Lansdowne Road Agreement (LRA) FAQs.
Why did the talks take place now?
At the time of the negotiation of the Haddington Road Agreement, the ICTU Public Services Committee took the precaution of writing to the Department of Public Expenditure and Reform advising that if the State’s finances improved to a degree that would enable the exchequer to cope, we could lodge a claim seeking improvements.
In the absence of this letter the management side would have been able to argue that no talks were due until the end of the Haddington Road Agreement in June 2016. This agreement enables income recovery to commence in January 2016 – six months earlier than would otherwise apply. Furthermore it was recognised that a delay in commencing talks would have run the risk of public servants income becoming part of a politicised budget debate.
What is the view of the IMPACT Central Executive Committee?
The elected leadership of IMPACT, the Central Executive Committee (CEC), concluded that the agreement met the IMPACT demands for a commencement of income restoration in the form of a cash outcome which disproportionately favours the lower paid. The CEC formed the view that the agreement achieves the essential objective of fairness, while at the same time offering greater benefit to lower paid public servants.
It also protects the HRA restoration terms for those who were subject to additional cuts under the HRA. Finally, the CEC concluded that there are serious risks if the agreement is not ratified as there are many commentators, lobbyists and elements in the political system that are opposed to any income restoration for public servants at this time. In all these circumstances, the CEC is recommending that members vote in favour of accepting the proposals.
What increases are contained in the agreement?
On 1st January 2016 the exemption threshold for payment of the pension levy will increase from €15,000 per annum to €24,750 per annum. This will reduce the pension levy by €600 per annum for all public servants earning above the threshold. On 1st January 2016 annualised salaries up to €24,000 will increase by 2.5% through a partial reversal of the 2010 public service pay cuts. On 1st January 2016 annualised salaries from €24,001 up to €31,000 will increase by 1% via the same mechanism.
On 1st September 2016 the exemption threshold for payment of the pension levy will increase further from €24,750 per annum to €28,750 per annum. This will further reduce the pension levy by €400 per annum for all public servants earning above this threshold. The combination of these measures in 2016 will improve all public service full time incomes by around €1,000 per annum. On 1st September 2017 annualised salaries up to €65,000 are increased by €1,000.
The agreement refers to ‘annualised salary’. What is that?
Annualised salary is the annual salary paid to a full time employee. Employees who do not work full time hours earn a percentage of the annualised salary based on their working hours. For example, if an employee is on 50% job sharing, they earn half the ‘annualised salary’ for the position.
In addition, the Department of Public Expenditure and Reform has confirmed that annualised salaries does not include pensionable allowances on this occasion.
How will the increases apply to part time staff?
Non-full time staff will receive pro rata increases based on the January 2016 and September 2017 increases in annualised salaries. As the pension levy applies to annual income in each calendar year, the benefits for non-fulltime staff will vary.
Will increments be affected by this agreement?
No. Under the Haddington Road Agreement (HRA) there was provision for a three-month increment delay for staff earning under €35K, two three-month delays for staff earning between €35 and €65K, and two six-month delays for staff earning over €65K. There is a three-year freeze for staff on salaries starting over €100K. Once these liabilities are discharged, no further delays arise for any of the categories. Specifically, no delays are created by the Lansdowne Road Agreement.
What will happen to staff who earn more than €65,000?
All public servants, irrespective of their salary, will benefit from the reduction in the pension levy in 2016. In the case of staff who earn more than €65,000 their pension levy will be reduced by €1,000. An important aspect of the agreement is that it is confirmed that pay restoration for these staff, negotiated as part of the Haddington Road Agreement, will apply on 1st April 2017 and on 1st January 2018.
It is disappointing that at the conclusion of the negotiations the management side confirmed that it was unwilling to extend the (2017) €1,000 increase to categories of staff earning above €65,000.
What happens to the ‘grace period’ under the LRA?
Under the Lansdowne Road Agreement, the Government has indicated that it intends to provide in the legislation for a further extension of the grace period - during which both the reduction in pay and any deferral of increment progression, provided for under the Financial Emergency Measures in the Public Interest Act, 2013, will be disregarded for pension purposes.The original grace period under the Haddington Road Agreement ran to June 2015 and the unions successfully argued for its extension to June 2016.
How will take home pay be affected?
