Minister for Transport Noel Dempsey said he does not believe the Government should interfere with pay rates in semi-State companies.
He was speaking after his Cabinet colleagues, the Minister for Finance Brian Lenihan and Minister for Energy Eamon Ryan, had said the issue should be examined.
Talking to reporters in Co Derry, where the North-South Ministerial Council meeting is taking place today, Mr Dempsey said: “I don’t think Ministers should be interfering in industrial relations matters and pay matters in the commercial semi-States."
Mr Dempsey also said the issue was not part of the formal Cabinet agenda for tomorrow.
Semi-States were commercial bodies and had to be “treated commercially if they are competing in a wider economy and they have to be allowed to act as commercially as they can,” Mr Dempsey said.
Any move would involve extending the pay cuts announced in the Budget last week for staff in the public service to workers in commercial semi-State companies and agencies such as the ESB, Bord Gáis, VHI and the CIÉ group of companies.
Cuts of 5 per cent and upwards in public servants’ pay were announced in last week’s Budget.
Earlier today Minister for Energy Eamon Ryan said the potentially divisive issue would be discussed at Cabinet. Mr Ryan said the issues to be discussed were "sensitive and difficult" but there would not be a "one size fits all" approach to dealing with pay in the sector.
Mr Ryan said the Government had no "agenda" in relation to pay cuts in the semi-state sector and that they would “consider an update on the issue tomorrow at Cabinet and continue to review it.”
Speaking on RTÉ's Morning Irelandprogramme, Mr Ryan said ESB and Bord Gáis were "profitable companies" but there was currently a process before the Labour Court that had to be recognised.
He said the Government would examine the issues with the management of the various companies to "see what they can do".
As a shareholder, the Government was "not powerless" in relation to pay at the semi-State companies. However, it had to be cognisant of the agreements that were in place.
Mr Ryan said the Government had, in reality, been discussing the pay issues over the past year.
Any decisions taken would not be designed to "punish" people or to predetermine what pay levels should be.
He said the issues were "sensitive and difficult". He said there are pay cuts going on right across the public service but under different circumstances.
"I don't think we should have a one size fits all approach."
Trade union leaders warned last night of serious industrial conflict if the Government moved to introduce pay cuts in the commercial semi-State companies such as the ESB, which are hugely profitable.
Eamon Devoy, TEEU general secretary designate said there would be “unholy war” if the Government touched the commercial State sector.
“There are people giving their life blood to secure the sustainability and profitability of these companies and now the Government wants to punish them with a pay cut. It is not going to happen,” he said.
The Irish regional secretary of the Unite trade union, Jimmy Kelly, said that any attempt to impose pay cuts in the commercial State sector would lead to industrial action in every shape and form.
Siptu president Jack O’Connor said the concept of pay cuts for staff in the semi-State sector was the logical consequence of the policy the Government had been advancing which was aimed at reducing wages across the economy.
He said that in State-owned companies which were facing difficulties and where jobs could be saved by the introduction of pay cuts – as in the case of RTÉ – the union had been prepared to negotiate an accommodation. However, he said that it would not be prepared to facilitate a “right-wing” pay reduction policy across the board.