End of social partnership as public sector talks collapse

Ireland’s 22-year-old system of social partnership effectively fell apart on 4 December 2009, after the government announced that talks with the public sector trade unions on an agreed method of securing a €1 billion reduction in the public pay bill had failed. The public sector trade unions were disappointed with this outcome and have indicated that they will be advocating a sectoral response to the breakdown of the talks.

The collapse of talks between the government and public sector trade unions, represented by the Public Services Committee (PSC) of the Irish Congress of Trade Unions (ICTU), could mark a new departure for Irish industrial relations. The trade unions believe that the social partnership and its architecture have collapsed, at least for the lifetime of the current government.

Government introduces public sector pay cuts

Instead of securing €1 billion worth of paybill cuts through a temporary measure linked to a wider public sector reform, as the trade unions believed government had wanted, the government decided on a straightforward wage cut for over 250,000 public servants. Initially, the government had signalled that the trade union option might be possible. Those affected by the pay cut include teachers, nurses, healthcare workers, local authority workers, civil servants, the police force (An Garda Síochána), the armed forces and prison staff.

The government and the PSC had been attempting to reach agreement on savings of between €1 billion and €1.3 billion from the public sector payroll bill in 2010. This cut was to be in addition to savings made from the imposition of a pension levy on public servants of about 7%, announced in a special emergency budget in February 2009. The total targeted public spending reduction for 2010 is €4 billion, which is part of an overall fiscal adjustment approved by the EU, to be achieved by 2014.

Trade unions adopt united stance

The public sector trade unions had opposed any cuts to basic pay for public servants, stating that pay, pensions and jobs had to be protected in any overall agreement. An alliance of trade unions with members who work in frontline services was formed with the objective of protecting their special allowances and premium payments, as well as preventing cuts in services. However, all of the unions adopted a united stance in their negotiations with the government.

A 24-hour public sector strike was held on 24 November 2009, with a second day of strike planned for 3 December. The latter was called off when it appeared that the parties were close to agreement in late night talks in government buildings. The PSC believed that it had the basis for an agreement that would see payroll savings achieved through the linkage of two key elements. First, a total of 12 unpaid leave days would formally apply in 2010 (but would be taken by workers over a number of years) across the entire public sector. This measure would achieve payroll savings of between €760 million and €967 million. Secondly, the trade unions would commit to a set of major reforms that would achieve ongoing savings and productivity into the future, to be finalised by the end of 2010. Further immediate savings, to raise the €1 billion of revenue required for 2010, could be secured through savings in overtime and planned reductions in the pay levels of senior civil servants and politicians.

Content of reform agenda

Under the proposed reform agenda, the following elements were agreed in principle:

  • redeployment of civil and public servants within and between organisations to ensure better delivery of priority services as budgets and staffing declined;
  • a process aimed at delivering an extended 08.00–20.00 working day in healthcare services, leading to longer opening hours;
  • the introduction of new rosters in healthcare – including the introduction of new nursing rosters by January 2011 – leading to more flexible services and a further reduced overtime budget;
  • reviews of healthcare service staffing ratios and skills mixes to help improve patient care at minimal cost;
  • the introduction of shared services in healthcare, local authorities, education and the civil services – in areas like finance, procurement, human resources and payroll;
  • the introduction of evidence-based performance measurement in healthcare;
  • the extension of competitive and merit-based promotions at all levels throughout the public services;
  • the supervision and substitution scheme for post-primary teachers to be made more flexible;
  • new procedures for redeploying surplus teachers;
  • a review of the teaching contract to remove impediments to teaching and learning;
  • cooperation with rationalisation of state agencies in the local government sector;
  • better management and standardisation of annual and sick leave arrangements;
  • changes to civil service opening and closing times and attendance arrangements.

The proposed agreement, according to the public sector trade unions, would also have included a new ‘transformation commission’ with independent leadership, charged with ensuring the implementation of the package. However, on 4 December 2009, Ireland’s Prime Minister (Taoiseach), Brian Cowen, stated that ‘unfortunately, the proposals put to government do not provide an acceptable alternative to pay cuts. Therefore, the government was unable to agree to the terms they had proposed.’

The public sector trade unions have since indicated that they will be advocating a sectoral response to the breakdown of the talks. They are to consider a strategy that would involve non-cooperation with efforts to introduce further change. The Irish Nurses and Midwives Organisation (INMO) has already stated in January 2010 that it will not participate in talks with the government if the process involves discussions on reducing pay in any form and has since issued a strike alert for 1 February 2010 along with the Services, Industrial, Professional and Technical Union (SIPTU).

Commentary

The case for the reform plan never really got off the ground, due in part to public anger over the unpaid leave strand of the talks, which manifested itself in pressure on members of parliament (Teachtaí Dála, TDs), and this in turn put Cabinet Ministers under pressure to drop the plan. Some of the public anger was directed at the idea of public servants having to work less at a time of rising demand for services. The fact that the extra unpaid leave days would have been spread over many years was lost in the media furore that surrounded the proposal. In this context, commentators also suggested a lingering public and political scepticism regarding reform, due to the failure of the first report of the Public Service Benchmarking Body (PSBB) in 2002 (IE0207203N) to deliver meaningful change. In addition, the Irish Business and Employers’ Confederation (IBEC) expressed hostility to the unpaid leave idea, which they believed would allow public sector trade unions to evade real reform.

Trade union leaders like ICTU General Secretary David Begg and Jack O’Connor, the ICTU President and also General President of the country’s largest union SIPTU, expressed their belief that the government, the Department of Finance (An Roinn Airgeadais) and IBEC favoured public sector wage cuts as these would put downward pressure on rates of pay in the private sector. As observed by the independent weekly magazine, Industrial Relations News (IRN), since the economic downturn, the process of social partnership has been linked by many commentators to the causes of some of Ireland’s current economic problems, specifically in relation to public sector spending and competitiveness. However, trade union leaders like the Chair of the PSC and General Secretary of the Irish Municipal Public and Civil Trade Union (IMPACT), Peter McLoone, lamented the breakdown, arguing that the government had missed a major opportunity to achieve long sought-after radical reform of the public sector.

Brian Sheehan, IRN Publishing

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