IMPACT general secretary sets out pay priorities of largest public service union

Issued 15.05.14

The leader of Ireland’s largest public service union today (Thursday) set out his union’s priorities for pay and income restoration arising from a “slow and fragile” economic recovery. IMPACT general secretary Shay Cody told his union’s biennial delegate conference in Killarney, county Kerry, that the union would:

  • Pursue pay increases in the public service once the Government meets its target of bringing the deficit below 3% of GDP, which is predicted to happen in 2015
  • Seek the restoration of frozen increments in the community and voluntary sector, and pursue pay increases in the sector to match any movement in the public service
  • Seek and support a continued “successful wage round” in the private sector among companies that can afford to pay
  • Work with other unions to make the recently re-established Joint Labour Committees effective in protecting pay and working conditions in the economy’s lowest paid sectors, and
  • Continue to prioritise job creation as the core economic policy because employment is the biggest determinate of income for most individuals and their families. Mr Cody said employment “must remain a top priority across the union movement, including among public service unions.”

Mr Cody told his conference that virtually everyone was worse off now than they were a few years ago, “but it has happened in different ways depending on where you work and what your personal circumstances are.” Unions were now “moving from the necessary and difficult defensive position of the last half-decade to a strategy of income recovery,” he said.

Mr Cody said we were now seeing pay movement in parts of the private sector, which was good news for the economy and the exchequer because higher pay delivered more consumer spending and more tax income than retained company profits. Although it was too early for a return to national agreements, he said: “We will eventually need a national framework for productivity and wage movement in the environment of a single currency and global competition.”

He said Joint Labour Committees – wage setting mechanisms for low-paid sectors, which have just been re-established after a successful legal challenge from employers – must “again become effective in protecting the pay and working conditions of those in the lowest paid sectors.” Mr Cody said that, although his union did not have members in the sectors covered by JLCs, “IMPACT will continue to contribute its resources to the ICTU campaign for decent pay and conditions for low-paid private sector workers.”

On public service pay, Mr Cody said unions had advised the Government that they would lodge a pay claim if and when the State’s finances “improved to a degree that would lead us to believe that the Exchequer could cope. In practical terms, once it is clear that the Government is on target to achieve the Euro requirement of a deficit of less than 3% of GDP in 2015 – and they are predicting that they will – we believe the Exchequer will be in a position to cope,” he said.

The union leader, who also chairs ICTU’s Public Services Committee, said public sector unions had to consider how best to develop a pay claim. “We need to honour the commitment that lower paid workers should be prioritised, but acknowledge that it will be difficult to secure a critical mass of public servants to support a claim that only applied to those who earn less than €35,000.” He outlined two possible ways of approaching this issue:

  1. Considering whether unions could rally around a flat-rate increase “as a way to deliver on the promise [to lower-paid public servants] while commencing income recovery for all,” and
  2. Considering whether unions should seek a reduction in the pension levy rather than increases gross wages.

Mr Cody said public servants had experienced average pay cuts of 14% through the so-called ‘pension levy’ and direct salary cuts, while those earning over €65,000 experienced a third pay reduction in 2013. Although the IMPACT executive had recommended the Haddington Road agreement on the basis that the alternative would almost certainly have been worse, he said “we shouldn’t downplay – or allow others to downplay – the impact of the agreement in terms of working time, working conditions and, for some, pay. Neither should we let others forget the previous sacrifices in terms of pay, or efforts in terms of delivering more services with many fewer resources.”

IMPACT also launched paper called Living on Less: Changes in earnings, incomes and employment during the recession , which found that

  • Over the five years to December 2013, average public sector weekly earnings decreased by 5.1%, while average public sector hourly earnings fell by 5.4%. These figures do not include the so-called pension levy, which has further reduced public service incomes by 7% on average.
  • Over the five years to December 2013, average weekly private sector earnings fell by 3.4%, while average private sector hourly earnings were stagnant.
  • Increased taxes and state charges had added to income decline, with CSO figures showing that average disposable household income fell by just over €8,500 between 2008 and 2012.
  • The average effective direct tax rate for Irish households increased from 12.8% to 13.5% between 2007 and 2010. This rises to just over 24% when indirect taxes are added. However, at 29%, Ireland’s tax-to-GDP ratio is the second lowest in the euro area.
  • During the recession, unemployment rose from under 5% and peaked at just over 15%, before falling to 11.7% in April 2014.
  • The average number of paid working hours fell by 2.5 in the five years to December 2013, despite increases in some sectors.

IMPACT’s conference is taking place in the INEC in Killarney, county Kerry today and tomorrow (Friday), when the Tanaiste Eamon Gilmore will speak.