I propose to take Questions Nos. 29 and 29 together.
The Financial Emergency Measures in the Public Interest Act 2013 was enacted on 5 June 2013. The primary purpose of the legislation is to implement the proposed pay reduction for public servants earning annual salaries of €65,000 or more, and the parallel reduction in public service pensions over €32,500. The legislation or the public service as an employer does not distinguish between those employees who are members or not members of unions and changes in terms and conditions are applied on a grade basis.
Contingency measures that may be deployed to secure the necessary reductions in the public service pay and pensions bill are also included, including provision for a universal freeze on pay increments. The Act also affirms that the person, which may be a line Minister or other public service body, that has the power to determine terms and conditions of employment may exercise that power to reduce non-core rates of pay or to increase hours worked. However, under the legislation, a facility is provided for unions and representative associations to conclude collective agreements with their public service employers. Where a union has signed up to a collective agreement, now called the Haddington Road Agreement, that will avoid the need for those contingency measures to be used.
It is a matter for public servants and their representative unions and associations to decide if they wish to conclude a collective agreement with their employers. This issue is currently subject to consideration or ballot by those unions and associations. I as Minister for Public Expenditure and Reform, do not intend to comment during that process.
With regard to those grades represented by a union who do not conclude a collective agreement under the Act, as well as the increment freeze that will apply directly under the terms of the Act, the relevant decision maker will have to take the necessary measures to meet their targeted paybill savings in 2013 and following years.
Under the Haddington Road Agreement proposals, it is proposed that for those public servants on annual salaries (inclusive of allowances in the nature of pay) above €65,000 to the max of the Principal Higher Grade in the civil service or similar across the public service, the reduction in pay will be restored within a maximum of 18 months of the end of the agreement (July 2016) in two equal phases of 9 months. There are no provisions within the proposals regarding increases in pension rates on a similar basis. However, I have stated that it is my intention as a matter of priority to move towards reducing the burden of the public service pension reduction, with the initial focus on the people in receipt of low pensions, at the earliest date economic progress permits.