Pay deal a fair outcome, says McGrath as unions call it 'best that could currently be achieved'

Negotiations on a public sector pay deal came to a close this morning after marathon talks overnight. 

Union officials did not give much away leaving the Workplace Relations Commission this morning, but the process was described as "difficult." 

Last June talks between the Department of Public Expenditure and Reform and unions broke down over the Government’s offer of a 5% pay increase over two years.

Unions had been pushing for an increase of at least 7%, which the Government argued its offer had amounted to because it would come on top of a 2% increase already given. That proposal would cost €1.2bn a year.

The new deal will see a 3% pay increase backdated to February of this year, a further 2% at the beginning of next March, and finally either a 1.5% or €750 — whichever is greater – increase coming on stream in October 2023.

This is in addition to a 1% or €500 hike due to be applied at the start of the coming October which was previously agreed under Building Momentum.

The various unions have made little secret of the fact the current pressurised cost of living is their main focus in securing improved terms for their members.

One source familiar with the discussions at this morning’s meeting of the PSC regarding the new deal confirmed that its terms had been “reasonably well received” and that the deal is seen as being broadly in line with improvements seen in private sector deals in the face of the current inflationary crisis.

Mr Callinan said the unions would now be explaining the offered package to their members, but fired a warning to Public Expenditure Minister Michael McGrath, who he said had “repeatedly promised” to supplement pay increases with other cost-of-living supports, notably in the early budget which is due at end September.

“A Government failure to deliver will certainly impact the ballots that will shortly get underway,” he said.

The individual unions will now decide on whether or not to recommend that the deal be accepted, before each ballots their members on the matter.

Mr McGrath said he thinks the outcome of the pay talks was fair and balanced.

"I think we have achieved a fair and a balanced outcome overall, which does go some of the way to supporting public servants in respect of dealing with the cost of living pressures that are there,” he told RTÉ radio’s News at One.

Mr McGrath also welcomed the reforms that could be carried forward as a result of the agreement. There would be a capacity to modernise and make the public service more efficient with greater flexibility.

The pay agreement would cost €1.6bn spread across three years 2022, 2023 and 2024 of which €1.4bn would come from the “expenditure envelope” in Budget 2023.

The main prize from the agreement, added Mr McGrath, was industrial relation stability. Three of the six increases will be targeted toward lower-paid workers.

Separate to this process the Government would also be doing more for the public to cope with the cost of living increases.

Earlier, Agriculture Minister Charlie McConalogue described the conclusion of pay talks as “welcome news” following "a lot of work" by Mr McGrath and the public service unions.

“It is very welcome news that we finally have a proposal this morning,” he told Newstalk Breakfast.

The objective of the Government all along had been to recognise that there was a cost of living crisis, but this had to be balanced with what was available in the public finances.