The Irish government’s hopes of saving €1 billion in public service costs appeared to be unattainable when its proposals were overwhelmingly rejected by unions. Three months later – with the help of the Labour Relations Commission – the government has persuaded almost all the public sector unions to sign up to a series of bilateral agreements within an overarching structure. The deal, known as the Haddington Road Agreement, means wage cuts imposed by legislation were avoided.
The Irish government has succeeded in its efforts to renegotiate the Public Service Agreement 2010–2014 to cut public service costs by an estimated €1 billion.
The original deal, known as the Croke Park Agreement (IE1212019I) will be replaced with the Public Service Stability Agreement 2013–2016. The new deal, known as the Haddington Road Agreement, is made up a series of bilateral agreements between the government and individual public service unions. It differs from the Croke Park Agreement, which was a single collective agreement negotiated with the Public Services Committee (PSC) of the Irish Congress of Trade Unions (ICTU).
The deal represents a remarkable turnaround for the government.
When the current Fine Gael–Labour government came to power in 2011, it inherited the original Croke Park Agreement, negotiated in 2010 by the previous Fianna Fail–Green Party coalition government.
Although the new coalition initially agreed to accept the agreement as it stood until December 2013, pressure on government spending and commitments to the European Commission (EC), European Central Bank (ECB) and the International Monetary Fund (IMF) – known as the Troika – meant that an additional €1 billion in payroll savings had to be found.
‘Croke Park Two’ was an attempt to revise the original agreement, and aimed to trim the public service pay bill by a further €300 million in 2013 and by a total of €1 billion by end of 2015. However, public service unions fiercely opposed the new cuts.
Intensive talks were held between officials from the Department of Public Expenditure and Reform (DPER) and the Public Services Committee (PSC) of ICTU.
Talks were led by senior negotiator Paul Reid of the DPER. The PSC represents around 20 trade unions representing a total of 290,000 public servants. Separate talks were held between government officials and representatives of the defence forces and the police (An Garda Síochána). These bodies are representative associations, not trade unions.
Again, the proposals contained in Croke Park Two were rejected by a majority of public service unions and by a large majority of members. However, had just 1,000 members of the Services Industrial Professional and Technical Union (SIPTU) voted ‘Yes’ instead of ‘No’, the proposals would have been accepted under the PSC’s aggregate ballot voting rules (IE1305029I).
By mid-June 2013, the government’s hopes of securing a public service agreement that would cover the period up to the next general election, due to be held by April 2016, looked to be less promising.
The government’s response was to threaten tough emergency legislation, using the Financial Emergency Measures in the Public Interest Act (FEMPI 354KB PDF), to cut wages and impose other changes from 1 July 2013. In the hope of avoiding enforced wage cuts, the government asked Kieran Mulvey, Chief Executive of the Labour Relations Commission (LRC), to get directly involved and attempt to reach a last-minute deal.
The approach adopted by Mr Mulvey was to meet the unions separately in the hope of reaching agreement with each of them, sector by sector, and to avoid an aggregate ballot of all unions. The aim was a series of collective agreements between the government and each of the unions involved rather than a single deal between ICTU PSC and the government.
Each union was asked to sign up to and register a collective agreement with the LRC to avoid cuts imposed by the FEMPI legislation. Mr Mulvey was given limited room for manoeuvre by the DPER on issues such as pay, increments and working time but did have some leeway to deal with unions individually and in a sector-specific manner.
Mr Mulvey told unions that the emergency legislation route would take key concessions in the rejected Croke Park Two Agreement ‘off the table’. They were also told that pay cuts for public servants earning between €65,000 and €100,000 a year would be permanent – previous proposals had offered the possibility of pay cuts being restored once the financial crisis was over. The Croke Park Agreement’s job protection guarantee and the limit it placed on how far away from a current job a redeployed worker could be expected to travel would be taken away.
The outcome of the talks, the Haddington Road Agreement (1.37 MB PDF), is named after the location of the LRC offices. Mr Mulvey was allowed by the DPER to offer a quicker return to pre-July 2013 pay rates for staff earning between €65,000 and €100,000. Double-time premium payments, valuable for nurses and police officers, would be retained for staff rostered to work on Sundays. Concessions were also made on matters such as the payment of increments, overtime, working time, contracts, work sharing and flexi-time working.
