Public pay cuts must not be reversed: employers
EMPLOYERS have warned the Government against a U-turn on the public service pay cuts imposed in the Budget.
As key talks with unions begin today, IBEC said the Government must achieve ambitious reform but not in a trade-off that means a reversal of the cuts which save €1bn in payroll costs.
It said such an agreement at the negotiations on pay policy would be unthinkable due to "the current state of the public finances".
However, in a recent bulletin to union members, Impact indicated that the Government had already conceded it was willing to "review" pay cuts imposed on more than 300,000 public servants.
The Irish Independent previously reported that the union told members management had said it was open to a "review" of pay cuts "within the context of the budgetary situation" at preliminary talks.
Impact said it aimed to get the Budget pay cut and the pension levy -- that equated to a 14pc reduction in the average salary -- reversed at the negotiations.
The union's general secretary and chairman of ICTU's Public Services Committee, Peter McLoone, has offered a programme of major reform in return for a reversal of the pay cut "over time".
IBEC sent a warning shot to the Government on the issue last night.
The big business group, which represents the employers of 70pc of private sector workers, and some public sector employers, said it should not contemplate a "pay for change" deal.
It also called for unions to immediately call off ongoing industrial action.
It said an ambitious programme of reform in exchange for minimising future pay cuts, not those that had already taken place, should go ahead.
Ibec pointed out that the public sector pay and pension bill would be €19bn this year, "consuming" 60pc of tax revenue, despite last December's pay cut in the Budget.
"Finding savings through public sector reform is the only way trade unions can hope to minimise the impact of future cuts, given that the Government is committed to making further budgetary adjustments of €3bn in 2011 and €3bn in 2012," said IBEC director Brendan McGinty.