A 4.5 per cent pay increase next year is likely to be sought by SIPTU if it returns to talks on a new national pay deal, the union's president, Mr Jack O'Connor, indicated last night.
The demand was immediately dismissed as "ridiculous" and "unsustainable" by the employers' organisation, IBEC.
Mr O'Connor, delivering a speech at the Galway Mayo Institute of Technology, indicated that SIPTU, the country's biggest union, remained committed to the social partnership process.
The union withdrew from talks on a new 18-month pay agreement at the end of March because of comments made by the Tánaiste, Ms Harney.
She said the Progressive Democrats' participation in the Government would be in question if the Coalition failed to liberalise bus routes and break up Aer Rianta.
Mr O'Connor said last night that before returning to the talks, SIPTU would require a clear indication that the Government would address "deteriorating standards" of employment across a number of sectors.
But he said he must acknowledge that whatever prospect there was of addressing the issue within social partnership, there was less outside it.
If SIPTU did re-enter discussions, a deal would be "very difficult indeed", but not impossible.
Despite "all the bluster and prophesies of doom from the employer organisations", there was space to conclude a pay agreement based on inflation and growth.
These were projected at 3.5 per cent for this year and 4.5 per cent for 2005, he said. In addition, the union would seek a minimum "flat rate" payment for those on lower pay.
This stance was immediately rejected by IBEC's director of industrial relations, Mr Brendan McGinty.
"Our position is that it is totally unsustainable to be talking about a rate of increase made up of inflation and economic growth, as seems to be suggested," he told The Irish Times.
Unions could not "have it both ways", he said. When inflation was high, they had been "the very partners" who had sought correspondingly high pay increases.
"Now when inflation is low at 1.3 per cent they are seeking some other ruse on which to base a ridiculous set of aspirations." Any increase in pay ahead of inflation would do major damage to the competitiveness of the Irish economy, he added.
Talks on a new 18-month pay deal, to cover the second half of the three-year Sustaining Progress partnership agreement, may resume next week.
No meetings have been fixed to date, however, and the process is likely to remain stalled in effect until SIPTU, which represents more than 200,000 public and private sector workers, decides to return to the talks.
A cumulative pay increase of 7.2 per cent was agreed for the first 18 months of the agreement.
Mr McGinty said IBEC's position was that the pay rise for the entire three-year term had been "front loaded", given that inflation for the three years was projected to be about 7 per cent.
There was therefore very little room to manoeuvre and the kind of expectations outlined by Mr O'Connor would not be met.
A new pay deal, if agreed, would take effect for some private sector workers on July 1st, with others to benefit at later dates, depending on when increases have been traditionally paid in various areas. The deal would apply to the public sector from December 1st, when current arrangements expire.
Mr O'Connor said that in addition to pay increases, there was scope for tax adjustments to boost workers' take-home pay.
