Playing ball on public pay deal
POOR Croke Park. The home of the GAA is known around the world as the site of gladiatorial contests, such as that which took place last Sunday. Its history is shackled to the nation through the events of Bloody Sunday in 1920. And it serves as a symbol of the resilience of the GAA, the only national institute to survive the investigations and financial upheavals of recent years.
Yet up and down the country, Croke Park is a term that divides many and generates a considerable amount of abuse. Some use it to illustrate all that is wrong with the country. Others proffer it as an example of what makes Ireland the best boy in the bailout class. For it was within the conference suites that look out on the hallowed turf that the Public Service Agreement 2010-2014 — to be known thereafter as the Croke Park Agreement — was signed in 2010.
For the growing legion of opponents, Croke Park means one thing. No pay cuts for public servants. With 440,000 people on the dole, the bailout boys dictating cuts to all manner of services, and the banks waiting in the wings like scavenging dogs, many find this position unacceptable.
Among trade unions, the agreement is regarded as an example of a mature approach to industrial relations. In politics, a growing number of Fine Gael TDs are kicking up about what they see as the cocooning of the public service from the gales of recession. The junior coalition partner takes the opposite view. With austerity measures and U-turns on promises eating into Labour’s vote, the public service constituency has grown in importance for the party.
Significantly, Sinn Féin, which is attacking Labour from the left, is not in favour of the agreement.
Wider society has its own issues. Elements in the business lobby habitually refer to the public pay bill as if it is a deadly virus, rather than a means of keeping the State ticking over. The ranks of the unemployed, thrown overboard from the economy, must look with envy on the protection afforded public servants. And among those who constitute or represent the most vulnerable, Croke Park is interpreted as a completely unfair distribution of shrinking resources.
The latest flare-ups over Croke Park were sparked by health cuts. James Reilly, minister for health, called the agreement the “elephant in the room”, when trying to explain the cuts of €130m in his budget. The targeting in those cuts of the personal assistants of people with disabilities led to a U-turn when a protest took place at the gates of Government Buildings.
The ripples from the whole affair carried a question that is now being posed with increasing frequency — who exactly is paying for Croke Park?
The Agreement:
It was signed on Jun 6, 2010, between the Government and various public sector unions. It stipulates no more pay cuts and no compulsory redundancies for the term of the agreement, to run for four years. Included in the pay element is the ringfencing of increments, which some see as pay increases, and allowances, which number up to 800 in total within the service. The total bill for allowances alone runs to about €1.5bn.
Employment levels within the service would be reduced through voluntary redundancies and retirements. In exchange, the unions pledged to drive reforms which would lead to major savings.
Context is everything. The agreement was signed against a backdrop of deteriorating public finances, recession and global upheaval.
Social partnership, which had prospered for 20 years until 2008, was no more. Two pay cuts, including the pension levy, had already angered public service workers. And the last thing a floundering Fianna Fáil-led government needed was industrial unrest.
In the midst of these conditions, the agreement was signed after the usual theatre of brinkmanship and all-night negotiations.
Other, longer-term considerations don’t appear to have impacted much on the negotiations. Public service pay increased by 60% between 2000 and 2008.
One reason for this explosion in pay was two rounds of benchmarking, a process ostensibly designed to bring public pay in line with remuneration in the private sector.
Benchmarking was also to have included major reform in how the service was run, but precious little reform ever took place. The unions could, however, rightly point out that culpability for the lack of progress might more appropriately be placed at the door of management.
A clue as to what was on offer was in the very first clause of the document: “This agreement will ensure that the Irish public service continues its contribution to the return of economic growth and economic prosperity to Ireland, while delivering excellence in service to the Irish people. This will be done by working together to build an increasingly integrated public service which is leaner and more effective, and focused more on the needs of the citizen.”
Excellence in service? There are many, hard-working, conscientious people working for the State, but the notion that the service delivers excellence would find little favour with users. Why would the service by “focused more on the needs of the citizen?” Isn’t that supposed to be its whole raison d’être? Or does the statement tacitly accept that heretofore, the service was more focused on the needs of the employees rather than the public?
The deal was that the agreement would be monitored by an implementation body. This consists of a chairman, a secretariat, and representatives of both public service unions and management. Thus, the progress or lack of it, is largely monitored by those who work or have worked within the service.
It’s not much commented on these days, but Clause 1.16 allows for the possibility of pay rises: “In the event of sufficient savings being identified in the spring of 2011 review, priority will be given to public servants with pay rates of €35,000 or less in the review of pay which will be undertaken at that stage.”
