Talks are continuing this evening between the Government and public service unions on plans to reduce the public service pay bill.

The Government has effectively set a deadline for the current talks to end by tomorrow.

Following the rejection of the Croke Park II proposals by trade unions last month, it asked the chief executive of the Labour Relations Commission, Kieran Mulvey, to report back by tomorrow on whether he believed a negotiatied solution was possible on its intention to reduce the public service pay and pensions bill by €300 million this year and by €1 billion over the next three years.

If Mr Mulvey reports that a negotiated agreement is not possible, the Minister for Public Expenditure and Reform Brendan Howlin is expected to bring proposals to Cabinet on Tuesday aimed at securing the pay savings unilaterally.

These proposals are expected to include pay cuts, a freeze on increments and reductions in premium and overtime rate payments as well as revised rosters for certain categories of staff.

Unions have already warned that such unilateral action would lead to possible industrial action.

Tánaiste Eamon Gilmore said today that the Government's preference was for a negotiated settlement.

“That’s why we’ve asked Kieran Mulvey to have direct discussions with each of the individual unions. He’s been having those discussions with him. He’ll be reporting back to Brendan Howlin tomorrow and we will hear at Cabinet on Tuesday the outcome to that. Our preference remains for a negotiated resolution of the issues.”

Asked if he would give Mr Mulvey more time to secure agreement should he need it, Mr Gilmore said time was not on the Government’s side. “We do have to achieve the savings. There’s €300 million that has to be achieved this year. There’s been quite an amount of time now spent since the ballot in consultation. I would hope, and our preference remains, that there should be a negotiated solution.”

Siptu president Jack O’Connor today suggested that the new talks at the Labour Relations Commission had the potential to produce an agreement.

However he said it was “quite clear” that the proposals that were rejected by trade union members last month, would not be accepted if they were “simply tweaked”.

He said the Government had “to temper its aspiration in terms of the €1 billion” proposed cut in the public service pay and pensions bill.