HSE decision to drop pay appeal will severely impact health budget

The Government is effectively on the run when it comes to the public pay bill


The decision by the HSE to drop its appeal against the decision of the Employment Appeals Tribunal in favour of two hospital consultants was not unexpected.

The Irish Times reported last year that the Attorney General had advised the HSE that it had little hope of winning the case – taken by two consultants who challenged the withholding of agreed pay increases in 2009 – and should seek a settlement of the case.

Many Government insiders believed the appeal was simply a way of putting off the inevitable, evil day when the money would have to be actually paid. That day is now closer.


And the implications for the health budget, and the public finances as a whole, are severe.

The two consultants are now due a hefty chunk of back pay, plus increased salaries into the future. That is not the problem.

The problem is that so are hundreds, and possibly many hundreds, of their colleagues.

In the Dáil Thursday afternoon, Minister for Public Expenditure Paschal Donohoe said further cases would be "vigorously defended".

The Government’s strategy - though insiders suggested it is more of a holding position - is to contest any further cases. Despite the fact that the court date was known for sometime, nobody appears to have been prepared. Cabinet was not briefed on the cases on Tuesday.

The HSE had originally estimated that the bill would be in the region of €250million-300 million. More recent revisions to those sums suggests that the bill could be closer to €700 million.

Whenever it arrives, this is a nightmare for the health service, which will see services slashed to pay this bill unless more money is made available for the health budget. And it comes amid threatened strike action by nurses, junior doctors and support staff.

But pressure on pay is not confined to the 100,000 or so workers in the health service. The other 220,000 public sector workers feel it just as much.

These demands have been turbo-charged by the desperate, last-ditch decision of the Labour Court to recommend hefty pay rises to gardaí to avoid a strike last November.

Last week, the Government announced that it would bring forward the €1,000 due to public servants in September to May. The move will cost €120 million. The Garda deal before Christmas will cost €50 million.

Neither has been budgeted for; they are to be met by “savings and efficiencies” within the system.

That is usually Government-speak for “We don’t know where we’re going to find it.”

With pressures on public sector pay growing ever more intense, it will fuel the fear that the Government is effectively on the run when it comes to the public pay bill.