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Public Service Pay Commission Report 

22 May 2017

It seeks to unwind emergency powers while tramping down on workers rights.

The recent report of the Irish Public Service Pay Commission attracted relatively little attention. Its main recommendation, that public sector workers pay more for legacy pensions, attracted a groan from those in the firing line. There was little more in the way of comment.

Yet the report is of huge significance. It sets out a line of march for government and unions in dealing with public sector pay and in gently breaking the news that low pay and poor pensions are the new normal for the Irish economy.

The report may well be the final round in a shell game that has been running since the banking collapse and before. The government run out an austerity regime laid out by the Troika. The trade union bureaucracy reluctantly agrees to the cuts. In between is the committee that provides recommendations and sanctifies the role of the others. The central illusion of the shell game is the supposedly neutral committee, packed with former members of the union bureaucracy and always willing to meet the needs of government and employers.

Rogue’s gallery

The pay commission is a classic example of a rogue’s gallery of collaborators in the service of capitalism.  The three employer’s representatives and one academic are flanked by:  

Kevin Duffy (Chair) an official of the Bricklayers’ Union then the Irish Congress of Trade Unions as Assistant General Secretary in charge of industrial relation,  moving on to the Labour Court.   Duffy chaired the Expert Panel on Water Charges which left the door open to retain a water charging and privatization structure. Even among the current crop of union bureaucrats who populate government commissions, he is known as a safe pair of hands.

After 30 years as a ITGWU/SIPTU bureaucrat, Noel Dowling served on the board of the European Transport Federation, the recognised Social Partner in the European Social Dialogue – partnership with the bosses on a global scale.

Peter Mc Loone was General Secretary of the IMPACT Trade Union from 1995 until his retirement in July 2010 and a former president of ICTU from 2005 to 2007. A member of the Labour Relations Commission for 15 years, he is well known as the loudest and most aggressive voice in support of partnership with capital.

Yet it is not the background of the committee members that sets the output of the committee as much as the terms of reference it willingly accepted.

These were:

• Maintaining sustainable national finances and competitiveness
 • Other Government spending priorities 
• The Public Service Reform agenda 
• Equity considerations on public service pay


The commission moved first to apply these rules to pensions.

Standard accrual legacy public service pension schemes are now, depending on assumptions made, worth more than private sector pensions. ‘Fast accrual’ public service pensions (where members accrue full pension faster than 40 years) are more valuable again than standard accrual legacy schemes. 

“In the Commission’s opinion and having regard to all of the information provided to us, the value could reasonably be fixed with a range of between 12% and 18% for the pre-2013 standard accrual cohort of public servants”. 

So the most widely reported element of the report is a new and substantial pay cut for public sector workers who survived the slashing of pension rights for new entrants. The justification for this is that it will bring them into line with the private sector.  

But didn’t the bureaucrats who are suggesting this have a name for this? Ahh....Yes... they called it the race to the bottom.  They once protested that constant comparison with the most oppressed would force the entire working class into penury. Now they are leading the charge.

Emergency Powers

The rationale for the cut is that it will enable the unwinding of the Financial Emergency Measures in the Public Interest (FEMPI) legislation – a sort of special powers act for the economy that allowed the government, with the support of the union leadership, to unilaterally slash and burn public wages and conditions.

Two realities emerge right away. The way to remove the legislation is to extend its effects to all public sector workers as a new normal. Yet again we are being told that the cuts are permanent. The Irish recovery will not be a recovery for workers.

The mechanism of state regulation of public sector pay and pensions is now firmly back on the rails 

The savage controls on wages and pensions and the constant deregulation and speed up of workrate and elimination of pay bands has rested on twin pillars of emergency legislation and collaboration by ICTU. With FEMPI the government had the ability to unilaterally cut pay, were able to put together partnership agreements with the unions that were founded on the cuts and, in most sinister development of all, FEMPI could be used as a scabs charter, piling extra sanctions on unions who did not accept the partnership element, even when their members voted decisively against the deal.

So in the operation of the Lansdowne road agreement public sector workers had to live  with reduced pay, pension cuts, work speed ups and a two tier pay system – when the level of cuts became too great the union bureaucrats had agreed to sacrifice new entrants to the public  rather than face an explosion from their existing members. Payments made in 2016/2017 helped win union members votes, without providing any mechanism for overall restoration of past pay and conditions.

