Brendan Howlin (Wexford, Labour) | Oireachtas source

I propose to take Questions Nos. 1 and 5 together.

Last December on behalf of Government I extended an invitation to the members of the public services committee of the Irish Congress of Trade Unions to enter discussions with public service management on a new agenda for reductions in the cost of delivery of public services and substantial longer-term productivity improvements and workplace reforms. Intensive engagement has taken place in recent weeks between the parties to the discussions, which were facilitated by the Labour Relations Commission. The discussions concluded last Monday morning. I attended a plenary meeting of the parties to the discussions at which the Labour Relations Commission tabled proposals of an agreement.

This has been a remarkably challenging and complex process. The Government had sought to reach an agreement that allows substantial costs to be extracted and enhances public service productivity to the benefit of all those who rely on public services while also ensuring that savings were achieved in a way that is broadly equitable and that impacts most on those who are best able to afford it. The Government stated from the outset that to support its determination to restore order to the public finances and to meet its fiscal targets an additional saving of €1 billion in the public service pay and pensions bill would need to be achieved by the end of 2015 and that €300 million of this saving would be needed this year to meet our spending targets.

I am pleased to report that the revised measures as recommended by the Labour Relations Commission have been evaluated as meeting the budgetary targets of the Government over the lifetime of the agreement. They address many of the concerns expressed by the staff representatives during the negotiations as well. I recognise that all public service workers have already made a significant contribution to our economic recovery. However, these further measures are absolutely required to achieve a sustainable reduction in payroll costs sufficient to enable us to meet our fiscal targets. I acknowledge that the negotiators for the public service unions were able to mitigate the effect of several management proposals.

The draft agreement will run for three years from 1 July 2013. It contains several measures aimed at significant cost extraction and changes to terms and conditions of public service workers, all of which have the objective of returning the public service pay and pensions bill to a sustainable path. Detailed proposals were published yesterday evening and copies have been placed in the Oireachtas Library.

I will outline the main elements of the proposed agreement. This is a three year agreement to run from 1 July 2013. Over the course of the agreement the overall savings target set by Government will be achieved. There will be direct pay reductions for those on remuneration in excess of €65,000. An increment freeze of varying lengths at different pay ranges is provided for. There will be a three year freeze for those earning over €65,000, two three month freezes, i.e. two 15 month increment periods rather than 12 months periods, for those earning between €35,000 and €65,000 and a single three month freeze for those earning under €35,000, that is, instead of a 12 month increment cycle there will be a 15 month increment cycle. In the interests of equity there will be balancing measures for those on the maximum of the scale through loss of leave or partial temporary recoupment of an increment.

There will be additional productivity through extra hours worked from most public servants. Those currently working 35 hours or under will in future work a minimum of 37 hours. Those working between 35 and under 39 hours will in future work 39 hours. Remaining overtime costs will be paid at a reduced rate of time and a half at the first point of the scale for those on less than €35,0000, and time and a quarter to individuals on the scale above €35,000. Public servants on 39 hours who work overtime will make available one unpaid hour of overtime per week. Twilight payments will be eliminated and a reduced rate of time and three quarters for Sunday pay will be implemented. Supervision and substitution payments in the education sector will be eliminated. A range of additional savings associated with the agreement relate to the defence and prison sectors and public service pensions etc. and all of these are laid out in the published document.

A range of additional savings have been proposed and a series of long-term workplace reforms have been agreed as part of the deal as well. These include: revision of flexitime arrangements and work sharing patterns, revisions to redeployment provisions, strengthened performance management arrangements and proposals in the area of grade restructuring.

I have made clear throughout the process that this is a draft agreement based on proposals by the Labour Relations Commission. It is now a matter for the trade unions and the representative associations to consider the proposals in advance of putting them to a ballot of their members in accordance with their rules and regulations.

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