The effect on take home pay from the reduction in the pension levy will vary depending on an individual’s income and tax rate. The pension levy currently attracts income tax relief in the same way as pension contributions. When the levy is reduced this tax relief will also be reduced. In essence, the final take home benefit of the €1,000 gross reduction of the levy will vary depending on whether the individual pays tax at the standard rate of 20% or the marginal rate of 40%.
The effects on take home pay, arising from the increases in pay, will vary depending on the individual tax rate, PRSI status, pension contribution and pension levy. Furthermore, it is anticipated that there will be changes announced in the relevant budgets for 2016 and 2017.
Why are the changes to working hours, twilight payments and overtime rates, agreed under the HRA, remaining?
The changes to working hours, twilight payments and overtime rates, agreed under the Haddington Road Agreement, were not time limited to the duration of the agreement. Reducing working hours and restoring twilight payments and overtime rates were raised by the union side in the negotiations but the management side was emphatic that it had no mandate from Government to make any concessions on these issues. There is nothing in this agreement that prevents unions seeking concessions on these issues in a future agreement.
Does the agreement alter any terms and conditions?
No. In contrast to the Haddington Road Agreement there will be no changes to individual terms and conditions like working hours, annual leave or sick leave.
Why is the agreement phased?
Phasing the pay increases allowed the union aspirations to be met in the context of the Government budget framework. This is a common feature of agreements in the public and private sectors.
Are there any changes to Flexitime?
It was agreed to conduct a pilot scheme in the civil service extending the flexitime carryover period to one and a half days per month. The outcome will be reviewed after six months. The outcome of this exercise could have positive implications for other sectors of the public service.
Does the agreement address outsourcing?
The parties agreed to reaffirm commitments to the use of direct labour to the greatest extent possible, consistent with the efficient and effective delivery of public services. Where any dispute arises on the application of this commitment, the parties will seek to resolve any matter directly and, where this fails, to use the dispute resolution mechanisms of the agreement.
Earlier commitments on consultation and evaluation must be undertaken prior to any outsourcing of an existing service taking place and – significantly - in the evaluation process any cost comparisons shall exclude the totality of labour costs which includes, basic pay, leave, premium payments and pension benefits.
Will pensioners benefit from the Lansdowne Road Agreement?
Pensions are not directly covered by the agreement. However, in a separate engagement with the Irish Congress of Trade Unions Public Services Committee and the Alliance of Retired Public Servants, the management side confirmed that - subject to a forthcoming government decision - pensions will be increased by way of a reduction in the pensions related deduction made from pensions in payment.
The threshold for the deduction will be increased from its current level of €12,000 – leading to a maximum increase of €900 per annum over the period 2016-17 – which means a total of 80,000 out of 140,000 public service pensioners being exempted from the deduction during this agreement.
Are there changes to the disputes resolution procedures under the Lansdowne Road Agreement?
No. The Labour Relations Commission (LRC), in commending the proposed agreement to the parties, confirmed that all existing dispute resolution procedures, including sectoral arrangements provided for under the Haddington Road Agreement, continue to apply.
Is there an overall ‘no strike’ agreement?
No. As is normal, the agreement provides that strikes or other forms of industrial action are precluded in respect of any matters covered by the agreement, where the parties are acting in accordance with its provisions. This is the same clause that was contained in the Croke Park, Haddington Road and previous agreements. There are no prohibitions on strikes or other forms of industrial action on any matters not covered by the agreement.
Why is the Irish Water Programme mentioned?
The agreement provides for engagement and consultation on the Government’s change and reform agenda. This includes the overarching Public Service Reform Plan 2014 – 2016 and various sectoral plans in the Civil Service, Education, Health and Justice. Specific to the local government sector are the Action Programme for Effective Local Government (‘Putting People First’) and Irish Water Programme.
Staff in the Irish Water company are not covered by the agreement but local government workers are, in many cases, working under service level agreements to the water programme. These local government workers will continue to engage with and be consulted on any changes in their workplace to the Irish Water Programme. Any differences will continue to require to be addressed in a structured manner and, where necessary, will be dealt with in accordance with the provisions of the dispute resolution machinery.
Is job evaluation being re-introduced in the health sector?
Yes. It is agreed that, if the Lansdowne Road Agreement is ratified, the relevant management and unions will meet to conclude arrangements on the conduct and scope of job evaluation exercises in the sector.
Are Section 39 funded bodies covered by the agreement?
No. Staff in section 39 funded bodies are not covered by the agreement. However the relevant branches will be seeking to engage with the individual employers with a view to unwinding some of the measures put in place in these employments over the last few years.
