The Irish Times view on the public pay deal: the Government pays up for peace

Detailed summary

The trade unions will be satisfied with their work in negotiating a new public sector pay deal, which their members would do well to accept. They took advantage of the delay in…

Government negotiators should have ensured that the real talking started earlier – much earlier. Leaving it until after the budget was presented left too little time and inevitably ran into this week’s events, giving the unions an opportunity to threaten disruption. The initial pay offer of 7.5 per cent was clearly too low and this wasted valuable time early in the talks process.

It is not clear what the Government side will get in the form of increased productivity in return for the pay increases. There are general commitments to cooperate with reform, including in the adoption of AI and the Government wants new rostering arrangements in some areas. But sectoral plans still have to be drawn up, with reports due by March 2027. More key productivity measures should have been tied down in tandem with pay. Now the pay increases have been agreed up front and the Government’s leverage is gone.

The focus on higher pay increases for lower paid and often younger employees is welcome as they face the most intense cost-of-living pressures. The terms here – ironically largely negotiated by older, senior civil servants – are generous and well ahead of expected inflation. This may also be a clever move by the unions as they seek to attract younger members. For the more highly paid, the deal should match or exceed expected inflation. Many public servants also benefit from annual pay increments.

There are risks for both sides – inflation could spike or economic problems could cause difficulties for the public finances. A clause in the agreement says that either side can trigger a review if conditions change “significantly.” Where the bar might be set here is not clear.

The cost of the deal to the exchequer is significant at €5.2 billion, though a chunk will be repaid via higher income tax. In inflationary times, it was never going to be cheap. For more highly paid public servants the increases are likely to be broadly in line with the private sector.

The Government had the leeway to…

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