Dáil debates

Thursday, 2 July 2015

Ceisteanna - Questions - Priority Questions

Lansdowne Road Agreement

9:35 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 pay related provisions in the Lansdowne Road agreement for annualised salaries over €65,000; in addition, details of the full pay restoration provisions for salaries in excess of €65,000, at the conclusion of the Haddington Road agreement; and if he will make a statement on the matter. [26504/15]

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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The Minister has described here again this morning the Lansdowne Road agreement as a mechanism by which he proposes to unwind the Financial Emergency Measure in the Public Interest Acts, FEMPI, to use his language. Much of the commentary around this agreement has focused on people in lower pay grades and my question seeks to complete the picture. I have asked the Minister the implications of this agreement for earners on annualised salaries of over €65,000 and to provide detail of the full pay restoration provisions for those on the same salaries in excess of €65,000 at the conclusion of the Haddington Road agreement.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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As part of the measures required to repair the Government finances and meet our international commitments to reach a GDP deficit target of 3% or below this year, it was necessary for the Government to secure agreement with unions and associations representing public servants for the introduction of significant productivity measures and also additional pay cuts for public servants earning over €65,000 from 1 July 2013.

Following detailed negotiations, agreement was reached with the unions and associations on a collective agreement, the Haddington Road agreement, under which public servants earning annual salaries of over €65,000 had their pay reduced by between 5.5% and 10%. There was also a commitment in that agreement for the restoration of the 2013 pay cuts in two equal phases. The recent proposals for the extension of the Haddington Road agreement, which is the Lansdowne Road agreement, simply reconfirms that position.

The Government intends to honour that commitment subject to the acceptance by the unions and associations of the Lansdowne agreement proposals. Under these proposals, for those public servants on annualised remuneration up to €110,000, restoration will be in two equal phases; the first phase of restoration will take place in April 2017 and the second phase in January 2018. For those on annualised remuneration in excess of €110,000 restoration will be in three equal phases with the first phase due to take place in April 2017 and the two remaining phases in April 2018 and April 2019.

The pension related deduction measures contained in the Lansdowne Road agreement also apply to those on annualised salaries over €65,000. On 1 January 2016, the exemption threshold for payment of pension related deduction will increase from €15,000 per annum to €24,750 per annum - that is the exemption threshold - and on 1 September the exemption threshold for payment of pension related deduction will further increase further from €24,750 per annum to €28,750 per annum.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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I thank the Minister for that reply which was very helpful. Let us consider this in the round. Rather than looking at the Lansdowne Road agreement and Haddington Road agreement separately, they must be viewed as a whole to understand what is happening in respect of what the Minister calls a measured and prudent unwinding of FEMPI. Those earning less than €65,000 will have about €1,000 per annum in their pocket. Nothing has been done about the additional hours being worked, which the Minister knows is causing great difficulties, particularly for many women, parents and carers within the public and Civil Service. There is a very partial approach for those set of earners but once one earns over €65,000 one will see a full unwinding of FEMPI in pay terms and it is in inclusive of allowances in the nature of pay between €65,000 and €110,000. It seems to be a tale of two unwindings - very partial for those under €65,000 and comprehensive for the higher earners.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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No. On the contrary, the Deputy is fundamentally wrong. The whole focus of Lansdowne Road agreement was to concentrate pay restoration initially on the lowest paid. If one considers what has happened with the unions, that is the reason the recommendations for acceptance have come largely from the lower paid. The ones that are resisting, such as the Association of Higher Civil and public Servants and the association representing doctors, feel that pay restoration is not quick enough for the higher paid and that is their complaint. Therefore, the Deputy is quite wrong. We have to understand what FEMPI is. The Financial Emergency Measures in the Public Interest Acts amounts to an emergency measure to cut pay. We have to restore that because although I laid a report before the House on 29 June in regard to the need for the FEMPI legislation to continue as the economy recovers, and thankfully that recovery is continuing and please God it will continue, there will be a case to be made that the FEMPI legislation should fall and we need to have an orderly unwinding of that.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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What I would say back to the Minister is that he is guilty of a very deliberate sleight of hand because he is deliberately insisting on looking at Lansdowne Road agreement and setting aside the Haddington Road agreement. We have to view the two of them to understand what the Minister's unwinding of the FEMPI legislation looks like and what the consequences of it are. He has provided a partial level of relief for those earning less than €65,000. I am not surprised that workers in that category and their trade unions would recommend acceptance of some relief.

That is entirely logical and if I were in their shoes, it is what I would do. To understand the dynamics of what is going on, one must consider both the Lansdowne Road and Haddington Road agreements. At the top of the tree, there is no pay restoration for those on more than €110,000, and that is good, but for those between €65,000 and €110,000, there would be a full restoration of pay. That is a very different approach from those earning less than €65,000. Despite the Minister's rhetoric, the focus has not really been all about the lower earners. I acknowledge that he has given a bit but he has been far more generous to people earning more money.

9:45 am

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Again, the Deputy is just not right, but she knows that. The Lansdowne Road agreement focuses entirely on the low paid.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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The Haddington Road agreement.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy is talking about the Haddington Road agreement but we debated that at length. People knew what was coming in that agreement and there was a solemn commitment that when we cut people's pay, we would, in time, restore it. It was an emergency measure and there is no legal authority simply to cut people's pay forever.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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They are all emergency measures.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It had to be done in a structured way. I am now beginning to unwind that process so it does not fall by court challenge. I am doing it in a focused, fair way, initially restoring pay to the lowest paid. That has been acknowledged and understood by the trade union negotiators, who have their members' interests much closer to their hearts than the Deputies opposite.