Public sector pay: workers to get up to 8pc over two years under proposals as Ictu urges unions to park threatened strike action

An initial increase of 3pc backdated to February, would be followed by further increases of 2pc and 1.5pc, or a higher sum of €750 for lower paid workers.

This is in addition to 1pc or €500, whichever is greater, due at the beginning of October 2022. The minimum payment of €750 a year from next October means a total package worth 8pc to workers earning €25,000 and 7pc to a person on €37,500 a year, unions chiefs said.

Unions representing around 340,000 state workers were locked in talks with Government representatives at the Workplace Relations Commission (WRC) headquarters in ­Dublin, and the proposed deal looks set to avert threatened strike action, with the umbrella group for unions coming out in support.

The WRC issued the proposed deal to all sides this morning and unions are being urged to recommend the proposals to their members, with the Irish Congress of Trade Unions (Ictu) issuing an analysis supporting the deal.

Ictu said the deal was “skewed to the lower paid”, who will benefit from a higher €750 increase than their better paid colleagues next October.

Ictu said: “The package would see pay increases of 3pc with effect from 2nd February 2022, 2pc from 1st March 2023 and 1.5pc or €750 (whichever is the greater) from 1st October 2023. This is in addition to 1pc or €500, whichever is greater, due at the beginning of October 2022.

“The minimum payment of €750 a year from next October means the package would be worth 8pc to a worker earning €25,000 a year and 7pc to a person on €37,500 a year.”

Ictu said a meeting of its public service committee this morning decided that individual unions should now consult members, through ballots and other means, on the package in advance of a collective decision on whether to accept or reject the package.

"This will take place at a further PSC meeting on Friday 7th October, where voting will be weighted to reflect the number of public servants that each union represents," Ictu said in a statement.

PSC chairperson Kevin Callinan said he believed the outcome of this long process was the best that could currently be achieved through negotiations.

“We’ll now be explaining this package to union members, who will have the final say in ballots," he said.

"Neither side has achieved all it sought, but this package is a significant improvement on the pay terms of Building Momentum, and it is worth more to those who need it most. This underlines the importance of the unions’ decision to invoke the review clause in the current agreement.

“Over the past weeks, Minister McGrath and his Government colleagues have repeatedly promised to supplement pay measures with other cost-of-living supports through the Labour-Employer Economic Forum (LEEF) process and the forthcoming Budget. Workers will now expect delivery on that promise. A Government failure to deliver will certainly impact the ballots that will shortly get underway,” he said.

PSC secretary John King said the PSC was also recommending that planned industrial action ballots be suspended while unions consult on the WRC package.

The total 2022-2023 increases due under the WRC-proposed package would be:

• February 2, 2022: 3pc
• October 2022: 1pc or €500 a year (whichever is the greater), agreed under the original Building Momentum agreement
• March 1, 2023: 2pc
• October 1, 2023: 1.5pc or €750 (whichever is the greater).
• These are in addition to Building Momentum increases of 1pc or €500 a year (whichever is the greater in October 2021, plus a sectoral bargaining fund worth 1pc of annualised basic pay from 1st February 2022.

Speaking this afternoon, Taoiseach Micheál Martin said the public sector pay increases will see less money for other public services in the Budget, according to the Taoiseach.

Mr Martin said cost of living measures will not deal with the “full entirety” of the high cost of energy prices, which will be “particularly high” in the coming months.

“The Budget will be the Budget for the full year and the [public sector] pay [increase] does affect that, because, you know, that will take up so much of what’s allocated in terms of the public service estimates provision, therefore, that does have impact in terms of what is available for other spending across the public service in terms of services,” he said.

“We are living through extraordinary times and workers both through the private sector and the public sector are under a lot of pressure. We always said it would be a combination of measures used to address the pressures that workers and households and businesses are under and pay is one of those.”

He welcomed a deal being reached between unions and the Government and encouraged union members to support it.

“I think it’s a fair agreement, I understand the difficulties and the challenges but this is a fair agreement. Coming out of Building Momentum, there was already 2pc there, and other significant additionality there in respect of the offer that has been made.

“We need harmony, we need to work on this and through this crisis in a collective way.

“The key instruments are pay, tax, initiatives around reducing costs.”

However, Mr Martin warned Government “cannot do everything”.

“Government cannot do everything and Government will not be able to cover the increased costs in their entirety. What is concerning us now is the projections for the next number of months and for the first part of 2023, that is concerning us in terms of the pricing that has been factored in now as people purchase on the wholesale market.

