A €20 euro a week pay rise for tens of thousands of public servants has been brought forward.
The Cabinet's approved the increase for those earning less than €65,000 from April 1st, which was due under the Lansdowne Road Agreement from September.
This comes under pressure from the Irish Congress of Trade Unions (ICTU) after gardai secured a €50m pay deal.
It'll cost an extra €128m which the public expenditure minister says will be found through "efficiencies and savings."
Business group IBEC has warned that public sector pay must consider the "needs of wider economy, not just public sector workers."
It added that public sector pay talks should factor in the pensions that are offered and the high level of job security.
IBEC argues that public pay decisions must, "reflect the needs of business and the wider economy, not just public sector workers, and must include taxation reform and new investment in infrastructure and public services."
Ibec Director of Employer Relations Maeve McElwee said: "It is in everyone's interest to have a coordinated approach to public sector pay determination and the competing demands for resources. The economy has improved faster than envisaged, but new uncertainties have emerged; not least the risks that Brexit presents. Any review of pay must also reflect the full value of pension entitlements in the public sector, which far outstrip those typically available in the private sector, along with the great level of job security.
"Government must address the underlying issues driving pay demands, such as housing and childcare costs, rather than using the blunt and expensive instrument of accelerated compensation to off set very specific cost of living expenses. At a headline level, there is currently no inflation in the economy. Targeting specific cost of living factors at source is the best way to protect competitiveness."
Michael Noonan with Paschal Donohoe
Commenting on the decision, Minister for Public Expenditure and Reform, Paschal Donohoe denied that he had caved to union pressure, saying:
"I don't accept at all that this is capitulation. If the Government had not accepted the Labour Court recommendation, [then we] would have been standing in front of you having to deal with questions regarding why we undermined the final court of resolution for industrial relations within our State."
Sinn Féin TD and spokesperson for Public Expenditure and Reform David Cullinan has said that the measure will provide some relief for public sector workers, but it fails to address the core issue of "equal work for equal pay" is still not being addressed.
