Public sector unions and Government officials are locked in talks over pay increases for about 340,000 State employees.
The negotiations at the Workplace Relations Commission (WRC) are taking place against the backdrop of a cost-of-living crisis and ahead of an early budget where the Government has pledged to help struggling households.
A previous effort to reach a deal collapsed in June and the threat of ballots for industrial action looms over the current discussions.
So what is the background to the talks, what are the unions seeking and what are the chances of an agreement being reached?
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Q: I thought there was a public sector pay deal, what happened to that?
A: The Building Momentum pay deal was struck in December 2020 and offered two 1 per cent increases that were to come into effect in October 2021 and 2022. However, the agreement ends this year and unions had already sought a review due to the cost-of-living crisis.
Q: What was on offer when talks took place in June?
A: The Government, led by Minister for Public Expenditure Michael McGrath’s department offered a combined 5 per cent pay increase, spread across two years. This was on top of the 2 per cent in Building Momentum. Talks at the WRC broke down in June after the unions rejected the Government’s offer as “not credible”.
Q: What did the Government say at the time?
A: In the days which followed senior Government figures expressed hope that talks would resume and suggested it would be possible to reach a deal. Tánaiste Leo Varadkar suggested that a “landing zone” for a deal could involve a higher percentage pay rise for lower-paid workers, tax reform to benefit middle-income earners and “social wage” commitments. The unions define the social wage as a measure of how much better off individuals are from social spending by government. Cost-of-living measures of the kind expected to be included in the budget could fall into that category.
Q: What have the unions said since?
A: Unions said the Government’s offer fell short of inflation which looks to exceed 10 per cent. In July the main public sector unions agreed to a co-ordinated campaign — including balloting on industrial action — aimed at putting pressure on the Government to do more to respond to the rising cost of living. In recent weeks unions have named dates for balloting to begin. Fórsa’s ballot is to start on September 1st. Siptu planned to ballot its members from August 29th though this plan changed to September after invitations for renewed talks in the WRC were issued. The Irish Nurses and Midwives Organisation, the Teachers’ Union of Ireland and Association of Secondary Teachers in Ireland are also to ballot members on industrial action.
Q: How did the renewed WRC talks arise?
A: In mid-August, indications began to emerge that the Government was prepared to make a revised offer. Mr McGrath said the administration was “prepared to make a move” but that pay increases wouldn’t be able to match record levels of inflation. He said the Government “will require the public sector unions to demonstrate flexibility as well”. Fórsa general secretary Kevin Callinan said the Government will have to bridge a “significant gap” with any improved offer but also said unions are prepared to be flexible.
Q: What’s in the revised Government offer?
A: Nothing has been publicly revealed about the offer tabled by the Government. The Irish Times reported on Monday that the new offer would be no more than an additional 1 per cent on top of the existing 5 per cent between now and the end of next year. Union officials heading into the talks on Monday refused to comment on specifics. Though remarks from Mr Callinan suggested an extra 1 per cent may not be enough, highlighting how inflation has exceeded this figure even since June when the talks collapsed. Officials from the unions and the Department of Public Expenditure began the renewed talks at lunchtime on Monday and the discussions continued into the evening.
Q: So what are the chances of a deal and what happens next?
A: There are indications a deal will be struck quickly, if at all. The issues at play are relatively simple: what will the scale of pay increases be and when will they kick in? The Government will want to get an agreement over the line soon so it can include the costs in Budget 2023. Officials have estimated that each 1 per cent increase for the public sector costs the exchequer about €250 million per year. Ministers are keenly aware that more money used for pay increases will mean less room for manoeuvre in other areas like spending measures and tax cuts. However, a failure to reach an agreement — while it could save the exchequer some money — would almost certainly result in industrial action. The ensuing winter of discontent would have a massive political cost for the Coalition. Big efforts to get a deal over the line can be expected in coming days.