Public sector pay deal will bring certainty for next three years

In practice, the new deal will see a 4.25% increase over 2024, 4% in 2025, and a final 2% jump in pay in 2026. File picture

The latest public service pay deal, negotiated over a 19-hour session at the Workplace Relations Commission, will bring certainty to the sector for the next three years.

The agreement translates to a deal of normality for the public service, which had never really been wholly comfortable with the previous pay deal, the stopgap Building Momentum which was agreed upon following expedited talks in December 2021.

It will mean an effective 10.25% pay hike for 385,000 public servants — the first 2.25% of which will be backdated to the beginning of the year — in what may well prove to be an election year, a fact which the Government will likely have few complaints about.

In practice, the new deal — assuming it is majority ratified by the 19 relevant unions, basically a certainty — will see a 4.25% increase over 2024, 4% in 2025, and a final 2% jump in pay in 2026.

It will be seen as something of a coup for the unions involved, given a further €700m funding has been squeezed out of the parsimonious hands of Public Expenditure Minister Paschal Donohoe.

The new deal is projected to comfortably exceed inflation projections, thus bringing a sense of finality to the cost-of-living woes being experienced by public servants, particularly those on lower incomes.

Such a deal had seemed far from a certainty after negotiations between the Government and unions came to a shuddering halt before Christmas.

Union speculation at the time had been that the Government had simply never put itself in a position to agree on a deal before Christmas, as the State’s negotiators had not been fully cognisant of how far the Government was willing to go in terms of what was on offer.

That left proceedings in a strange kind of limbo over the holiday season, though no one involved was feeling particularly wary, the common expectation among sources being that a deal would instead be struck early in the new year.

That changed when talks collapsed on January 11 with the public sector unions contemptuous of the initial offer of an 8.5% increase over 30 months. At the time lead union negotiator, Kevin Callinan, said the Government’s offer was “extremely disappointing”.

Perhaps the unions’ subsequent sabre-rattling over potential strikes in an election year proved too much for the minister.

Regardless, his previous intransigence has now been swiftly replaced by a deal that will benefit not just public servants but former and current politicians also and will have the private sector looking on with covetous eyes.

It equates to splashing of the cash by a minister renowned for his prudence when it comes to financial matters. There may yet be a political reward to be reaped from that gambit when the country finally goes to the polls.