Employers accept that a new talks pay process is needed but remain cautious about any unreasonable demands in a fresh deal which could have knock-on consequences for the private sector.
Maeve McElwee, Ibec’s director of employer relations, says it is clear that Lansdowne Road will not last until 2018. But she says employers don’t want to see a complete breakdown of negotiations where unions would be “leapfrogging” each other or “cherry picking” deals. “It is important that the Lansdowne Road Agreement in some form survives,” says Ms McElwee. Uncertainties must also be weighed up, she suggests, including Brexit and the outcome of the US presidential election. “We need to maintain a steady, measured and competitive review of any wage growth.” she adds.
Furthermore, public sector wage rises have “consequences for the wider economy”, she says, including private employers. Some private employers have factored in median rises of 2% next year, she said.
The Small Firms Association insists now is not the right time for new pay talks and warn money for workers must not come from services or tax cuts.
Its director Patricia Callan says its members are concerned about industrial unrest and the Government handling of the pay dispute. “We are in a recovering economy,” she said, “and the Government must be mindful of the finances, of the quality of services and the need to reduce taxation.”
Ms Callan also says Ireland could be looking into a deflationary period in the new year. There was no need to bring the talks forward and the public sector pay commission should do its work, she said.
At the same time, the SFA say the Government should not entertain any pay talks if there is no cash. “You don’t want to raise expectations if the money is not there.”
The teachers’ union say they have been warning for some time about bringing forward the pay talks process. The union’s priority is about addressing unequal pay for new teachers. They also want previous increases agreed for principles. The union, representing over 32,000 teachers, wants new talks to start by the end of the year or early next year. It is all about pay equality, explains union assistant secretary general Peter Mullan. New teachers who started in 2010 are still getting 10% less than colleagues and want “the gap closed”. This could cost up to €70m, he says.
Pay changes could be met through the Government reviewing its existing tax policies, through corporation taxes or a review of USC cut pledges, say the INTO. “The Government could look at existing policies and revenue-raising abilities,” added Mr Mullan.
Fine Gael is standing by the Lansdowne Road Agreement, the current pay deal with public sector workers in place until late 2018.
Public Expenditure Minister Paschal Donohoe says the Garda pay deal has “far-reaching consequences” but wants trade unions to stay within a collective agreement. He says there is no more money for public pay rises, beyond that committed to. Changing this would have huge consequences on plans to improve public services, the minister warns, or have implications for tax commitments. The Government says no decision on the next pay deal will go ahead prior to the public pay commission reporting by the middle of next year. This will be a difficult timeline to maintain with the pressure mounting to accelerate the pay talks process. Fine Gael, though, is also keen to avoid any strikes.
But Finance Minister Michael Noonan stresses it is “not affordable” to extend pay rises across the public sector.
Fianna Fáil, not surprisingly, is piling the blame for the public sector pay spat on the minority government. Party leader Micheál Martin says the Government has let the controversy “drift”.
Concerns among gardaí could have been dealt with at an earlier stage, says Mr Martin. He also suggests the Government will move to quickly “unwind” the Lansdowne Road Agreement. Fianna Fáil was in power for years and awarded public workers huge pay increases under benchmarking. It is now playing a cautious approach, in opposition.
Mr Martin says his party is standing by the Lansdowne Road Agreement and a “reality check” is needed around pay demands. The Government must also be careful about making promises the country cannot afford, he said. He suggests the Government has gone “soft” on the pay issue. A party spokesman said the Government should work to bring down living costs, such as rents and car insurance.
The party will launch a new policy on public pay today and accepts union demands for an accelerated talks process. “The Government can’t hang on until 2018,” says public expenditure spokesman David Cullinane. “Start the talks either now or by the end of the year.”
Sinn Féin want a ‘fair deal’ and equal pay in a new agreement, pointing out that workers on €65,000, or more, got better pay restoration.
“This was always going to lead to discontent,” said Mr Cullinane. The party wants to see increased pay accounted for in the setting of the budget for 2018.
“There is €1.4bn in unwinding Fempi (the emergency pay cuts process), but it can’t all be done in one,” says the Waterford TD. “The low and middle-income workers have to see pay restoration over the next three to four years,” he added.
CEO Neil McDonnell says that unions and workers must justify any pay demands and where the money would come from. He said there is a real concern the public pay bill “will get out of control”. The expectations are far beyond what would be entertained by employers.
Up to 40% of businesses currently have no pay rises for staff planned, he said. “We cannot have a free-for-all or strikes, it would be just nuts,” he said. “The Lansdowne Road Agreement is the basis for the budget. There is no mandate for more tax or reduced spending or more borrowing.” He also said there is “no material justification” for why they should get pay increases. In some cases, there is a 17% to 30% gap in pay between the public and private sector, he noted. However, Mr McDonnell said he did not see any problem in bringing the pay talks process forward, as the unions were demanding.
Union president Jack O’Connor put the Government on notice last week that a new pay talks process must begin shortly in the New Year or strikes could take place.
Mr O’Connor wants the Government to convene a new set of pay talks by February or Siptu will ballot its members on strikes. He has given the government until this Thursday to confirm talks will go ahead. Siptu represents 60,000 workers in the public service. Siptu has signalled that, in any new pay talks, its members get over €1,000 more than scheduled next year under the Lansdowne Road Agreement. Mr O’Connor rejects the suggestion the choice is between better pay or improved services.
Over €600m Vat breaks for the tourism sector was a choice the Government did not necessarily need to make in the budget, he said. Cuts in capital taxes were also allowed, costing €46m.
PSEU (Public Service Executive Union) general secretary Tom Geraghty wants talks for a new pay deal with workers to begin at the start of 2017. The union sees no reason why the public pay commission cannot accelerate its work in order for talks on a successor to the Lansdowne Road Agreement to begin in January.
Mr Geraghty is coy about discussing levels of pay restoration before any talks begin with the Government.
“There have to be early talks, probably after Christmas. Even before the situation with gardaí, we wanted to accelerate the process of pay restoration, given the improved economy. But the worst thing you can do going into negotiations is start throwing about figures,” he said. The union, like others, is sick of being told that the emergency is over but, on the other hand, workers’ pay is not being restored. The €40m deal for gardaí must now be given to other workers.
Impact is warning the Government needs to move quickly to prevent strikes. Head of communications Bernard Harbor says the recommendation in the Garda disputes changed the situation “quite dramatically”.
“The situation has changed for the vast majority of public servants, around 280,000, who are within the agreement, they are now looking at a situation where a group outside has achieved more. Impact says there is an inevitability now that groups within the public service will start to claim more and “possibly threaten industrial action”.
The Government needs to move quite quickly if it wants to sustain the agreement. It has to indicate it will talk to the majority of unions early in the New Year with a view to bringing forward pay restoration more quickly than was originally envisaged in the Lansdowne Road Agreement, he says. The union said the duration and money concerned will be matters for negotiation.