Saturday 23 September 2017

Donohoe fires the opening shot in public sector pay talks

Filling the so-called 'free hours' worked by public servants would cost €600m and take 12,000 new recruits

Waging tough campaign: Minister Paschal Donohoe says there are going to be difficult future negotiations with unions
Waging tough campaign: Minister Paschal Donohoe says there are going to be difficult future negotiations with unions
Kevin Doyle

Kevin Doyle

Let's talk about pay. All the experts say it's good to talk, but, for many, even the mention of public sector pay sends stress levels rising and the mood plummeting.

For 300,000 people, the upcoming negotiations will decide their household budgets for the next three years, but they will also impact massively on the national budget.

Unions and politicians will have to find a middle ground that is sellable to both the public and private sectors, which the media will inevitably be accused of pitting against each other.

But that's the reality of what these talks will become. Public sector workers feel they have an entitlement to 'pay restoration'. The rest of the country will cry foul out of jealousy.

Already there has been much speculation about Minister Paschal Donohoe's plans to make civil servants pay more for their so-called 'gold-plated pensions'.

Pay hike figures of around 2pc per year have been tossed out as the starting target and unions have suggested the increases should be brought forward to early next year, even though the existing Lansdowne Road Agreement is in place until September 2018.

Today, the Sunday Independent can reveal the first shots being fired from the Government side will centre on the issue of productivity.

Public Expenditure Minister Paschal Donohoe is set to argue that the potential for public sector pay hikes will be wiped out unless State employees agree to continue working 15 million 'free' hours every year. He will warn unions that the so-called 'Croke Park Hours' must be considered the new norm.

Backing up his argument, he will present new analysis carried out by the Department of Public Expenditure which indicates the value of the additional hours currently being worked in the region of €600m per year.

And, according to the minister he would have to hire an additional 12,000 staff to just maintain frontline services if the 'free' hours are ended. This would be on top of the planned recruitment of 6,100 staff this year.

"We have repeatedly said a big element of the fairness of a future Lansdowne Road Agreement has to be that they allow us to continue to maintain or improve public services. That's why those figures are so important," Mr Donohoe told this newspaper.

Under the current arrangement, public servants such as teachers and nurses work just over two extra hours a week, or 27 minutes a day, bringing their working day to seven hours, 24 minutes.

According to the minister, the loss of those hours would have "a significant budgetary effect and a significant effect on the delivery of frontline services".

His comments are the first clear indication of a 'red-line issue' emerging.

One of the unions' top priorities is to have the unpaid hours abolished. Delegates at the Civil, Public and Services Union's annual conference earlier last month backed a motion to ballot on strike action if the Government refuses to roll back the hours by June.

However, Mr Donohoe argued the hours are used to cover absences in the health service, avoid schools closing for parent-teacher meetings and to extend opening hours in libraries.

The analysis on 'free hours' was done internally and has no link to the Public Sector Pay Commission's Report, which was published last Tuesday.

Critics hit out at that report for not delving deep enough into the 'pampered' work practices of the civil service.

The main take-away was that the public sector's pension benefits are worth up to 18pc more than private sector workers' pensions.

It said those who benefit from "legacy" schemes and fast-track pensions, such as those available to gardai, politicians and judges, should make bigger contributions.

Changes to any pension entitlements will be strongly resisted by union bosses but there is a growing expectation among taxpayers that something will have to give.

Similarly, though, there is an understanding that this will happen in tandem with pay rises, depending on your viewpoint.

Few private sector workers are able to assume they will get a pay rise every year between now and 2021 - but the minister says public sector workers have a legitimate expectation.

Unions call it 'pay restoration' but that's a phrase Mr Donohoe is careful not to use.

"We're negotiating on the basis of increases that are affordable for the State. One of the reasons why I talk about an extension to the Lansdowne Road Agreement is: the litmus test of any change cannot be 'is it affordable in the year that we give it?'. It has to be 'is it affordable in the years afterwards?'," he says.

However, the minister defends the right of public servants to get increases.

Out of politeness, Mr Donohoe will acknowledge the "gigantic contribution" made by public servants, but will ask them to allow him to strike a balance between increased pay and extra resources.

"I have a clear understanding regarding what an affordable agreement looks like. We know what we need to do. We know what the investment needs are in transport, in hospitals and in schools.

"We know what we need to do in terms of public pay to allow us deliver that balancing act. But these are going to be incredibly difficult negotiations," he says.

Let the talks begin.

Sunday Independent

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