A PRIVATE SECTOR pay deal worth 9.25 per cent over 39 months has been agreed in outline by unions and employers in talks on a national agreement last night. When tax cuts are taken into account, the overall value of the agreement for most workers will be at least 12 per cent.
However serious problems remain over how the deal will apply in the public service. A number of problems have also emerged over how a proposal to pay a lump sum of £100 to private sector workers early in the new year will be applied.
A Government spokeswoman said at 2.20 a.m. "significant progress" had been made in the over all figures on a possible pay agreement. "Talks are continuing," she said. "These include discussion on the phasing and duration of an agreement. Talks will be continued tomorrow on the significant differences in the application of the agreement to the public service."
The breakthrough on the main items came at 9 p.m. after almost 12 hours of talks. The Irish Business and Employers Confederation agreed to improve its pay offer to 9.25 per cent in return for the unions extending the life of the agreement by three months.
There are still considerable obstacles. The Government wants an extended pay pause for the public service and it is reluctant to agree to a comprehensive local bargaining clause. There were also problems emerging with interpretation of the private sector deal.
It had been proposed to pay all private sector workers a £100 lump sum at the start of the new tax year next April, along with an estimated £350 million worth of cuts in personal taxation. The £100 is to compensate for receiving the first general round increase of 2.5 per cent from April rather than January. However, queries were emerging about whether it would be paid to part time, temporary or new staff, as opposed to long serving permanent workers.
During year two of the agreement, there will be a further 2.25 per cent general pay round and an opportunity for an extra 2 per cent in local bargaining negotiations. The local bargaining clause would come into play during the second half of 1998. In year three, there will be a final 2.5 per cent general round paid.
The general rounds will ensure all private sector workers will get pay rises worth at least 7.25 per cent over the life of the agreement, while most should get 9.25 per cent when local bargaining is included. The cumulative value of the deal is 9.65 per cent over the life of the agreement, or close to the 10 per cent figure the Congress of Trade Unions.
The chairman of the talks, Paddy Teahon, estimated night the overall value of the 10 private sector workers would be between 12 per cent and 14 per cent, after tax cuts were taken into account. With inflation projected to run somewhere between 6 and 7 per cent during the life of the agreement, most PAYE private sector workers should receive increases worth about 6 per cent.