There is a particular advantage to sitting across a table from Danny McCoy when the conversation turns to pay.

He has been around the block.

The Ibec chief executive has spent 21 years inside the organisation, 17 of them as its CEO. He has sat through enough wage negotiations, economic shocks and industrial disputes to know that the numbers are rarely the hardest part.

The difficult bit is what happens when everyone starts digging in.

Sitting in the studio with The Currency this week, McCoy was his typical candid self when it came to the issue of the new national pay deal, and the prospect of public sector strikes.

“I think so. I think it’s shaping up that way,” he said when I asked whether Ireland was heading for a “winter of discontent”.

He pointed to the fuel protests earlier this year, when the Government implemented a high-cost package of supports for the haulage sector and households to end the disruption.

“The Government lost its shape,” he says.

For McCoy, that episode shows the pressure that can build on a government when a cost-of-living issue turns into something bigger.

The pay talks themselves, he says, will be difficult. There is resistance within Government to simply writing the cheque, despite the buoyancy of the State coffers.

But there is one line McCoy thinks the Government should not cross.

Full indexation of public-sector pay to inflation.

“It’s great from the trade unions’ point of view, because then they’re inside the tent and are always protected from inflation, but the ones who aren’t protected by inflation are going to be the private sector workers,” he says. “This is incredibly divisive. Incredibly divisive.”

The full interview will be released tomorrow, and his comments on the pay talks and the prospect of strikes are interesting given the host of public sector unions balloting their members on potential strike action in the absence of a new national pay deal.

Members of the Irish Nurses and Midwives Organisation (INMO) voted last week for industrial action in protest over the lack of progress. The proposal was backed by 99% of those who participated in a nationwide ballot. Fórsa, Siptu and Unite had previously declared similarly Putinesque numbers in favour of action.

Fórsa said its 90,000 members will not work overtime and will not cover the work of colleagues or other grades, in addition to other measures, from September 30. Fórsa’s Kevin Callanan, a key broker in the process as he is the head of the Irish Congress of Trade Unions, said at the time that the scale of the majority was a clear indication of the level of anger and frustration among public service workers who were seeing their earnings eroded by inflation.

It all begs some pretty big questions. For a start, is the threat of strike action part of a performative process, the usual theatre show in advance of a last-minute deal? Is the sabre-rattling a means for union leadership to show relevance to their membership?

The fuel protests nearly saw the entire apparatus of collective bargaining shoved aside. It represented an existential challenge for unions and other representative organisations. They need to show their value to their members, or risk an erosion of their relevance. 

It is also important to remember we are talking about groups of unions who now cover only the most supported parts of the economy. Union density is at or around 25% now, in the state and semi-state sector, mostly. 

Very few of these workers will be exposed to the same uncertainty the fuel protestors were exposed to. 

And yet, the collective power they can exert is tremendous. 

So, are we actually heading for a winter of discontent?

In truth, this is what happens when the Government is seen to have money to spend and everyone starts asking for their share. It is also what happens when the Government has developed a reputation, rightly or wrongly, for folding to vested interests such as the haulage lobby and the hospitality sector.

Some of those involved in the process told me last week that the Government’s hard-line approach to the pay negotiations was partly designed to end its recent habit of caving in.

Others said that the demands being made by unions were simply too excessive, and it was always within the minister’s gift (in this case Jack Chambers) to divide and conquer by cutting bespoke deals with individual unions and sectors.

Public expenditure minister Chambers, for his part, says the threat of industrial action is “unnecessary” and “completely unwarranted”.

He told RTÉ last weekend that “two months have been lost because they’ve decided to ballot for industrial action rather than engaging in a discussion with officials from my department on a successor pay agreement”.

The two months were a reference to exploratory talks earlier in the summer, after the previous pay deal expired in June. Those talks, as is abundantly clear, went nowhere.

So, just weeks out from the budget, we are still without a pay deal. It makes budget arithmetic tricky, something the Fiscal Advisory Council noted in its recent pre-budget submission.

“Budget 2027 will need to leave appropriate room for the costs of a potential pay deal in the budgetary figures, otherwise overruns will be all but guaranteed,” it said.

(Interestingly, it also pointed out that Budget 2024 and the Revised Estimates of Public Services 2024 allocated €700 million towards the potential cost of a new pay deal for 2024, where the figure subsequently agreed in 2024 came to €1.1 billion for that year, more than 50% higher than allocated.)

The unions are seeking to focus the conversation on pay, while the Government is stressing the need for reform and efficiencies. There is nothing new about this, barring the obvious need for increased productivity for the enormous sum being paid to these workers.

But surely there are other ways of looking at it. Yes, inflation has eroded much of the pay increases from the last deal, as it did for private sector workers. But would it not make more sense to have an overarching, social partnership-style arrangement that focuses on living standards, including creche support, taxation, social welfare, rather than just headline pay?

The previous deal focuses almost exclusively on pay. That was a different time. The issue now should be about aligning the public sector workers with the broader interests of the State and of state policy on issues such as AI and climate change.

In the end, however, I suspect a number will be agreed upon, and both sides will move on.

After all, it is all part of the theatre, and the final curtain needs to come down at some point.

Elsewhere last week…

Launched by Vincent Browne in 1977, Magill shook up Irish journalism and was home to some of the country’s best investigative writers. A new book charts its powerful impact – until things began to go awry. In a fascinating two-part report, Alan looked at the personalities and the history of the magazine founded by Vincent Browne, and spoke with the author of the book, Kevin Rafter.

Garrett Hayes has advised the family office of French billionaire Xavier Niel and worked on telecoms and private-equity deals. The son of the late Senator Maurice Hayes told Tom the story of how his career brought him back to Dublin as a partner at Dentons.

The GAA were accused of misogyny last week as the row about integration with Ladies Gaelic Football and camogie rumbles on, but Paul Flynn argued that the heart of the row is something else.

In 2006, Joe Gill made the case to investors for an Aer Lingus IPO that many thought impossible. Higher costs and rising competition are now putting pressure on its transatlantic strategy, but he maintains that the advantages behind the investment case two decades ago remain.