Existing Agreements on Pay Must be Honoured by Trade Unions
In responding to the latest announcement by SIPTU (11.04.22) that the union is “to seek greater pay increases across private sector to offset inflation”and will also seek to “re-renegotiate earlier deals that are no longer sufficient to recompense workers for the increase in inflation”, Stratis Managing Partner, Brendan McGinty has stated that “This position, if pursued, will run entirely contrary to the critical importance for all parties of honouring collective agreements as a hallmark of good industrial relations. Indeed the union would be the first to castigate an employer if a collective agreement was not honoured by that employer. Any attempts by unions to reopen existing agreements with employers on pay for 2022 and 2023, which have been already negotiated and concluded in good faith before the current inflation spike should, in the absence of a review clause, be strongly resisted. It is important to note that employers did not seek to re-open agreements when inflation was negative in 2020 (annual average CPI was minus 0.3%).”
Mr McGinty added “The current inflation pressures are posing real challenges for both businesses and employees in terms of both the cost of living and of doing business. However, they are only one point of reference in the consideration of pay and reward issues. A ‘pay chasing inflation’ spiral is beyond the control of any employer and if pursued it will undermine competitiveness and the sustainability of jobs across many sectors. While the current inflation rises will endure for longer than was first being predicted the balance of forecasts are pointing to more moderate levels in 2023 and beyond.”
Finally, Mr McGinty commented “There is an inherent risk that a change of strategy on pay by some trade unions will put more jobs at risk at a time of peak uncertainty. This is also occurring at a time when the ICTU has already signalled that in light of the potential impacts of the war in Ukraine, the protection of employment must remain as big a priority as confronting the cost of living. Current developments also point to the need for greater coordination and guidance on incomes policy generally through the Labour Employer Economic Forum (LEEF).”
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Disclaimer: The information in this statement is for practical guidance only and does not constitute legal or case specific advice. The answers to specific situations will vary depending on the circumstances of each case. This is not a substitute for specific professional advice relevant to individual circumstances facing each business.