“It has the capacity to undermine the economy, so we’ve got to be conscious of the broader framework here. That is why demand reduction is important all round, at individual level, at Government level.

“How do we reduce the use of energy as a cost saving device because costs are going to be particularly high over the coming while,” he said.

He said the “rebound” of the economy from the pandemic has given the State “resources” to help people but it will “not deal with the full entirety of the cost” of high energy prices.

Mr Martin said the EU Commission will shortly put forward “an emergency measure” as an immediate support, as well as reform of the energy market over the next 12 months.

He was speaking to reporters in Co Monaghan as he laid the foundation stone for Phase 2 of landmark Ulster Canal restoration project.

Speaking about the proposals, Minister for Public Expenditure and Reform Michael McGrath said it is important to secure “industrial relations stability”.

“From my perspective as minister, at all times our aim here was to achieve a fair deal and strike the right balance between on the one hand acknowledging the impact of inflation on public service workers but at the same time not to chase inflation,” told the News At One on RTÉ.

Minister McGrath said the Government wanted a deal that was “affordable and sustainable” for taxpayers.

He said the Government is “really concerned” about the level of inflation in domestic and business bills.

Mr McGrath added that the additional cost of the pay adjustments agreed last night is approximately €1.6 billion spread across a three-year period.

“We also wanted to get certainty in respect of the public service pay bill for 2023 and I think we have achieved a fair and balanced outcome overall,” he said.

This morning Socialist Party TD Mick Barry voiced opposition to any pay deal which does not fully compensate the country's public sector workers for inflationary price rises.

It is understood that the Government made a proposal to increase public sector pay by 6pc over two years at the start of the talks yesterday.

However, the Cork North Central TD said that any increase which does not match inflation effectively amounts to a pay cut.

"With inflation running at nearly 10pc, a 6pc pay increase over two years would effectively represent a massive pay cut for public sector workers. Many of these workers, for example health service workers, were on the frontline getting this country through a pandemic. They do not deserve to have their wages cut,” he said.

“I hope that the unions do not put a ‘below inflation’ pay proposal out to ballot but if they do I hope that it is then roundly rejected. Working people deserve better than that," he added.

Meanwhile, the Irish Small and Medium Enterprises Association (Isme) said that while it understands the pressure on public sector pay because of inflation, the public service already enjoys wages that are 22pc higher than the average private sector wage, and 46pc higher than the average small business wage.

It said public sector employees also have well-documented benefits and job security far beyond those enjoyed by others in the workplace.

“Ireland has a number of concurrent crises to deal with including housing, inflation and security of energy supply. Tackling these issues will be capital-intensive and must be the priority for Government, citizens and society. If we throw our budgetary space at the public sector, we diminish the ability to tackle the other, more urgent crises,” said Isme chief executive Neil McDonnell.

“This is on top of the continuing impact and aftermath of the Covid-19 pandemic; the ongoing uncertainty arising out of Brexit and the more recent and atrocious Russian invasion of Ukraine. We must now allow reckless public service union self-interest prevailing over Ireland’s national interest.

“The Government must stand up to any threat of strikes by any union in the public sector. It has to take a balanced view for the other 85pc of the workforce not working in the public service and it cannot allow itself to be informed or influenced by any Union threat to go on strike.

“While all sectors of the economy are experiencing recruitment and retention pressures, these are least impactful in the public sector, which is still managing to poach employees away from the private sector. This cannot be much of a surprise, with the rates of pay on offer.”

Mr McDonnell said Isme does not oppose pay increases for the public sector. However, just as in the private sector, efficiencies, effectiveness, reform and ongoing change must take place to mitigate the overall cost to taxpayers.

“The only way to manage public sector pay expectations in Ireland is to set up a standing public sector pay commission, as they have in the UK,” he said.

“The public sector versus private sector pay gap experienced in Ireland is not found in other EU countries other than Portugal, Spain and Italy, where private sector wages are in fact far lower,” he added.

The talks initially began after unions triggered a clause in the Building Momentum deal that allows a review to take place.

Unions had warned they will not discuss an extension of the existing deal, which expires at the end of December, until a review is finalised.

The Government was warned public servants would begin balloting for industrial action later this week if a “credible” pay offer is not made at new talks.

Talks resumed yesterday morning after collapsing last June.

They had broken down after unions rejected an extra 5pc of pay rises for members spread over this year and next.

This is on top of 2pc being paid under the deal this year – 1pc of that last February and another 1pc due in October.