Nurse deal has significant price and could lead to other public service awards

The Government will be very relieved the dispute by 40,000 nurses which caused chaos in the country’s hospital system this year has been brought to a close.

However, the settlement has come at a significant price, about €50 million over this year and next year, and potentially more depending on whether offsetting productivity measures materialise.

Yet it is the destabilising effect the settlement has had on the overall public service agreement and the Government’s public service pay policy in general that may be more telling in the long run.

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However other public service groups are also restless. Many see the settlement proposals as stretching the existing public service accord to the limit, if not beyond, and a general pay review across the public service may now be on the cards in the months ahead.

Since 2010 governments have locked down their public service pay strategies in a series of agreements with unions and organisations representing more than 300,000 teachers, civil servants, local government workers, health service employees and Defence Force personnel and other staff.

Control over public service pay was held very tightly by the Department of Public Expenditure. In the background it also held a big stick in the shape of financial emergency legislation which allowed it to impose penalties such as the freezing of annual increments of members of unions that “repudiated” the centralised accords.

However, in recent weeks there has been a succession of announcements by Ministers which would indicate that the grip of the Department of Public Expenditure may be loosening.

Up to last autumn the Government’s firm position was the €900 million public service accord settled its public pay issue until early 2021.

Apart from pay improvements , the agreement provided for some other initiatives such as on recruitment and retention difficulties, mainly health and in the Defence Forces, and to deal with lower-pay arrangements for staff recruited since 2011.

Allowances

On foot of a report of the Public Service Pay Commission the Government agreed a €20 million package for nurses and midwives, including increases in some allowances and faster access to promotional posts.

The recent entrant pay issue was to be tackled under a €200 million initiative which would see the staff concerned “catch up “ with the pay of their more longer-serving colleagues on a phased basis up to 2026.

The Minister for Public Expenditure Paschal Donohoe said specifically that this was a far as the Government was prepared to go.

However, the nurses rejected the €20million package, and two of the main teaching unions voted to oppose the deal aimed at ending the two-tier pay system.

Ministers insisted for months there could be no more money for nurses than set out in the current agreement. However, following a series of strikes the Government ultimately accepted proposals that would see thousands moving on to a higher paid salary scale or qualifying for additional allowances.

Very tellingly the Cabinet decided not to apply financial penalties on nurses in the same way as it had with second-level teachers after they went on strike three years earlier.

In the run-up to this year’s union conference season, other developments came thick and fast.

Minister for Education Joe McHugh told teachers that remaining issues on recent-entrant pay would be given “full consideration” either as part of a new pay review in the public service or in talks on a successor to the existing overall public service pay agreement.

However, up to that point the Government had never given any indication that there was to be any interim pay review. It was always envisaged that there would be talks – probably in early summer 2020 – on a successor agreement to come into effect in January 2021.

Mid-term review

Separately, Kevin Callinan of the largest public service union Forsa suggested there should be a mid-term review of the current accord in the light of the nurses' dispute settlement.

The second-level teaching union ASTI said in the light of the Government’s decision not to apply sanctions on nurses, it would legally challenge the Government over €15 million in penalties imposed on its members after their dispute in 2016/17.

Minister for Health Simon Harris told doctors last Saturday he would look at a new process to end the two-tier pay system. This move could cost €40 million.

The Department of Health is also facing other pay claims from 17,000 health workers. This could cost €21 million to implement.