Wages rose by 4 per cent last year and personal disposable incomes by 7.5 per cent when tax cuts were taken into account, according to the annual report of the Labour Relations Commission. Inflation during the year was 1.5 per cent.
The report, published yesterday, warns that growing skills shortages and the continuing economic boom could test national pay agreements to the limit during coming months.
It warns that the crisis in Asian economies could have an adverse impact on the volume and prices of exports from high-technology sectors. "The closure of Seagate in Clonmel, announced in 1997, illustrated the profound effects which global trends and production cost differentials can have on the business and employment of international companies located in Ireland."
It also says that gain-sharing and other new forms of reward bargaining have begun to spread rapidly in the private sector. Wage relativities, "once a standard feature of industrial relations and pay fixing", have largely disappeared from the private sector, but continue to dominate public-sector pay negotiations.
The LRC records that the downward trend in strikes and days lost through industrial action over the past decade continued through 1997. There were 28 strikes in the Republic last year, compared with 30 in 1996. Days lost through industrial action totalled 74,508 last year, compared with 114,585 in 1996.
There was a further increase in the referral of disputes to the LRC's conciliation committee, up from 1,487 in 1996 to 1,588. The chief executive of the LRC, Mr Kieran Mulvey, says there is likely to be an even sharper increase this year and next. This is because disputes with many groups, such as local authority and health service workers, are now being transferred to the LRC because internal conciliation and arbitration systems have been scrapped.
The increase in the workload has put extra pressure on the LRC's resources, but the overall trend shows that more employers and trade unions are trying to resolve disputes without resorting to outright conflict. The LRC has taken a strong line with groups which seek to bypass negotiating structures, such as craftworkers in the health service and train drivers.
"There is no basis in modern Irish industrial relations for unofficial action when there are State agencies available to help resolve differences," Mr Mulvey says. He is also concerned at the number of cases coming to the LRC "almost as a first resort, rather than as a last resort after local negotiations have failed".
The success rate of the conciliation services continues to rise. It was 83 per cent last year, compared with 81 per cent in 1996 and only 66 per cent in 1994.
As usual, disputes about pay dominated in the category of referrals to the LRC, accounting for 44 per cent of the total. But for the first time disputes over restructuring are the second-largest category, at 25 per cent. These have displaced disputes over conditions of employment, traditionally the second-largest category.
This change, says the report, shows that the pace of activity on the partnership front has increased significantly since Partnership 2000 came into force. Major restructuring deals had emerged as a feature in both public and private sectors. Eireann and TEAM Aer Lingus.
The Minister of State for Labour Affairs, Mr Tom Kitt, welcomed the report. He said the increasing effectiveness of the commission's services was promoting a more co-operative and mutually beneficial approach to industrial relations.