Updated, 14:01

THE GOVERNMENT and the trade unions representing most of Ireland’s 292,000 public service workers have concluded the first steps on extending and amending the terms of the Croke Park pay deal.

A proposal for an agreement to cut €1 billion from the public pay bill was finalised just after 11am this morning after a final 13-hour session of talks in Ballsbridge, which followed the withdrawal of four unions from the negotiations last night.

The proposals include pay cuts for higher-earning public workers, a freeze on increments for all staff, extended working hours and cuts to the Sunday premium and overtime rates.

In the education sector, supervision and substitution payments will be eliminated – though sources in teachers’ unions said new entrants to the sector since 2011, who have taken proportionally larger pay cuts than older peers, would be protected from this, either by having the allowance secured or by moderate pay increases.

In exchange, the public service pension levy will be cut slightly; the €15,000 to €20,000 band rate will be cut from 5 per cent to 2.5 per cent.

• At a glance: What’s in the proposed public pay deal >

Public Expenditure minister Brendan Howlin, who joined the talks this morning to help conclude a deal, said he was confident today’s proposals would be “the last ask” made of public servants. He said:

All public sector workers have already made a significant contribution to our economic recovery, however, these further measures are absolutely required to achieve a sustainable payroll cost.

Howlin said he hoped the public unions would acknowledge what he saw as the requirement for the “balanced measures”.

The proposal from the Labour Relations Commission will now go to ICTU’s member unions to be ratified on an individual basis, with a majority of ICTU unions required to ratify the deal before it can take effect.

SIPTU president: Proposals are not a ‘deal’

SIPTU general president Jack O’Connor stressed that the proposals did not form an ‘agreement’, but rather a commonly agreed proposal from the Labour Relations Commission which now needs to be approved by unions and their members.

“Ultimately it’ll come down to individual union members casting vote on a single ballot, one way or another,” O’Connor told RTÉ’s Today with Pat Kenny.

He added that the key question being put to union members would be whether they felt the deal was better than one they might secure after industrial action.

When you recognise that justice has been thrown out the window in this country years ago, when you look at the question as to whether or not you would be likely to do better as a result of a protracted industrial battle [...] the debate will, I would expect, focus in on the strategies of the people who decided that you would do better [by taking industrial action].

Members would “have to weigh up: is this strategy feasible, is it working, is it worth the risk,” he said.

ICTU: ‘Better protections’ than across-the-board pay cuts

Unions said the agreement would bring an end to the “two-tier” public service, where newer entrants to some professions were paid significantly less than those who had entered the system shortly before them.

ICTU, which is the vehicle by which the agreement can be ratified by public workers, said the negotiations had resulted in “better protections for public servants than across-the-board pay cuts” or other unilateral measures the government had threatened.

ICTU officials at the talks said union input helped to blunt the edge of “virtually every element” of the proposals being tabled by the Government.

“We have achieved far more through negotiation than we could have hoped to gain through protests,” ICTU public services committee chairman Shay Cody said in a statement.

It added that Unions had not accepted the plans to cut “so-called ‘higher pay’”, but that their input meant pay rates would only be cut for the highest-paid.

The deal looked to be on the line when four unions – representing doctors, nurses, midwives, and low-paid civil servants, with a total membership of about 64,000 – walked out of the talks last night.

With two Garda bodies having left the talks and psychiatric nurses opting not to participate, the deal reached this morning was struck by unions representing about 70 per cent of the total public workforce of 292,000.

If ratified, the provisions of the deal would take effect on a three-year basis from July 2013. The existing Croke Park Agreement remains in place until June 2014.

Read: Pat Rabbitte: Ministers and TDs should ‘lead by example’ and take paycut