Wage pressures in the financial services sector are set to rise following a recommendation to raise AIB bank officials' pay by up to 16.1 per cent. The bank is the largest financial services employer, with 6,000 employees in bank official grades.
Meanwhile, a major confrontation is looming between the Construction Industry Federation and the Building and Allied Trades Union over pay and early retirement. BATU, representing bricklayers and carpenters, has put in local pay claims for up to £1,000 basic a week.
The chief executive of the CIF, Mr Liam Kelleher, has written to the Taoiseach complaining that BATU "has refused to accept the PPF [Programme for Prosperity and Fairness] agreement and is in breach of the registered agreement [for the industry] and the 1990 Industrial Relations Act".
Employers and unions fear that local disputes over pay and pensions could grow into a national dispute.
The AIB increases, from 6 per cent upwards, have been recommended by an independent arbitrator, Mr Ray McGee, head of conciliation services at the Labour Relations Commission. The bank is expected to accept the proposals if the officials ballot in favour.
The increases provide for the starting scale to rise from £11,289 a year to £13,000 at the bottom of the scale, and from £20,860 at the 13th or top-point to £21,500. The increases are backdated to last June 1st, and provide for minimum pay rises of £1,000 a year for all employees.
The 2 per cent "cost of living increase" due in April as a result of the emergency pay review of the PPF is being implemented from January 1st. An extra 1 per cent is being added, bringing the increase to 3 per cent.
The pay increases are inclusive of the first phase of the PPF. Therefore bank officials at the top of the scale will only receive 1 per cent more than they are due, but younger staff will receive over 11 per cent more than the terms of the PPF.
The Irish Bank Officials' Association is to ballot without a recommendation. Its deputy general secretary, Mr Larry Broderick, said yesterday that the recommendation was "a very positive development at a time of change in banking". He added, in a comment clearly aimed at Ulster Bank's recent attempts to cut pay rates, that AIB was addressing issues "in a fair and more balanced way than some banks".
If the deal is accepted, he said, "it should help from the bank's perspective to get staff to engage with competitiveness and improve AIB's reach in the marketplace". However, he said acceptance was by no means certain, as it would leave senior staff slightly better off. "Bank officials are looking at teachers and other groups," he said.
AIB recently concluded deals with the IBOA in Northern Ireland, where it trades as First Trust, and in Britain. The overall pay increase in Northern Ireland was 3.4 per cent, and in Britain 3.8 per cent. Inflation in the UK is running at 2.9 per cent, compared with 5.2 per cent in the Republic.