Category: Archive

Government, labor unions hammer out 3-year contract

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — A government promise of £3 billion tax and welfare handout in the next three budgets and a deal on child-care costs has sealed a new 33-month national program with the social partners.

Called the Program for Prosperity and Fairness, the agreement was sealed at a final negotiation session on Monday attended by the taoiseach, tanaiste and minister for finance.

The deal, which will replace the 39-month Partnership 2000 package, has still to be voted on by the 500,000 trade union members at a special ICTU conference on March 23.

The deal has been hammered out in marathon talks involving employers, unions, farmers and community and volunteer groups and will give workers record take-home increases of more than 15 percent in pay and a 10 percent cut in taxes.

The pay package is frontloaded with two 5.5 percent increases, in 2000 and 2001, and a final 4 percent over nine months in 2002. The cumulative effect will be a 15.75 percent increase.

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There will be minimum pay increases of £12, £11, and £9 in 2000, 2001 and 2002, respectively, even if these are higher than the percentage increases. This is substantially higher than similar floors in past agreements. In Partnership 2000, the floors were £3.50, £2.40 and £1.60.

The government will sweeten the pay increases with a £1.5 billion tax package that would give about another 10 percent in tax savings during the next three budgets.

It is also an agreed objective to remove workers on the national minimum wage or below from the tax net during the lifetimes of the agreement.

The tax deal also includes a renewed assault on the black economy and a government-union-employer study on new tax incentives for employee share ownership programs and other gain-sharing schemes.

Another £1.5 billion will be spent on a range of social inclusion measures dealing with low pay, the marginalized, social welfare recipients and poor households.

There is a commitment to increase the current £72 basic social welfare payment to £100 a month during the agreement, with progress accelerated if expected average annual growth of 5.6 percent is exceeded.

The £56 a month child benefit for a third and subsequent child is also to be raised to £100.

The social package aims to ensure that nobody outside the workforce will be receiving less than half the minimum wage within three years.

A £4.40 per hour minimum wage will apply from April 2000, rising to £4.70 in July 2001 and to £5 in October 2002.

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