Pat Leahy: Government faces major challenge in the new year

Public sector is preparing to march if it does not get a sign that more cash is on its way

Staff at Loreto Secondary School, Bray, Co Wicklow, on strike in October. Photograph: Nick Bradshaw

Staff at Loreto Secondary School, Bray, Co Wicklow, on strike in October. Photograph: Nick Bradshaw

 

Paschal Donohoe should enjoy his Christmas, because his new year is going to be pretty hairy.

The Government is facing a flurry of pay claims from the public sector unions which will present the Coalition with the most significant challenge since its formation, one which will threaten its stability, coherence and very existence.

This is not the Coalition’s own fault; nor are the public sector unions behaving unreasonably in the circumstances.

Rather it is a consequence of the extraordinary ruling by the Labour Court in the case of the gardaí.

Donohoe was apparently coming out of a funeral when he received a call from his officials informing him of the Labour Court recommendations.

The court had just buried the Government’s policy on public sector pay.

For the sake of form, everyone has decided to pretend that the Lansdowne Road Agreement is still alive.

But its chief tenet – pay restraint until 2018 in the public sector – has been blown out of the water by the Labour Court.

Hopefully Santa will come to the Donohoe house next weekend. He has already come to the gardaí.

They secured an early Christmas present of around €4,000 a year in new allowances as a result of the court’s ruling last month.

The Labour Court ruling was produced under threat of a strike, which most Ministers and senior officials now regard as a stick-up, pure and simple.

Turbo-charge

Its immediate effect was to turbo-charge the existing desire for early pay increases amongst the already restive public sector unions.

It is now transformed into something much more like a demand, which, if left unsatisfied, will inevitably lead to industrial action sooner rather than later.

The union leaders, previously content with the patient policy of gradual restoration of pay over the medium term, have to show their members that they can produce results much more quickly now.

This week’s ballot for strike action by nurses shows the extent to which pressures are building in the sector.

Practically the whole public sector is preparing to march if they don’t get an early sign that more cash is on the way.

It’s hard to see a shaky Government surviving that.

Donohoe’s response to this is to propose a two-stage process.

He will have talks with the unions on the implications of the garda ruling early in the new year, while a more comprehensive negotiation process on a successor to the Lansdowne Road Agreement will begin later in the year, probably the summer.

It’s hard to see how either process will conclude without pay increases of some sort for public servants; that, surely, is the point of them.

Part of the process will be an examination of pay and pensions in the public sector, and how they compare to both the private sector and to public sector employment in comparable countries.

This will occasion much huffing and puffing on both sides, and it’s a useful exercise in its own right. But it’s not really where the action is.

Best-paid

After all, as a report by former Labour Court chair John Horgan demonstrated earlier this week, the gardaí are already the best-paid part of the public sector, with pensions worth an additional 50-80 per cent of salary.

This fact was known to both gardaí and the State before the garda dispute ended up in the Labour Court.

It didn’t dampen gardaí’s demands for wage increases nor the state’s willingness to pay them.

There are already masses of data available on public sector pay and pensions, and ample evidence that it they are – on average – superior to private sector conditions.

Getting an up-to-date picture from the Public Service Pay Commission is all very well, but it won’t change the demands to accelerate pay restoration from the public sector unions.

The idea that the unions will read the report of the commission and decide their pay claims are unjustified is rather touchingly naive.

Yes, putting numbers on it will make it harder for the unions to make the case in public; but it won’t stop them from making it.

And some of them are rather good at this. How do you think we ended up with benchmarking? Why do you think that public sector pay is higher in the first place?

The reality is that the demand for public sector pay increases does not rest on dry comparisons of public and private sector pay, on rows of numbers in a spreadsheet.

It rests on the real-life experience of public servants who saw their incomes slashed and their living standards, circumstances and expectations curtailed. It rests on longer hours and more work. It rests on several years of feeling sore about that.

Great pensions

They are also pretty fed up of being told that they have great pensions. (They do have great pensions, though.)

The head of steam that has built up in the public sector is driven by powerful emotions, as much as anything else.

Donohoe will have to deal with all this in the new year. He is tougher than his smiley, hail-fellow-well-met demeanour would suggest, and much of his political character was formed by the experience of defending and justifying the austerity policies of the Troika years.

But the reality is that he will not be able to maintain industrial peace without putting money on the table somewhere along the line. And yet, for political, economic and legal reasons, the Government cannot bust its own budgets.

Finding a way to balance these two imperatives will be the defining challenge of the first quarter of 2017 for the Government.

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