The Minister for Public Expenditure and Reform, Deputy Michael McGrath, was in possession and has 14 minutes remaining.
Public Service Pay Bill 2020: Second Stage (Resumed)
That is right. I am resuming from where I left off a number of weeks ago. At that point, I had referred to the need for this legislation to progress a range of pay reform matters. I had just begun to touch on the seagoing commitment scheme, which is one of a number of measures advanced in 2020 to support recruitment and retention in the Naval Service. It provides for a €5,000 payment for each 12 months of seagoing service. Naval personnel of able rating and above with at least three years service, of enlisted rank of able rating and above and of officer ranks are eligible. These measures which support reform, recruitment and retention in particular areas of our public service cannot be progressed to payment under existing Financial Emergency Measures in the Public Interest, FEMPI, Acts. That underscores the need for this amending legislation.
In summary, the Financial Emergency Measures in the Public Interest (No. 2) Act of 2009 provides that no change can be made in the pay of a public servant without legislative amendment, a court order or a determination that there is a legal entitlement to a pay increase. While it is possible to set a pay rate for a new grade or post, it is not possible to change the pay of an existing public servant in post. The Bill provides for amendment of the restrictions on increases to public service pay introduced by the Financial Emergency Measures in the Public Interest (No. 2) Act of 2009. This will allow the Government to provide for changes to remuneration and greater flexibility in the allocation of available resources to public service pay requirements. In the short term this will allow implementation of the pay increases provided for by the Building Momentum agreement, the new public only Sláintecare consultant contract and the seagoing commitment scheme.
Turning to the details of the legislation, the Bill amends or appeals sections 4 and 5 of the Financial Emergency Measures in the Public Interest (No. 2) Act of 2009, section 12A of the Ministers and Secretaries (Amendment) Act of 2011 and section 24 of the Public Service Pay and Pensions Act 2017. This means that the Bill provides for: amendment of the restrictions on increases to public service pay introduced by the Financial Emergency Measures in the Public Interest (No. 2) Act of 2009; changes to pay arising from an Act of the Oireachtas, an order of court or a determination that there is a legal entitlement to a pay increase, increases in the pay or allowances of public servants may be sanctioned; amends the Ministers and Secretaries (Amendment) Act 2011 to ensure that where a contract of employment is amended in accordance with amended provisions of the Act of 2009 no further ministerial sanction is required under that Act; and amends the Public Service Pay and Pensions Act 2017 to align the date for appeal of certain restrictions on increases to public service pay with a date provided in this Bill.
Section 1 sets out a definition of the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 as the "Act of 2009".
Section 2 amends section 4 of the Act of 2009 to provide that in addition to changes to pay arising from an Act of the Oireachtas, an order of the civil courts, an order of the Labour Court or a determination that there is a legal entitlement to a pay increase, increases in pay or allowances of public servants may be sanctioned.
Section 3 amends section 5 of the 2009 Act to provide for retrospective application, up to the date on which this proposed Act is enacted, of a provision allowing for amendment of contracts of employment to increase pay.
Section 4 amends section 16A of the Ministers and Secretaries (Amendment) Act 2011 to ensure that where a contract of employment is amended in accordance with section 4 of the 2009 Act, as amended by this proposed Act, that no further ministerial sanction is required under the Ministers and Secretaries (Amendment) Act 2011.
Section 5 amends section 24(3) of the Public Service Pay and Pensions Act 2017 to align the date for repeal of certain restrictions on increases to public service pay with the date on which the proposed Bill is enacted.
Section 6 provides that the Short Title of the proposed Bill is the Public Service Pay Act 2020.
Concluding the repeal of the financial emergency legislation is an important milestone in the history of the State. Underpinning this achievement and the new public service pay agreement is the strong performance of the economy. The economy is expected to recover next year, with that recovery commencing in the second half of this year. In 2022, the economy is expected to grow by around 4.3% as outlined in the forecasts of the Central Bank, the Irish Fiscal Advisory Council and the OECD, which forecast GDP growth of 4.6%, 4.1% and 4.3%, respectively.
