Strikes loom as unions reject pay cuts

The Government may seek to introduce elements of Croke Park II to avoid crippling strike action which would result from a direct 7% pay cut across the public service.

Following comprehensive rejection by trade unions of the Labour Relations Commission’s proposals, Minister for Public Expenditure Brendan Howlin warned he is “literally going to run out of money” between now and the end of the year unless the savings of €300m envisaged under the deal are found.

Crippling strikes loom if he goes ahead with legislation in the Dáil to impose pay cuts he previously indicated would amount to 7%. Such a move could also threaten the Coalition, with Labour backbenchers warning they could not be expected to vote such cuts.

The Government last night refused to say if it would legislate for pay cuts but insisted the savings, which will amount to €1bn over a year, must be found.

Unions representing two thirds of Ireland’s 290,000 public servants opposed the cost-saving measures proposed by the LRC.

There was speculation the Government could choose to select the required payroll savings from a menu of sources in order to maintain some of the improvements contained in Croke Park II.

That menu would include measures such as a cut to pay and pensions, increments, compulsory redundancies, and changes to working arrangements. The savings available from each of those areas has already been clearly established by public service management during the negotiations on the new deal. Therefore, the combination which would achieve the required total could easily be calculated. Sources believe this solution might also take some of the pressure off Labour TDs, who would otherwise face voting for straight pay cuts.

Public service unions, including Siptu president Jack O’Connor, yesterday said the Government faced “major confrontation” and sustained industrial action if it pressed ahead with pay cuts.

Mr O’Connor said his union’s vote to reject Croke Park II reflected the sense of grievance among working people, and public service workers in particular, “that they are carrying an excessive burden in the post-crisis adjustment”.

Labour backbenchers last night said the union vote must be respected.

“I wouldn’t be happy and I couldn’t imagine many parliamentary party members being in favour of legislation for pay cuts,” said Dublin North-West Labour TD John Lyons.

Dublin South-East Labour TD Kevin Humphreys said the way forward would be difficult. He said the unions had exercised their democratic right. “We’ll reflect overnight. But the mathematics haven’t changed.”