Meanwhile, one particularly important element of the defeated Croke Park Two plan was retained. No worker earning below €65,000 a year would have their pay cut, although they might have to accept a short delay in payment of their annual rise.
All but three of the 20 PSC unions have since voted for or signalled agreement to the revised deal that went ‘live’ on 1 July 2013. Large majorities in favour were recorded in most ballots, with 76% of the members of the country’s largest union, SIPTU, giving their approval compared to the 53.7% vote against Croke Park Two.
The union’s Vice President, Patricia King, also a key member of the PSC, said:
We now hope that we can move on to implementing the reform process in order to improve the services for those who depend on them, while protecting the jobs, terms and conditions of those who provide them.
The three education sector unions – the Teachers’ Union of Ireland (TUI), the Associations of Secondary Teachers in Ireland (ASTI) and the Irish Federation of University Teachers (IFUT) – remain outside the agreement. ASTI and TUI adopted the same approach, initially rejecting the Haddington Road Agreement without a ballot.
However, they have been advised that the agreement is, in law, a substantially different set of proposals to Croke Park Two and they therefore need to ballot members. This will now happen after the summer holiday.
IFUT plans to ballot members with a recommendation to reject the Haddington Road Agreement. However, the Civil & Public Services Union (CPSU) also recommended a ‘No’ vote to its members, but provided them with detailed examples of how enforced wage cuts through emergency legislation would affect their pay and conditions. CPSU members backed the Haddington Road deal.
The Unite union, large in the UK but with a modest presence in Ireland, also recommended a ‘No’ vote and its 6,000 public service members duly rejected it. However, after the acceptance of Haddington Road by the vast majority of other public service unions, Unite re-balloted with a ‘Yes’ recommendation. Unite also warned members about the drastic effects of imposed FEMPI legislation said it had sought legal advice.
According to the specialist weekly Industrial Relations News (IRN), the TUI and ASTI teaching unions have been told that a ballot on the new agreement would be advisable, and their members should be told clearly about the differences between the agreement and the emergency legislation. IFUT is expected to offer this perspective to its members when re-balloting.
The outgoing implementation body for the Croke Park Agreement published a final report on 1 July 2013. It recorded €161 million in exchequer pay bill savings for the nine months to 1 July 2013, and non-pay or administrative efficiency savings totalling €169 million. The report states that ‘This brings the total pay and non-pay savings achieved under the Agreement to approximately €1.8 billion since 2010.’
The implementation body’s Chair, PJ Fitzpatrick, said the report
affirms the considerable progress that has been achieved across the sectors of the public service under the Croke Park framework in terms of leveraging savings, reforming work practices and reconfiguring services to the public.
Under the Haddington Road Agreement, the next round of assessments will be made within the DPER. Industrial relations issues will be overseen by a dedicated body chaired by LRC’s Head of Conciliation, Kevin Foley. This will continue the practice of reaching binding decisions on disputed issues, as was first done under the Croke Park Agreement. In a significant industrial relations milestone, such binding decisions were accepted, even though under Ireland’s voluntarist industrial relations system – which is similar to that of the UK – they have no legal force.
The government has passed revised FEMPI legislation to give ministers the necessary powers to impose more draconian measures if unions fail to secure and register collective agreements. However, it seems likely that all unions involved will eventually register agreements.
Conclusion of the Haddington Road Agreement is a relief to the government and DPER Minister Brendan Howlin, particularly at a time when Ireland is hoping to exit the Troika bailout. It also seems to provide a platform for industrial peace, stability and continued reform of the public service.
It remains to be seen whether the stated targets of €300 million of savings this year and €1 billion by end of 2015 will be met. Both the government and the Troika know that targets can only be precisely guaranteed by imposed measures such as pay and job cuts, rather than through a balanced set of agreed reforms that the Haddington Road Agreement represents.
Industrial action has been rare in Ireland since the start of the crisis in 2008. There were just five small private sector strikes recorded by the Central Statistics Office (CSO) during the whole of 2012. This ‘peace dividend’ stands in marked contrast to the level of industrial action witnessed in other EU countries due to the impact of austerity measures.
The conclusion of the Haddington Road deal, which in effect revises and refines the Croke Park Agreement, suggests that the industrial relations ‘peace’ can be extended until the agreement’s formal expiry date at the end of 2016.
Brian Sheehan, IRN Publishing