Labour market conditions are also expected to improve next year with employment growth of 3.2% and 3.6% projected for 2022 by the Central Bank and the Irish Fiscal Advisory Council. As a result of the growth in employment the unemployment rate is projected to decline to 7.8% and 6.7% next year, well below the record levels recorded in 2020.
Our approach is about balancing the need for pay restraint, stability and certainty in the delivery of public services with the need to support ongoing public service reform. Key areas of our public services have experienced and responded to very challenging demands over the past 12 months. This Bill allows for implementation of reasonable pay increases and provides a means of using pay, where appropriate, to support the wider public service reform agenda. It is on that basis that I commend the Bill to the House and I look forward to hearing the views of colleagues across the House.
I thank the Minister. We proceed to the Sinn Féin contributors. Deputy Mairéad Farrell proposes to share her time with Deputy O'Reilly.
That is correct. Táim fíor-shásta an deis seo a bheith agam faoi dheireadh. Bhí muid ceaptha an t-ábhar seo a phlé le roinnt seachtainí anuas agus táim an-sásta go bhfuil an deis agam inniu é a phlé, éisteacht leis na daoine eile a bheidh ag labhairt faoin gceist seo agus plé a dhéanamh ar an gcomhaontú agus ar an mBille. I welcome the opportunity to contribute to the Second Stage debate on the Public Service Pay Bill 2020. We have waited a number of weeks to speak on the Bill so it was welcome to see today that we would be speaking on it. This Bill will form the bones and the connective tissue of the new public service stability agreement. I am glad to see that members of the trade union movement have had the opportunity to vote on the Building Momentum agreement. I had raised concerns that an uncertain situation could have occurred whereby the previous agreement would have expired without a new agreement being in the offing.
I refrained from commenting directly on the Building Momentum agreement because I believed it was a matter for the union membership to decide and I did not want to be seen to be prejudicing the outcome. The results are in now.
They were resoundingly in favour. We see that in the results from the two largest unions, SIPTU and Fórsa, whose membership voted in favour by margins of 91% and 95%, respectively. Notwithstanding that, some smaller unions voted against the agreement and I want to address some of their concerns. It is worth highlighting that their rejection was partly based on legacy issues that have not yet been addressed. I will deal with some of those in a moment.
First, it is worth acknowledging that most of the unions have accepted this deal. Since the beginning of the austerity budgets 12 years ago, public sector workers have had their real earnings gutted. FEMPI, the Croke Park agreement, the Haddington Road agreement and the Lansdowne Road agreement are terms that will resound in the minds of many of those working in the public sector since the crisis that followed 2008. It is only in this past year that pay has been restored to 2008 levels. For these valuable and essential workers in our hospitals, local authorities, educational institutions, the community sector and public administration, this has been long overdue. Wages for general operatives in local authorities, attendants in hospitals and cleaners in schools start at around €25,000, rising to approximately €35,000 after ten years. These workers are the backbone of our public services. These are the workers who have taken the financial hit over the past 12 years only to see restoration arrive now.
Certain media and political commentators have spoken on this issue. The reality is that public sector workers have had more than a decade of lost earnings as a result of the economy going into receivership following the mismanagement of a Fianna Fáil-Green Party coalition. We also had the austerity of the Fine Gael-Labour Party Government, of which the Tánaiste, among others, was part. Both Governments were supported at the time by Independents, who did not show independence of action or thought by standing up for these workers. These workers have had to spend their wages every week to make ends meet and have had a significant reduction in their standard of living due to the policies of austerity, which have manifested in a seemingly never-ending housing crisis, long waiting lists for routine medical procedures and creaking infrastructure. They will see their wages rise but they will never get back the wages that were lost. They have lost a decade. Public service pay has been decimated over the past 12 years.
Let us not forget that these workers and others were forced to pay for the reckless risk-taking of the banking and property sectors. We are again seeing politicians fall over themselves to pay tribute to those two sectors. Some would have us believe that this is ancient history. It could be ancient history but it is also contemporary policy. Not a day goes by that we are not reminded of the events of more than a decade ago, such as with the banks that were bailed out with taxpayers' money and had their future tax obligations waived by allowing them to carry forward their losses indefinitely using what are referred to as deferred tax assets. They are now being thanked. We see the current housing policies, which are very much in favour of the developers rather than those who cannot afford to buy a home.
