IPPN

Published: 18 November 2008

Source : Irish Independent

THE country's biggest unions are expected to ratify the draft national pay deal today, giving workers an average of a 3.5pc pay rise that is likely to beat inflation next year.

As the economy worsens, experts have revised their predictions on inflation and expect the wage agreement will mean much-greater rewards for employees than unions anticipated.

Inflation was running at 5pc when the social partners began negotiating the pay deal and most unions were unenthusiastic about the pay terms that were on the table.

They initially rejected a 5pc offer over 21 months in the summer but negotiated 6pc, and 6.5pc for the lower paid, over the same timeframe in September.

Balloted

The final deal, which is still being balloted, is worth around 3.5pc a year.

However, as inflation has dropped to 4pc, economists revealed they expect it to drop further next year, with the consensus estimating it may hit 1.7pc and 2.1pc in 2010.

This would put the 3.4pc a year pay deal 1.7pc ahead of inflation during 2009.

A total of 391 delegates from the main private and public sector unions are expected to endorse the wage agreement at a special conference in Dublin.

They will vote on behalf of their 620,000 members on the deal that spans 21 months at the Irish Congress of Trade Unions meeting in Liberty Hall.

Following weeks of balloting, the majority of union members have backed the draft deal -- including members of the country's biggest union, SIPTU -- whose vote is crucial.

The agreement gives most workers a pay rise of 6pc over 21 months, or 3.4pc a year, in two increments, although anyone earning less than €11 an hour will get an extra 0.5pc.

This means the average pay rise per year is 3.5pc per worker.

Public sector workers must endure an 11-month pay freeze before they can get the first 3.5pc increase in September next year, which will be followed after nine months by a further 2.5pc. But an estimated 300,000 private sector workers have already served the mandatory three-month pay pause for their sector.

This means they will be immediately entitled to the first 3.5pc increase.

They will get a further 2.5pc after six months for the remaining 12 months of the deal.

SIPTU will have 77 votes at today's conference while the public sector union Impact has 35 delegates.

Unite, which voted 'no' to the deal, will have the second-biggest delegation at today's conference, with 37 delegates, but has failed to sway majority opinion.

When balloting began, the union attracted support from individual activists from the SIPTU, the NBRU, and ASTI for its 'no' campaign.

The union has warned that most employers will use an 'Inability to Pay' clause that is part of the deal to avoid paying the increases.

Yesterday, the Irish Exporters Association (IEA) warned that many employers who trade internationally would not be able to pay the 6pc rise and would use the clause due to exchange rate losses, bad debts and drops in business and consumer demand.

The main union in favour of the deal has pushed it as the best it could get in the circumstances and claimed that it will actually rise above inflation during its 21 month timeframe.

Admitted

SIPTU general president Jack O'Connor admitted the transitional agreement to the Towards 2016 pay deal is "by no means the best deal" ever achieved in the history of social partnership.

But he said the negotiators did not "leave a cent behind in Government Buildings" for their members, due to the economic downturn and widening government deficit.

Although enthusiasm for the deal was muted among the unions at first, it is now expected to exceed the predicted inflation next year.

Today's special conference in Liberty Hall in Dublin will be attended by 26 of the main unions in the country.

Employer group IBEC is expected to give its verdict on the wage agreement early this week.

- Anne-Marie Walsh and Shane Hickey