PAY FREEZES will remain the norm in Irish businesses for another year at least with some firms planning further cuts in remuneration, the employers’ group Ibec has said.
It said companies should not entertain claims for pay increases from staff given the current challenging economic climate and that the focus must be on creating new jobs at competitive wage levels.
In a commentary issued today on its latest quarterly survey on pay, Ibec said the vast majority of firms had put in place wage freezes in 2009 and 2010. It said this trend was set to continue for the remainder of 2011 and into 2012.
Ibec director of industrial relations Brendan McGinty said seven out of 10 companies expected no change or a fall in their 2011 pay bill, with 73 per cent freezing basic wage rates.
He said the average expected change to basic pay rates in 2011 was “flat at –0.12 per cent, and about 6 per cent of companies are planning pay reductions”.
“We expect the high degree of realism in 2010 concerning pay developments to continue through 2011 and into 2012. Most people are very realistic about pay expectations and general pay increases are off the agenda in favour of measures to keep people in jobs. Any pay increases this year have generally been by exception on productivity grounds.
“The country needs to focus on getting people back to work at competitive wage levels. At least one in four firms reduced nominal wage rates over the course of the recession, but they remain up to 15 per cent higher than those of our main competitors. To close the gap, wage growth in Ireland needs to remain below our trading partners. This will help companies regain lost competitiveness and encourage them to start hiring again.”
Ibec said the protocol it had reached with the Irish Congress of Trade Unions on private sector pay was contributing to the orderly conduct of industrial relations.
It said that the protocol specifically recognised that protecting jobs was the most important objective and was an important source of guidance to the State’s industrial relations machinery in pay disputes.
Ibec’s commentary on pay comes as the Irish Congress of Trade Unions is set to begin its biennial delegate conference in Killarney.
Taoiseach Enda Kenny is due to address the conference today with Tánaiste and Minister for Foreign Affairs Eamon Gilmore set to speak on Wednesday.
The Taoiseach’s address to the conference comes just days after one of the Republic’s leading trade union leaders effectively called for the establishment of a new social partnership structure.
The former system of social partnership – which had run for more than two decades – collapsed following the decision of the former Fianna Fáil/Green administration to cut pay for public service staff in December 2009.
In an address to a private conference organised by the Department of Public Expenditure and Reform on Thursday, the general secretary of Impact, Shay Cody, said that the Croke Park deal on public service pay and reform would benefit “from being surrounded by the framework of a social partnership structure allowing insight for interested representative bodies in business, farming and the community and voluntary sector.
“The trade unions are open to that. I believe that the other social representatives are.
It is now a matter for Government to decide if this is to be developed and I believe they should.”