The new public service pay agreement has delivered on the Government’s vow to ensure pay restoration from the bottom up, with hikes ranging from 7% for a worker earning €30,000 to just 1% for someone earning €100,000.
Under the deal, which extends the Haddington Road Agreement from 2016 to 2018, most public servants will see their pay rise by €2,000 by the end of 2017. As predicted, the wage restoration will be achieved through a combination of adjustments to the public service pension levy and a partial reversal of the 2010 public service pay cuts.
The first phase, which begins on January 1, 2016, will see the pension levy threshold — the amount above which the levy is payable — increase to €24,750 from the current level of €15,000.
Annualised salaries up to €24,000 will increase by 2.5% through a partial reversal of the 2010 pay cut. Salaries between €24,001 and €31,000 will increase by 1% via the same mechanism.
The second phase, which kicks in on September 1, 2016, will see the pension levy threshold increase to €28,750.
The combination of those measures will improve all public service full-time pay by around €1,000 per year.
Phase three is in 2017 and sees annualised salaries up to €65,000 increase by €1,000 per year. Pay restoration for staff earning over €65,000 negotiated as part of the Haddington Road Agreement will apply on April 1, 2017, and January 1, 2018.
According to the Department of Public Expenditure and Reform, the net effect of all three phases is that a public servant earning €30,000 will see their earnings rise by €2,170 or 7.2%. A person earning €60,000 will see their income rise by 3.2% or €1,895. Finally a worker earning €100,000 will see their earnings rise by €1,000 or 1% between 2016-2018.
A spokesman for the trade union movement said the deal, to be known as the Lansdowne Road Agreement, focuses on oversight arrangements, dispute resolution and — importantly from a union perspective — outsourcing protections. He said it achieves the essential objective of fairness, while at the same time offering greater benefit to lower paid public servants by using a flat rate pay adjustment.
Individual unions will now consult their executives before balloting members.
Public Expenditure Minister Brendan Howlin said the deal means an additional cost of €566m to the exchequer over a three-year period but said it “strikes the right balance between the legitimate aspirations of public servants for pay recovery and sustaining our improving public finances” and would secure a peaceful industrial relations environment until September 2018.
Mr Howlin said the deal also reinforced the ongoing commitment of the State’s employees to the wider reform agenda in the public service. He also said that, separate from the agreement, he would begin an “orderly restoration” of public sector pension reductions made in recent years.
Employers’ body Ibec said the new deal must deliver “the necessary and very significant reform” to work practices that are still required”. It also expressed concern that the new deal creates “overly-restrictive” rules around outsourcing.
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