Leaders of the State's largest three unions have warned they will seek pay rises if there is a major increase in inflation.
Economists are predicting increases significantly above the 2 per cent predicted when Partnership 2000 was negotiated, because of the weakness of the Irish pound against sterling and the dollar. In this event, union leaders are warning that the pay rises of between 4.25 and 4.75 per cent due this year may not be enough.
The vice-president of SIPTU, Mr Des Geraghty, said yesterday his union would be "very, very anxious to see action to dampen down inflation by the Government. There is no reason to accept that higher inflation is inevitable and the domestic factors contributing to it should be addressed immediately".
If the Government failed to act, and if employers and business interests generally did not show the sort of restraint workers had demonstrated, then SIPTU "would have to review the situation" on pay.
"There is no point in talking about the need for restraint on workers' pay and then ignoring it when it comes to inflation. It is incumbent on the Government to ensure all actors on the economic scene show restraint."'
He said: "When the Irish currency was moving the other way against sterling, there was no end of complaints from exporters about the effect it was having on their business.
"We are mainly an exporting country and we should actually be benefiting from the present currency changes," he added. Any disadvantages in the falling value of the Irish pound were being offset for business by cuts in corporation tax, lower interest rates and the benefits for exporters.
The Irish secretary of the Amalgamated Transport and General Workers' Union, Mr Michael O'Reilly, said trade unionists would be watching what the business community decided to do in the present crisis.
"I've heard some employers argue that competition is such that they can't risk passing on increases. Others are saying you can create jobs and hold prices by switching to local substitute products, which should be cheaper in the present situation," he said.
While accepting there was no provision for renegotiating the pay rises in Partnership 2000, Mr O'Reilly said: "If inflation rises to 5 or 6 per cent the reality is that the increases in the agreement will not contain pay expectations. I don't see any problem in renegotiating pay increases in circumstances which nobody could have foreseen at the time the agreement was made."
IMPACT's general secretary, Mr Peter McLoone, said yesterday his members "would not wear" price increases of 5 or 6 per cent. "We will be calling on the Irish Congress of Trade Unions to go and meet the Government and talk about the issue and the measures needed to contain inflation."
The ICTU executive is meeting on Wednesday and the implications of future inflationary trends, along with union recognition, are expected to be the main items on the agenda.
Mandate is the largest private sector union after SIPTU. Its national officer, Mr Maurice Sheehan, said his union would also be watching the situation closely.