The €6,000 public pay cut
Government facing union battle as it puts demands on the table
The average public sector worker will be asked by the Government to sacrifice up to €6,000 a year in pay and pension entitlements in a desperate bid to save €2bn.
But insiders are predicting only public sector employees on higher pay will take an actual reduction in salary, amidst union resistance to swingeing across-the-board pay cuts.
The Government's opening salvo in talks, due to begin tomorrow, is expected to be pay cuts of up to 10pc across-the-board and an increase of up to 4pc in pension contributions.
The proposal would mean the average earner on €50,000 would lose nearly €6,000 from their gross salary.
But senior sources expect the outcome of the negotiations to result in only those on over €60,000 or €70,000 being hit with direct pay cuts, and a pay freeze for lower paid public sector employees.
Senior government sources revealed it would also be looking to reduce the working week for non-frontline staff.
The Cabinet is holding its second day of meetings today on plans to cut €2bn from spending with public sector wages top of the agenda.
Talks with unions and employers are expected to begin tomorrow, when the Government is expected to present its proposals.
A senior source said the increase in pension contributions and 10pc pay cut would be the Government's opening position. This would lead to an immediate €2bn saving -- as the public sector pay bill is just below €20bn.
But government officials expect a compromise, in the shape of a pay cut above a threshold around €60,000, with lower paid workers facing a pay freeze.
Benchmarking
The Government is also likely to seek deferral of pay increases under September's national wage deal and the postponement of an overdue benchmarking pay rise of €50m. Sources said overtime and increments were not a centrepiece of the proposals as they were highly complex to negotiate, unless applied across the sector, and were "hard won" by unions.
Although public sector unions have ruled out a pay cut, senior sources this week indicated they might accept pension contribution increases.
A high-ranking government source said "everything would be on the table", adding: "The Government would love to get 10pc pay cuts across the board but there is likely to be a compromise.
"It is likely that pay will be cut above a certain level but it will not be anywhere as high as €100,000.
"We won't want to waste time on things that will only generate Mickey Mouse money of around €60m or €70m. We need €2bn."
The source said the Government could afford to have some public servants "not turning up" by reducing the working week, but not frontline services, including nurses and gardai.
- Anne-Marie Walsh and Charlie Weston