Public and Private

In the way of these summaries, a team of civil servant have laboured to produce a glossy report packed with graphs and statistics. However everything rests on one basic assumption – that an equals sign can be drawn between public and private sectors.  Yet as the report itself makes clear in chapter 5, this cannot be done. The private sector responded to the fall in orders and profits by contracting, shedding jobs and cutting hours and pay rates – capitalism at work through the boom-bust cycle. In the public sector the level of need did not fall. The need to squeeze public sector workers was a result of the government’s banking guarantee and subordination to Europe’s squeeze on government borrowing. The mechanism for public servants was direct cuts to pay and pensions, job loss through natural wastage and a recruitment ban and extra hours and the removal of promoted posts to increase productivity, going on to establish two-tier pay rates and lower rates for new entrants.

The commission deals with these issues by dismissing them.  They point out (correctly) that these arrangements do not arise from FEMPI legislation but from negotiation between ICTU and the government. It is up to the bureaucracy to renegotiate. However the commission is far from neutral;

“...where pay adjustments are implemented in the public service, the must continue to be contingent on the delivery of reform and continuous improvements in productivity...”

There is no objection to more pay as long as the workers pay for it themselves with speedup and job losses! The hardest of hard human resource policies are applied. Workers are replaceable elements of production and the bottom line is, as the commission members cynically observe, there is no problem if more recruits are available at the going rate.

Loyal servants

The report concludes by again repeating the commission’s loyalty to the constraints set by government;  

“A critical factor in any future pay agreement and the unwinding of FEMPI will be the state’s ability to pay...”

A new Lansdowne Road agreement would involve negotiating a timeframe that would involve;

“Maintaining sustainable national finances and competitiveness...”

In a classic example of “garbage in ... garbage out” the government constraints on the commission are now presented as the impartial outcome of a neutral process and will become the rock-hard limits of the coming Lansdowne Road negotiations, accepted as a basis for negotiation by the union leaders still waiting their turn on the commission payroll. 

The only issue is; will the partners get away with it this time?

There are difficulties. The Garda strike threat drove a coach and horses through the existing agreement and the constant litany of corruption coming from every level of the police makes it impossible to justify the payments in terms of public utility. The mechanism of FEMPI, alongside open scabbing by INTO and TUI, was used to isolate and cripple the third teachers union, ASTI, so that their pay and promotion rights were constrained just as the Garda were rewarded. This year’s public sector conferences were awash with bombast and demands for the end of two-tier pay – precisely the issue that ASTI were fighting on when they were betrayed by the other unions.  The demands are being made in the knowledge that the new negotiations will take place in a very narrow fiscal space left after paying a tranche of a sovereign debt that extends until 2054.

The only deal possible in these circumstances will be jam tomorrow – both single tier pay and pay restoration will be spread over many years with an unspoken perspective that when the number of older workers falls to a small enough ratio the lower pay rate will become the only pay rate – this is precisely the deal being forced on Bus Eireann workers today despite a desperate and extended struggle on their part. As down payment the pay commission report will fix a new normal of permanent longer hours, loss of overtime and promotion payments and an endless round of reform that will involve endless speedup.

Yet the prospect of revolt comes ever closer. ASTI workers set other unions to shame by striking not for themselves, but for younger workers on lower pay rates. After years of collaboration, major union leaders no longer dare to appear on demonstrations. Bus workers took unofficial action outside the direct control of the bureaucracy and there exists enormous resentment at the role of the transport union leaderships in selling them out.

However the growing desperation of large sectors of the working class may provide the final straw. Local gombeen capitalism is riding an out of control housing bubble.  The state is not able to alleviate the crisis because they are prevented by the troika from any sizeable borrowing for social housing. In fact they have made the problem immeasurably worse through a firesale of property taken from speculators into public ownership. The body responsible for the property, NAMA, amid the usual stories of bribery and corruption, handed over large tranches of residential property to New York’s Vulture capitalists and they are now relentlessly seeking repossessions and fuelling a further rental bubble. 

As things stand, many are skipping meals to pay the mortgage. Ireland is in recovery, but it is a recovery for local capital and transnational companies. Inequality is constantly rising and the government is facing into the catastrophe of Brexit in the same way that rabbits face into a set of oncoming headlights. Workers, told that sacrifice would mean recovery, are now told that unending sacrifice will be their lot.

At some point the partnership of capital and union bureaucracy will put the last extra straw on the camel’s back. All the indicators suggest that this final straw will not be long in coming.

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