IBEC to withdraw from pay agreement before New Year

The group said it still supported an agreed partnership approach to the current economic challenges, but said efforts must focus on "keeping companies in business and supporting jobs".

IBEC will take unilateral action if no agreement is reached with ICTU between now and mid-December on an alternative pay agreement that is appropriate for the economic and commercial environment of 2010.

IBEC Director General Danny McCoy said: "The terms of the current pay agreement were agreed in a radically different economic context and are now utterly inappropriate. It would be reckless to attempt to apply those terms in the current circumstances, with so many employers fighting for their very survival.

“The real casualties of the economic downturn are the many thousands who have lost their jobs. This is where all our efforts should focus. IBEC has proposed a set of measures that would redirect public funds towards keeping people in jobs, rather than allowing a drift into spending equivalent funds on social welfare payments.

"We need to work together to get ourselves out of this crisis quickly so that we restore our own confidence, and international confidence, in our country. Lack of jobs is the single biggest issue facing our economy, but only competitive businesses can sustain and create employment.

"The business community is willing and able to play its part in getting the country back onto a sustainable path. Pay expectations must however reflect the overriding need to restore competitiveness and protect existing employment."