Written answers

Thursday, 6 November 2014

Department of Public Expenditure and Reform

Public Sector Staff Remuneration

Photo of Clare DalyClare Daly (Dublin North, United Left)
Link to this: Individually | In context | Oireachtas source

19. To ask the Minister for Public Expenditure and Reform the steps he will take to tackle low pay in the public service. [42003/14]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
Link to this: Individually | In context | Oireachtas source

Notwithstanding the necessary imposition of pay reductions on public servants through the Financial Emergency Measures in the Public Interest Acts 2009-2013, terms and conditions including pay rates for public servants have traditionally been determined through collective bargaining processes with due regard to statutory provisions including the National Minimum Wage Act. Indeed, the Deputy will be aware that one of the first actions of this Government on taking office was to increase with effect from July 2011, the Statutory Minimum Wage rate, reduced by the previous Government in 2010, to its pre-existing rate. While the fiscal emergency which arose through the mismanagement of the economy by the previous Government gave rise to the exceptional statutory reductions in pay imposed on public servants, the process of collective bargaining has survived and has been highlighted by the concluding of difficult public service agreements including most recently, the Haddington Road Agreement, by staff representatives and their public service employers. 

In relation to the pay reductions imposed on public servants through the Financial Emergency Measures in the Public Interest Acts 2009-2013, the reductions imposed have been progressive, thereby ensuring that reductions imposed impacted on low paid workers least and that higher reductions were imposed on the higher paid. Significantly, the more recent  pay cuts applied to public servants under the Financial Emergency Measures in the Public Interest Act 2013 and the Haddington Road Agreement apply only to those higher paid public servants on annual salaries of €65,000 or more. The core pay of 87% of the workers in the public service was not reduced by the legislation.

The Haddington Road Agreement sets the terms of pay in the public service until 2016.  The fiscal targets in Budget 2014, which the Government is committed to achieving, are based on the reduced remuneration rates as well as on the revenue accruing from the Pension Related Deduction and Public Service Pension Reduction as provided for under the Financial Emergency Measures in the Public Interest Acts.

In order to continue the recent encouraging evidence of progress in relation to the public finances, any amelioration in the impact of the Financial Emergency measures, and public service pay policy generally, will continue to have regard to our overall fiscal targets including achieving a deficit of less than 3% of GDP by the end of 2015.  Nevertheless, the Government has acted to begin an amelioration of the measures. As provided for in the Haddington Road Agreement and subsequently legislated for in the Financial Emergency Measures in the Public Interest Act 2013, the rate of PRD on the €15,000 to €20,000 band of pay received in a year fell from 5% to 2.5% on 1 January 2014. This rate cut is worth €125 annually in gross terms to most public servants, with those taxed at the standard rate enjoying the greater gain in terms of an increase to take-home pay.

The public service unions have indicated their intention, should the State's financial circumstances permit, to lodge a pay claim next year.  If such a claim is made the Government will of course have to consider it, in line with the prevailing fiscal position. The legal position concerning the financial emergency legislation, which has underpinned the reductions to date, will also have to be addressed as part of putting in place more normal pay setting arrangements in the public service for the future.

Comments

No comments

Log in or join to post a public comment.