Ticking bomb of public service pay demands may be ready to explode


Having stretched the terms of the Programme for Competitiveness and Work to the limit in response to Garda pay demands - and almost precipitated a public services free-for-all in reaction - Government Ministers yesterday began to breathe more easily.

A deal had been done. Time, that most valuable of political commodities, had been bought. And while there was trouble ahead, plans could now be laid to deal with it in the autumn.

Assuaging Garda militancy had become a Government priority as its members embarked on a "blue flu" campaign of industrial disputes. But the deal which gave them special productivity payments under the PCW, which ended 18 months ago, was almost a bridge too far where other public service unions were concerned.

Payment of a 1.5 per cent increase for "past productivity" might be swallowed. But a down payment of a further 2 per cent for merely entering into talks on future productivity caused Joe O'Toole to announce that the INTO was about to lodge a new pay claim.

Behind him, other public service unions representing nearly 100,000 workers in the Civil Service, education, local authority and health services were queueing up for their share of an expanding national cake.

Nine days ago, following considerable huffing and puffing from Charlie McCreevy about inflationary pressures and placatory noises from Peter Cassells of ICTU and John Dunne of IBEC, Bertie Ahern seemed to have defused the issue at Dublin Castle.

A review of the negotiating system for the public service unions would begin in September, he said. A promised minimum wage of £4.40 an hour would be introduced by April 2000. Action would be taken on trade union recognition. And the Government would target tax cuts at the lower- and middle-income groups in the December Budget.

It was a nice, neat package. It represented the kind of partnership approach that has underpinned economic growth in this State. But it may not be enough to buy off the INTO. Certainly, Mr O'Toole's view of what is now on offer seems to conflict with the attitude of the Taoiseach.

Leaving Dublin Castle last week, Mr Ahern said that claims under the PCW could not be reopened but the next national agreement could involve a review of parameters. Mr McCreevy was even more blunt. Further pay claims from the teachers' unions would not be entertained.

Last night Mr O'Toole said his union could not wait for the next national agreement to address their grievances. His executive would consider the situation in two weeks, and the issues would have to be dealt with "within the course of Partnership 2000".

The INTO had demands, but Mr O'Toole said he had no difficulty if the Government chose to address the issue in a general way. The Taoiseach had spoken of finding imaginative ways to allow the public sector share in the growth of the economy and he applauded that. But he said he did not regard Mr McCreevy's response as imaginative.

On the basis of Mr O'Toole's response, public service wage demands may still be a time-bomb waiting to explode.

And the success of the GRA in pursuing exemplary wage increases could prove to be the fuse. Announcing the result of the ballot yesterday, P.J. Stone welcomed the emphatic endorsement of the package by 68 per cent of his members.

Of far more interest to other public sector unions, however, was his acceptance of it as an "interim offer". The pay claim war was not over. Phase two of the negotiations would begin in September and were not likely to be completed until December.

Apart from the establishment of modern negotiating machinery, there was the question of a further productivity deal involving rostering, civilianisation and new technology.

What this productivity deal was likely to yield to his members Mr Stone would not say. But he expected it would far exceed the 2 per cent that had already been paid on account.

Peter McLoone and Dan Murphy of the ICTU public service committee had those demands in view when they warned of a predictable reaction if certain groups fared better than others in pay deals. It was, they said, simply not credible that some groups could be dealt with in isolation.

IBEC takes a similar view and points out that pay settlements in the public sector have been running well ahead of those in the private sector.

Pressure to renegotiate elements of Partnership 2000 is certain to increase later this year as inflation rises above 3 per cent. But public recognition of the value of wage moderation, linked to the Government's commitment to increase the take-home pay of workers through tax cuts in the December Budget, may hold the line.

The situation will be complicated by the fact that negotiations on a new national agreement are due to begin next year.

They will certainly open the way to address growing dissent within some public service unions over responsibilities, pay levels and productivity.

John O'Donoghue was hugely relieved by the outcome of the GRA ballot. Had it gone wrong, there would have been more "blue `flu" and a distraction from the job of battling criminals.

The Minister for Justice looked forward to the establishment of a mechanism that would allow the GRA to enter future public pay talks. But he was rash enough to suggest the pay deal was within the parameters of national wage agreements.

It's not a view that is accepted within the public service unions. And the Economic and Social Research Institute all but criticised the Government in public for its milk-and-water approach. Public sector employees had to be convinced, it said, that wage agreements would not be breached as a result of threatened industrial action.

As things stand, the public service pay time-bomb is still ticking.