Firms and unions shake on 3% annual wage rise deal

A fixed 2% will be given, plus another variable amount of up to 1% depending upon productivity, company results and whether or not the worker has been absent frequently and without justification.

This annual rise is not legally-binding, but 'strongly recommended' and affects around 4,000 industry-specific working conditions agreements.

Unions wanted to include a clause making it compulsory for pay increases to rise each year in line with inflation if this is more than 2%, but it has been left as 'a possibility'.

Although the rises are not obligatory, they will carry great weight when different sectors renew their collective employment conditions agreements, which is a joint process between the companies involved and unions.

In the last few months, collective agreements signed and sealed have included average annual rises of around 1.6%, to include fixed increases and productivity- or results-linked increments, meaning the new 3% deal will make a considerable difference.

Companies and unions have already signed off the new minimum wage – which is compulsory in any job – at €14,000 per year for a full-time, 40-hour week, which equates to €1,000 a month after tax.

Other steps the government plans to take in terms of labour relations includes making it obligatory for companies to treat agency and outsourced workers the same as salaried and contracted employees, to prevent cost-cutting at the expense of secure jobs and a trend towards worsening conditions and wages across the board.

The government also wants to encourage and reward firms for avoiding redundancies by temporarily cutting workers' hours – where companies are in financial difficulties or running on a shoestring, they are urged, and could be forced if the tendency does not catch on, to come up with 'agreed flexible solutions' based upon working hours, not by having staff on strings of temporary contracts and a high employee turnover, and to aim to avoid redundancies asa priority.

Unions want the government to introduce legal changes that allow job contracts to terminate automatically upon retirement, provided the employee is entitled to a 100% pension, in order to free up jobs for the younger generation.

They are also calling for an 'observatory on absenteeism' to find out the causes and tackle them – although they recognise that since the financial crisis, 'presenteeism' has been just as much a problem.

Addressing the gender pay gap and adapting vocational and professional training and qualifications to suit the actual requirements of the job market are also at the planning stages.