Centralised wage bargaining does not give sufficient scope to reward local initiatives and performance by workers, the vice-president of SIPTU, Mr Des Geraghty, has warned.
If national partnership was to develop, both employers and the Government needed to be more imaginative and pro-active, he said.
He told an EU conference yesterday that the Government must use the next Budget to promote financial participation for employees through "a special tax package to facilitate the extension of share ownership, share purchase schemes, gain-sharing, profit-related bonuses or employee share-option schemes" in both private and public sectors.
"While adequate provision existed to look after the needs of other groups such as directors and management regarding financial participation, the absence of such measures when it comes to employees is no longer appropriate or equitable."
He added that "a major weakness of centralised bargaining was the limited scope it allowed for local initiatives to acknowledge effort and improve earnings, or facilitate shared rewards for exceptional performance, either by individual workers or the work force as a whole".
Ireland had "benefited greatly from the achievement of a balance between pay increases, tax reductions and low inflation".