Public sector pay: A test of ministerial mettle

The case for moderation

 

Government discipline will be tested during the coming months and its response to public pay demands will have long-term economic consequences. In an uncertain post-Brexit world, the need to maintain competitiveness and hard-won productivity is compelling.

But those objectives are under pressure because of pay and related demands in the transport and public sectors. A series of threatened strikes and public disruptions will expose ministerial resolve.

Next Thursday and Friday, in spite of Labour Court involvement and employer/union discussions, more than 250,000 commuters will be affected by a planned Dublin Bus strike. Further disruption is being organised as part of a campaign involving six one-day strikes. Travel restrictions and business losses are likely to exceed those occasioned by the Luas dispute earlier this year and the prospect of an early settlement is poor.

Trade unions have demanded general pay increases amounting to 21 per cent over three years for Dublin Bus employees, with additional concessions for drivers, in contrast to a suggested Labour Court award of 8.2 per cent. With private sector pay increases ranging from two to three per cent, the Labour Court award appears reasonable.

But trade unions representing Dublin Bus are taking the basic Luas settlement of 18 per cent as their starting point while workers at the State’s rail and rural bus services look on. Demand for major pay increases among transport workers is threatening to explode.

The Lansdowne Road Agreement represented an attempt by the last government to gradually unwind some of the pay and pension losses experienced by public servants following the economic crash. The benefit for most employees, in terms of reduced pension levies, came to about €1,000. It was widely accepted. But the Association of Secondary Teachers of Ireland and the Garda Representative Association rejected it. Not just that. They are attempting to set aside earlier productivity deals.

National pay agreements were promoted on the basis that they deliver industrial peace while providing for public service reform and increased productivity. Precious little reform or increased productivity resulted. But what was achieved should not be easily surrendered. Talks are underway with two of the teaching unions involving additional working hours and recruitment pay levels and the ASTI would do well to follow suit.

Lip service was paid to maintaining international competitiveness in the past. Public pay rose rapidly and could not be afforded. It represented a failure that ran in parallel with the banking crash and resulted in wage cuts and pension levies. Lessons should be learned from that debacle. After eight years of slow, painful restructuring, pay moderation is required if the knock-on effect of disproportionate awards is to be avoided.

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