Cost of unwinding ‘austerity era’ hours only starting to become clear

A process to look again at the working week of hundreds of thousands of staff across the public service was a key concession made by the Government in the talks that led to the pay deal for State employees last December.

However, the cost of meeting that commitment is now only starting to become clear, with the HSE estimating that reducing hours to pre-2010 levels will cost nearly €300 million a year in health alone.

It was a general principle of previous governments and the Department of Public Expenditure that while pay cuts introduced in the austerity era were temporary and would be rolled back over time, the parallel work practice reforms would be permanent. This included the additional, unpaid, working hours for staff introduced under the Haddington Road agreement in 2013 at the height of the recession.

The Haddington Road deal increased the working week to 37 hours for those who had been working 35 hours or less up to that point. Those working more than 35 hours faced an increase of up to 39 hours.

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Rolling back the Haddington Road additional hours were a key demand of unions going into the talks with the Government last year.

The unions argued that the unpaid hours remained “a deep and primary industrial relations grievance” among public servants.

“The continued requirement to work the hours is seen as a throwback to a past period of enforced austerity, where a worker’s contribution was measured in terms of pain imposed rather than the gain added to public services and those who rely on them.”

The unions have contended that the removal of the Haddington Road hours need not lead to additional costs, reduced productivity or poorer service quality.

Independent body

Under the new public service agreement, the additional Haddington Road hours were not to be scrapped immediately. However, an independent body was established to report on its examination of this whole area by the end of this year. Crucially, the Government agreed to put in place a €150 million fund in 2020 to pay for the implementation of its recommendations.

Minister for Public Expenditure Michael McGrath told The Irish Times in an interview last February that the Government was not “committing to a full reversal of the additional working hours but we are putting in place a process that will scope out exactly the consequences of what that would be and we are committing to making a start to that”.

However, the unions ultimately want the additional hours abolished and a key question will undoubtedly be how much this would cost.

The Department of Public Expenditure estimated in 2017 that such a move would cost up over €600 million, although this figure is disputed by trade unions.

The Department of Public Expenditure has not published any updated estimate since 2017 – a time when there were fewer personnel in the public service.

However, the HSE estimate is far more recent – it was drawn up at the end of June.

As well as predicting a cost of €296 million a year, the HSE implicitly suggests that a significant proportion of the increased health service workforce – to be recruited under Government plans – would be taken up by dealing with the reduced working week.

It says the Government last year provided funding to recruit 16,000 whole-time equivalent staff. However, it says that a return to pre-Haddington Road working hours would “result in a loss of eight million hours or 4,300 whole-time equivalents”.