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Public Sector Pay

Dáil Éireann Debate, Tuesday - 3 July 2018

Tuesday, 3 July 2018

Questions (8, 10, 106)

Mick Barry

Question:

8. Deputy Mick Barry asked the Minister for Public Expenditure and Reform the estimated cost of eliminating all forms of two-tier pay discrimination in the public service; and if he will make a statement on the matter. [29101/18]

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Richard Boyd Barrett

Question:

10. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform his plans to remove pay inequality for new entrants in the public sector in view of the current economic position; and if he will make a statement on the matter. [29109/18]

View answer

Joan Burton

Question:

106. Deputy Joan Burton asked the Minister for Public Expenditure and Reform the status of the negotiations with regard to pay equalisation; the timeline for negotiations to conclude; and if he will make a statement on the matter. [29010/18]

View answer

Oral answers (18 contributions)

My question asks the Minister to set out the estimated cost of eliminating all forms of two-tier pay discrimination in the public service, and to make a statement on the matter.

I propose to take Questions Nos. 8, 10 and 106 together.

Under the Public Service Stability Agreement 2018-2020, which we negotiated last year, it was agreed by all parties that there would be an examination of remaining salary scale issues in respect of post-January 2011 recruits at entry grades. The agreement stated that this would be undertaken within 12 months of the commencement of the agreement.

In addition, when the legislation to give effect to the terms of the agreement, the Public Service Pay and Pensions Act 2017, was going through the Oireachtas the Government accepted an amendment at section 11 which provided that within three months of the passing of the Act, I would prepare and lay before the Oireachtas a report on the cost of dealing with pay equalisation for new entrants to the public service and a plan for doing so. This was a significant body of work, which was carried out by the Irish Government Economic Evaluation Service. On 16 March last, I submitted the report on the matter, which outlined the figures in this regard. It would be a two-point adjustment overall for our public services, involving an annual cost of €200 million.

Discussions on this issue with public service trade unions and representative associations commenced in October 2017, with a further plenary meeting taking place in April and further discussions taking place since then.

The two-tier pay discrimination is still very much in place. Apart from being bad news for young workers, it is bad news for our public services because the Minister cannot fill much-needed positions in the public service, partly because of low basic pay rates but also because of two-tier pay discrimination. In teaching, he cannot fill the positions in mathematics and information and communications technology, ICT. In the Defence Forces, he cannot fill the positions for engineer artificers. However, the impact of this on nursing was highlighted dramatically this week. According to information received by The Irish Times, the Bring Them Home campaign has attracted three nurses to return so far this year. Four years after a target was set to bring home 500 new nurses, 120 nurses, or less than 25% of the target, have come home. There is a global market. Ireland is not competitive and the question of two-tier pay is not helping in that regard.

It is clear what needs to be done. First, the Minister needs to increase basic pay rates for these grades and, second, he must end the scandal of two-tier pay, not just for young workers but for our public services.

Since 2011, our public services have hired more than 60,500 new entrants.

The Deputy mentioned two professions. We have hired some 16,000 more teachers and nearly 10,000 more nurses. Earlier I provided information to Deputy Jonathan O'Brien in which I indicated that during the first four months of 2018 the HSE hired the equivalent of 380 more persons per month. It is not the case that we have broad recruitment difficulties within our public service. We are able to hire, recruit and retain excellent individuals to pursue careers within our public services to deliver the services that are so important to our society.

Where we have specific difficulties that need further inquiry the Public Service Pay Commission will address these. It will report on these issues in July. On the basis of the report, we will then engage with representative bodies in the health service on the issues raised.

The Minister, Deputy Donohoe, must be the only person in Irish society who does not believe there is a problem recruiting and retaining nurses for our hospitals. I will leave him on that.

Tomorrow in Macroom, County Cork, young archaeologists who have been working on the Macroom N22 bypass will place pickets over a dispute on union recognition and low pay. Their direct employer is the Irish Archaeological Consultancy, IAC, but it is working to a State contract. These young people have degrees, master's degrees and ten years' experience and yet they are on €12.50 per hour. Compare this to the more than €17 per hour earned by a general operative in the construction industry. The two-tier payscales for teachers and nurses is the direct responsibility of the Government but the low pay and effective two-tier pay rates for young workers such as these archaeologists are indirectly the responsibility of the Government, which continues to give State contracts to employers such as theirs. This is also exploitation, direct and indirect, and both should end.

The State has no intention to exploit anybody for their services or work. We do not. If the Deputy or any group have concerns in this regard they know all the mechanisms and options that are open to them. I had hoped that Deputy Barry's views on the job market would also acknowledge the latest unemployment figures, which have come from the CSO today, that show the unemployment rate is 5.1%. There are 34,000 fewer people without a job now than one year ago. This is a sign of living standards and jobs being created for people due to policies that Deputy Barry has constantly disputed and challenged, as is his right. It is, however, getting to a point of creating employment which is seeing the unemployment rate move to that level.

