Cowen faces crisis amid fears of a pay free-for-all
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TAOISEACH Brian Cowen faces a new crisis as the collapse of pay talks threatens to spark a free-for-all on wages.
Mr Cowen was under fire for not moving more decisively to halt what is being seen as the first failure in the 21-year history of national pay deals.
He was criticised for failing to persuade the social partners to agree to an adjournment, instead allowing negotiations to abruptly collapse early on Saturday. Critics said his failure to produce an anti-inflation package had hamstrung the unions' ability to sell a pay pause to their members.
One of the country's biggest unions, Unite, is now gearing up to serve pay claims in excess of 6pc on financial services companies within a fortnight.
The union, which represents 10,000 financial services workers, revealed its plans to serve claims well above inflation on several insurers and banks, including Hibernian, AIB and Bank of Ireland.
And as social partnership goes into limbo, the prospect of an industrial relations "free- for-all" looms, with individual pay claims potentially undoing any progress already made.
Meanwhile, Mr Cowen has not made any public statement since the collapse of the talks, while critics said his intervention at the 11th hour was too little, too late.
A brief statement was issued on Mr Cowen's behalf after the talks, saying he "may" wish to meet various parties at the end of August. He said he may talk to them about the "arrangements that would operate" regarding pay in the period ahead.
Sources close to the Taoiseach said he believes it is time for reflection and taking stock of the situation.
But trade unions indicated last night they are not prepared to wait for an uncertain review by the Taoiseach before flooding employers with claims.
National officer Jerry Shanahan also warned employers that unions are no longer bound by procedures under social partnership in pursuing claims.
He pointed out that the most significant of these, a rule that claims could not be made above national agreement pay rises, no longer applied. This means there is no upper limit on claims.
Retail union Mandate also said it plans to lodge individual claims with employers for "substantial flat-rate pay increases with "immediate effect".
Strategy
Other unions have also promised to make claims and will set out their strategy at a high profile meeting of the Irish Congress of Trade Union's Private Sector Committee this week.
The unsettled industrial relations climate spells further uncertainty for the economy, as it slides rapidly into recession. Fine Gael last night suggested the Taoiseach -- and his Government -- were to blame for the collapse of the negotiations.
Party finance spokesman and deputy leader Richard Bruton said it was always going to be difficult to secure a new pay deal "in the absence of any anti-inflation strategy by the Government".
Escape
He said Mr Cowen could not escape responsibility.
"This is the latest core element of economic policy to have unravelled under Brian Cowen," he said.
Labour called the collapse of the talks a "very disappointing development". Frontbench spokesman Willie Penrose said the Taoiseach must now take "full advantage" of any opportunity to solve the problem.
Key union negotiator David Begg said he was not highly optimistic that the talks would get off the ground again.
"Brian Cowen holds the ring in this hand if he thinks there's a better prospect of a deal that would be worth his while," said the general secretary of the Irish Congress of Trade Unions.
Mr Begg also revealed that the unions would have accepted a wage rise below inflation.
But it would have to be accompanied by a flat-rate rise above inflation for the lower paid and Government measures to lower inflation.
These measures would have meant reducing VAT and taking measures to prevent British multiple charging higher euro than sterling prices.
The employers' best offer was a six-month pay pause, followed by a 2.5pc pay rise for six months and a 2.5pc increase for nine months.
- Anne-Marie Walsh and Senan Molony
