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Irish pay deal gets inflation adjustment

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — After long negotiations, employers and trade unions agreed on Monday to a 3 percent pay raise in the terms of the beleaguered national pay deal to compensate for inflation.

The adjustment to the 33-month-long Program for Prosperity and Fairness was welcomed by Taoiseach Bertie Ahern.

The deal was originally agreed earlier this year to deliver 15.75 percent in pay increases and 10 percent in tax cuts in three phases.

However, the country has been hit by a rash of strikes recently as the Celtic Tiger economic boom continues but rising inflation — currently running at 6.8 percent — eroded the first 5.5 percent pay increase.

Ahern said the renegotiated deal also provides for a renewed commitment to industrial peace and the creation of a climate for greater stability.

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The first phase of the extra pay raise will be paid as 2 percent beginning April 6, 2001.

A once-off lump-sum payment, equal to 1 percent of base pay, will be negotiated to be implemented on April 1, 2002.

The new deal says the 1 percent shall not be pursued through industrial action of any kind and employers can claim inability to pay. Ireland’s official labor-relations body shall adjudicate on disputes.

A National Implementation Body is being established to try to ensure there is industrial peace

Next year, the second phase of the PPF will now increase from 5.5 percent to 7.5.

A new Center for Partnership and Performance will be set up to promote "gain sharing and profit sharing" on a voluntary basis.

Finance Minister Charlie McCreevy is expected to announce tax cuts and social welfare increases in his budget this week in an effort to further copperfasten the crucial deal.

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