REFORM:THE GOVERNMENT has set a deadline of next September for the Croke Park agreement on public service reform to begin delivering savings on its pay bill.
The memorandum of understanding on the €85 billion financial package agreed between the Government, the EU and the IMF effectively warns that commitments given to public service staff on pay and compulsorily redundancies in the deal will be reviewed if the savings sought do not materialise by the end of the third quarter next year.
The memorandum states: “The Government will consider an appropriate adjustment, including to the overall public service wage bill, to compensate for potential shortfalls in the projected savings arising from administrative efficiencies and public service numbers reductions.”
In its plan on economic recovery last week, the Government said it wanted to save up to €400 million on public service pay next year.
Under the terms of the Croke Park agreement, the Government has given a commitment not to cut public service pay and not to introduce compulsory redundancies until 2014 in return for co-operation with a widespread series of reform and efficiency measures.
The memorandum appears to suggest that if the savings envisaged as a result of reforms under the agreement do not materialise by next September, the protections for staff set out in the deal in relation to pay and numbers could be reassessed to generate the required reductions in the pay bill.
The Irish Times reported last month that the Croke Park deal would be reviewed next year.
However the memorandum, published yesterday, sets out the situation in starker terms than had been previously stated officially.
Meanwhile, the memorandum also states that the planned cut in the national minimum wage will come into effect next May.
The document also repeats that the Government wants to enlarge the scope of the inability-to-pay clause in the legislation governing the national minimum wage.
The memorandum states that in future employers will be able to invoke this inability to pay clause on more than one occasion.
“These measures should come into effect by May 2011,” it adds.
