Pay cut law was in place before talks collapsed

BEFORE the collapse of yesterday’s public service pay talks the Government had already prepared legislation facilitating straight pay cuts.

The decision to end discussions will almost certainly lead to strikes in the sector within days.

A senior Cabinet source last night said the Government had rejected the unpaid leave alternative because it simply “wouldn’t sell” with the public.

The source said the necessary legislation giving effect to an across-the-board pay cut had already been drafted, a clear indication the Government had been prepared for the collapse of the talks.

The legislation is required because the pay cut means altering existing contracts, the source said.

Nonetheless, the Irish Examiner has also learned that less than a couple of hours before the Government rejected unions’ offer of unpaid leave as the main mechanism of saving the Exchequer €1.3bn, three Cabinet members told three different union leaders they were happy with the deal on the table.

However, at 4.30pm Taoiseach Brian Cowen held a press conference at which he said the Government could not agree a deal because the unions’ alternative proposals would not have achieved the necessary savings.

“The Government is clear that the public service pay bill must make a significant and proportionate contribution to the necessary adjustment in the public finances in 2010 and subsequent years,” he said.

“Unfortunately, the proposals put to Government do not provide an acceptable alternative to pay cuts.”

The decision not only means that when the ICTU public service committee meet on Monday it will signal an almost certain return to strikes. It also means all the concessions given by unions towards the long-awaited reform of the public service will be withdrawn.

Those concessions would have seen major improvements to the efficiency of key sectors, such as health, where the offer of longer core days for staff would have meant a higher turnover of service delivery to the patients.

ICTU’s Peter McLoone warned it was now “inconceivable” that members would rally to public service reform after the Government had reneged on a deal and moved to impose pay cuts.

But another Government source suggested that the unions had left themselves exposed by publishing the list of reforms they would have signed up to had their unpaid leave proposal been accepted.

“They’ve put out the list of things they said they would do. Why don’t they go ahead and do them [in the interests of a better public service]? Do it anyway.”

The opposition lambasted the Government’s handling of the issue.

Labour leader Eamon Gilmore said the Government had been given an extraordinary opportunity to achieve long-term reform of the public sector but had wasted it.

Fine Gael deputy leader Richard Bruton said the Government’s economic policy was “in tatters” with just days left to the budget.

“Fianna Fáil has been at sea from day one, changing its mind on a regular basis and making up its strategy on the hoof,” Mr Bruton said.


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