Friday 30 January 2015

Public sector talks not limited to pay cuts

Published 14/08/2014 | 02:30

Brendan Howlin Minister for Expenditure and Public Reform. Photo: Frank McGrath
Brendan Howlin Minister for Expenditure and Public Reform. Photo: Frank McGrath

Talks on reversing public sector pay cuts made during the economic collapse will take in far more than just pay.

The ongoing reform agenda and terms and conditions in the public sector will also be on the table in the negotiations on the restoration of pay.

And it is not yet clear if promises of tax cuts will also be included in the commitments to increase pay of public servants, as was the case during the social partnership agreements of the past.

But additional productivity measures, such as the extra hour worked by teachers every week under an agreement, are not expected to be reversed.

Unions are also expected to come to the talks with their own list of demands.

Coalition ministers are already suggesting the public sector pension levy will have to be made less harsh - but will remain in some form as a contribution to pension pots.

The new deal with the public sector is expected to kick in from 2017, Government sources have indicated.

The existing Haddington Road Agreement lasts until the end of the 2016.

Public Spending Minister Brendan Howlin said the talks will be on the restoration of pay cuts to the public sector made during the economic crisis.

However, Mr Howlin has stressed not all the 'emergency' pay cuts will be restored and any reversals will be done over time.

Reversing all the public sector pay cuts would cost the taxpayer almost €2.2bn.

Government figures are stressing the emergency pay cuts will have to be unwound over a lengthy period of time.

"There will be no point in unwinding the financial emergency measures and then creating another financial emergency as a result," a Government source said.

Under Haddington Road, there were pay cuts for those earning between €65,000 and €100,000, which will be restored in full by 2018. The restoration will occur in two equal phases on April 1, 2017 and on January 1, 2018.

Collapse

Overall, cuts of various types were made to nearly 300,000 public sector workers under emergency legislation, prompted by the economic collapse - the Financial Emergency Measures in the Public Interest Acts 2009-2013, known as FEMPI.

The Department of Public Expenditure has confirmed the value per annum of each measure:

* €900m for the pension levy, which was worth an average of 7.5pc of salary;

* €950m for the pay cut on a sliding scale, dependent on salary size, but worth an average of 6.5pc;

* €125m for the pensions cut for retired public sector workers;

* €210m pay cut for higher-paid public servants earning more than €65,000 and pensioners on more than €32,500.

Unions will bring their own list of demands to the table on pay and other matters around terms and conditions.

"A whole series of related issues will be on the table," a source said.

Irish Independent

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