Unions, employers and the Government today begin intensive negotiations aimed at securing a new national pay deal within three weeks.
An early marker for the talks was put down yesterday by the Irish Congress of Trade Unions (Ictu), which claimed the conditions for a "generous" wage settlement had never been better.
This will be rejected at the talks by the employers' body, Ibec, which says the main focus must be on restoring lost competitiveness.
As well as wage increases, significant disagreement is expected over a range of associated issues. These include the duration of any new agreement, pension reform and the unions' demand for a local bargaining clause that would allow them to pursue "top up" pay rises from highly-profitable employers.
A consensus has already emerged that a new national partnership programme, setting out broad social and economic objectives, should run for 10 years.
Employers want the pay element to cover a three-year period and they were supported in this yesterday by Taoiseach Bertie Ahern. "To be going through this process in any shorter period of time would be just unnecessarily painful for everybody involved," he said.
Union leaders, however, have expressed a preference for a shorter pay deal of perhaps two years', or even just a year's duration.
Linked to this is the thorny question of whether any new deal should include a local bargaining element, which is a priority objective of private-sector unions.
They argue that it is wrong that employees in hugely-profitable sectors such as banking must accept modest pay increases tailored to suit the needs of hard-pressed manufacturing companies.
Ibec is strongly opposed to such a provision, however, insisting that unions can have local bargaining or a national agreement, but not both.
Union sources have indicated that in the absence of a local bargaining clause, there is no chance of them agreeing a deal longer than 12 months. The two sides concur on the need for pension reform, but disagree over how it is to be achieved.
Ictu favours mandatory occupational pensions, but this is opposed by Ibec on cost grounds. It is seeking the introduction of a tax credit to encourage those on lower incomes to contribute to pensions.
The parties hope that the talks will be concluded before the biennial conference of Impact, the State's biggest public sector union, which opens in Killarney on May 24th.
Impact general secretary Peter McLoone is a key figure in the talks in his role as current Ictu president, while both the Taoiseach and Ictu general secretary David Begg are also due to address the Impact conference.
In a pre-talks statement yesterday, Ictu economic adviser Paul Sweeney said Irish business had "never had it so good".
"Many firms are enjoying double-digit profit levels, while businesses here pay far less tax and social contributions than their European counterparts. They can afford a generous wage settlement," he said.
This contrasts with the view put forward by Ibec in a paper presented at the beginning of partnership negotiations in February.
It said the deterioration in Ireland's cost competitiveness had undermined the ability of many companies to compete in international markets.
Mirroring Mr Sweeney's language, Ibec also claimed that, with unemployment at just over 4 per cent, Irish workers had "never had it so good".
The decision to open pay talks today followed a breakthrough last week in negotiations between the parties on measures to underpin employment standards.
New legislation is to be introduced to deter employers from making people redundant in order to replace them with cheaper labour, while the number of labour inspectors is to be trebled to 90.
