Thursday 29 September 2016

Paschal Donohoe: The Government must respect the unions that signed up to pay deal

We cannot give public sector workers benefits of Lansdowne Road pact if they have not agreed to it, says Paschal Donohoe

Paschal Donohoe

Published 03/07/2016 | 02:30

Paschal Donohoe: ‘We know the unaffordable wage increase of today is the savage wage cut of tomorrow. And Ireland does not want to go down that path again.’ Photo: Frank McGrath
Paschal Donohoe: ‘We know the unaffordable wage increase of today is the savage wage cut of tomorrow. And Ireland does not want to go down that path again.’ Photo: Frank McGrath

Last week, I made the important decision to allow for the Financial Emergency Measures in the Public Interest legislation - known as FEMPI - that underpins many of the reductions in public sector pay of the last few years to continue.

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This has, understandably, caused reaction and debate. But opposition from some should not be at the cost of recognising broader issues about our public wages and services.

Nobody expects public servants not to benefit from an improving economy. Moderate pay restoration is a reasonable expectation within our public service, just as it is for other workers across the economy.

That is why the government last year agreed, when it negotiated the terms of the Lansdowne Road Agreement, to budget for pay increases across the three-year period with a total cost of €844m in 2018.

By way of example, a public servant earning €30,000 will receive an extra €2,170 under the agreement.

So, our public servants are not facing wage cuts. They are experiencing gradual wage increases.

Furthermore, this deal has now been accepted by the vast majority of public servants.

Over 280,000 of them are now working within the agreement. Twenty three unions have now voted for it. Three remain outside it.

I made the decision to renew the FEMPI legislation because we must continue to plan sensibly for the future. Too many have learned that the unaffordable wage increase of today is the savage wage cut of tomorrow. Ireland does not want to go down that path again.

Our borrowing is down. Our national debt is decreasing. However, much needs to be done to bring both to acceptable levels.

As a small open economy, Ireland is also particularly susceptible to external risks. The biggest of these is, of course, the decision taken by our neighbours in the UK to leave the European Union.

These are all reasons as to why we must plan for the future. This planning also delivers benefits now.

The Lansdowne Road Agreement allows the Government to hire more public servants to meet increasing demands for public services.

By the end of 2016, we will have been able to hire an estimated additional 18,000 public servants to teach in our classrooms, to help the elderly, to police our streets and work in our hospitals.

That is at a cost of an extra €1.1bn to our pay bill over three years - necessary spending to help our citizens every day.

The agreement is also flexible enough to allow for the concerns of recent recruits to the public service to be addressed in a negotiated way.

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That is clear from the deal reached with the two unions that represent firefighters, who, in return for more effective delivery of that critical public service, have negotiated a single common pay structure for all firefighters, including new recruits.

That structure sets a precedent for similar arrangements for other newly recruited public servants - a negotiated arrangement within the terms of the Lansdowne Road Agreement to deliver better public services in return for restructured pay arrangements.

In fact, officials at my department will have an initial engagement with the two teacher unions who have signed up to the agreement next week to hear their concerns on this very issue as well.

I also intend to engage shortly with public service unions and associations on the establishment of a Pay Commission, which also formed part of the terms of the Lansdowne Road Agreement.

The commission will help Government, union negotiators and the taxpayer to come to a mutual understanding of the challenges of managing the public pay bill over the coming years.

The Government has to, and will, respect the decisions of the vast majority of public servants to come within the Lansdowne Road Agreement.

We cannot give some unions the benefits of being within the Agreement without delivering the productivity needed to provide much-needed services to the public at a reasonable cost.

That isn't an arrangement that the Government could sign up to while keeping faith with all other public servants and their representatives.

The Government does not want to be in dispute with any group of people working for it. We want to collaborate on improving how we go about our business.

Invitations have been extended to those unions that remain outside the Agreement - the GRA, PDFORRA and the ASTI - to come and talk to their respective ministers on issues of mutual concern. I urge them to do so.

Paschal Donohoe is Public Expenditure Minister

Sunday Independent

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