The agreement does set up a process to ensure that there will be a requirement in their service level agreements that will oblige them to utilise the industrial relations machinery of the state. IMPACT had sought this provision following its experience with a small number of agencies unwilling to engage with the union.
Does the agreement affect the current arrangements for the CORU fee?
Yes. It is agreed that, if the Lansdowne Road Agreement is ratified, the commitment under the Haddington Road Agreement to freeze the CORU fee at €100 per annum will be extended to the expiry of the extension of the agreement.
Was the issue of unimplemented adjudication findings raised?
Yes. The parties have agreed that any outstanding adjudication findings in the original Croke Park Agreement will be reviewed jointly by the parties prior to the expiry of this agreement.
Why were tax rates and the universal social charge not addressed in this agreement?
Since the collapse of Social Partnership in 2009, there has been no forum where unions and other social partners engage in negotiations with government on overall economic issues including taxation. While unions and other social partners can make submissions to government in advance of budgets, decisions are made exclusively by Government. Accordingly, these negotiations were conducted with public service employers and were restricted to public service pay issues in a similar way to company level negotiations in the commercial semi state and private sectors.
Who has a vote on this agreement?
IMPACT members who are public servants are being balloted on this agreement. While some members who are employed outside the public service may be indirectly affected by the outcome, they are not parties to the agreement. Accordingly they are not being balloted. Similarly, retired members are not being balloted as the separate arrangements regarding pensions are not part of this agreement.
How will the ICTU Public Services Committee ultimately decide on the outcome?
Within IMPACT, the votes of all eligible members received by the deadline will be aggregated on a national basis to determine the outcome of the ballot. It is understood that a similar approach will be taken by each other affiliated union within the ICTU Public Services Committee (PSC). The outcome of the IMPACT ballot will determine our vote at a meeting of the ICTU PSC which, in turn, will determine the overall public service union position. Voting strength at the ICTU PSC is related to the public service membership of each union.
Example: table showing effect of LRA changes to clerical officer pay.
These tables, prepared by IMPACT, show the original Civil Service clerical officer scale effective from 2008 before the cuts (column A), and the 2010 scale that incorporates the salary cuts of that year (B). The tables then show the proposed pay increases on salary points up to €31,000 in 2016 (C) and the €1,000 pay increase in 2017 (D) - giving percentage values for the combined pay increases (E). The current pension levy on all the points on the scale are displayed (F), the reduced amounts of the pension levy applying following the proposed 2016 changes under the LRA (G) and the cash value of these reductions (H). Clerical officers in health, local government and education and special needs assistants in schools are paid on a similar scale. To assist comparison, the scales do not include the new entrant rates from 2013.
Illustrated examples of the effect of the Lansdowne Road Agreement on salaries
Illustration 1: Tom – salary €30,000 per annum
- Tom works fulltime and earns €30,000 per annum
- He currently pays €1,125 per annum pension levy (€43.12 per fortnight)
- On 1st January 2016 his salary will increase to €30,300 and he will pay an additional €30 per annum pension levy following this increase, while his pension levy will be reduced by €600 from 1st January 2016 (€23.00 per fortnight)
- On 1st September 2016 his pension levy will be reduced by a further €400 per annum (€15.33 per fortnight)
- On 1st September 2017 his salary will increase to €31,300 (This example ignores any increment that might be paid in the meantime).
Illustration 2: Mary – salary €40,000 per annum
- Mary works fulltime and earns €40,000 per annum
- She currently pays €2,125 per annum pension levy (€81.45 per fortnight)
- On 1st January 2016 her pension levy will be reduced by €600 from 1st January 2016 (€23.00 per fortnight)
- On 1st September 2016 his pension levy will be reduced by a further €400 per annum (€15.33 per fortnight)
- On 1st September 2017 her salary will increase to €41,000 (This example ignores any increment that might be paid in the meantime).
Illustration 3: Anne – salary €50,000 per annum
- Anne works fulltime and earns €50,000 per annum
- She currently pays €3,125 per annum pension levy (€119.78 per fortnight)
- On 1st January 2016 her pension levy will be reduced by €600 from 1st January 2016 (€23.00 per fortnight)
- On 1st September 2016 his pension levy will be reduced by a further €400 per annum (€15.33 per fortnight)
- On 1st September 2017 her salary will increase to €51,000 (This example ignores any increment that might be paid in the meantime).
