Dáil debates

Thursday, 6 November 2014

Ceisteanna - Questions - Priority Questions

Public Sector Staff Remuneration

9:30 am

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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2. To ask the Minister for Public Expenditure and Reform the implications of his proposal to delete section 2B of the Financial Emergency Measures in the Public Interest Act 2009 for the take-home pay of Civil Service and other public sector workers; and his plans for future negotiations with the public sector trade unions. [42275/14]

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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My question is in a similar vein, although it refers specifically to the Minister's proposal to delete section 2B of the FEMPI Act of 2009. As we all know, this gave him unilateral power to cut the pay of public servants and increase their hours. What is the implication of the repeal of that section for the take-home pay of civil service and public sector workers, and what are his plans for further negotiation with public sector trade unions?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I thank the Deputy for the question. The Government has accepted my proposal to amend the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 by the deletion of section 2B, which was inserted into the Act by section 2 of the Financial Emergency Measures in the Public Interest Act 2013. Section 2B provided that existing powers under any other enactment could be exercised to reduce non-basic pay - premium and overtime rates - or increase the working hours of individual public servants. This was a limited contingency measure whose effect was confined to confirming that existing powers to make changes to working time and remuneration rates other than basic pay may be exercised to effect less favourable terms if required to secure necessary savings in the public service pay bill. The provision was regarded as a necessary backstop to enable measures to be taken, in the absence of agreement with employees, to secure the absolutely required savings.

As the Deputy will be aware, rather than acting unilaterally to reduce pay as its predecessor did, the Government chose last year to continue to negotiate with public service unions. As a consequence, we were able to reach an acceptable agreement which provided not only a basis for savings in the public service pay and pensions bill of up to an additional €1 billion in the period to 2016, but a way to address all matters relating to working hours and non-basic pay.

The powers provided under this section did not need to be exercised and were not exercised, and the requirement to have the powers on the Statute Book, in my view, has now passed.

As I said in my reply to Deputy Sean Fleming, I am committed to keeping the emergency legislation under general review, which is important. Because there is such concern among public servants generally and their representatives about this power it is appropriate to delete it, now that it is no longer required.

As regards future negotiations with public service trade unions, I have stated the Government's position is that the Haddington Road agreement will last until 2016. The cost reductions, productivity increases and the reform dividend which allow me to recruit new front-line staff continue. This demonstrates that the agreement is delivering and making a significant contribution to the achievement of the fiscal consolidation target as we work to achieve a deficit below 3% of GDP by 2015.

9:40 am

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I welcome the deletion of the measure. At the time it was regarded correctly as a very negative development, not just in terms of the pay and conditions of public service workers but also a real intrusion on the voluntarist system of collective bargaining which had traditionally operated in this jurisdiction. It gave the Minister unilateral powers, which he said he did not use. Of course, he did not have to use them because it was the stick, rather than the carrot, that he used in his dealings with the public sector trade unions. It is very important that the Government now accept that that type of measure, be it an emergency measure or otherwise, was wrong and that it commit to using the traditional form of negotiation and bargaining with the unions.

On the issue of pay recovery, the subject of the second part of my question and the one most immediately in people’s minds, is the Minister saying that, notwithstanding the hoopla about the repeal, public service workers will not see any improvement in their pay packets between now and 2016?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I agree with much of what the Deputy said. I am a strong supporter of free collective bargaining. The problem we faced in recent years was a real threat to the viability of the economy and we were required to make savings across all fronts, all of which were challenging and difficult, not least the very large contribution we required the public service to make, as it consumed one third of the total current budget. Public servants stepped up to the plate and voted to accept the Haddington Road agreement. We must now work towards normalising the relationship between public service employers and public servants in normal dialogue. That will happen as we emerge from the crisis.

On the impact of the repeal of section 2B, clearly, as it was never invoked, its repeal will not have any monetary impact.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister will recall that at the time he did not invoke the provision as he did not have to do so. Public sector workers felt that, while they were nominally around the table for discussions, in fact, they were on the menu. They felt hugely disempowered. The Minister took an onerous power onto himself. It is welcome that the measure will be repealed and removed from the Statute Book and I hope it will never reappear in any incarnation in the future.

There is a difficulty with the issue of pay recovery and I have discussed the matter previously with the Minister. Lower grade public servants and civil servants on lower pay are struggling badly, not unlike others in society and the economy. Whatever is the detail of the repeal of specific mechanisms, the real question for them is when there will be some relief in their pay packets, pockets and households. The Minister is aware that many people who work for the State rely on family income supplement to make ends meet. There is an urgent need to address the matter, starting with the low paid, not with those in the upper echelons, and to set out and agree in a concrete way, rather than in a theoretical way, to the milestones people might expect to see in respect of pay recovery. As the Minister was quick enough to set out milestones for cuts and the damage to people’s income levels, he should set out a positive trajectory in terms of pay recovery.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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A number of questions were raised. First, each union voted on the issue. For the first time every single union voted, with the exception of the Irish Hospital Consultants Association, to accept the framework.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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It was a case of accept it, or else.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That was in stark contrast with the actions of the previous Government. Public servants understood our capacity to maintain public services was under threat unless we all contributed in the way we had set out.

In terms of another section 2B being necessary in the future, I hope it will not. I hope we never again face the type of existential threat to the economy that we faced in steering the ship of State in recent years. Please God, we will never have that level of disaster visited on us again.

I strongly agree with the Deputy in her question on low pay. That is the reason the Government has determined to establish a low pay commission that will apply not only to the private sector but also to the public sector. We want to ensure that not only do we restore full employment in the State, which is our objective – yesterday we saw that the unemployment rate was still very high, but it is now 11% and falling – but also that those who are in work have a liveable wage.