Doctor bonuses could lead to knock-on claims

Following the economic crash and the consequent widespread job losses, salary cuts and pay freezes, the whole concept of employment bonuses became politically toxic.

However, the difficulty for the Government will be how to handle any moves towards reintroducing bonuses as the economy improves, particularly given the outrage that greeted revelations of performance-related pay in Irish Water.

In 2009 the then Government scrapped bonus payments for staff in the Civil Service and in other parts of the public service when it terminated a performance- related scheme.

However, only last Saturday, Minister for Health Leo Varadkar raised the prospect of the introduction of "a system of bonuses and excellence awards" for hospital consultants as part of reforms of their contracts.

Whether the re-establishment of a such a bonus system could be limited to senior doctors without knock-on claims for similar arrangements in other parts of the public service remains to be seen.

In the case of non-commercial State agencies, Government policy has been that performance-related pay schemes be suspended on an indefinite basis.

Newly appointed chief executives, or those who were being reappointed, were no longer to have access to such arrangements previously included in the employment contracts.

Problematic

The situation was potentially more problematic in the commercial State sector, which has to compete directly with the private sector.

In 2012 the Government, following a review, restated a position it had adopted the previous year and requested that commercial State companies, in light of the serious state of the public finances, should not award bonus payments to their chief executives. However, the Government has no statutory authority in relation to performance-related pay schemes for staff in commercial State companies below chief executive level.

The Department of Public Expenditure and Reform told The Irish Times "it is expected that the boards of these organisations will act responsibly in designing and implementing pay structures that drive performance in the competitive environment in which they operate, while ensuring that they are fully compliant with Government pay policy".

Not affordable

Last year, Minister for Public Expenditure and Reform

Brendan Howlin

said that while performance-related payments were not affordable in the public service at that time, he was not against them in principle.

In a debate on public service reform, he said: “We need to have a debate about performance-related pay. It is easy to talk about the notion of bonus payments as being unacceptable.

“Performance-related pay is the norm in the commercial sector. All commercial companies set targets and reward people who overachieve, and there are consequences for those who underachieve.

“We need a debate about performance-related pay, not to say that performance- related pay should never be given.”

In the light of the controversy about performance-related pay at Irish Water – even though this formed part of a deal that eliminated effective automatic entitlement to incremental pay rises – it remains to be seen what the view of future administrations will be on this issue.

The department said: “In November 2013 the Minister for Public Expenditure and Reform stated, following consideration of the matter by Government, that at an appropriate time in the future he will submit a memorandum to Government seeking to implement a pay-related award scheme [at chief executive level in commercial State companies].

“This remains the position, and no further review has been carried out to date.”