Pay talks collapse pose questions for all

Ireland"s current economic malaise highlights just how important it was to get an agreement in the national pay talks which collapsed in the early hours of Saturday morning without a deal. With the breakup of the discussions and no deal on pay on the table has come the creeping fear of a wages 'free-for-all" as unions now threaten to slap claims for above inflation wage increases on individual employers. The breakdown in the talks between workers and employers represent the first failure to cement a national deal on pay in 21 years. That it comes as Ireland is facing into the most difficult economic conditions experienced since the 1980s is not altogether surprising given the competing demands on both sides, but it is a further complication at a time when the country needs some industrial certainty. The two decades-old negotiations between the unions, employers and the Government - known collectively as the social partners - set the template for industrial peace and was widely regarded as one of the cornerstones of the birth of the Irish economic miracle of the past 15 years and, as such, has been a key plank of Government policy. Regarded in many quarters as a sop to pacify a sometimes restless public sector, the process nevertheless has benefited the country enormously since the late 1980s and a deal is still considered crucial if Ireland is to weather successfully the storms ahead brought about by our domestic travails, which include rising unemployment, the construction sector collapse and rising prices, all of which are eroding consumer confidence. In the 21 years since 1987 when unemployment stood at 15 per cent, the culture of the workplace has changed a great deal and widespread industrial strife in the intervening years has been rare. It is unlikely there is going to be industrial chaos on foot of the weekend"s failure to tie up a deal but there needs to be a realistic and common sense approach adopted by all sides on pay rises going forward. It has been predicted, and indeed, overtly stated by some unions, that they will lodge pay claims with private sector employers over the next few weeks but employers" group IBEC has urged its members not to engage in local bargaining until a further meeting between the Taoiseach and the social partners in three weeks" time. There is already some posturing between both sides with the unions aggrieved that employers would refuse to engage with them while the former seek to up the ante by lodging claims as a statement of intent. Despite this, there seems to be a broad belief that widespread industrial relations chaos is not about to follow. The time between now and the end of August should be used for both sides to take stock of their positions and rexamine the areas where a breakthrough might be possible. The Government is taking some solace from the fact that the collapse of the talks was amicable and without recrimination, so there is a feeling that all may not be lost. For Brian Cowen, however, it will be a stern test to get something out of this. It has been something of a nightmare start to Mr Cowen"s stewardship of the country following the loss of the Lisbon referendum and the deteriorating state of the public finances. As consumers face higher food and fuel prices and dole queues lengthen in the sharp slowdown, his Government is going to be under some pressure to frame a budget in December which is likely to see spending cuts and quite possibly even tax increases. Even though other parts of partnership may be intact, such as tackling poverty, education and healthcare issues, without a deal on pay, serious questions will have to be asked as to whether the social partnership model can continue to play a crucial role in keeping industrial peace in the new landscape of post-Celtic Tiger Ireland.