Irish pay policy hits crisis

The national Irish pay pact, the Programme for Prosperity and Fairness (PPF), which was agreed by unions, employers the government and community representatives in March this year (see Bargaining Report April 2000) has hit major problems.

Inflation is running much higher than expected (6.2% in August) and has already outstripped the increase in pay agreed for this year. The PPF provides for a 5.5% increase in 2000, the same for 2001 and 4.0% for the last nine months of the agreement in 2002. There are also guaranteed minimum increases for the lowest paid.

Reacting to this the unions have called for an additional 5% increase within the PPF. Des Geraghty the president of Ireland's biggest union, SIPTU argued that this was necessary "to compensate workers for the erosion of their living standards due to inflation". However, earlier this month the employers stated that they could not countenance "re-negotiation of the pay element" of the agreement.

The government is expected to use its December budget to cut some prices. But with the unions calling on the employers "to put their hands in their pockets" and the employers apparently reluctant to do so the future of the programme, which is a voluntary agreement and has no legally binding force, is uncertain.