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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure IE-2022-19/2407 – measures in Ireland

Revised public sector pay agreement concluded amid cost of living concerns

Country Ireland , applies nationwide
Time period Open ended, started on 06 May 2022
Context COVID-19, War in Ukraine
Type Bipartite collective agreements
Category Responses to inflation
– Increasing income in general
Author Roisin Farelly (IRN Publishing) and Eurofound
Measure added 23 May 2022 (updated 18 September 2022)

Background information

In early 2022, the Irish Congress of Trade Unions Public Services Committee (PSC) invoked a review clause in the public sector pay agreement (the 'Building Momentum agreement') because of high and sustained inflation, which was not anticipated when the agreement was negotiated in late 2020.

In February 2022, Kevin Callinan, the leader of Ireland’s largest public service union, Forsa, said the Building Momentum agreement had not kept pace with inflation and that talks on a successor agreement “must prioritise the restoration and improvement of living standards in the context of high inflation.”

In May, Minister for Public Expenditure and Reform, Michael McGrath, directed his officials to enter into exploratory discussions with Public Service Unions and staff associations “in relation to an agreed way forward on public service pay issues”.

The first set of talks at the Workplace Relations Commission talks failed to reach agreement when union negotiators rejected a Government offer totaling 5% (on top of existing pay adjustments). Talks resumed on 29 August and the newly proposed terms will now be put to union members in ballots.

Content of measure

Under the previously agreed current public sector pay agreement, 'Building Momentum', public sector workers received a % or €500 a year (whichever is the greater) from 1st October 2021, with a further 1% or €500 a year (whichever is the greater) from 1st October 2022. There was also the equivalent of 1% increase through sectoral bargaining from 1st February 2022 (many public servants received this as a straight 1% payment).

The new proposals are in addition to the ones above and are as follows:

  • 3% with effect from 2 February 2022
  • 2% with effect from 1 March 2023
  • 1.5% or €750 a year (whichever is the greater) with effect from 1st October 2023

According to the Fórsa union: “In percentage terms, the package is worth an additional 6.5% between February 2022 and December 2023, on top of existing Building Momentum pay adjustments. But the cash floor of €750 (in October 2023) means a higher percentage increase for workers who earn below €50,000.”

Use of measure

More than 300,000 public servants will be covered by the Agreement if it is accepted by union members.

Contents

  • Pay increases

Target groups

Workers Businesses Citizens
Particular professions
Does not apply to businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Social partners jointly
Trade unions
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Only trade unions
  • Main level of involvement: Peak or cross-sectoral level

Involvement

Public sector trade unions and employers negotiated a revised public service pay agreement against the background of rising inflation and cost of living.

Views and reactions

ICTU PSC chairperson Kevin Callinan said he believed the outcome was the best that could currently be achieved through negotiations. “We’ll now be explaining this package to union members, who will have the final say in ballots. Neither side has achieved all it sought, but this package is a significant improvement on the pay terms of Building Momentum, and it is worth more to those who need it most. This underlines the importance of the unions’ decision to invoke the review clause in the current agreement.”

Minister for Public Expenditure and Reform, Michael McGrath said: “The backdrop to these negotiations on public service pay has been exceptionally challenging given the cost of living pressures affecting public servants and the rest of society, while at the same time the government is facing a highly uncertain international economic environment." "The government’s objective from the outset has been to strike a fair deal for public servants that is also affordable and sustainable for taxpayers generally. I am satisfied that the proposal from the WRC meets this objective, and I will be recommending acceptance of this proposal to government."

"If the proposed agreement is ratified, it enables the government to move quickly to alleviate some of the impact of inflation on our public service workers, as well as securing industrial peace. Under the proposed agreement, the benefits for those on lower levels of pay will again be higher than the headline percentage increases.

"Given that the public sector pay bill accounts for one third of total current expenditure, the proposed agreement represents a vital piece of the jigsaw for Budget 2023. It also serves to protect public services at a time of significant global uncertainty."

Sources

  • 15 February 2022: Call for public service pay talks to prioritise restoration of living standards (www.forsa.ie)
  • 06 May 2022: Minister McGrath approves exploratory discussions on Public Service Pay (www.gov.ie)
  • 19 May 2022: Government willing 'to go beyond' terms of current public sector pay deal (www.rte.ie)
  • 20 May 2022: McGrath: Difficult balance to strike on public sector pay (www.rte.ie)
  • 30 August 2022: WRC-proposed public pay package skewed to lower paid (www.ictu.ie)
  • 30 August 2022: Minister McGrath welcomes outcome to public service pay talks (www.gov.ie)
  • 31 August 2022: Minister McGrath secures government approval of Public Service Pay Deal (www.gov.ie)
  • 02 September 2022: Public pay proposals: Your questions answered (www.forsa.ie)
  • 05 September 2022: Review of Building Momentum Proposal (ICTU) (www.gov.ie)

Citation

Eurofound (2022), Revised public sector pay agreement concluded amid cost of living concerns, measure IE-2022-19/2407 (measures in Ireland), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/IE-2022-19_2407.html

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