Croke Park: What happens now?

Public servants are in uncharted territory following yesterday’s rejection of proposals for an extension of the Croke Park agreement by the Irish Congress of Trade Unions’ Public Services Committee. 

Earlier this week, IMPACT announced that its members had voted to accept the proposed agreement by a margin of 56% to 44%. The turnout of 65% was the second highest ever in an IMPACT ballot while the margin of acceptance was closer than usual. Both figures reflect the fact that this was a very difficult proposition for anyone to endorse.   

Ballot results from other unions meant the proposals were rejected and, for the first time, IMPACT finds itself in the minority among the public service unions. So what happens next?  

For the moment, the ball is firmly in the Government’s court and media statements from ministers suggest two things. First, they seem steadfast in their commitment to make further cuts of €1 billion in the public service pay and pensions bill over the next three years – with €300 million coming this year.

Second, they are in no mood to rush into a response to the ICTU rejection. The cabinet is likely to discuss the issue when it meets next Tuesday (IMPACT’s elected executive meets two days later) but it will be no surprise if it takes another week for a clear Government response to be articulated. Then it will have to act fast if it remains determined to make savings this year. 

The Government has three options:

  1. It could give up on the savings and leave things as they are until the existing Croke Park agreement expires next March. 
  2. It could seek to clarify, or even amend, the rejected proposals – perhaps with the assistance of an external facilitator like the Labour Relations Commission.
  3. Or it could move to impose the cuts – or a worse package – without agreement.

The first option is the least likely. The economic fall-out from it would include the prospect of extra taxes or cuts in services to make the budgetary arithmetic work in 2013 and 2014 plus a damaging dust-up with the troika, which is currently underwriting the cost of delivering public services. Ireland’s growing international reputation would be put at risk and prospects for a successful exit from the troika package next year would diminish.  

Option one would bring temporary relief for public servants, although the protections of the existing Croke Park deal would run out in within a year. Without an unlikely surge in our economic fortunes in the second half of 2013, we’d be heading into negotiations on a successor at precisely the time the budgetary figures were at their worst. It’s hard to see how anything better than the recently-negotiated package could emerge from that. A worse package would be a more likely outcome. 

In the short-term, the second option – an attempt to clarify or finesse the existing package –seems the most likely Government move. But the scope for this is extremely limited. The proposed deal negotiated earlier this year was itself a delicately-constructed package that sought to raise a broadly proportionate contribution from all groups within the public service. Broadly speaking, if €1 billion is still to be saved, you can only make things more acceptable for one group by making it less acceptable for another.  

A clarification that can win support from other unions would be welcome. But as IMPACT made it clear in the media yesterday, we won’t accept a situation where IMPACT members face a worse package in order to appease members of other unions who have voted to reject. If that were to happen, it would be entirely unacceptable to all IMPACT members.  

In this scenario, there is no certainty that the ‘no’ unions would change their view if the proposals were clarified or finessed. In fact some have a long standing tradition of opposing everything on the assumption that others will carry the day. If no majority emerged in favour of a clarified agreement, we would likely find ourselves in the third scenario – the Government imposition of similar or worse cuts to pay and working conditions without agreement. This would also mean the collapse of the existing agreement, leaving the path clear for management to seek to impose anything from compulsory redundancies and increased working hours to cuts in increments, flexitime arrangements and other working conditions.  

IMPACT has said it believes sustained industrial action would be the only way to protect staff in these circumstances. Unions that led the campaign for a rejection have been largely silent on this question and they, too, will be reflecting on the implications of their decision over the coming days. 

IMPACT’s executive made a clear and strong recommendation that the negotiated proposals were the best option for members in the difficult circumstances we find ourselves in. That judgement was accepted by a majority of IMPACT members and it remains our analysis.  

The union also predicted that there’d be uncertainty if the package was rejected. That’s where we are right now. The Government has to make the next move and it will be a little while before we know what happens next. In any scenario, IMPACT’s job now is to protect its members, regardless of whether they voted ‘yes’ or ‘no’ in the recent ballot.