Fempi legislation used to cut public service pay has been fully unwound, says Donohoe

Controversial financial emergency legislation under which a series of pay cuts were applied to State employees following the economic crash in 2008 has now been completely unwound, the Minister for Public Expenditure Paschal Donohoe has said.

In his annual review and report on the Financial Emergency Measures in the Public Interest Act (Fempi), which was laid before the Oireachtas in recent days, the Minister said he found that the legislation had achieved its objectives.

Mr Donohoe said that the final element of restoration of reductions imposed under the legislation related to cuts put in place for those in the public service who were paid more than €150,000. This took place in July 2022.

He said that savings generated under the provisions of Fempi legislation had allowed the Government to “balance the competing needs of society as a whole”. He said it could meet the needs for enhanced public services by employing over 107,000 additional staff in the decade to the beginning of 2024. He said this included 16,369 teachers and 14,055 nurses.

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Public service trade unions had sought the full and final unwinding of financial emergency legislation in the talks that led to the recent pay deal for the 400,000 staff on the State payroll. Union leaders had argued that the ending of Fempi was needed to re-establish normal industrial relations in the public service.

The financial emergency legislation provided for the Minister to carry out a review of the necessity of the measures and to the report to the Oireachtas at the end of June each year.

Following the collapse in the public finances in 2008 a series of financial emergency laws were passed by the Oireachtas.

The first piece of Fempi legislation in 2009 provided for the public service pension levy and for State bodies to reduce professional fees paid to external providers.

A second Fempi Act allowed for reductions of between 5 per cent and 20 per cent in remuneration to public service personnel including members of the Oireachtas and certain public office holders.

Legislation in 2010 allowed for cuts to public service pension costs and to the national minimum wage.

Another piece of Fempi legislation put in place in 2013 implemented more pay cuts for those in the public service earning over €65,000.

Legislation introduced in 2015 provided for the gradual unwinding of measures introduced in the earlier Acts. The Public Service Pay and Pensions Act in 2017 set out a statutory roadmap for the rolling back of remaining Fempi measures.

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