Pay deal still likely despite union outrage

Both the Government and unions have key priorities for Croke Park II, writes Stephen Rogers

DESPITE their highly vocal outrage at the Government’s “draconian” proposals under Croke Park II, and last night’s warnings by INMO general secretary Liam Doran, public service union representatives still privately admit the likelihood of a deal being achieved has not actually diminished.

The chances of success were annunciated as “50-50” before the events of Monday, and yesterday an informed source said those odds still held true.

“Management is kidding itself if it thinks we will agree a package that includes all the measures it tabled yesterday,” Impact general secretary Shay Cody told members yesterday. “But if this is a menu of issues to explore, it might be possible to negotiate an acceptable and equitable package that can be put to ballot, although this is clearly going to be very difficult indeed.”

Those who have exposed the list to forensic examination have surmised that if it were achieved in its entirety, it would yield considerably more than the €1bn in savings which are being sought. Therefore it appears the talks over the coming weeks and months will be about what combination of ingredients will add up to €1bn.

The menu includes an extra hour on the working day, changes to premium payments, longer distances for redeployment, elimination of increments, performance management contracts and changes to flexitime.

The perception on the union side is that the management, mindful of the need for a rapid conclusion to the process, has already extensively costed the options being considered. Therefore, it is likely a possible combination of measures could be in place very quickly. Two of the areas which caused the most hysteria on Monday afternoon were “exit mechanisms” — considered to be another term for compulsory redundancies — and pay reductions “at certain levels”.

Going into yesterday’s meeting designed to lay out a timetable for the coming weeks of discussions, Siptu vice president Patricia King warned: “There will be no agreement with [compulsory redundancies] in it”.

The likelihood is the “exit mechanisms” will not materialise in any agreement which emerges because the rationale for it, provided to unions, is that it pertains to those workers who management wants to redeploy but who are refusing to be moved.

One expert pointed out: “Under Croke Park I, you cannot refuse to be redeployed. It is not allowed. You can appeal but you can’t say: ‘I don’t like the options you are giving me, so I’m staying put.’ Managers need to operate the agreement that is there.

“Some managers are hoarding staff. In other areas, public servants are being unreasonable but management haven’t step forward and taken them on.”

The area of pay reductions “at certain levels” goes to the very heart of whether any deal can succeed.

One of the key union demands going into the process was the concept of fairness — any deal which emerges has to be seen to impact all sectors of the public service, not unduly falling on the shoulders of one group.

Sources have surmised that the pay reductions will be aimed at the higher echelons of the public service because it is the only way they will be able to bear their share of the burden.

The perception is that a number of the other measures where savings are being sought including overtime, working hours and flexibility are not applicable to the higher grades. In most cases, they do not get overtime rates and rarely work a regular 39-hour week. Therefore the cross-sector cuts proposed will not yield savings from that grouping.

However, the Government will have to outline early at from what salary level the reductions would be set. As an example, a 10% reduction for staff earning over €200,000 may not yield nearly as much in savings as a 7% reduction for those earning over €150,000. Unions would argue that the vast bulk of public servants are actually earning low-to-middle incomes.

During Monday’s talks, the unions outlined their own list of requirements from Croke Park II. They insisted the negotiation would have to make a distinction between temporary measures needed to address the current budgetary crisis and changes that would remain in place beyond the crisis. They also outlined a series of measures which they said must be addressed to their satisfaction. In particular, two requirements stand out:

*They are looking for an adjustment to the pension levy to exempt a larger percentage of workers’ earnings. The obvious problem with that suggestion is that it will mean a cost to the State rather than a saving. However, one union source pointed out that Croke Park I, contained a clause which indicated a payback of cut incomes.

“If you exempted more earnings everybody would benefit but people on lower incomes would benefit more proportionally,” he said.

*The second major requirements is eliminating a two-tier workforce.

Unions fear that, within 10 years, there will be a major issue whereby staff doing the same job will be on vastly different payscales due to the rigours of the savings process.

Therefore they are looking for some guarantee that when the economic climate recovers, measures are put in place to rectify imbalances and address what is, particularly in teaching and health, a three-four tier system.

It is also partly for that reason that some of the unions will fight to stop pay increments from being frozen or abolished. The increments bring staff on lower pay levels up to a certain threshold over their employment in the public service. Again that would lead to some sitting on a different pay tier for doing the same work.