ANALYSIS:The one-day strike is over and talking will resume. Possible compromises are emerging, writes MARTIN WALL.
THE TRADE unions will today resume talking with the Government on an alternative plan for cutting the public sector pay bill by €1.3 billion next year without reducing pay levels. In the background, the unions will be armed with a mandate for a further one-day stoppage scheduled for Thursday of next week if negotiations fail.
At the same time, the Government is entering the talks with a determination to proceed with pay cuts across the public sector, unilaterally if necessary if no agreement can be reached on an alternative plan.
The outline of a possible alternative has been known for some time. However, time is now very short for the negotiations to conclude successfully with the budget only a fortnight away and as ever the devil will be in the detail in any deal.
Any agreement is likely to involve generating the significant savings sought by the Government on the public sector pay bill by scaling back the number of staff on the State payroll and by introducing wide-ranging reforms to work practices and existing productivity arrangements.
However, such savings will not materialise until 2011 at the earliest so a second strand to any agreement will have to deal with measures aimed at cutting costs next year. These are the so-called “bridging mechanisms” that parties close to the process have been talking about over recent weeks.
For the first time publicly yesterday the chairman of the public services committee of the Irish Congress of Trade Unions, Peter McLoone, acknowledged that it would “be necessary to agree some temporary measures to cut payroll costs in 2010 because reforms were unlikely to deliver the necessary savings before 2011”.
The details of these bridging mechanisms have not been published but highly placed sources maintain that the menu of options from which they will be drawn will include:
Paying overtime at flat rates rather than time and half;
Introducing an 8am-8pm core day during which no overtime payments would apply;
The introduction of a number of days unpaid leave;
The possibility of staff working a small number of additional hours per week;
The elimination of privilege days at Christmas and Easter.
Such bridging measures are likely to hit the overall earnings of staff and there is no guarantee that this plan will be acceptable to everyone at the table.
There are also important details that would have to be worked out about how the pain from these “temporary measures” would be shared between the different categories of public sector workers.
There are also questions on how some of the proposed measures would work. How, for example, would the introduction of a day or so per month of unpaid leave operate in schools?
However, it might be easier for unions to sell painful measures involving cuts in overtime or allowances or unpaid leave as temporary measures to remain in place until the substantive savings from job reductions and reforms come on stream in subsequent years.
Unions could argue that workers would be able to claw back their traditional conditions if they produced verifiable savings in other areas in the years ahead.
Such a scenario could also prove attractive from the Government’s perspective.
In the public service in the past governments have used the carrot of additional money such as the benchmarking awards to secure reforms. Under this proposal the stick – in the form of the bridging mechanisms – would be to the fore and workers would have to verifiably increase productivity and change work practices if they wanted the cuts introduced next year to be reversed in the future.
The reform strand of the forthcoming talks will be based on a Government document published late last Friday night under which it envisaged a leaner, more agile and more effective public service in the years ahead.
The over-arching philosophy behind the document is that more will have to be provided with fewer resources in the coming years.
The document indicates that the number of staff on the State’s payroll will fall substantially over the coming years and it signals that the current controversial moratorium on recruitment in the public service will remain until 2014.
It also proposes what sounds like a voluntary redundancy scheme when it maintains that “targeted exit mechanisms may be needed to address situations where it is impractical to redeploy people”.
However, the language used is measured. For instance, there is no specific reference to the HSE’s demand made in talks with unions several weeks ago for arrangement to compulsorily redeploy personnel.
One highly placed source said the theory behind the two-strand approach was that it would allow all of the parties “to stay in the game” for the present.
It has been widely reported that there are serious potential tensions on the union side in the talks between those representing staff who receive the bulk of the earnings in core salary and those representing workers such as nurses, gardaí, prison officers etc who receive a considerable proportion of their pay through various allowances.
Everyone is still on board as the new talks resume but it remains to be seen whether they will all remain on board.
In the absence of an agreement, a second one-day strike will take place on December 3rd, while the Government will also certainly reinstitute its original plan for pay cuts in the budget the following week. But the Government will also be bearing in mind that if it unilaterally cuts pay, it could effectively be saying goodbye to co-operation with its wider objective to secure public sector reform.
Martin Wall is Industry Correspondent