Public pay needs to keep in step with emerging pay improvements – IMPACT

Shay Cody, IMPACT general secretary.

Irish economic recovery has kick-started a series of pay improvements in the private sector, further upward pay movement will happen this year and the public service needs to keep in step, according to IMPACT, Ireland’s largest public sector trade union.

Speaking at the annual Industrial Relations News (IRN) conference today (Thursday 12th March) at the O’Reilly Hall in UCD, IMPACT general secretary Shay Cody said “Pay movement is not just a sign of economic recovery. It’s one of the elements that really drives recovery. Wage rounds are clearly underway in the private sector. The public service needs to keep in step with those developments.”

Mr Cody said that pay rises in the financial, retail, construction and multinational sectors were early indicators of wage recovery, and added that recent data from a Price waterhouse Coopers’ (PwC) survey revealed that, in 2014, 64 per cent of firms had planned to increase pay. “That has increased to 78 per cent for this year, and next year it moves up to 88 per cent of firms expecting to improve pay. It’s a pattern we can’t ignore, particularly after such a long period of retrenchment on pay” he said.

Mr Cody said that pay improvements of between two and three per cent appeared to be the norm, and that this would have a beneficial effect on the economy as long as it was replicated wherever employers could afford to do so. He added that last year’s CSO figures on pay revealed that average annual earnings had actually fallen despite economic growth and longer working hours.

Mr Cody added “Pay improvements across all sectors are key to boosting domestic demand. Most of that money goes straight into Ireland’s small and medium businesses because extra cash in workers’ pockets is more likely to be spent locally.

“This will be a key driver of job creation and the improvement of living standards generally. This cycle of activity is vital if the Government is to achieve its target of full employment by 2018. Every trade union wishes to see this objective realised, but it can only be achieved by enabling workers to spend more in the domestic economy” he said.

Mr Cody said that talks with the Government on how to unwind pay cut legislation appeared to be getting closer. “The deficit target is on course to be achieved this year and our borrowing costs are lower than a lot of EU states, including Britain and France. These are all signs that something positive can be done on public service pay. We can achieve this in a way that’s keeping in step with what’s happening in the private sector. Wage movement is just one vital ingredient of economic recovery, and public service pay improvement is just one element of that” he said.

IRN Conference

Shay Cody was taking part in a panel discussion on wage bargaining prospects for 2015 and beyond: private and public sectors, scheduled as part of the IRN conference for 9.20am:

“This discussion will take into account of the results of the IRN CIPD pay survey; the need for business competitiveness; equity considerations and affordability; the Government’s commitment regarding the “orderly winding” down of FEMPI (emergency pay legislation) and the well-flagged talks between public service unions and Government. Do we require a new national structure to manage wage bargaining in the private sector – a ‘sensible’ form of social partnership, as the LRC chief executive, Kieran Mulvey, called for recently? Or should the private sector stick with the new form of ‘constrained wage bargaining’ that has emerged in recent years, which combines some of the stability of national deals with the flexibility of local bargaining?”

Included on the panel: Danny McCoy (CEO, Ibec); Shay Cody (General Secretary, Impact); Patricia King (General Secretary designate, ICTU); Mike McDonnell (MD, CIPD).

The programme for the conference can be downloaded here.