The Government is likely to face higher pay demands from State employees next year if inflation continues to rise, public service unions have signalled.
The head of the State's largest public service trade union, Fórsa, said on Wednesday that "high inflation will shape pay bargaining".
The current pay agreement for more than 340,000 civil and public service staff – which involves two 1 per cent rises, with a further 1 per cent available under local bargaining provisions – will expire next year, and talks on a successor deal are likely to get under way next spring or early summer.
Fórsa general secretary Kevin Callinan said maintaining living standards against a background of rising living costs would be the priority in future pay talks.
Speaking at the conference of Pdforra, the organisation representing enlisted personnel in the Defence Forces, in Killarney, Co Kerry, he said: "If the return of inflation is sustained over time, there will certainly be a renewed focus on the cost of living when negotiations on a new public service deal get under way."
He said the latest year-on-year figures showed Irish inflation running at 2.85 per cent. He said the figure in Germany was over 4 per cent.
Mr Callinan said there was "a new tolerance of inflation among European policymakers and central banks". This included the European Central Bank, he said, which showed no signs of increasing interest rates – its traditional response to rising living costs.
“This approach presents significant opportunities in terms of employment, public services and infrastructure. But it has a different impact on the lower-paid in all sectors, for whom cost-of-living increases are far more than a mere statistical indicator.”
Mr Callinan maintained that the daily costs borne by workers, particularly those who were lower paid, were “not fully reflected in the Consumer Price Index” – the standard measure of inflation.
“I speak here of rent or mortgage payments, childcare costs, and fuel prices that are set to further rocket. These necessities form very large elements of weekly outgoings for lower- and middle-income families, regardless of what sector they work in,” he said.
Mr Callinan told delegates that the current agreement, Building Momentum, was significantly skewed in favour of lower-paid workers, with a €500-per-year floor in pay rises that provided those on lower incomes significantly larger percentage increases than higher-paid staff.
He said improving living standards while poverty-proofing lower pay would fit with the Coalition’s stated objective of moving to a living wage. And he called on the Government to play its part as an employer. He said many public servants – including in the Defence Forces – earned below the living wage.
Recognition for Covid efforts
Mr Callinan also said the Minister for Public Expenditure Michael McGrath had recently sought the views of the Irish Congress of Trade Unions (Ictu) on "recognition for workers' efforts during the Covid pandemic". He said the issue would now be addressed by the Labour Employer Economic Forum, which brought together senior representatives of Government, employers and unions.
“The competing messages emerging from Government in recent weeks were not helpful, but I hope for an outcome that will bring lasting improvements for workers across the economy. The most effective recognition of the efforts of our health workers would be an unequivocal determination to create the universal health system promised by Sláintecare. But few would not argue that those who truly risked their lives to keep the rest of us safe should get some acknowledgement,” he said.
Mr Callinan also urged that associations representing Defence Forces personnel and gardaí should be allowed to affiliate to, or associate with, Ictu.
But he said that Ictu strongly opposed the establishment of a permanent review body to deal with Defence Forces pay. He warned such a development would herald the end of centralised public service pay agreements.
"It would make much more sense for the Irish Government to recognise the value of the system of pay determination that has served the country well in good times and bad," he said.
“We understand the sensitivity surrounding the role of the military and the different context in relation to the right to strike. But, just as the members of the Defence Forces stood alongside fellow public servants to keep citizens safe during the pandemic, so too should they receive an equal opportunity to have their pay and conditions dealt with in the same process as their public service colleagues,” he said.