Business Irish

Wednesday 7 December 2016

Don't link wage rises to housing, say IBEC

Published 02/05/2016 | 02:30

IBEC boss Danny McCoy
IBEC boss Danny McCoy

Business employers' group IBEC has insisted it does not want wage demands linked in any way to house price increases even as unions eye a return to a social partnership pay model.

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An IBEC spokesman also told the Irish Independent that the group does not envisage a return to centralised wage agreements, and that for the "foreseeable future" wage agreements will continue to be thrashed out at an enterprise level.

IBEC boss Danny McCoy and the head of the Irish Congress of Trade Unions, Patricia King, have held meetings in recent weeks amid increasing unrest as workers from companies including Luas operator Transdev, Irish Rail and Tesco push for pay increases.

But while weekend reports suggested that the talks might pre-empt a wider shift towards returning to social partnership, an IBEC spokesman said that the business group has always held talks with unions.

"We don't always see eye to eye, but it's never the case that we don't talk to each other," he said.

He added that while IBEC is cognisant of the pressure being put on employees as a result of the housing shortage, he said the issue is equally of concern to employers.

He said that any attempt to link wage increases to rising home prices would be a step towards "repeating mistakes of the past".

"One of the big mistakes of the boom years was the awarding of significant pay increases that did not accurately reflect the underlying health of individual businesses or the economy as a whole," Mr McCoy told the IBEC CEO conference less than two weeks ago.

Housing starts have remained near record low levels, with the pace of construction significantly short of demand. Builders have had to fund more of construction projects themselves, while the new mortgage rules are also impacting the market.

By the middle of 2014, house prices in Dublin had risen by 40pc since the beginning of 2013. But property group Daft said that house price inflation slowed to 0.9pc in the first quarter of this year as the new mortgage rules bit. However, it said that in Dublin there are just 27 homes for sale for every 10,000 people, compared to 62 for every 10,000 elsewhere in the country.

Siptu and the National Bus and Rail Union have threatened possible strike action at Irish Rail if the company refuses to "meaningfully" engage on wage demands.

Irish Independent

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