The Minister for Public Expenditure has announced plans to invite public service unions to talks on an extension to the Lansdowne Road public service pay agreement.
Citing Brexit, the minister said the country is facing “exceptional challenges” when it comes to funding the public service.
The minister was speaking following the publication of a report into pay-scales by the Public Service Pay Commission.
He warned that there will be "no ATM created" for the public sector adding that there are huge demands being placed on the resources that are available:
Successor to Lansdowne Road
The commission found that there is now a basis for all parties in the public sector to enter into negotiations for a new national public sector pay agreement.
It called for any future pay adjustments to be linked to the delivery of workplace reforms and continuous improvements in productivity – adding that pay for public service employees is still higher than private sector pay levels for people with similar characteristics.
It said that all parties in the upcoming negotiations will have to decide on a timeframe for the orderly unwinding of the FEMPI (Financial Emergency Measures in the Public Interest) legislation introduced in 2009.
It also called for a “comprehensive examination” of all underlying difficulties in relation to recruitment and retention.
Pensions
The report found that pension benefits for workers recruited into the public service before 2013 are worth up to 18% more than those available to private sector workers.
It called for public service employees to contribute more towards their pension arrangements.
It recommended that the public service pensions levy – which is due to be phased out – be replaced with these increased contributions from “legacy” workers.
The levy is currently worth €720m a year to the exchequer.
The rates of contribution will be a matter for negotiation at the upcoming talks, according to the commission.
Time to reflect
.@Paschald Minister @Paschald says there will be a need to balance the needs and be fair to everyone pic.twitter.com/NIYaOGQQkU
— Páraic Gallagher (@paraicgallagher) May 9, 2017
"The independent evidence-based analysis set out by the Commission in its Report will be a key input to the negotiations on an extension to the Lansdowne Road Agreement, which will get underway in the coming weeks,” said Minister Donohoe.
“It is important that we now take a short time to reflect on the Report.
“From Government’s perspective, the Commission’s acknowledgement of the risks to the fiscal and economic environment in considering how best to unwind FEMPI legislation is welcome.
“So too is the focus on the State’s ability to pay when considering future pay awards.”
Recruitment and retention
The Commission has also recommended that pay constraints in “specialist and scarce skills areas” may need to be reconsidered in the upcoming talks.
If the government accepts the recommendation, it could see nurses and midwives offered a special deal as part of the negotiations – in an effort to address the recruitment and retention issues that have been widely held up as a primary contributor to the crisis in Ireland’s health service.
The report found that there are “problems in the case of some specific and specialist groups across the public service.”
“This includes those groups that are internationally in demand, particularly in the health sector,” it said.
“Where there are significant problems attracting candidates in particular work streams there may be a benefit in looking at the various structural and organisational constraints within such streams.
“There is evidence that some senior level leadership positions are increasingly finding it difficult to attract a wide candidature, which suggests there may be structural issues that need examination at these levels.”
Union reaction
Responding to the report, the ICTU Public Services Committee (PSC) called for early talks on a successor to Lansdowne Road.
“We welcome today’s publication of the report of the Public Service Pay Commission which, among other things, provides a good summary of the sacrifices public servants made in the years following the economic crash,” said an ICTU spokesperson.
“It’s now time to move swiftly into negotiations with a view to accelerating pay recovery for workers whose incomes are significantly lower than they were nine years ago.
“Our priorities in the talks will be to restore incomes as quickly as is sustainably possible, and to protect the value of retirement incomes.”
