Croke Park failure would see legislation on pay cuts

ANALYSIS:The larger-than-anticipated turnout of frontline public service staff at the rally against further cuts in earnings on Monday night and the palpable anger displayed will undoubtedly have caused the Government discomfort.

The current talks on an extension to the Croke Park agreement – in which the Government is seeking to cut its public service pay and pensions bill by €1 billion over three years (€300 million this year) – are at a crucial stage.

Given it is the objective of the Government that many public servants would receive less in earnings, an agreement with the public service committee of the Irish Congress of Trade Unions was never going to be easy.

The determination of groups such as gardaí, nurses, prison officers, paramedics and firefighters to resist any cuts to their premium rate earnings is likely to make concluding any deal all the harder.

Parity of pain

A key element in the architecture of any extension to the Croke Park agreement was always going to be the “parity of pain” principle. In achieving the proposed €1 billion in savings, all groups would have to be seen to be taking a hit.

However, many of the groups have little in common with each other, other than having the State as their employer. How could a deal be put together that would equally affect teachers, nurses, gardaí, civil servants and Defence Forces personnel, who have widely different attendance patterns and work practices?

Broadly speaking, the Government’s proposals revolved around all public service staff facing some combination of additional working hours, reduction/abolition of some premium payments, changes to flexitime working arrangements and a straightforward pay cut (or a step back on the incremental pay scale) for higher earners.

However, whether such measures are fair or otherwise when applied to individual groups goes to the heart of the row.

Frontline staff such as gardaí or nurses receive a significant amount of their overall earnings – unions consider the figure to be 20 per cent – from premium payments designed to compensate them for having to work at night or weekends.

With the Government seeking to reduce the existing double-time payment for Sunday work to time-and-a-half and to abolish the premium rates for working on Saturday and evenings, the frontline groups maintain they are being targeted.

Their fear is that they will be hit hard in the pocket while many other staff, particularly those working regular hours, would not face a direct financial loss but rather would have to change their work practices by working additional hours or seeing the end of their flexitime arrangements.

The Government has argued frontline personnel are not being targeted but that the overall €750 million bill for overtime and premium payments is too large.

The country’s largest public service union, Impact, entered the argument yesterday when it told members that claims by frontline public servants they are being singled out are “wrong”.

Impact said sums larger or equivalent to the €170 million being sought in the area of premium payments were being targeted in other parts of the public service.

“It has emerged that over €350 million – more than a third of the additional €1 billion in pay and pension savings sought – is likely to come from those on higher pay, together with an accelerated reduction in public service headcount facilitated by extended working hours,” the union said.

“Virtually no ‘uniformed’ public servants will be affected by any adjustment in higher public service pay.”

The Impact comments followed strong criticism made by the Psychiatric Nurses Association of the role being played by Impact and other unions in the Irish Congress of Trade Unions in the talks.

Despite the departure of the Garda representative bodies and warnings from other unions that they were on the brink of following them out the door, the talks with the Government are continuing. Large unions such as Siptu and Impact are determined to stay the pace and try to influence whatever may finally emerge.

However, there is no guarantee a deal will be reached. Certainly if a union such as Siptu (due to its size) was to conclude there was not enough on the table to warrant a deal, there would not be an agreement, regardless of whoever else was in favour. Any deal would also have to be put out to ballots of union members.

For the Government, time is of the essence. It has calculated on savings on the pay bill of €300 million this year. This requires various measures being implemented – not just agreed – by the end of April or early May.

If there is no agreement, the Taoiseach has pledged to legislate to cut the pay bill.

Many highly placed sources believe any such cut would not be an across-the-board pay reduction such in 2010. Rather, it would be more “focused”. This could see reductions in the premium payments or in the supervision and substitution allowances for teachers along the lines of those proposed in the talks.

Unpopular politics

Politically, legislating for a public service pay cut would probably prove highly unpopular, particularly in the Labour Party. However, Minister for Public Expenditure Brendan Howlin has staked a lot on securing the cuts in the pay bill and TDs would probably be told this would be the final time that public servants would be hit.

The passing of such legislation would more than likely bring to an end the industrial peace the Government has highlighted in recent times.There might not be all-out strikes. However, work-to-rules and low-level disputes may take place. And a sullen workforce would be in no mind to co-operate further with overall public service reforms.

Where that would leave ambitious plans such as the introduction of universal health insurance is open to question.

* Martin Wall is Industry and Employment Correspondent