Pay Restoration – What it means for you
The Public Service Pay and Pensions Bill passed in the Dail this month and enabled the implementation of PSSA pay adjustments including a 1% increase from 1st January 2018.
More significantly, it establishes a legal timetable for the dismantling of the hated FEMPI legislation. This is what SIPTU and other unions have been working for since the pension levy was first imposed on public servants in 2009.
The PSSA will see pay restoration for all those earning up to €70,000 a year by the end of 2020 while also preserving the value of public service pensions. Low paid workers will be completely out of FEMPI pension levy provisions by 2020. This will be done by increasing the pension levy ceiling from €28,750 to €34,500 for all workers.
This will be worth a total of €575 per year.
Click here for Consolidated Salary Scales with effect from 1/1/2018
What do the proposals mean for my income overall? (Read the PSSA in full here)
- By 2020, more than 90% of public servants will be out of FEMPI pay provisions, and almost a quarter will have exited FEMPI pension levy payment
- 73% of public servants gain more than 7% by 2020
- 1st January 2018: 1% pay adjustment
- 1st October 2018: 1% pay adjustment
- 1st January 2019: Pension levy threshold up from €28,750 to €32,000 (worth €325pa)
- 1st January 2019: 1% pay adjustment for those earning less than €30,000
- 1st September 2019: 1.75% pay adjustment
- 1st January 2020: Pension levy threshold increased to €34,500 (worth €250pa)
- 1st January 2020: annualised salaries up to €32,000 to increase by 0.5%
- 1st October 2020: 2% pay adjustment
The Lansdowne Road agreement was due to expire in September 2018. The proposed Public Service Stability Agreement implements the first tranche of pay restoration from January 2018.
- A combination of pay and pension levy adjustments worth 7.4% to those earning €30,000 a year or less, over the lifetime of a deal.
- A combination of pay and pension levy adjustments worth between 7.0% AND 7.4% to those earning between €30,000 and €50,000 a year, over the lifetime of a deal.
- A combination of pay and pension levy adjustments worth 7% to those earning between €50,000 and €55,000 a year, over the lifetime of a deal
- A combination of pay and pension levy adjustments worth between 6.6% and 6.9% for those between €55,000 and €80,000 a year, over lifetime of a deal
This table sets out the combined pay and pension levy adjustments in different salary bands.
Column 6 of the main table shows the total percentage adjustment for staff employed before January 2011 (excluding those with ‘fast accrual’ pension arrangements). Column 4 of the second table shows the same for staff employed after that date.
What about the restoration of the Haddington Road pay cuts?
The 2011 Haddington Road agreement introduced temporary pay cuts for staff who earned €65,000 a year or more. This was a third pay cut, which didn’t apply to staff on less than €65,000 a year. The restoration of these cuts began in April 2017. Full restoration of this cut will be implemented, as previously agreed, on 1st January 2018.
Is there any good news for ‘new entrants’ – people who started work after 2011?
It should be recalled that unions secured an agreement in 2013 to merge the new entrant pay scales with the pre-existing pay scales.
The new entrant pay scales had been introduced by the Government in 2011, without agreement. The effect of the 2013 improvement was to place the new entrants on the old rates albeit with two additional incremental points.
The proposals would establish a 12-month process in which the Public Service Pay Commission will explore how best to improve pay scales that were lengthened. Unions wanted to remove some scale points to boost incomes for new entrants and equalise the number of years it takes for pre – and post- 2010 entrants to reach the top of pay scales.
However, management refused to simply remove the two additional scale points, which were added to the bottom of many pay scales. These points were introduced as part of the deal that did away with entirely different pay scales – worth 10% less than older staff on every point of the scale – which was imposed without an agreement in 2010.
Is the pension levy being clawed back through additional pension contributions?
Between 2018 and 2019 the pension levy ceiling will be increased from €28,750 to €34,500 for all staff except those who benefit from ‘fast accrual’ pension arrangements. This will be worth a total of €575 per year. The remainder will remain as an additional pension contribution.
Staff who joined the public service on or after 1st January 2013 will pay a smaller additional contribution. This reflects the fact that their pension benefits are less favourable than staff who joined before that date.
Staff who are currently on ‘fast accrual’ pension arrangements (i.e. where it takes fewer years’ service to accrue full pension benefits) will make additional pension contributions.
SIPTU has worked to ensure the highest possible threshold for the additional pension benefits. And we also ensured that the value of pensions is unchanged, despite suggestions that future pension years would be calculated on a less- valuable ‘career average’ basis, and that future pension increases should be linked to inflation rather than pay movements.
Going into the talks, the Government was adamant that public servants should pay more towards their pensions. This was on foot of a Public Service Pay Commission (PSPC) recommendation, which said pension contributions should increase to reflect the fact that public service pensions are worth more, on average, than those in the private sector. In the event, it wasn’t possible to simply ignore a specific PSPC recommendation.
What’s been agreed on outsourcing and agency staffing?
There has been no change to existing outsourcing protections that unions won in the Croke Park and Haddington Road negotiations.
Management wanted to water down existing protections that require management to consult with unions and produce a business plan setting out the case for what it calls ‘external service delivery’ if it wanted to outsource a service or part of a service. Crucially, it can’t cite labour costs (i.e. pay) as part of the business plan. They also wanted to amend the rules to allow projects worth €10 million or less to be outsourced without reference to existing protections, or any consultation.
