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Siptu boss warns of pay rise 'explosion' for the new year


SIPTU's Jack O Connor

SIPTU's Jack O Connor

SIPTU's Jack O Connor

THE leader of the country's largest union has predicted a wage "explosion" with thousands of workers lodging claims for pay rises if economic growth continues to soar.

Siptu General President, Jack O'Connor, whose union represents over 200,000 employees, said he expects far more pay increase demands to be served on employers next year than were made this year.

His comments came as Bank of Ireland staff yesterday voted to accept a 3.7pc pay rise in addition to a 5pc one-off bonus in what is tipped as the start of a wider demand for an increases in bank pay.

Yesterday, the Irish Bank Officials Organisation (IBOA) said it is now in talks with AIB and Ulster Bank, after agreeing the new deal at Bank of Ireland

Speaking to the Irish Independent, Mr O'Connor said: "An increase in wage claims will unfold and will reach a certain point and then become explosive."

He noted there may not be a deluge of claims immediately but the "momentum" is likely to build up if unemployment continues to fall, and the economy continues to grow at its fastest rate in seven years.

"It will unfold gradually as the economy recovers and unemployment diminishes."

Siptu has been serving claims for pay rises since the recession ended, but expects to increase these claims in 2015.

"I think it's fair to say this year as the economy recovers and unemployment diminishes that there will certainly be an increase in wage claims as people try to recover some of the ground they lost over the last six years of austerity," said the union chief.

But he added that retention of jobs is still the union's top priority.

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The CEO of the main employer group IBEC, Danny McCoy, also said "pay pressures" are starting to emerge in parts of the economy.

"There needs to be a broad discussion around general income trends, and what is right and sustainable for the economy at this time," he said.

He said this discussion needed to factor in tax, social welfare and pensions policy.

"Establishing broad pay norms, linked to productivity, would be useful for some businesses, but a one-size-fits all centralised wage agreement is not the answer," he said.

"We need to avoid pay pressures undermining the hard won competitive gains of recent years. Tackling unemployment must remain the priority."

IBEC said 51pc of employers awarded pay rises this year - it expects similar next year.

Although 2pc to 3pc pay rises have been the norm in recent years, some sectors may take their cue from higher wage deals brokered recently.

They include the 3.7pc pay rise for 6,000 Bank of Ireland staff over one-and-a-half years on top of a lump sum equal to 5pc of their salary.

Under the deal agreed between unions and Bank of Ireland the pay increase agreed this year will be followed by fresh talks each autumn aimed at agreeing potentially annual cost of living increases.

An annual staff bonus scheme is also being introduced to replace increments, which have been scrapped.

IBOA is now involved in talks with AIB and Ulster Bank, although they are at an early stage. AIB in particular ruled out any pay increase before the bank returns a "substantial amount of cash" to taxpayers.

Permanent TSB, where Unite is the main union, has ruled out pay increases until the bank returns to profit - which is expected in 2016.

Unions at major semi-state, the ESB, have lodged a claim for a 3.5pc annual pay rise over the next three years.

Unions are also gearing up to lodge claims with the government for the over 280,000-strong public sector workforce early next year.

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