Pay cap of €200,000 for senior public recruits
Published 13/06/2011 | 05:00
BASIC pay rates for senior new recruits to the public service will be capped at €200,000 -- €50,000 less than the current limit -- under new plans to be considered by the Cabinet.
The proposals will also cap the basic pay for future commercial semi-state bosses at €250,000, a measure that was previously imposed by former Finance Minister Brian Lenihan.
However, the Government will examine the pay ranges for incoming semi-state bosses in the hope of hiring them on lower basic pay packets than the proposed €250,000.
Basic pay above the €250,000 cap will only be allowed in exceptional circumstances where it is believed necessary to attract a higher calibre of candidate.
Currently, CEO pay is determined by the Hay report, commissioned by the previous government in 2007, which sets out ranges for chief executives benchmarked against private sector rates in various sectors.
Sources said the measure -- to reduce these pay ranges -- would be a less crude instrument than the previous government's flat rate cap.
The new plans to be put forward by Public Expenditure Minister Brendan Howlin will have no immediate effect on existing staff, whose wages are legally protected in their employment contracts.
But sources revealed that the Government plans to put severe pressure on the semi-state chief executives to volunteer for pay cuts and bring their wages down to the existing €250,000 cap.
Just one boss -- Dick Fearn of Irish Rail -- took a reduction in his €256,000 pay to the new cap introduced in last December's Budget.
A recent report revealed that the combined pay for the heads of 10 semi-state companies came to almost €4.4m in 2009.
The head of the ESB, Padraig McManus, was the top earner, with a package of €752,568, a massive increase on his remuneration two years earlier of €534,000.
Bord na Mona's Gabriel D'Arcy got €392,000, while Coillte's David Gunning received €417,000, and Dublin Airport Authority's Declan Collier's package was worth €568,100.
The new plan also includes measures to cap senior public service pay at €200,000.
This would see a cut of 12pc to the €228,000-a-year wages of new secretary generals in government departments.
The move to cut senior pay is a major attempt to counterbalance the Coalition's forthcoming plans to drastically reform wage deals in industries across the economies.
It faces severe criticism over its plans to reform legally-binding wage deals for the lower paid but has to reform the system as it is a condition of the €85bn bailout with the EU and IMF.
However, the Labour Party does not want to be seen to back more radical Fine Gael proposals which have prompted union outrage, and ministers have publicly distanced themselves from the plans.
They have refused to support proposals by Enterprise Minister Richard Bruton to slash Sunday premium payments and wage rates for experienced workers from the deals.