Public sector pay deal hailed as good news for staff and State

Minister for Public Expenditure Paschal Donohoe says agreement is ‘fair, equitable and affordable’, adding that it would cost the exchequer ‘€3.6bn over four budget years’

A new public sector pay deal agreed between Government and unions on Friday is a good one for the 385,000 staff who will receive pay increases of at least 10.25 per cent over its 2½ years, but also for the State which will be better able to deliver public services, Paschal Donohoe has said.

The Minister for Public Expenditure hailed the agreement, which he said offered the least well paid staff total increases of 17.3 per cent, as “fair, equitable and affordable”, adding that it would cost the exchequer “€3.6 billion over four budget years”. He was confident that it would not fuel inflation, and with wage increases of “just over 4 per cent” per year it was “in line with wage growth we expect to see happening in our economy”.

Mr Donohoe also said the agreement would also provide a pathway to changes in working practices that would allow the public sector to make more effective use of technology, including AI, and address the need for more flexible staff rostering, particularly in the health service.

The Minister was speaking after senior officials from his department and union representatives concluded 22 hours of negotiations at the Workplace Relations Commission which produced an agreement that included compromises by both sides with regard to their positions on pay two weeks ago.


Fórsa’s Kevin Callinan said it was the best that could be obtained for union members in the circumstances.

The basic 10.25 per cent increases provided for over the course of the deal fell just over 2 per cent short of what unions had sought earlier this month, but there was some satisfaction on Mr Callinan’s part that a restructuring of the increases obtained represented a significant improvement on the Government’s offer on January 11th of 8.5 per cent. “We’ve got more money and we’ve got it sooner,” he said.

If endorsed in ballots to be held by the 19 Congress-affiliated unions with members in the public services over the next two months, some 385,000 staff across a huge cross-section of sectors from healthcare to education to administration and the Defence Forces will receive pay increases of 4.25 per cent this year, 4 per cent in 2025, and 2 per cent in the first half of 2026. Those earning less than €50,000 will receive larger increases in percentage terms.

Mr Donohoe confirmed that pensions for retired public servants would rise in line with the pay increases provided for in the agreement.

He also said he expected to see changes to the way many public servants worked as part of the deal, and suggested he attached considerable importance to clauses he said had taken a great deal of time to negotiate in relation to “more flexible working arrangements” and “innovation”.

Government side documentation points to an agreement that the public sector must play “a leading role” in the use of new technology, and to engage on the “provision of more accessible public services over a seven-day week where needed”. This has been identified as a requirement for the more efficient delivery of healthcare services by the HSE, although there was some scepticism on the part of union officials in the sector that sufficient resources could be deployed to allow it to work.

Another member of the union negotiating team, John King of Siptu, described the entire talks process as “difficult”, but said the unions were pleased there would be no changes on issues like outsourcing.

Several other unions acknowledged the significance of that but all mentioned the money, with the pay increases secured bound to be the central issue for those who participate in ballots, the results of which will be announced on March 25th.

Emmet Malone

Emmet Malone

Emmet Malone is Work Correspondent at The Irish Times