To: Each Branch Secretary
Date: 8th June 2017
News Update: 011/17
Re: Proposed Public Service Stability Agreement 2018 – 2020
Please circulate to all members.
Please see the full text of the Proposed Agreement, a set of FAO’s and salary tables including Pay Adjustments for CO Pre and Post 1995 Scales attached.
The Executive Committee will consider the details of the proposed deal and the related outcomes to CPSU specific issues at a meeting tomorrow.
A further News Update will be issued in due course.
Proposed Public Service Stability Agreement 2018 – 2020.
A number of CPSU specific issues at General Council were also resolved in sectoral discussions and details of these will be uploaded shortly.
Some questions relating to the provision of the Central Agreement answered.
- What are the proposals for income overall?
- By 2020, more than 90% of public servants will be out of FEMPI pay provisions, and almost a quarter will have exited FEMPI pension levy payments
- 73% of public servants gain more than 7% by 2020
- 1st January 2018: 1% pay adjustment for all
- 1st October 2018: 1% pay adjustment for all
- 1st January 2019: Pension levy threshold up from €28,750 to €32,000 (worth €325pa)
- 1st January 2019: 1% pay adjustment for those earning less than €30,000
- 1st September 2019: 1.75% pay adjustment for all
- 1st January 2020: Pension levy threshold increased to €34,500 (worth €250pa)
- 1st October 2020: 2% pay adjustment for all
- Combination of pay and pension levy adjustments worth 7.4% to those earning €30,000 a year or less, over lifetime of a deal
- Combination of pay and pension levy adjustments worth 7% to those earning between €30,000 and €35,000 a year, over lifetime of a deal *
- Combination of pay and pension levy adjustments worth 7.4% to those earning between €35,000 and €40,000 a year, over lifetime of a deal
- Combination of pay and pension levy adjustments worth 7.2% to those earning between €40,000 and €45,000 a year, over lifetime of a deal
*there is a small arithmetic ‘blip’ in the percentage resulting from the threshold for converting the levy to a pension contribution at €34,500.
This table sets out the combined pay and pension levy adjustments in different salary bands. Column 6 of the main table shows the total percentage adjustment for staff employed before January 2011 (excluding those with ‘fast accrual’ pension arrangements). Column 4 of the second table shows the same for staff employed after that date.
- What about the ‘new entrants’ – people who started work after 2011?
It should be recalled that unions secured an agreement in 2013 to merge the new entrant pay scales with the pre-existing pay scales.
The new entrant pay scales had been introduced by the Government in 2011, without agreement. The effect of the 2013 improvement was to place the new entrants on the old rates albeit with two additional incremental points.
The proposals would establish a 12-month process in which the Public Service Pay Commission will explore how best to improve scales that were lengthened. Unions wanted to remove some scale points to boost incomes for new entrants and equalise the number of years it takes for pre – and post- 2010 entrants to reach the top of pay scales.
However, management refused to simply remove the two additional scale points in this deal.
- Is the pension levy being clawed back through additional pension contributions?
Between 2018 and 2019 the pension levy ceiling will be increased from €28,750 to €34,500 for all staff except those such as Gardai, Firefighters and Prison Officers who benefit from ‘fast accrual’ pension arrangements. This will be worth a total of €575 per year. The remainder will remain will be converted to a new Additional Superannuation Contribution (ASC) on earnings above €34,500 which will be subject to the normal tax relief applicable to Superannuation contributions.
Staff who joined the public service on or after 1st January 2013 will pay a smaller additional contribution. This reflects the fact that their pension benefits are less favourable than staff who joined before that date.
Members of other unions such as the Gardai who currently enjoy ‘fast accrual’ pension arrangements (i.e., where it takes fewer years’ service to accrue full pension benefits) will pay most, with no adjustment to their existing pension levy contribution.
The Unions sought to ensure the highest possible threshold for the additional pension benefits. And we worked to ensure in particular that the value of pensions is unchanged, despite suggestions that future pension years would be calculated on a less-valuable ‘career average’ basis, and that future pension increases should be linked to inflation/CPI rather than pay movements. There will be no change to the pension benefits accruing for pre 2013 staff under this deal.
It is worth noting that going into the talks, the Government was adamant that public servants should pay considerably more towards their pensions. This was on foot of a Public Service Pay Commission (PSPC) recommendation, which said pension contributions should increase to reflect the fact that public service pensions are worth more, on average, than those in the private sector.
- Is the mandatory retirement age affected?
The proposals concede that issues for employees who must retire at 65, now that the state pension is paid at age 66, “need to be addressed as soon as possible,” and says that unions will be consulted over Government proposals on the matter.
- What about the additional hours?
Despite our determined efforts there is no general reduction in working hours. However, there is a new provision that gives staff the option of a permanent return to ‘pre-Haddington Road’ hours on the basis of a pro-rata pay adjustment. Staff can opt into this arrangement at the beginning of a new deal (January-April 2018) or at the end (January-April 2021).
There is also provision to convert non statutory annual leave (i.e. leave days above 20) into working hours on the flexitime system, which could help staff with temporary need for more flexible working arrangements.
Although these two provisions fall very far short of the full restoration of the additional hours, they at least give options to staff for whom time is more important than money. This was the best outcome available in the current talks and allows scope for the issue to be revisited again.
