Crucial talks on PPF today as 1% divides sides


Today's talks between employers and trade unions will decide the fate of the current national pay agreement.

A gap of around 1 per cent still divides the two sides.

The SIPTU general secretary, Mr John McDonnell, said yesterday that when talks ended on Saturday evening "the employers were still at 1 to 2 per cent and we were at 3 per cent. If we had been prepared to accept 2 per cent we could have concluded talks but we are seeking to restore the value of the 25 per cent pay and tax package agreed in the Programme for Prosperity and Fairness. We believe that now needs to be around 30 per cent over the life of the agreement.

"We aim for the pay element to be agreed by tomorrow," he added. "We'll still be looking to the Budget to give special tax reductions over and above those in the PPF." Overall, he stressed, the pay increases and tax cuts would have to be worth 5 per cent.

Whether talks break down or conclude successfully tonight, the Minister for Finance, Mr McCreevy, will know precisely how much extra he needs to concede to the PAYE sector to keep the PPF afloat. Under existing terms he has to concede 5 per cent in income tax reductions on Wednesday. The unions are now clear that every 1 per cent shortfall in talks with employers will have to be balanced by income tax concessions.

The director general of the Irish Business and Employers Confederation, Mr Turlough O'Sullivan, agreed with Mr McDonnell that today is "crunch time" in the talks. He said whatever was agreed "would have to deliver on industrial peace in a way the PPF has not delivered so far".

On pay he said: "Any extra money made available must be on the basis that employers have the right to bargain at local level, as the provisions of the PPF allow, to seek greater flexibilities, productivity and so on. If they don't have that, the bottom line is it will impact on competitiveness."

The expected upturn in the euro could cause problems "for companies which have not been able to keep up with changes in global markets. There are a lot of vulnerable sectors and people need to understand there are a lot of companies on the edge." While Mr O'Sullivan conceded that many of these firms were in the low-pay sector, where workers felt left behind by the boom, he said there was a danger that high pay increases could put people out of a job.

Renewed reports that the Review Body on Higher Remuneration in the Public Sector is recommending increases of between 11 per cent and 17 per cent are likely to put increased pressure on trade unions to hold out for at least 2.5 per cent or 3 per cent in the current talks.

But the INTO general secretary, Senator Joe O'Toole, said yesterday that "far from being a problem, any increases in the review are an opportunity for other groups and for teachers in particular" to seek more.

Any concessions to groups such as senior civil servants or hospital consultants could be used to press for increases in talks with the new bench marking body, he said. In light of the reported review body increases Senator O'Toole would be "very unhappy with any figure for teachers that was not significantly above 10 per cent" from the benchmarking process.

The public services committee of the Irish Congress of Trade Unions is to meet Department of Finance officials again this morning, ahead of the wider negotiations between the ICTU and IBEC this evening.