Unions reject plan to cut public pay bill by €1 billion

Public service unions in Ireland have rejected any revision of the Public Service Agreement 2010–2014, known as the Croke Park Agreement. The ‘Croke Park Two’ proposals are intended to cut the public service pay bill by a further €300 million this year and €1 billion by the end of 2015. The government has warned that it may now have to legislate to cut wages and other non-basic pay remuneration if unions and the Labour Relations Commission cannot reach a compromise.

The Croke Park Agreement

The first Croke Park Agreement, known formally as the Public Service Agreement 2010–2014, ensured there would be no compulsory redundancies among public servants in return for trade union cooperation with an average 7.5% wage cut and a four-year wage freeze (IE1007039I). The agreement was set to expire in 2014.

However, in December 2013, the government sought to amend the agreement’s terms and, in effect, conclude what has become known as the ‘Croke Park Two’ agreement. The immediate aim was to further trim the public service wage bill by €300 million this year and by €1 billion in total by the end of 2015 (IE1212019I).

The proposals have been rejected by a majority of public service unions and around 70% of all members who voted on the issue. More importantly, it was defeated by a delegate count within the public services committee (PSC) of the Irish Congress of Trade Unions (ICTU). The PSC uses an electoral system similar to the US Electoral College system, whereby the votes of union delegates are based on the numerical membership strength of each union.

It is significant, however, that had just 1,000 members of the country’s largest union, the Services, Industrial, Professional and Technical Union (SIPTU), voted the other way, this would have resulted in a ‘yes’ vote within the PSC and ‘Croke Park Two’ would have been accepted.

The government’s reaction

The government’s reaction to the result was to ask the chief executive of the Labour Relations Commission (LRC), Kieran Mulvey, to engage with each of the 20 unions involved and assess whether some basis for an agreement remains possible. He was given two weeks to complete this task and was instructed to tell the unions that, if a compromise could not be reached, the government would use its regulatory powers to reduce Sunday premium pay and overtime rates. The government also said that it is prepared to legislate through the Dáil (Parliament) by 1 July 2013 in order to meet its targets.

The details of the government’s position were set out in a briefing note obtained by Industrial Relations News (IRN), and its contents, summarised below, were communicated to each of the unions involved by Kieran Mulvey.

  • Higher pay will be cut by legislation and all annual increments will be frozen. Items such as overtime rates and premium rates (that is, double time for Sundays) will be subject to regulations (downwards).
  • The proposed pay cuts for those earning between €65,000 and €100,000 will be permanent, rather than allowing for ‘clawback’, as was proposed under the Croke Park Two terms.
  • The government would take action to outsource existing services at reduced cost.
  • There would be no job protection, nor any limit on the distance to alternative posts offered to redeployed workers (currently 45km under the existing Croke Park Agreement).

Kieran Mulvey has also told the unions that there is no time for what he has described as formal ‘blank page’ talks. His task is to find out whether some of the unions that voted ‘no’ can find a way to accept the rejected proposals without upsetting the payroll reduction calculations already decided by the government.

The unions were also told that the government’s forced solution would hit their members harder than the now defeated plan.

Commentary

If the government does introduce legislation, a critical factor will be the stance taken by Labour Party members of the Fine Gael/Labour coalition government. Labour ministers have expressed confidence that their deputies would introduce legislation if necessary. However, the unions fighting the proposals can be expected to mount a strongly political opposition campaign.

Labour Party opposition to the government’s proposals could lead to a general election, with the prospect of the Labour Party losing a large number of seats given their currently very weak position in national opinion polls.

SIPTU is the largest Irish union and a supporter of the Labour Party. Its President Jack O’Connor has warned against any government move that would rely simply on a re-ballot of his 65,000 public service members to get the proposed agreement ‘over the line’.

Meanwhile other unions, such as the Civil Public and Services Union (CPSU) and the Teachers’ Union of Ireland (TUI), have warned against any ‘tweaking’ of the defeated agreement. One informal, inter-trade union group of activists has warned: ‘No means no.’

However, some union leaders are fearful that if the government imposes a solution, trade union members may ultimately ask those union executives who recommended a ‘no’ vote why they did so, when the defeated proposals would have meant a less draconian outcome.

Brian Sheehan, IRN Publishing

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