These concessions, extracted by government for the restoration of pay, have delivered significant savings to the public purse, but our public sector workers are our most valuable resource. They have held the line during the pandemic and paid a high price with their health and, in some cases, with their lifeblood. They kept our system going during the pandemic. They have held the fort in our public health systems, from hospitals to nursing homes and from schools to State services. They are the lowest earners in our public system and they are the citizens of whom we have asked the most. They clean our hospitals, sweep our streets, run our laundries and administer our public services. They need more than pay restoration and they deserve more than applause. They deserve our considered gratitude and that consideration must be quantifiable. I hope to see that in the next public service stability agreement. These workers have the benefit of union negotiated terms and conditions of employment, which give them sick leave and special pandemic leave, but we should not forget the large numbers of private contractors who are being used in the public system. They do not have the same entitlement. This significant private spend must be examined and serious effort must be made to convert these private, for-profit contracts into direct hire jobs which offer safety and security to the worker and better value to the State.
I want to say a few words about the FEMPI legislation, as some may question the need for this Bill and the reason the FEMPI legislation was not fully repealed. It is worth noting that between 2015 and 2018, FEMPI and the agreements that succeeded it generated a reduction in Ireland's public pay bill of almost 20% through a combination of universal and progressive wage cuts, a pay freeze, reduced rates for new entrants, elimination of performance bonuses and certain allowances, and reduced rates of overtime and other non-core pay.
Section 2 amends section 4 of the Act to give the Minister the power to provide for an increase in remuneration save where this is set by or under an Act of the Oireachtas. This would appear to be mainly designed to vest more power in the Minister and to reduce circumstances in which legislation is required to give effect to public sector agreements. Insofar as this encourages collective bargaining at a national level, it is welcomed. One consequence of the 2017 Act, which gave a legislative entitlement to the increases in remuneration set out in the public service stability agreement, was that further legislation would have been required to take away that entitlement. The amendment to section 4 of the Act seems to be a clever way to ensure the State does not run into this difficulty in the future. Overall, it might be said that the amendment to section 4 gives considerable power to the Minister, but he probably already had such power or equivalent power under various statutory provisions or the contractual agreements of public servants. The sanction of the relevant Minister, with the consent of the Minister for Finance, was standard practice in respect of adjustments to remuneration prior to the collapse of the public finances in 2008.
I am aware that there are still some lingering issues, such as pay equality, and that the sectoral bargaining fund that has been established will be used to address some of these issues. In agreement with sectoral management, each union or bargaining unit will have the option to use some or all of the sectoral fund to address issues mentioned, but certain claims are excluded as these are decided centrally, including overtime, weekly hours of attendance, annual and sick leave entitlements and pension arrangements. Alternatively, the union or bargaining unit can elect for the funds involved to be used as a sectoral pay round. If they choose to do this, the unions encompassed by that sectoral bargaining unit can agree that they may not pursue any grade or pay-related pay agreements.
I am aware that, despite all of this, some unions such as ASTI and the Medical Laboratory Scientists Association have rejected the agreement. Sinn Féin's alternative budget called for the immediate pay equalisation of pre and post-2011 public sector entrants, as we see equal work for equal pay as being absolutely central. Under a Sinn Féin Government, we would seek to address these issues. We would also ensure a living wage for all public sector entrants. Sin mo thuairim ar an méid atá á phlé againn inniu. Bhí ról lárnach ag na daoine seo agus na hoibrithe seo agus tá sé fíorthábhachtach go dtugann muid chuile chabhair a theastaíonn uathu dóibh.
I welcome the opportunity to finally make a contribution to this debate, which has been put back on many occasions, though for good reasons. The Minister refers to the importance of concluding the job of repealing FEMPI. I was reminded that this is my annual opportunity to remind people in the House that I was part of the trade union delegation in Government Buildings on the night that FEMPI was announced. We did not know what it was. We certainly did not believe we would come to use the abbreviation for it. I am not sure if the Minister was there personally, but I know that many of his colleagues, most of whom are still around, attended a briefing in December before the FEMPI legislation was introduced. They attended a briefing in the audiovisual room with me and Patricia King. We had a deep discussion and engagement in which we outlined how the savings that had to be made could have been made without impacting on the rate.
