector companies.

However, in the public service the official position is that pay policy under the Haddington Road agreement is settled until 2016.

Recoup concessions

At the weekend, the TEEU union, which represents 40,000 workers, said it would be looking for increases of 5 per cent for members in both the public and private sectors. It also said it would be seeking to recoup all the concessions made on issues such as pensions and working conditions over recent years.

Since the collapse of social partnership there has been no mechanism to determine pay increases at a national level.

In its place, any talks on pay have been very much at a local enterprise level.

Since the economic crash, many unions have had to engage in concession bargaining with employers, which frequently resulted in members agreeing to a deterioration in their traditional terms and conditions in return for greater job security. While pay cuts were common in some areas, they were not the norm.

Pay stagnation

Pay stagnation was far more widespread. For example, Siptu, the country’s largest union, secured 234 pay agreements with various manufacturing employers over the past four years. Most of these involved increases of about 2 per cent a year.

Retail sector trade union Mandate estimated earlier this year that its members had secured more than €20 million in pay increases over the previous 24 months.

This included increases of 4 per cent for staff in Tesco, 3 per cent in Dunnes Stores and 2½ percent in Marks & Spencer.

In the public service, trade unions have signalled that they will be lodging pay claims next year.

The TEEU is the first union publicly to put a figure on its pay demands. However, the union is just one of more than 20 organisations and unions representing staff in the public service, and it has a smaller membership in this area than many others.

Going into the negotiations, different unions will have different priorities.

For many, the sole aim will be to seek pay increases or restorations. For others, concessions agreed over recent years, such as a longer working week, are also hugely important and members will want these addressed in parallel to pay demands.