Fear of failure to aid case for new PCW

DELEGATES representing 500,000 organised workers meet in Liberty Hall, Dublin this morning to decide if the Irish Congress of Trade Unions should enter talks on a successor to the Programme for Competitiveness and Work (PCW).

Few of those attending the ICTU special delegate conference will disagree with Mr John Dunne, director general of the Irish Business and Employers' Confederation, when he says that any talks on a new agreement will be the most complex and difficult so far.

The most potent argument in favour of another agreement is that the vast majority of employers and trade unionists is better off now than in 1987. But this breeds its own problems.

"Expectations are high because of the feel good factor", says Mr Dunne. "We have to be able to convince people that progress so far is the way forward. If we go back to the uncontrolled approach of free collective bargaining it will set things back".

Some delegates will take a lot of convincing. While the ICTU executive is likely to receive a mandate to are enter talks the margin is expected to be narrower than ever before.

A major reason is the lack of progress on public sector pay. As a result there has been a loss of faith in national agreements among the likes of teachers and civil servants.

Private sector workers are already aggrieved at the small pay increases under the PCW and the lack of progress on union recognition and "social partnership" at local level.

THE one area where there is agreement between employers and unions is taxation. Both want cuts.

Predictably IBEC wants further PRSI reductions. Mr Dunne also says it now favours "increasing personal allowances", looking "particularly at the lower rate, rather than widening the tax bands".

But the general secretary of congress, Mr Peter Cassells, says the unions want much more. PAYE workers are still paying the bulk of income tax. While tax bands have widened, reductions in other reliefs such as mortgage interest, VHI payments and the taxation of short term welfare benefits have clawed much of it back.

In contrast, reliefs for high income earners and property investors have continued at the highest marginal rate of tax.

Employers will retort that more tax cuts would be possible if public sector spending was curbed. Containing public sector wages - and numbers - is seen by Mr Dunne as essential to tax reform.

The biggest issue dividing the two warns that if the unions seek national pay rises which IBEC considers too high, the employers will withdraw from negotiations. Tax reform offers the best prospect of large increases in take home pay, he says.

Mr Dunne is also opposed to any local bargaining clause allowing workers in the most profitable sectors of the economy, such as banking and construction, to look for more. "I'd have to be very blunt", says Mr Dunne. "The greatest attraction to employers of national agreements on the pay side is certainty. The more you introduce so called flexibility, the more you reduce certainty.

THE only pay flexibility Mr Dunne is willing to contemplate concerns pay cuts. The advent of EMU, with Britain staying out, would put tremendous competitive pressures on some companies. Pay cuts might be necessary in certain cases, "and I hoped these will be as few as possible".

He suggests one way of minimising the impact of the cuts would be to give increased tax relief where wages were being cut. We already provide tax relief where workers are being made redundant, Mr Dunne says, and it might be more cost effective to the Exchequer to provide relief that averts closures. He concedes such a scheme might be abused to drive wages down.

Far from considering pay cuts, the ICTU is likely to press for minimum standards of pay and conditions, especially for part time and casual workers. "It is as much in the interests of good employers as workers to have minimum standards," says Mr Cassells.

"We are not opposed to atypical work. Often it is what people want. But there needs to be a balance between flexibility and security."

Both IBEC and ICTU have open minds on the wider issues of profit sharing, gain sharing and other ways of rewarding employees for helping their companies become more profitable, or productive possible that the gap between the sides on local bargaining may be bridged through creating new structures to increase access to such schemes.

It is in the intangible area of "social partnership" that some of the biggest problems lie. The refusal of some companies, particularly new, hi tech US firms, to recognise unions is simply the most potent symptom of the disease.

The ICTU has argued for some time that while it accepts IBEC is committed to social partnership, many of its constituent companies refuse to co operate.

Mr Dunne gives almost a mirror, response. IBEC accepts ICTU's commitment to social partnership but it questions the attitude of many unions.

It could be put down to a little misunderstanding, but a confidential report prepared for the National Economic and Social Council predicts that the failure of social partnership to develop at local level is the biggest threat to the future of national agreements.

Details of the report were published in The Irish Times on September 11th. It warned that, without partnership at local level, workers could lose faith in official union structures. Then those in strong sectors would simply ignore national agreements and push for higher wages anyway.

Neither ICTU nor IBEC has any intention of being relegated to the wings. That is why, despite the complex and tough negotiations that lie ahead, they will try to accommodate each other.