More than most CPSU argued for a return to pre-2011 hours indeed at times it appeared they were only a ‘red line concern’ in the main for ourselves, the PSEU and IMPACT. DPER Minister Paschal Donohoe and his officials however, were adamant that they would not do a deal that would restore working time lost under previously (the so-called ‘Croke Park hours’). We repeatedly raised the issue, but the other side would not budge, saying the additional working time was worth a total of over €583 million to €621 million a year, €102 million a year in the Civil Service alone – money that would have to come out of the pay-restoration pot if they were to be conceded.
- What’s been agreed on outsourcing and agency staffing?
There has been no change to existing outsourcing protections that unions won in previous Agreements and the LRA in particular.
Management wanted to water down the existing protections that require management to consult with unions and produce a business plan setting out the case for what it calls ‘external service delivery’ if it wanted to outsource a service or part of a service. Crucially, the LRA provides that it can’t cite labour costs (i.e., pay) as part of the business plan. They also wanted to amend the rules to allow projects worth €10 million or less to be outsourced without reference to existing protections, or any consultation.
CPSU and other unions declared this a ‘red line,’ and management eventually withdrew its proposals at a very late hour in the talks.
This is a considerable victory as abandoning the ‘labour cost’ provision would have meant pretty much every business case would lead to outsourcing – on the basis of minimum wage levels and rock-bottom workers’ rights in the private sector – regardless of the impact on service quality and worker protections. We’ve avoided that in these talks while the €10m threshold has also been dropped – if management had secured that, there would have been a huge potential for an increase in the outsourcing of our work across all Departments.
- Is Saturday work on the cards?
No. The proposals allow for reviews of rostering arrangements if service needs or operational needs suggest they might be necessary in a sector. But they also acknowledge the need for rosters to ensure ‘predictability of attendance,’ and says no roster changes can be introduced without agreement. These rosters do not apply generally in Administration in the Civil Service.
- What about Saturday premium payments where they apply?
There will be no change to existing Saturday premium payments.
- Are there any changes to overtime payments?
From January 2019, non-pensionable overtime payments will no longer be subject to the pension levy. This will increase the value of overtime payments by around 10%.
Unions called for the full restoration of overtime rates, which were cut during the emergency, but management was not prepared to concede this or the Civil Service divisor in the context of other aspects of income restoration.
- Work-life balance
The proposals commit management to ensure that work-life balance arrangements (including flexible working) are available to the greatest possible extent across the public service. They say disputes of local and sectoral implementation of work-life balance arrangements can be processed through normal disputes resolution processes. This will allow CPSU pursue issues about the non-application of certain work patterns in individual Departments as necessary. And they say management in each sector must monitor progress on gender balance in career progression.
- Recruitment and retention issues
The proposals say unions can make submissions to the Public Service Pay Commission on recruitment and retention issues identified in its report. The Commission will then do an analysis of the causes of the problems in each specific area and recommend options to deal with them by the end of 2018. The implementation of the Commission’s recommendations will then be considered by unions and management.
The proposals also commit the parties “to discuss” more open recruitment “where this is appropriate to meet particular organisational needs.”
It also includes safeguards over the use of internships, clinical placements, work experience and job activation measures which were a cause of concern in the past. The text now provides that where such initiatives arise in future there must be “an agreement on protocols” on any such programmes.
- Starting pay on promotion
The proposals acknowledge barriers to mobility across the public service and contains a commitment to a review of the current arrangements on starting pay and transfer and promotion in the public service.
- Outstanding adjudications
The proposals contain a commitment to a process to deal with outstanding adjudications where they exist, “having due regard to their continued validity and cost,” which will conclude by the end of September 2018.
- Any more on PMDS?
The proposals require performance management systems to be introduced in parts of the public service where they aren’t already in place.
- Does the deal mean weekly pay will change?
No. The text refers instead to the potential to modify payment systems to introduce an arrears arrangement subject to consultation and no monetary loss to staff which would help avoid overpayment difficulties.
- Other productivity measures
The proposals say productivity measures set out in the Lansdowne Road agreement will continue to apply and will reflect various renewal policies which in our case is the Civil Service Renewal Plan.
- Do the proposals ban strikes?
As with all previous public service agreements, industrial action is ruled out in situations where the employer is abiding by the agreement. As usual, the proposals include a binding process for dealing with problems that arise without recourse to industrial action. These restrictions do not extend to matters not covered by the agreement.
- Why did the negotiations happen now?
The Lansdowne Road agreement (LRA) is due to expire in September 2018 and there are no further pay adjustments scheduled between now and then. For over a year, we have been saying pay restoration should be faster than envisaged in the LRA. This is because the economy – and therefore the money available – has recovered faster than envisaged when the deal was done in 2015.
Initially, the Government resisted, but last December it conceded the point when the Public Service Committee ramped up the argument following the publication of Labour Court recommendations on Garda pay. On foot of talks with unions, the Government agreed to (1) bring forward a scheduled 2017 pay adjustment of €1,000 a year from September to April 2017 and (2) to open talks in May on an extension to the LRA.
In bringing the process forward from September 2018 to June 2017 restoration will now happen sooner than was provided for – if the original time scale applied no deal would have been in place until end 2018 at the earliest.
- What is the duration of the proposed deal?
If accepted in ballot, it will run from 1st January 2018 to 31st December 2020.
The duration of a deal ensures that over 90% of public servants (those earning up to around €70,000) will be out of the FEMPI pay cuts by the time an agreement expires, and almost a quarter will be out of the FEMPI pension provisions.
- What happens now?
The Executive Committee will first consider the terms of the Central Agreement and the related outcomes to the CPSU specific issues such as HCO Uplifts and EO promotions ratios etc. Branch General Meetings will be called and a National Ballot arranged.