Your Questions Answered – Proposals on a Review of ‘Building Momentum’

In March 2022 the Public Service Unions of the ICTU (PSC) invoked the Review clause in Building Momentum because of high and sustained inflation, which was not anticipated when the agreement was negotiated in late 2020.
On 30th August 2022, the Workplace Relations Commission (WRC) published proposals for a public service pay package aimed at resolving differences on pay between public service unions and the Government.

The PSC met and agreed that individual unions should consult and ballot their members on the proposals. The PSC will meet again on 7th October 2022 to make a collective decision on whether to accept or reject the package.

What are the pay proposals being balloted on now?
The package would make the following pay adjustments:
• 3% with effect from 2nd February 2022
• 2% with effect from 1st March 2023
• 1.5% or €750 a year (whichever is the greater) with effect from 1st October 2023. The €750 a year floor means those on lower incomes will receive a larger percentage increase than higher paid staff (see below).

Is this in addition to existing Building Momentum pay adjustments?
Yes. The WRC-proposed increased would come on top of those paid and scheduled under the original Building Momentum agreement.

These are:
• 1% or €500 a year (whichever is the greater) from 1st October 2021. This floor of €500 provided higher percentage increases to workers on lower incomes.
• The equivalent of 1% increase through sectoral bargaining from 1st February 2022. This fund was used as a general pay round (PAC Division) and to address long-standing claims with the Health Division.
• 1% or €500 a year (whichever is the greater) from 1st October 2022. Again, the €500 floor means those on lower incomes will receive a larger percentage increase than higher paid staff (see below).

How do lower paid workers benefit more?
In percentage terms, the package is worth an additional 6.5% between February 2022 and December 2023, on top of existing Building Momentum pay adjustments.

But the cash floor of €750 (in October 2023) means a higher percentage increase for workers who earn below €50,000. This includes special needs assistants, most clerical staff, and general operatives.
For example, the salary level of a person earning €25,000 a year would increase by 8% and the salary level of a person earning €37,500 would increase by 7%.

These measures when taken in conjunction with the provisions of Building Momentum provide significant increases to workers on lower incomes.

When would I receive the 3% increase due in February 2022?
If the package is accepted, the first additional increase of 3% will be backdated to 2nd February 2022. This would appear in pay packets as a ‘lump sum’ back-payment after the agreement is ratified. This would likely be in November or December 2022.

Are there additional non-pay elements to the package?
While there are no additional non-pay elements in this specific package, the Government came to the negotiations promising that economy-wide cost-of-living supports would accompany any pay improvements. These are expected to come through the 2023 Budget announcement (scheduled for 27th September 2022) and the Labour-Employer Economic Forum (LEEF), which is Ireland’s main national forum for social dialogue between unions, employers and Government.

Does the WRC package affect sectoral bargaining under Building Momentum?
No. The ‘sectoral bargaining fund’ established under the original Building Momentum agreement is not affected by the WRC proposals. Groups of public servants that opted to use this 1% fund to address outstanding adjudications, recommendations, awards and claims relevant to specific grades, groups or categories of workers will continue to do so. Groups that opted to use the allocation as a straight 1% payment have either received it, or are due to receive it with effect from 1st February 2022.

Do the pay improvements apply to allowances?
The increases would apply to pensionable allowances and the higher hourly rates will also benefit through recently-restored overtime/on call allowances.

What about part-time workers, job-sharers, etc?
If the proposed agreement is accepted, pay adjustments will be delivered through revised pay scales. Part-time workers and others who don’t work full-time hours will get pro-rata adjustments based on the number of hours they work.

Who would the package apply to?
The package would apply to workers currently covered by the Building Momentum agreement, including staff directly employed in the civil or public service, staff in ‘section 38’ agencies, and staff in Non-Commercial State Agencies.

Are there any productivity measures in the package?
There are no additional productivity measures in the WRC-proposed package. It reaffirms the measures in the original Building Momentum agreement.

What is the duration of the WRC-proposed package?
The package would extend the duration of Building Momentum by one year, so that it would expire on 31st December 2023. Unions would expect to be in negotiations on a successor agreement around the middle of next year.

