State gives extra week to save pay talks

The Government has agreed to allow another week for pay talks to be agreed with unions as the deadlock continues over €300m needed in public sector savings this year.

Failure to agree on a new deal could see pay cuts for some workers forced through in just three weeks, union chiefs have been warned.

Public Expenditure Minister Brendan Howlin said last night that he had given negotiator Kieran Mulvey until next week to find an agreement with unions.

Mr Mulvey, the chief executive of the LabourRelations Commission, has already spent two weeks in discussions with trade unions following the recent collapse of the Croke Park II talks.

Mr Mulvey sought the extra negotiating period last night to explore “potential areas for progress that have emerged as part of the above engagement process”, a statement from the minister’s office stated.

It added: “The minister agreed to this request on the basis that this limited and intensive process would conclude over the coming week in order that the minister may provide a full report to the Cabinet on Tuesday, May 14.”

It was also confirmed last night that the Government have already begun assessing legislation surrounding the needed savings with the Attorney General.

A spokeswoman for the Government said no decision had been taken on “the nature” of the legislation.

However, she added: “It is the case that initial discussions on the options available to Government have commenced between the Department of Public Expenditure and the Attorney General’s office.”

Taoiseach Enda Kenny said yesterday that he hoped progress was being made on the pay talks with unions.

Mr Mulvey has told unions that, in the absence of a negotiation, the Government will look to impose pay cuts on those earning €65,000 from Jun 1 rather than Jul 1 as would have been the case if Croke Park II had been passed.

That would leave just three weeks for the Government to decide that negotiation was not going to be successful and press ahead with introducing legislation. Union sources believe that means the Government has already begun drafting legislation for that purpose.

Meanwhile, Siptu has revealed that employers at sectoral level are already introducing changes to working terms and conditions, particularly in health and local authorities and that the union was already balloting in some areas.

“There is a lot of activity on the ground at the sectoral employers’ level,” said Siptu vice president Patricia King.

“We have a fair bit of activity where there are employers making decisions about cutting overtime, restructuring or outsourcing.

“That is starting to happen in employers on the ground. We are now in several places balloting so we can resist that. It is becoming almost par for the course.

“It would not surprise me if there are more and more of those incidences happening.”

Siptu attack

Siptu has criticised a call by employers’ body Ibec for the Government to abandon tax increases for high earners, saying the money generated would ease the burden on those on lower incomes.

The union’s general president, Jack O’Connor, welcomed Ibec’s decision, announced in its quarterly annual review, to “abandon the sinking ship of one-sided austerity”.

“We agree with a call for the alleviation of the tax burden on low and middle-income families, alongside increased investment in job creation,” said Mr O’Connor.

“However, we are concerned that the Ibec call to ease back on tax measures in the forthcoming budget may be a Trojan horse for those lobbying the Government to abandon its commitment to abolish pension tax relief for high end contributors. It was agreed in Budget 2013 that this measure would be implemented in Budget 2014.”

Mr O’Connor said the ending of pension tax reliefs for high-end contributors would result in savings of at least €250m which should be used to alleviate the tax burden on lower-income earners.

“While tax alleviation for those on incomes at the middle and lower end of the spectrum should form a key part of an economic stimulus package, which is now clearly essential, there is still plenty of potential to raise at least €1bn by increasing the contribution of those with wealth or high earnings over the next two budgets.”

— Stephen Rogers