We were very clear at the time that it would have been wrong to impact on the rate of pay. It was wrong then and it is still wrong. There were changes that could have been made in respect of unpaid leave, etc., which would have ensured that the rate for civil and public servants would have been protected. We were also of the view that the Government could have made the savings it needed to make without impacting on civil and public servants, most - indeed all - of whom were working hard and who were not at fault for what happened. Indeed, when the Minister's party was busy crashing our economy off a cliff, many civil and public servants I was representing, such as nurses and healthcare workers, asked what they had done to deserve what was visited upon them. They said they had worked hard and come to work early in the morning, as the Tánaiste likes his workers to do, and did everything that was required of them. Their only crime was that they worked for the State, which could just slash their wages. Indeed, we were brought in to try to negotiate that. It was a horrible time to be representing workers in the face of a Government that was dead set against them.
Nowhere was that more obvious than in the context of the pension levy. If the Minister will recall, the pension levy was imposed on all civil and public servants, but there is one particular group in respect of whom the cruelty of it has never left me. It was levied on home helps, who were the lowest paid and doing probably the most precarious type of work within the civil and public service. They had to pay a pension levy. Of course, as the Minister can imagine, as soon as that was announced, my phone lit up like a Christmas tree because, as the workers pointed out, they did not qualify for pensions. So, it was never a pension levy - it was a pay cut. It was not put to them in that way. I spent a lot of time talking to people and explaining that it was not a pension levy and its introduction did not mean that they would get a pension. It was most unfortunate and sad that some of them believed that the Government was finally going to grant their demand for pensions. How could workers be subject to a pension levy if they did not have pensions? They had no pensions but they still paid the levy. I thought at the time that there was a cruelty in that. As the Minister will know, many of these people worked hard. We know that home helps in particular do quite thankless work. They provide great value for money, actually. However, often their work goes unrecognised and unrewarded.
I know that the Minister will not be unaware that only a few months ago the House passed a motion in respect of the pay of student nurses. The Government is talking about equal pay for work of equal value at the moment. If nurses and student nurses are working, they should be paid. We know that reviews are planned, but these people should be paid for the work that they are doing. Due to the systematic and systemic underfunding of our health service over decades, the wards that student nurses go to work on, where they are supposed to be supernumerary, are often understaffed. It is most difficult to be supernumerary and not to help and work. In light of the motion that was passed unopposed in the House, it would be a decent commitment to make to ensure that in cases where they are working, they get paid. Paying them the healthcare assistant rate is the most obvious solution as is the introduction of a system of allowances that are appropriate and recognise the work that is done.
While I am on the topic of the health service, I want to raise the matter of the bill for agency staff. In 2019, the agency staff bill was running at approximately €1 million per day. To my knowledge, no value-for-money audit of any kind of scale or quality has been carried out in respect of the spend on agency staff. Do not get me wrong; I know that the health service and other areas of the civil and public service need agency staff from time to time. However, the problem has become apparent in the past number of years because of the recruitment moratorium. The Minister will remember from his previous experience in government that two years before a recruitment moratorium on the rest of the civil and public service was imposed, a recruitment moratorium was imposed on the health service. As a result, it has more catching up to do in terms of staffing levels. It is even further behind than other sectors. The latter has generated an over-reliance on agency staff that is expensive and does not offer not good value for money. Indeed, it takes away the potential of being able to pay our student nurses, radiographers and other people working within the civil and public service who have been working and because of the nature of their work, often find themselves in situations where learning is possible, but they learn on the job. They do end up as part of the team. As we emerge from this pandemic, which will hopefully be soon, that is something that we would do well to reflect on, on behalf of the people who have worked all the way through it. The very least they deserve is to be paid for the valuable work that they are doing.