On the core point put to me in Deputy Barry's initial question, we have a process under way with the unions on new entrants' pay. As I indicated earlier to Deputy Barry Cowen, I am approaching this process in good faith to see if progress can be made in this matter.

As the Minister is taking questions Nos. 8, 10 and 106 together I invite Deputy Boyd Barrett to ask his supplementary question.

Between 2011 and 2017 applications for second level teaching have dropped by 62%. By any measure this is a dramatic reduction in the number of people who apply to go into second level teaching. The Minister can quote figures about increased recruitment, which is not hard given what happened during the austerity period and the slashing of public sector numbers, but the fact remains that we are having extraordinary difficulty in attracting people into teaching and nursing. Another group I have mentioned before as suffering this pay inequality is the service officers and ushers in Dáil Éireann who came in after 2012. They get less pay than those who came in before them, and with whom they work side by side. How can this attract people?

Consider the gap between the earnings, which is a second, lower tier of new entrants' earnings, and the costs of accommodation or being able to buy a house. This is the same generation, 25% of whom now believe they will never under any circumstances be able to afford a house. Consequently, some 60,000 mostly younger, educated people are leaving the State every year. They cannot live here.

Because of changes we have seen in Dublin and some of the other larger cities I absolutely understand that those people who work in our public services, and especially during the early part of their careers, are facing challenges around affordability for rent or mortgage payments. I can see this in many parts of the country and I can see it happening in Dublin. I shall outline our response to this. I remember that for many years Deputy Boyd Barrett called for the unwinding of the financial emergency measures in the public interest legislation, FEMPI. This is now happening. The Deputy put points to me. He is very fair-minded and always comes forward with solutions and ideas on how he thinks things could be done differently. Perhaps the Deputy will acknowledge that this year two pay increases were made available to our public sector workers, one of which is already happening and the other will happen in September or October. This was done to recognise the fact that our public servants took wage cuts in response to exceptional circumstances within our economy. As those circumstances have changed we have looked to put in place the unwinding of the FEMPI legislation, which is well under way.

With regard to new entrants' pay, I reiterate that I am engaged with the unions on the matter but it goes beyond teachers. If a solution is put in place for any part of our public services it will need to apply to all.

Will the Minister indicate when he plans to roll out the supplementary pension, with regard to public service pensions?

As the Minister is taking questions Nos. 8, 10 and 106 I will invite Deputy Joan Burton to ask her supplementary question for Question No. 106 if she wishes. It concerns the status of pay equalisation. Deputy Burton can ask Question No. 9 shortly.

In the meantime Deputy Boyd Barrett can ask one more short supplementary question.

There has been some unwinding of FEMPI but at the end of the current pay agreement public sector workers will still be earning less than they were earning in 2008. This is pretty extraordinary. In 2018 public servants will earn less than in 2008. Government spokespeople claim that it has closed 75% of the new entrant pay gap. This is not true. For the first 13 years the gap is more like 50% to 60%. Over a full career the gap is closed by some 75% but most of the difference hits people when they are younger and for the first 13 years when it remains a 50% to 60% gap. This is why people cannot afford anywhere to live. That such a pay gap exists is unacceptable in any event. I put it to the Minister that such a gap has to be closed immediately or we will not solve the recruitment problems and the desperate problems in getting people into the health and education sectors and into other areas of public service. I have not the time now to go into the details but we have put forward many proposals where other groups could be taxed to finance such a measure.

Deputy Joan Burton can now ask her supplementary question on this group of questions.

It is very simple. When does the Minister propose to proceed with the expansion of the age limit for employment in the public service?

Many people want to retire early while there are others who want to stay on. The Minister indicated that he would raise the age of retirement and abolish the compulsory retirement age in line with many other countries. How has that work progressed?

Am I also dealing with Question No. 9?

We will deal with that in a minute.

When does the Minister propose to proceed with abolishing the compulsory retirement age in the public service?

Two different elements are at play. I will publish the legislation on Thursday. There will be a Government meeting that morning, to which I will bring legislation in order to deliver what the Deputy mentioned. I hope and anticipate that it will be agreed by the Government and published that day. Depending on whether the Business Committee makes time available, I expect the legislation to pass quickly through the Houses. However, we have interim measures in place, of which approximately 100 members of the Civil Service have taken advantage.

Regarding Deputy Boyd Barrett's remarks about FEMPI, public servants and their earnings now compared with 2008, that is not the case. If someone was on a lower level of earnings in our public service prior to the crash, he or she is now back at that level. The Deputy is right about people on middle incomes, in that there is still a difference, but that is because the pension-related deduction that was introduced on a temporary basis has since been legislated for on a permanent basis. We are asking those who work in our public services to make a longer contribution to the funding of the pensions that they will avail of later in life. If someone was on a high income level prior to 2008, what he or she is earning now is still below that level.

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