How would this affect public service pensioners?
Under public service agreements, increases in public service pay scales are generally reflected in public service pensions that are linked to pay scales. The PSC has written to the Minister for Public Expenditure and Reform seeking confirmation that, if accepted, this will apply to the WRC-proposed package in the usual way.

How will a decision on accepting or rejecting the package be reached?
Individual ICTU-affiliated unions representing public servants are now consulting with their members and arranging ballots. The unions will meet again to take a collective decision on whether to accept or reject the package on Friday 7th October. Voting at that meeting will be weighted to reflect the number of public servants that each union represents.

What about planned industrial action ballots?
The ICTU Public Services Committee (which represents most unions in the sector) has recommended that planned industrial action ballots be suspended while unions consult on the WRC package.

Lansdowne Road Proposals Frequently asked questions

Why did the talks take place now?

At the time of the negotiation of the Haddington Road Agreement, the ICTU Public Services Committee took the precaution of writing to the Department of Public Expenditure and Reform advising that if the State’s finances improved to a degree that would enable the exchequer to cope, we could lodge a claim seeking improvements.

In the absence of this letter the management side would have been able to argue that no talks were due until the end of the Haddington Road Agreement in June 2016. This proposed agreement enables income recovery to commence in January 2016 – six months earlier than would otherwise apply. Furthermore, it was recognised that a delay in commencing talks would have run the risk of public servants’ income becoming part of a politicised budget debate.

What increases are contained in the Proposals?

On 1st January 2016 the exemption threshold for payment of the pension levy will increase from €15,000 per annum to €24,750 per annum. This will reduce the pension levy by €600 per annum for all public servants earning above the threshold. On 1st January 2016 annualised salaries up to €24,000 will increase by 2.5% through a partial reversal of the 2010 public service pay cuts. On 1st January 2016 annualised salaries from €24,001 up to €31,000 will increase by 1% via the same mechanism.

On 1st September 2016 the exemption threshold for payment of the pension levy will increase further from €24,750 per annum to €28,750 per annum. This will further reduce the pension levy by €400 per annum for all public servants earning above this threshold. The combination of these measures in 2016 will improve all public service full-time incomes by around €1,000 per annum. On 1st September 2017 annualised salaries up to €65,000 are increased by €1,000.

The Proposals refer to ‘annualised salary’. What is that?

Annualised (basic) salary is the annual salary paid to a full-time employee. Employees who do not work full-time hours earn a percentage of the annualised salary based on their working hours. For example, if an employee is on 50% job sharing, they earn half the ‘annualised salary’ for the position.

How will the increases apply to part-time staff?

Non full-time staff will receive pro rata increases based on the January 2016 and September 2017 increases in annualised salaries. As the pension levy applies to annual income in each calendar year, the benefits for non full-time staff will vary.

Will increments be affected by these Proposals?

No. Under the Haddington Road Agreement there was provision for a three-month increment delay for staff earning under €35,000, two three-month delays for staff earning between €35,000 and €65,000, and two six-month delays for staff earning over €65,000. There is a three-year freeze for staff on salaries starting over €100,000. Once these liabilities are discharged, no further delays arise for any of the categories. Specifically, no delays are created by the Lansdowne Road Proposals.

What will happen to staff who earn more than €65,000?

All public servants, irrespective of their salary, will benefit from the reduction in the pension levy in 2016. In the case of staff who earn more than €65,000 their pension levy will be reduced by €1,000. An important aspect of the Proposals is that it is confirmed that pay restoration for these staff, negotiated as part of the Haddington Road Agreement, will apply on 1st April 2017 and on 1st January 2018.

What happens to the ‘grace period’ under the LRP?

Under the Lansdowne Road Proposals, the Government has indicated that it intends to provide in the legislation for
a further extension of the ‘grace period’ during which both the reduction in pay and any deferral of increment progression, provided for under the Financial Emergency Measures in the Public Interest Act, 2013, will be disregarded for pension purposes. The original ‘grace period’ under the Haddington Road Agreement ran to June 2015. Unions successfully argued for its extension until the expiry of the proposed agreement.

How will take home pay be affected?

The effect on take home pay from the reduction in the pension levy will vary depending on an individual’s income and tax rate. The pension levy currently attracts income tax relief in the same way as pension contributions. When the levy is reduced this tax relief will also be reduced. In essence, the final take home benefit of the €1,000 gross reduction of the levy will vary depending on whether the individual pays tax at the standard rate of 20% or the marginal rate of 40%.

