Accepting Haddington Road

Austerity fatigue has been reflected in a fragmentation of national pay structures and the militancy of some public service unions. Despite that, the Government – with the help of the Labour Relations Commission - has done well to secure acceptance by the great majority of public service workers for the terms of the Haddington Road Agreement. Acceptance or rejection of the deal is not decided by an aggregate of unions affiliated to the Irish Congress of Trade Unions on this occasion, but by individual organisations. Because of that, some disruption in services can be expected.

The choice facing the trade unions was stark. Financial pain for all public service workers was inescapable. It was a question of seeking to minimise the impact on their most vulnerable members through negotiation or challenging the Government to apply across-the-board cuts, as provided for under the Financial Emergency Measures in the Public Interest Act. Balloting on those options, the majority of workers have taken the non-confrontational road.

Acceptance by Siptu members, earlier this week, provided strong encouragement for the Government. But a pivotal shift came with the approval by the Irish Nurses and Midwives Association and the Psychiatric Nurses Association for the deal. Support from within the Garda Síochána represented the icing on the cake. Almost 200,000 workers have now decided to accept an unpalatable compromise, rather than trigger an automatic three-year suspension of pay increments and raise the prospect of industrial unrest.

For many low-paid workers, the agreement represents the “least bad” outcome. As incomes rise, the financial pain increases. Those with pay or pensions that exceed €65,000 a year face cuts of more than 5 per cent and the freezing of all increments. Top earners will be equally affected, no matter what their unions decide. Those unions that reject the Haddington Road Agreement will, however, lose existing protections affecting redundancy, pay and pensions. Specifically, their members will forfeit all pay increments for three years. Staff may be redeployed and, if that is not acceptable to them, they could be sacked. Existing activities may be outsourced.

Very big sticks are being waved at recalcitrant trade unions and their members. The Government is displaying determination to keep faith with its EU-IMF lenders and to bring the deficit to 3 per cent of GDP by 2015. That will require savings of €1 billion in the public pay bill over three years. At the moment, the Government borrows almost €1billion a month to pay wages, provide services and, as Brendan Howlin puts it: "keep the show on the road". That gap between income and expenditure must be closed. But, with a start date of July 1st, doubts remain as to whether savings of €300 million can be made this year.