Ireland: Latest working life developments – Q4 2016

Planned talks about public sector pay restoration, a new Public Service Pay Commission, an increase to the minimum wage and pay rises in the contract cleaning sector 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 2016.


Public sector pay

In November, the government invited public service unions to talks in early 2017 to discuss the possible acceleration of public pay restoration. The government stated that its priorities in these discussions would be to:

  • secure the continued implementation of the Lansdowne Road Agreement;
  • maintain the productivity, industrial peace and stability provided by the Agreement, which are of critical importance to the country and its international reputation;
  • ensure that issues of mutual concern to the parties are addressed in a fair and reasonable way and in a manner that safeguards existing government expenditure commitments and the broader fiscal position.

Talks were considered necessary following a dispute with the police force (the Garda Síochána or simply the Garda) which was resolved by a Labour Court recommendation. Many commentators believed the court’s recommendation gave extra concessions above those allowed for in the current public service agreement (the Lansdowne Road Agreement).

Affiliates of the Irish Congress of Trade Unions (ICTU) Public Services Committee (PSC) issued a statement that reaffirmed their intention to maintain a collective approach to public service pay and related issues. The Garda associations are not members of ICTU. According to the PSC:

Public servants and their representatives require clarity about the process and timetable for addressing…issues, including the need for accelerated pay restoration... the Lansdowne Road Agreement will be undermined unless this happens quickly.

The PSC also said in its statement:

The wider implications of the Garda Labour Court recommendations can and should be dealt with in negotiations early next year, under paragraph six of the Lansdowne Road Agreement, which allows such issues to be addressed within the scope of the Agreement.

Public Service Pay Commission

Separate to this process, the Public Service Pay Commission is expected to deliver its initial report in the second quarter of 2017. This report will recommend the best ways to manage the unwinding of the Financial Emergency Measures in the Public Interest (FEMPI) legislation in the context of the national finances. It will also address any particular labour market challenges the Commission identifies and other conditions of service of public servants, including tenure and pensions. In October, Kevin Duffy, former chair of the Labour Court, was appointed chair of the Commission.

Minimum wage increase

The government accepted the majority recommendation of the Low Pay Commission to increase the national minimum wage by 10 cents, from €9.15 per hour to €9.25 per hour on 1 January 2017. Statutory Instrument 516 of 2016 (National Minimum Wage Order 2016) was signed in October 2016.

New pay agreement for contract cleaners

A new Employment Regulation Order (ERO) for the contract cleaning sector provides for a cumulative total pay rise of 10.75% in three separate increases, covering the period up to December 2019. The sector is understood to employ up to 30,000 workers.

The ERO was negotiated by the sectoral Joint Labour Committee, which includes representatives from the Services, Industrial, Professional and Technical Union (SIPTU) services division and the Irish Contract Cleaning Association (which is part of Ibec, the country’s main employer body). It was signed by the Minister for Employment and Small Business in October, following a public consultation period after which it was examined by the Labour Court.

Private sector pay and HR survey

A pay and HR survey (PDF) by employer association Ibec found that 64% of Ibec members increased their pay in 2016, and 71% were forecasting increases for 2017.
 The survey had a total of 392 respondents from a range of sectors including high-tech manufacturing, other manufacturing, distribution (retail and wholesale) and service industries. The median pay increase for 2016 among member companies was 2.2%.


The survey also found:

  • just over 40% of employers are expecting to increase staff numbers in 2017;
  • 15% of respondents said they planned to increase use of agency staff and independent contractors in 2017;
  • skills gaps were strongest among engineers, at 21%, while just 4% of respondents identified skills gaps among HR specialists; 

  • just 7% of employers said they will decrease the use of flexible work contracts, with a plurality (42%) saying they will keep their use at the same level over the next three years;

  • a third of employers will keep e-working at the same level, with another 31% increasing the use of location flexibility for work.


Commentary

The fourth quarter of 2016 was dominated by debate over public sector pay, sparked off by disputes involving the Garda and second-level teachers. The Garda dispute was settled by giving extra concessions as part of a Labour Court recommendation. This recommendation had immediate implications for the Lansdowne Road Agreement. As a result, the ICTU public service unions and government agreed to begin talks on fast-tracking public sector pay restoration under the Lansdowne Road Agreement.

In the private sector, meanwhile, local-level pay bargaining continued and the majority of companies awarded pay increases.

An immediate issue for the government is how to find the extra money if the January 2017 talks do result in agreement for pay restoration in a quicker timeframe than provided for in the Lansdowne Road Agreement. The government will need to decide if it can commit to faster pay restoration given current economic uncertainties. These economic uncertainties may have an impact on private sector job creation and the tax base on which all public service expenditure is contingent.

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