It is in everybody’s long-term interests that industrial unrest should be avoided as the Government seeks to reduce the gap between its income and expenditure. Existing arrangements affecting public service remuneration, working conditions and pensions can no longer be afforded. Efforts to reduce the financial deficit through a programme of voluntary redundancies, redeployment and increased productivity fell short of what was required as economic growth failed to materialise. Both unions and management have been aware of that unpalatable reality since last autumn. Now they must deal with it.
The first formal steps were taken yesterday as representatives of the Government and public service unions exchanged position papers. Later today, talks will address an agenda of reform that will involve longer working hours, curbs on overtime and premium payments, a suspension of increments for higher earners and other matters. The demands being made by Government were described as “alarming” by one union leader.
There is intense pressure on Minister for Public Expenditure and Reform Brendan Howlin. The Labour Party approach of reducing the number of public employees within a reform programme has not produced the required savings. His Fine Gael colleagues are losing patience while the troika and the European Commission have criticised the policy of shedding existing jobs, rather than cutting pay levels. A tipping point may be in sight. Maintaining public services and industrial peace at a time of falling living standards has been a significant achievement. But the Government’s overriding priority is to meet its fiscal targets.
Savings of €300 million will be required from the public service this year, with a total of €1 billion expected by 2015. Union leaders are in an extremely difficult position. Results from any successful negotiations are likely to antagonise their members. Yet failing to reach agreement could make matters worse.
Back in 2009, unions were shocked when the then government imposed public service pay and pension cuts rather than accept 12 days of unpaid leave offered as an alternative. In 2010, in return for a commitment to leave pay and pensions untouched, unions agreed to co-operate in generating the required savings. Now that a financial shortfall has developed, their choice lies between influencing where savings can be made or losing vital protection for basic pay and pensions. They are between a rock and a hard place. The prospect of agreement is uncertain. Some union leaders have already signalled their opposition to any reduction in payroll costs. The outcome will depend, to a large extent, on a careful balancing of civic responsibilities and the influence exerted by Impact and Siptu.