This is a considerable victory for SIPTU and the wider trade union movement as abandoning the ‘labour cost’ provision would mean pretty much every business case would support outsourcing – on the basis of minimum wage and rock-bottom workers’ rights – regardless of the impact on service quality and worker protections. We’ve avoided that in these talks.
On agency staffing, the proposals require management to engage with unions with a view to minimising the use of agency staff as much as possible.
Will I have to work Saturdays if I back these proposals?
No. The proposals allow for reviews of rostering arrangements if service needs or operational needs suggest they might be necessary. But they also acknowledge the need for rosters to ensure ‘predictability of attendance,’ and says no roster changes can be introduced without agreement.
Is there any reduction in working time?
There is no general reduction in working hours. However, there is new provision that gives staff the option of a permanent return to ‘pre-Haddington Road’ hours on the basis of a pro-rata pay adjustment. Staff can opt into this arrangement at the beginning of a new deal (January-April 2018) or at the end (January-April 2021).
There is also provision to convert annual leave into flexitime, which could help staff with temporary need for more flexible working arrangements.
Although these two provisions fall far short of the restoration of additional hours, they at least give options to staff for whom time is more important than money. This was the best outcome available in the current talks.
Unions wanted a return to pre-2011 hours. However, the Minister for Public Expenditure and Reform, Paschal Donohoe, and his officials were adamant that they would not do a deal that restored working time lost under previous agreements (the so-called ‘Croke Park hours’). Unions repeatedly raised the issue, but the other side would not budge, saying the additional working time was worth a total of over €583 million to €621 million a year – money that would in any case come out of the pay-restoration pot if conceded.
Will my Saturday premium payment disappear if I back these proposals?
No. There will be no change to existing Saturday premium payments.
Are there any changes to overtime payments?
From the outset in January 2018, non-pensionable overtime payments would no longer be subject to the pension levy. This would increase the value of overtime payments by around 10%.
Unions called for the full restoration of overtime rates, which were cut during the emergency, but management was not prepared to concede this in the context of other aspects of income restoration.
There is no change to the civil service overtime divisor.
Does it address the mandatory retirement age?
The proposals concede that issues for employees who must retire at 65, now that the state pension is paid at age 66, “need to be addressed as soon as possible,” and says that unions will be consulted over Government proposals on the matter.
The proposals commit management to ensure that work-life balance arrangements (including flexible working) are available to the greatest possible extent across the public service. They say disputes of local and sectoral implementation of work-life balance arrangements can be processed through normal disputes resolution processes. And they say management in each sector must monitor progress on gender balance in career progression.
Recruitment and retention issues
The proposals say unions can make submissions to the Public Service Pay Commission on recruitment and retention issues identified in its report. The Commission will then do an analysis of the causes of the problems in each specific area and recommend options to deal with them by the end of 2018. The implementation of the Commission’s recommendations will then be considered by unions and management.
The proposals also commit the parties “to discuss” more open recruitment “where this is appropriate to meet particular organisational needs.”
It also includes safeguards over the use of internships, clinical placements, work experience and job activation measures by saying there must be “agreement on protocols” on cooperation with such programmes.
Starting pay on promotion
The proposals acknowledge barriers to mobility in the public service and contains a commitment to a review of the current arrangements on starting pay and transfer and promotion in the public service.
CORU and other professional registration fees
The proposals would fix CORU and other professional registration fees at their current rate, at least until the expiry of an agreement in December 2020.
The proposals contain a commitment to a process to deal with outstanding adjudications, “having due regard to their continued validity and cost,” which will conclude by the end of September 2018.
Is there anything on performance management?
The proposals require performance management systems to be introduced in parts of the public service where they aren’t already in place.
If I’m paid weekly, will this change?
In circumstances and subject to consultation payroll operations can be modified.
Other productivity measures
The proposals say productivity measures set out in the Lansdowne Road agreement will continue to apply and will be updated to reflect various renewal policies, which are named in the text.
Do the proposals prohibit strikes/industrial action?
As with all previous public service agreements, industrial action is ruled out in situations where the employer is abiding by the agreement. As usual, the proposals include a binding process for dealing with problems that arise without recourse to industrial action. These restrictions do not extend to matters not covered by the agreement.
Why did the negotiations happen now?
The Lansdowne Road agreement (LRA) is due to expire in September 2018, although there were no further pay adjustments scheduled between now and then. For over a year, the unions have been seeking accelerated pay restoration.
Initially, the Government resisted, but last December it conceded the point following the publication of Labour Court recommendations on Garda pay. On foot of talks with unions, the Government agreed to (1) bring forward a scheduled 2017 pay adjustment of €1,000 a year from September to April 2017 and (2) to open talks in May on an extension to the LRA.
By bringing the process forward, under these proposals SIPTU and other unions can achieve acceleration of pay restoration from September 2018 to January 2018, if they are accepted by members in the public service.
What would be the duration of a deal?
It would run from 1st January 2018 to 31st December 2020. The duration of a deal ensures that over 90% of public servants (those earning up to around €70,000) will be out of the FEMPI pay cuts by the expiry of the proposed agreement (see table 3).
Read a letter from SIPTU Vice President, Gene Mealy here