OVERNIGHT, NEGOTIATIONS BETWEEN government and unions ended without an agreement for the second time in the ongoing public service payment talks.

Unions have said the offers from government so far have been “extremely disappointing” while Minister for Public Expenditure Paschal Donohoe said last night that the state is attempting to “strike the correct balance” in the agreement.

Negotiations take place routinely between the state and unions representing those in the public sector in order to come to an agreement on the pay and conditions for all workers in the public service.

This includes those who are gardaí, teachers, nurses, prison officers and carers down to administrative workers and civil servants working in the healthcare system and other government agencies.

The state aim to create multi-year deals in order to plan ahead in future budgets and avoid annual negotiations. Donohoe today said he believes multi-year agreements “serve our public services and those who worked in our country well”.

The majority of the cohort are represented by the Irish Congress of Trade Unions (ICTU), a collective trade union who represent 44 different unions and over 800,000 workers.

ICTU’s Public Service Committee (PSC), other smaller unions and the Minister for Public Expenditure usually discuss and thrash out the agreement in the public sector pay talks.

In 2022, these talks became a priority for government and unions as they attempted to negotiate a pay agreement which would make sure public servants were not being priced out of the cost of living.

After weeks of talks, both parties agreed to extend what was known as the ‘Building Momentum agreement’, that introduced incremental pay increases for the duration of 2023.

These negotiations are always tough, but over the last 15 years they’ve become even tougher. Currently unions are working towards restoring their pay scale to what it once was before the financial crash.

What impact did the financial crash have?

After the global financial crash in 2008, through successive austerity measures taken in government budgets, pay conditions were slashed by over €4 billion in 2009 for those in the public sector.

In some services of the public sector there was a 7% cut to pensions, promotions across all public services were prohibited and income tax rates and other duties were doubled.

It all areas of the public sector, spending was cut. At the time, it was reported as the state’s “most severe budget“.

ICTU-affiliated unions held strikes throughout 2009 in opposition to these pay cuts in the emergency budget that year and Budget 2010.

Then-chairman of the PSC Peter McLoone said temporary measures would have to taken to cut payroll costs as reforms were unlikely to deliver enough savings before 2011.

McLoone said he believed it was possible to agree an alternative that would achieve the savings required in 2010.

What was decided?

Years of public pay talks focused on curbing further austerity cuts. In brokered deals between unions and government better conditions, safeguards and pay were negotiated in return for longer hours and fewer allowances.

Following intense negotiations in 2010, ICTU and other unions agreed to the ‘Croke Park Agreement‘.

The agreement would cease further pay cuts, ban compulsory redundancies and see a review conducted every spring of public pay conditions until 2014.

Working hours of many in the public sector employees were increased as a part of the deal.

Following the unions’ refusal to extend this deal for another three years in 2013, talks took place in the Spring where the ‘Haddington Road deal‘ was drafted and accepted – with a heavy heart – by most unions.

The deal again saw increased working hours for public sector employees, flexitime arrangements frozen for incumbent workers (and limited for future workers), allowances scrapped or significantly decreased for teachers and the Defence Forces and pay cuts for those on above-average incomes.

While many unions told their members to accept the deal, teachers from the ASTI most heavily contested it.

The group took industrial action by striking in September 2013, with secretary general Pat King saying at the time that the priority was not about pay but the “changing of structures”.

Then-public expenditure minister Brendan Howlin and Tánaiste Eamon Gilmore ruled out any renegotiation of the Haddington Road deal following the announcement of the strikes.

However, in the year that followed Howlin revealed that public service employees’ earnings will be slowly restored.

The subsequent Lansdowne Road Agreement saw an extra €2,000 given back to civil servants in 2014.

So, what are they about now?

The Lansdowne deal was a turning point for unions, where the focus shifted away from preventing austerity measures to restoring the conditions that were stripped of workers in 2009.

This turning point has been a tough challenge for the state to traverse through. While successive ministers have quipped that government must maintain balance in the pay scales, the unions have argued that the public sector is not catered to enough.

The cost of living crisis, beginning in 2022, drastically highlighted this argument.

Unions argued that workers had been priced out of markets and that the Public Service Stability Agreement – brokered in 2017 – was not keeping up with the rising cost of living and the level of inflation in the state. 

This was despite over 90% of workers having gained pay restoration, according to trade union Impact, by 2020 from the deal.

The ‘Building Momentum deal’ was agreed in 2021, which saw incremental pay increases introduced over two years. This deal was extended in October 2022 in order to tackle the cost of living.

Why didn’t they reach an agreement today?

With the final increment being implemented in October 2023, Minister Paschal Donohoe invited the PSC to discuss the next agreement in November.

These negotiations failed to reach an agreement before Christmas and, as of 3am last night, that has not changed.

Donohoe said unions last night were offered a pay increase of €2.9 billion last night in a deal where those on the lowest incomes working in the public service would be set to benefit “by around 12%”.

Donohoe told reporters today that the offer made to unions last night was considered a “very significant proposal” by government.

He detailed that offer would total increases of “just over €2.9 billion” over two years with 8% increases over that period. He added that the aim is to ensure those on lower incomes see increases of over 12%.

The unions however are arguing that the government is not using the same initiative to take steps towards curbing the impact that inflation has on their member’s pay as they did to protect the economy in 2022.

Lead negotiator for the unions, general secretary of Forsa Kevin Callinan said that the difference between what was offered in the ‘Building Momentum agreement’ and inflation has resulted in a 19% gap in the difference of pay to public sector workers.

Board members of the PSC, made up of the leaders of Forsa, INMO, Siptu and INTO have claimed the deal undermines the government’s position ahead of the negotiations – that they would protect workers from inflation – and that the agreement “lacks credibility”.

Callinan said: “In contrast to its recent measures to address the cost-of-living challenge on the National Minimum Wage and social protection payments, where it has demonstrated a real pragmatism, its approach to completing a public service pay agreement lacks credibility.”

The minister said earlier that he is “disappointed” after public sector pay talks between the Government and trade unions failed to reach a new deal after a late night of intensive negotiations.

Donohoe said: “What I would ask now is that the representatives of the unions reflect on the magnitude of the proposal that was made.”

However, the PSC today confirmed that it has agreed on the wording of a ballot for industrial action has been agreed upon, and warned that they have unions poised to commence a ballot should it become necessary in the coming days.