Government faces trouble on public pay

OBSERVER: One of the first big issues to face the next government is the outcome of the benchmarking process on public sector pay.

Under the Programme for Prosperity and Fairness (PPF) the Benchmarking Body was established to make recommendations on public service pay. The body is engaged in an exercise ostensibly designed to compare the remuneration package of specific public service categories with those performing similar work in the private sector. In effect, the Benchmarking Body constitutes a mechanism designed to establish whether any of these groups should be awarded a special pay increase.

The benchmarking body faces a daunting task. The more cynical - or perhaps realistic - observers contend that it is expected by Government to combine the wisdom of Solomon with the thrift of Scrooge. So while the staff interests, including teachers, nurses, Gardai and civil servants, will expect it to redress a raft of their concerns, their opponents will attempt to stymie any such initiatives.

For example, IBEC's recent outburst over the prospect of another national pay deal fits well in this context. Any attempt to mollify public sector workers with generous pay rises prior to negotiations on a new deal is unlikely to win its approval. In contrast, of course, failure to award such increases will dissuade the "heavy-hitting" public sector unions from re-engaging in such arrangements. Many of them have already indicated that they'll be pursuing industrial action in such an eventuality.

Under the terms of the PPF, all parties accepted that any pay claims would only be dealt with in the context of benchmarking. This helped ensure that the outgoing administration was able to deflect any unwelcome union demands to that forum. The merit of this strategy is probably reflected in the fact that last year Ireland enjoyed the lowest annual number of industrial disputes since 1970.

Critics of benchmarking legitimately argue that - whatever route is taken - it's a highly subjective process that will only serve to provide Government with the means to cloud decisions forced upon them by volatile economic circumstances and aggressive interests groups.

A key issue for the Body is the problem of finding comparable private sector workers. As the body itself put it: "many public sector occupations are relatively unique in their nature, with direct comparisons not immediately obvious in the private sector."

Consequently there is a real danger that the Benchmarking Body's determinations will be seriously undermined by its failure "to compare like with like". For example, thousands of recently redundant workers from the private sector will want to know just how you put a value on all those "permanent and pensionable" public sector jobs.

Nevertheless the Body has devised a "job evaluation" system to facilitate its comparisons. Beyond the fraught and somewhat discredited history of "job evaluation" as an organisation-based initiative, its use on a national scale by the Benchmarking Body constitutes a wholly different and much more ambitious exercise. Interestingly such was the Dutch experience with benchmarking via national level job evaluation that Prof Craig at the University of Cambridge concluded that it's "unworkable on a national scale."

Even the ICTU Public Services Committee agrees that the various job evaluation methods available can produce significantly different results. The practical upshot of all this is that if the Benchmarking Body gives priority to appeasing the teachers, it could devise a system that goes some way toward meeting Joe O'Toole's "ATM" machine aspirations, without overly opening the public purse to other groups.

This could be achieved by the benchmarkers selecting education as a key factor in the evaluation process, and according it a sizeable weight in the overall pricing process. In its findings, the Benchmarking Body is likely to respond most to those who can apply most pressure, and those who have problems with staff recruitment and retention. Any other beneficiaries may well be largely coincidental.

Whilst some parties have emphasised the difficulties that the conventional public service pay determination process creates for recruitment and retention, just how the Benchmarking Body adjusts the relative position of these problem groups without triggering wide-scale follow-on claims remains the acid test.

Once the Body has completed its exercise, anybody who is discomfited by the end-product is forced into the unenviable role of trying to nit-pick the findings and playing a difficult game of "catch-up" in terms of pay.

Current strike figures suggest that the Benchmarking Body has proven to be, quite simply, a resounding success to date. If it succeeds in squaring the circle in June the confidence invested in it by Government, employers and (most) trade unions will prove to be well founded. Alternatively, the nightmare scenario predicted by former Taoiseach Garret Fitzgerald may be realised; that is, far from delivering "goodies", the process could well fuel attacks on conditions of service throughout the public sector. If so, the ensuing industrial unrest will undoubtedly tarnish the lustre of any prospective national agreements and make the early days of a new government anything but a honeymoon.

Dr Gerard McMahon is a lecturer in Human Resource Management at the Faculty of Business, Dublin Institute of Technology, and co-author with P. Gunnigle and G. Fitzgerald of Industrial Relations in Ireland, published by Gill & McMillan.