Talks between trade unions and the Department of Public Expenditure on a possible new public sector pay deal will get under way later this month, with senior sources on both sides pointing to the possibility of a deal before the summer.
The existing pay deal runs until the end of this year, with public servants due a further 1 per cent pay increase in October. However, in the light of surging inflation, the unions have triggered a clause in the deal that allows for a review if circumstances change substantially.
The unions triggered the clause two weeks ago, and Government sources said that officials from the Department of Public Expenditure would meet Irish Congress of Trade Unions officials before the end of April.
Unions are under pressure from the activists on rising costs, and that pressure is expected to grow as they enter conference season for the trade unions. “This is the only thing being discussed at branch agms and so on,” said one senior union source.
A Government source said officials would meet with the unions before the end of this month to “sound each other out”, with a view towards entering negotiations before the summer. If a deal was agreed, it could be ratified by the unions over the summer and take effect in the autumn, effectively superceding the existing agreement, with bigger pay increases for public servants than the scheduled 1 per cent later in the year.
“If that’s the timetable they’re thinking of,” said one trade unions source, “we’d need to get started.”
Minister for Public Expenditure Michael McGrath suggested an extension to the current deal at the weekend, but unions will seek further pay increases this year, whether there is an extension or a new agreement.
Some Government sources favour a new agreement of short duration, perhaps for one year, which would allow the two sides to return next year when the political and economic environment may be more stable.
Government officials have warned, however, that demands from some union figures for pay rises to match the rate of inflation were unrealistic, and would not be agreed by any government. “There’s no way were going to 6 or 7 per cent, that’s not going to happen,” said one senior source.
The Department of Public Expenditure says that each additional 1 per cent on the public pay bill costs about €250 million in a full year.
It is also understood that the Government is likely to hold out the possibility of tax reductions of some form in the budget later this year as part any offer to the union.