Pay talks set to be ‘challenging’, according to Minister

The Minister for Public Expenditure Michael McGrath has warned of “difficult and challenging negotiations” after the Government and the public service trade unions began talks on Wednesday at the Workplace Relations Commission on a possible extension to the public service pay agreement.

Unions are seeking to reopen the current pay deal to take account of inflation, with recent union conferences hearing calls for pay increases of up to 10 per cent.

The Department of Public Expenditure has consented to a review of the deal but sources say there is no chance of an agreement to pay the sort of increases that union delegates demanded at the recent conferences. Public sector workers are currently due an additional 1 per cent in October under the current deal.

The two sides began formal talks at the WRC on Wednesday after several informal exchanges in recent weeks. Afterwards, Mr McGrath said that he expected the negotiations to be “difficult and challenging”.

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He added: “It is in everyone’s interests that we secure industrial peace through collective agreement but it remains to be seen if this is possible.

“We have to strike the right balance and achieve a deal that is both fair and affordable, fair to the taxpayers generally and fair to the public servants who we employ and who are represented by the unions,” Mr McGrath said.

Fórsa general secretary Kevin Callinan, who leads the union negotiating team as chair of the ICTU Public Services Committee, said he was focused on the gap in living standards that has emerged since Building Momentum was agreed in late 2020.

“Our sole focus is on pay, the cost of the living and the way in which inflation is impacting on public service workers. Neither side expected 18 months ago that inflation would outpace the agreement in the way it has. After we triggered the review clause three months ago, the Government accepted that the economic assumptions underpinning the deal had changed and things have got a lot worse since then,” he said.

There were mixed views among unions and Government sources about the prospects for a wider agreement — a possibility raised repeatedly by the Taoiseach in recent days, when he said that he wanted to see engagement between unions, employers and Government about an agreement that could trade wage restraint for Government action to reduce the cost of living and improve public services.

Speaking at the European summit in Brussels earlier this week, Mr Martin said that a “collective, society-wide response [to inflation] is better for the country rather than different sectors pursuing it on single issues right across the board.

“I think it would be more coherent for the country to approach it in this way and that is what we will explore to see if that can be achieved,” he said.

Some Government sources are enthusiastic about a deal and believe that tax cuts, investment in public services, cuts to the cost of third level education and childcare could be exchanged for wage restraint from workers. One person involved in discussions in Government said such a deal could be done quickly over the summer.

Others are more sceptical, and think a short-term agreement on wages is more likely, with a broader deal taking longer to work out. Trade union sources also express scepticism about a deal and say that they haven’t received any detailed proposals from Government.

“We’d be open to it but we haven’t been given any indications about how and when it might work,” one union source said.