Why are the changes to working hours, twilight payments and overtime rates, agreed under the Haddington Road Agreement, remaining?

The changes to working hours, twilight payments and overtime rates, agreed under the Haddington Road Agreement, were not time limited to the duration of the agreement. Reducing working hours and restoring twilight payments and overtime rates were raised by the union side in the negotiations but the management side was emphatic that it had no mandate from the Government to make any concessions on these issues. There is nothing in this proposed agreement that prevents unions seeking concessions on these issues in a future agreement.

Do the Proposals alter any terms and conditions?

No. In contrast to the Haddington Road Agreement there will be no changes to individual terms and conditions such as working hours, annual leave or sick leave.

Why are the Proposals phased?

Phasing the pay increases allowed the union aspirations to be met in the context of the Government budget frame- work. This is a common feature of agreements in the public and private sectors.

Do the Proposals address outsourcing?

The Parties agreed to reaffirm and strengthen commitments on the use of direct labour to the greatest extent possi- ble, consistent with the efficient and effective delivery of public services. Where any dispute arises on the application of this commitment, the parties will seek to resolve any matter directly and, where this fails, to use the dispute reso- lution mechanisms in the Proposals.

Earlier commitments on consultation and evaluation must be undertaken prior to any outsourcing of an existing service taking place and – significantly – in the evaluation process any cost comparisons shall exclude the totality of labour costs which includes basic pay, leave, premium payments and pension benefits.

Will pensioners benefit from the Lansdowne Road Proposals?

Pensions are not directly covered by the Proposals. However, in a separate engagement with the Irish Congress of Trade Unions Public Services Committee and the Alliance of Retired Public Servants, the management side confirmed that pensions will be increased by way of a reduction in the Pensions Related Deduction made from pensions in payment.

The threshold for the deduction will be increased from its current level of €12,000 – leading to a maximum increase of €900 per annum over the period 2016-17 – which means a total of 80,000 out of 140,000 public service pensioners being exempted from the deduction during this period.

Are there changes to the disputes resolution procedures under the Lansdowne Road Proposals?

No. The Labour Relations Commission (LRC), in commending the proposed agreement to the parties, confirmed that all existing dispute resolution procedures, including sectoral arrangements provided for under the Haddington Road Agreement, continue to apply.

Is there an overall ‘no strike’ agreement?

No. As is normal, the Proposals provide that strikes or other forms of industrial action are precluded in respect of any matters covered by an agreement, where the parties are acting in accordance with its provisions. This is the same clause that was contained in the Croke Park, Haddington Road and previous agreements. There are no prohibitions on strikes or other forms of industrial action on any matters not covered by the Proposals.

Why is the Irish Water Programme mentioned?

The Proposals mention Irish Water in order to provide the means by which our Local Authority workers, who work under Service Level Agreements to the Water Programme, can be engaged with and consulted on changes in their workplace.

Is job evaluation being re-introduced in the Health Sector and Higher Education Sector?

Yes. It is agreed that, if the Lansdowne Road Proposals are ratified, the relevant management and unions will meet to conclude arrangements on the conduct and scope of job evaluation exercises in the Health Sector for Support Staff and Officer Grades. In the Higher Education Sector there will be job evaluation in respect of Library, Clerical, Administrative and Support Grades subject to departmental approval.

Are Section 39 funded bodies covered by the Proposals?

No. Staff in Section 39 funded bodies are not covered by the Proposals. However, the relevant sections will be seeking to engage with the individual employers with a view to unwinding some of the measures put in place in these employments over the last few years.

The Proposals set up a process to ensure that there will be a requirement in their Service Level Agreements that will oblige them to utilise the industrial relations machinery of the State. There is a process to address zero hour contracts and pension gratuity payments for Home Helps.

Do the Proposals affect the current arrangements for the CORU and NMBI fees?

Yes. It is agreed that, if the Lansdowne Road Proposals are ratified, the commitment under the Haddington Road Agreement to freeze the CORU and NMBI fees at €100 per annum will be extended to the expiry of the proposed agreement.