Public sector employees will wonder how their earnings are to be protected against inflation, writes Peter McLoone
Unions
The second benchmarking report, published yesterday, is a lengthy and detailed document, which will require careful study over the coming days and weeks. However, the first reaction of most public servants is one of disappointment. Many are angry.
The report's controversial conclusion that most public servants should get nothing has been shaped by two decisions. First, the benchmarking body changed its methodology from that used in the first exercise. Second, it imposed a much higher premium on pensions this time.
Most public servants will accept that any increases recommended by the benchmarking body must be supported by the evidence in its surveys of public and private sector pay and benefits. But they are also likely to conclude that the body's decision to change its approach was influenced by the relentless criticism of the first report and of the benchmarking process itself. (Ironically, yesterday's report trashes one of the main criticisms - the wild myth that public servants earn 40 per cent more than private sector workers.) The benchmarking report itself acknowledges that its change of methodology is "open to criticism," yet it gives no reason for the change. Many will conclude that it was simply designed to minimise the pay awards.
The same goes for pensions. It is clearly unfair that the thousands of public servants on low and middle incomes have had their pensions valued at 12 per cent of salary, almost the same as those on six-figure salaries whose pensions were recently valued at 15 per cent. A departmental secretary general, who will retire on a pension of €150,000 a year, may see this as fair. A low-paid special needs assistant with little job security or pension expectation will not.
The report now presents the Government with some big challenges over pay, public service modernisation and the future of public pay determination.
The pay expectations of most public servants and most unions were realistic when we went into the process. But zero awards for all but 15 of 109 benchmarked grades will certainly leave thousands of public servants asking how their standards of living are now going to be protected against growing inflation.
Going into next month's pay talks, the Government and employers face a trade union movement more united than ever. Not just on pay and the growing gap between those at the top and bottom of the pile, but on crunch issues like the exploitation of agency workers, which now threatens to drive down pay and working conditions in health and other public services just as it has in many parts of the private sector.
The benchmarking report covers some 300,000 workers - or a sixth of the total workforce - most of whom have traditionally been supporters of national agreements. The pay talks will now have to deliver pay increases significantly above inflation. The Government and employers should be under no illusion. Failure to produce an acceptable deal will create a very real risk of rejection by the workers that have hitherto been the bedrock of social partnership.
The benchmarking report presents the Government with a second challenge over the future of public service modernisation. Since benchmarking was established, pay policy has been the main driver of change in public service working practices and working conditions. (This is also true of the private sector, where big changes in banking, finance, aviation and other sectors have been oiled by pay settlements above those set out in national agreements.)
Since the first benchmarking report was published in 2002 public servants have had to deliver modernisation and changed working practices before any pay awards - under benchmarking or national deals - were sanctioned. Detailed modernisation plans were agreed for each sector (health, education, local government, and so on) and performance verification groups (PVGs) had to confirm that workers and their unions complied with these before any pay increases were sanctioned. The PVGs were made up of equal numbers of employer, union and independent members and each has an independent chairperson.
Impact has criticised management's modernisation agenda, saying it is far too focused on internal structures and practices and has done too little to improve people's access to, or experience of, public services.
They've been obsessed with delivering pain for public servants rather than gain for people who use public services. But the relatively junior staff covered by benchmarking had no influence over this.
Over-criticised public servants will welcome the report's acknowledgment that there has been significant public service modernisation. They share the public's desire for more and better services. And they have delivered all the change demanded of them under the first benchmarking exercise. In 2002, the Government decided to link pay and public service modernisation through the benchmarking process. It will have to rethink its approach in the aftermath of yesterday's report.
Peter McLoone is general secretary of Impact, the largest public sector trade union in the Republic, and chairman of Ictu's public services committee