Government cuts pay of most public servants by up to 8%

In his budget for 2010, Ireland’s Minister for Finance announced pay cuts of between 5% and 8% for the majority of public servants. In addition, higher reductions in the pay of senior civil servants and politicians are to be introduced, including for the country’s Prime Minister. Although employers have largely welcomed the cuts, the trade unions have condemned them as being too severe arguing that they will lead to further job losses.

Wage cuts introduced in the budget for 2010 range from 5% to 15% and will result in some €1 billion savings for the Irish exchequer over the course of a full year. The trade unions had proposed achieving these savings through the temporary introduction of 12 days’ unpaid leave – spread over a number of years – followed by a commitment to public sector transformation, as an alternative to straightforward pay cuts. However, following the collapse of talks between the public service trade unions and the government, the Minister for Finance, Brian Lenihan, proceeded with the announcement of unilateral pay cuts.

The cuts will be implemented through the Financial Emergency Measures in the Public Interest (No. 2) Bill 2009 – the purpose of which is to ‘reduce the remuneration of public servants as a financial emergency measure in the public interest. The bill is introduced in the context of the priority being given to the stabilisation of the public finances, including the need to achieve an adjustment of over €1 billion in the public service pay and pensions bill in 2010’.