Bosses urged not to give their workers pay hikes this year
Published 12/02/2010 | 05:00
EMPLOYERS have been told not to reward workers with pay rises this year.
The country's main employers' group IBEC has told its members they "should not entertain" any claims for pay rises this year, the Irish Independent has learned.
The warning is contained in a strongly worded internal guide to IBEC's 7,500 members urging them to take a hard line in negotiations with unions following the collapse of social partnership.
In the circular, IBEC claimed labour costs in Ireland were currently 30pc higher than in the UK.
It said pay restraint and some pay cuts on a national basis were "essential" as wage costs, which include employers' PRSI, have soared by 54pc between 2000 and 2008.
The big business group, representing the employers of more than 70pc of private sector workers, said members should consider the effects of their actions on other members when dealing with pay claims.
And it claims there is no justification for pay increases because of falling prices and low wage growth in other EU countries.
It said that for many companies, the necessity of a pay pause and some pay reductions "have become pressing" although it said outstanding claims under the pay deal should be honoured.
"It is now a matter of trying to survive the recession, maximising sustainable employment and in so doing avoid lay-offs and redundancies," it added.
The comprehensive guidebook, titled 'Negotiating pay and related matters at enterprise level', was sent to members recently following IBEC's withdrawal from the national wage agreement shortly before Christmas.
The employers' group is in informal talks with the Irish Congress of Trade Unions in a bid to suspend the national pay deal and agree an alternative.
It said labour costs here were now fifth-highest in the EU at €47,000 per head, well above an average of about €40,000.
"This is a marked change from 2000, when Ireland ranked 11th," it said.
It said a recent survey of EU members suggested there would be a further reduction of 3.3pc in total pay bills this year and a drop of 1.1pc in average pay rates.
IBEC's industrial relations and human resources services department penned the guide, which also advises members how to maintain industrial peace in the absence of a national agreement "without provoking widespread unrest".
However, it said companies should not aggravate disputes and any pay cuts should be seen to apply to workers fairly.
It added they should deal with workers and unions reasonably and steer them towards talks at state mediation bodies in a bid to have the threat of industrial action lifted.
Tanaiste Mary Coughlan, who has refused to rule out further pay cuts for public servants this year, would not say whether she agreed with IBEC's guidelines last night.