Ireland: Latest working life developments – Q4 2017

The creation of a new public service union, the extension of maternity leave for premature births, asylum seekers’ right to work, and research on pay and wages are the main topics of interest in this article. This country update reports on the latest developments in working life in Ireland in the fourth quarter of 2017.

New public service union

Fórsa, a new public service union with over 80,000 members, will come into being in early 2018. The members of the Civil, Public and Services Union (CPSU), IMPACT, and the Public Service Executive Union (PSEU) voted in November 2017 to amalgamate the three organisations.

Fórsa will represent a large number of grades, professions and occupations, including around 30,000 civil servants, 30,000 health workers, 12,000 education staff, 10,000 local authority workers, and 6,500 people in semi-state organisations and private companies. The new entity will be the second largest union in the country.

The members of all three unions strongly backed the merger, voting by 76% (CPSU), 86% (IMPACT) and 70% (PSEU) in favour. Turnout was highest in the CPSU (close to 60%); even though some observers believed its members might be most resistant to the change. Turnout for the PSEU was just over 53% and around 35% for IMPACT.

Maternity leave extension for premature births

From October 1 2017, a new policy allows mothers whose children are born prematurely to extend both maternity leave and state maternity benefit by the number of weeks between the birth and the 37th week of a full-term pregnancy. The additional leave and benefit is to be added to the end of the normal 26-week maternity period. Maternity leave normally starts two weeks before the expected birth date, usually in the 37th week of pregnancy.

Asylum seekers’ right to work

In November 2017, the government confirmed its intention to opt in to the EU (recast) Reception Conditions Directive (2013/33/EU) that will enable asylum seekers to access the labour market for the first time. In May 2017, the Supreme Court ruling in the landmark case of N.V.H. versus the Minister for Justice and Equality found Ireland’s ban preventing asylum seekers from working was unconstitutional because there was no time limit on how long the asylum process might take. The ban therefore clashed with the right to work and the Supreme Court gave the government six months to come up with a solution.

Central Statistics Office survey on pay

Figures published by the Central Statistics Office for the third quarter of 2017 show that enterprises with between 50 and 250 employees recorded an average pay increase of 2.8%, while those with more than 250 employees increased pay by 2.2% over the same period. In enterprises with less than 50 employees, there was an annual increase of 2.0% in average hourly earnings. The largest annual percentage increase in average hourly total labour costs was in the transportation and storage sector, rising by 4.3% from €23.97 to €25.01 per hour.

Central Bank paper on 2018 wage growth predictions

According to a Central Bank of Ireland paper The labour market and wage growth after a crisis published in October 2017, nominal hourly wage growth is predicted to be just under 2.8% in 2018, up from 2.2% in 2017. This prediction was made using an economic model that takes into account unemployment (forecast to fall below 6% in 2018), inflation (assumed to be 0.7% in 2017 and 1.3% in 2018), trend productivity growth (3%), migration (6% growth in non-Irish employment) and the effective exchange rate (no change).

SIPTU report on pay increases

SIPTU’s services sector reported a total of 125 agreements with ongoing pay increases over the two years 2015 and 2016, with an average increase of just over 2% per year. The average pay increase in each 12-month period in the hotels, catering, print, leisure and media sectors was 2.15% for 9 deals in 2015 and 2.08% for 32 deals in 2016. Although the 2016 average was very slightly lower, there were far more deals agreed.

In the security, cleaning, insurance and finance sectors, the average increase was 2.45% in 2015 and 2.74% in 2016. Overall, there were 35 deals agreed – 17 in 2015 and 18 in 2016 –showing a consistent level of bargaining. While in the wholesale, retail and distribution sectors, the average increase was 2.01% in 2015 and 2.11% in 2016, showing a slight increase between the two years. The number of deals went up somewhat, from 19 in 2015 to 24 in 2016.

Ibec HR survey on basic pay

The Ibec HR update survey, published in October 2017, found that 75% of respondent companies increased basic pay in 2017 by a median 2.2%, with a similar median increase expected in 2018.

Other key survey findings were that:

• three-quarters of respondents increased basic pay in 2017, with a similar proportion expecting to increase basic pay next year;
• median increases to basic pay in 2017 were 2.2%;
• median increases to basic pay in 2018 are expected to be at around the same level of 2%;

• the total pay bill, which includes both changes in basic pay and changes in numbers of employees, increased in over two-thirds (69%) of respondent companies this year;

• the total pay bill in 2018 is expected to increase in 71% of respondent companies.