So low-paid workers were in line for a hike if reform took off. In a service obsessed with relativities, it’s difficult to imagine that had that fanciful notion ever come to pass, that everybody else wouldn’t be demanding likewise.
Reform in the agreement was outlined in “action plans” for the various sectors, drawn up by management and the unions.
The plans are specific. For example, the education plan includes provision for an extra, weekly hour in front of a class for teachers, while the medical plan charts progress in centralising the processing of medical cards. Specific goals are outlined and achievements noted in progress reports.
The implementation body is happy — or, to use the term in vogue, relaxed — about progress so far. Its latest report issued in June found that: “€650m in pay bill savings and €370m in non-pay savings have been achieved in year two of the agreement; staff are co-operating with reform measures and public services have been maintained against the backdrop of a 17,300 reduction in staff during the first two years of the agreement.”
It all sounds good, and much of it is. There is genuine reform taking place in the public service. Arguments abound as to the speed and extent of reform, but change is certainly afoot.
Disagreement
While all those involved in Croke Park — the Government, unions, and functionaries of the industrial relations mechanisms — are relaxed about progress, many on the chilly outside see it through a different lens.
Earlier this week, the Labour Court made a recommendation that all local authority staff must work a minimum of 35 hours a week. Heretofore, staff in 16 councils put in between 32 hours 55 minutes and 34 hours 45 minutes for the working week.
Adjudication was necessary, because the trade union Impact declared that any increase in working hours was equivalent to a reduction in pay rates, which were protected by Croke Park.
The new hours won’t come into effect until next March in order to offset compensation claims for changed circumstances.
For anybody working outside the sector, this stuff beggars belief. The low level of working hours, the requirement for a process to adjudicate, the need to consider compensation, all hark back to a time of restrictive practices and supreme trade union power. Most notable was Impact’s role. It quite obviously signalled that far from embracing reform, some in the union movement treat it as giving up each inch only after a blazing row.
The song remains the same elsewhere. Parents of school-going children around the country would have received a note last week about changed circumstances in some schools. “As a result of the Croke Park Agreement, there are no early closures for staff meetings this year,” it read. Wow. Remember that when you don’t have to make alternative arrangements for your children when staff meetings take place in school hours. Thank Croke Park for saving your inconvenience.
Again, most people would be aghast that it took a sweet deal on pay during a recession to ensure that school days weren’t interrupted to facilitate staff meetings. One person’s reform is another’s merely doing the job one is paid to do.
Another element of the deal that riles in some quarters is the one size fits all. The pay and conditions of the clerical worker on €25,000 is subject to the same protection as that of the hospital consultant on a salary of €200,000-plus. And just as a trade union objected to workers putting in a 35-hour weeks, so too are the representatives of consultants dragging on reform to work practices which would save money.
The other issue coming to the fore is the plight of new entrants to the service, including teachers.
All new entrants are coming in on different terms — some as low as 28% less starting salary — in the drive for reform. This in turn will create a two-tiered service, divided by those covered by Croke Park and the new, mainly young, entrants who can whistle Dixie.
All the indications are that the Government will see the agreement through to its conclusion. The risk of industrial unrest during what is already shaping up to be a winter of discontent is just too awful to contemplate. The mixed messages emerging from cabinet over the last week seemed to indicate that change might be in the air, but Enda Kenny and Eamon Gilmore have firmly committed to letting Croke Park run its course.
In the meantime, if current budgetary policies are pursued, cuts in areas like health and social welfare will continue to be made to the roughly 20% of the overall budget, because the remainder is pay-related, thus ringfenced by Croke Park.
That is the price being paid for industrial harmony at a perilous time for the economy. The debate as to whether it is too high a price is set to continue.
If the Government — or the trade unions — were minded to renegotiate Croke Park, there is a way out. Clause 1.28 is short and to the point.
“The implementation of this agreement is subject to no currently unforeseen budgetary deterioration.”
Since the signing of the deal, there has been plenty of budgetary deterioration. Unemployment in Jun 2010 stood at 12% and it is now 14.7%. This, in turn, has adversely affected income tax receipts and added to the social welfare bill.
An even bigger change has come in the Government’s control over the public finances. In Nov 2010, the bailout boys arrived in town and the troika has run the rule over the public finances since then.
If one party were to invoke the clause, it would still require agreement from the other side to proceed. In any event, if the Government was so minded, the troika has not as of yet provided cover. In the welter of diktats handed down by them, none have suggested that Croke Park should be consigned to the scrapheap.
On Wednesday, Enda Kenny, pictured, indicated that there would not be a review of the agreement, but he wanted further savings to be made through reform. The Taoiseach called this “a reinvigoration”.
What exactly will be reinvigorated remains to be seen.
* Read more here and here
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