I might just move to another topic, namely, the pay deal agreed recently . As my colleague, Teachta Mairéad Farrell, pointed out, we did not comment on the deal. Having had the experience of bringing pay deals back to workers, I was never grateful or thankful for politicians interfering in that. It is much better to let the trade unions get on with their business. However, there are thousands of workers who will be impacted on by this deal and who were not represented. I recall, from my time on the public services committee of the Irish Congress of Trade Union, ICTU, talking to representatives from the Association of Garda Sergeants and Inspectors, the Garda Representatives Association and PDFORRA, who often referred it as being like the big table and the little table, or the upstairs and the downstairs. Negotiations took place with the ICTU public services committee in respect of the deal, but that group of workers is completely disenfranchised. The fact that gardaí and members of the Defence Forces are prohibited from being members of ICTU effectively excludes them from those negotiations. I know the Minister will be familiar with the phrase "nothing about us without us". It was long the cry of the women's movement. It means being left out and having decisions taken by other people. In order for any future pay negotiations to be reflective of the broader civil and public service, all persons who are affected should have a right to sit at the big table, be part of a parallel process or a secondary set of discussions. As we know, members of An Garda Síochána and the Defence Forces turn on the radio to find out what has been negotiated. That is not very fair.
The Minister will be aware that the report by the European Committee of Social Rights which was published recently found that the refusal of the Government to allow An Garda Síochána and the Defence Forces the right to collectively negotiate pay deals and denial of the right to strike is in breach of the European Social Charter. The Minister should not take my word for it, he can take the committee's word for it. These workers deserve a seat at the table. They work hard and they are civil and public servants. The way that the pay is determined means that it is not open to an individual member of the Defence Forces or An Garda Síochána to stroll into the boss's office and ask for bargaining on an individual or face-to-face basis because the workers cannot collectively bargain. That option is simply not open to them. What they have instead, is a system whereby pay deals are negotiated by ICTU, which should be doing that on behalf of its own members, and these are then imposed on members of An Garda Síochána and the Defence Forces without them having an opportunity to have an input into that. As I have said, this has been found, time and again, to be wrong. Yet, we see intransigence on the part of the Government.
The Government is doing the members of An Garda Síochána and the Defence Forces a disservice by not allowing them that opportunity. They want to have their voices heard. They are members of associations which are de facto trade unions, but without the title. I ask the Minister to consider allowing these workers to have a full seat at the table.
I thank Deputies Mairéad Farrell and O'Reilly for their contributions. Hopefully, they will be in a position to support the Bill.
I look forward to the Bill being progressed in the weeks ahead, particularly as it is needed to give effect to the Building Momentum pay agreement. The latter is a very fair agreement. It involves general pay increases in October and October of next year of 1% each or €500, whichever is greater. It also involves a new sectoral bargaining fund amounting to 1% of basic pay to resolve any outstanding issues such as those that resulted in industrial action in the period of previous agreements. That particular sectoral bargaining fund is a most important innovation because there are always legacy issues on the industrial relations front that need to be addressed.
We did not have such a fund in place all along to deal with those particular issues outside of the general round of pay increases. Work on the implementation of the fund and the identification of the sectoral bargaining units, for example, is well under way and I look forward to seeing it progress over the period ahead.
In addition to that work, as colleagues know, we now have a process in place to deal with the Haddington Road agreement hours. An independent body will set out its analysis of what would be involved in addressing the matter. The trade union movement very much sees those hours as an outstanding issue. We have provided a fund to address the recommendations that will be made as part of that process.
This Bill is needed, not just for building momentum but also for the implementation of the Sláintecare consultant contract in the health service, which is a key part of the reform of the public health system. The Minister for Health, Deputy Stephen Donnelly, and his Department will continue to work on the advancement of the new Sláintecare public-only consultant contract. The Bill is also needed, as I outlined, for the implementation of the seagoing service commitment scheme, which is a very important reform for the retention of staff in the Naval Service.
I look forward to continuing to work with colleagues on progressing the Bill. I hope it will pass Second Stage and proceed to Committee Stage. I would like to see that happening relatively quickly in order that we can get the legislation enacted as soon as possible and go about our work of implementing what is a fair, affordable and sustainable pay agreement.
I thank the Minister. I will now put the question.
I was hoping to speak on Second Stage.
I am sorry but the Deputy cannot do so after the Minister has wrapped up the debate.
I thought we would be able to come back in after the Minister finished.
No, the Deputy was not back in the Chamber in time to contribute.