Donohoe warns public sector unions over pay demands

Staff want impact of inflation on spending power addressed in any new agreement


The Government will have to make its unilateral decisions on public service pay if the current system of negotiating agreements with unions breaks down, the Minister for Public Expenditure has warned.

Were that to become the case, Paschal Donohoe said, pay rises for public servants would be determined in each budget based on what was affordable and after other spending pressures were accounted for.

Speaking at the Industrial Relations News annual conference in Dublin, Mr Donohoe said recent strikes by nurses challenged the viability of the current public pay model, which he maintained had served the State well.

He said governments directly decided public service pay in some jurisdictions but he did not consider this a preferred model.

“All of us need to reflect on recent developments and ensure the viability of collective agreements into the future,” he said, adding that collective agreements negotiated with unions provided stability and certainty to the Exchequer and workers.

Mr Donohoe said there was a fairness in the existing approach which meant that those who “shouted loudest” did not crowd out others in different bargaining positions. However, he said the continuation of centralised deals would only be possible if the trade union movement and individual unions were committed to delivering the “fundamental requirements” on their side of the bargain - adhering to the terms of the deal and keeping industrial peace.

The Minister said Brexit would have negative consequences for Ireland in all scenarios and that “now is the time for stability and order in all budgetary matters, including pay”.


He said wage progression in the public service “compared favourably” to that on offer in the private sector with many workers benefitting from annual increments and general pay increases.

Kevin Callinan, the general secretary designate of the Forsa trade union, told that the conference the credibility of the public service accord was being stretched by two factors — spending power after living costs are factored in and scope to respond to profession-specific and grade-specific issues.

“This means that a paradigm shift involving a greater recognition of the generalised loss of spending power and the need for a mechanism to review individual grades , groups and categories is urgently required,” he said.

“Otherwise a raft of relativity, productivity and change-related claims — and the potential for industrial unrest that, historically, has accompanied then — seems almost certain.”

Mr Callinan’s call for the Government to address spending power and staff grade claims represents the most significant response by the trade union movement to the recent pay proposals aimed at resolving the strike by nurses.


Mr Callinan, the acting secretary of the public service committee of the Irish Congress of Trade Unions, said all grievances he heard at union meetings and in workplaces were connected to the failure of incomes to match the rising cost of living over the last decade.

“It will simply not be credible to seek to continue on the current course without a correction to this,” he said.

He said CSO data showed public service incomes had fallen or remained static between 2008 and 2018 when cumulative inflation was more than 6 per cent.

Mr Callinan said “the very significant rise in unemployment from 2008 until 2014 appears to have had little, if any, impact in private sector earnings.

“So provided they didn’t lose their job — and that is a significant caveat— private sector workers do not appear to have experienced pay cuts although incomes were negatively affected by increased taxes and charges.”