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26 Jun 2022

Government cannot justify pay restoration delay for high earners, Varadkar says

Government cannot justify pay restoration delay for high earners, Varadkar says

The Government cannot justify delaying the restoration of pre-austerity wage rates for thousands of Ireland’s highest paid public servants, the Tanaiste has insisted.

Leo Varadkar said he realised the move would prove controversial amid the cost-of-living crisis, but he said legal advice received by ministers was “very clear” that an intervention would be hard to defend in the courts.

Wages across public services were cut following the financial crash of 2008 and the vast majority have been restored since legislation was passed in 2017 to reinstate the original pay rates.

The group earning above 150,000 euro, which includes hospital consultants, judges and top-grade civil servants, is the final cohort to receive the pay rise.

The restoration is due to take effect at the start of July.

Mr Varadkar said the Government considered delaying the restoration but concluded it could not justify “singling out” one group of public sector workers while wages have already been restored to all others.

“That legislation that was used to cut the pay of public servants was a financial emergency provision,” he told RTE’s Morning Ireland programme.

“There is no longer financial emergency, we’ve record levels of employment, public finances are in good order and we would have to go into court and make the arguments that it was right to fully reverse the pay cuts for a school principal or somebody working in the passport office or a Garda inspector but it was OK to single out doctors, and that wouldn’t be right.”

Taoiseach Micheal Martin said that the government cannot circumvent legal obligations.

He said: “About 90% of those receiving that would be doctors, consultants, and that is part of the pay restoration, which opposition parties, Sinn Fein included, called for back in 2017.

“They called for full restoration at the time and the trade union movement did and it’s the fulfilment of that.

“Legally, that is the situation, there’s no circumventing of legal obligations on government to fulfil, by law the government has to do and that’s it.”

The Minister for Housing Darragh O’Brien said that the full restoration of pay was part of the agreement.

Mr O’Brien said: “Let’s be clear, 99% of our public servants and civil servants have their pay restored.

“This is the last 1%, many of which are hospital consultants, people that we have rightly tried to make sure that we keep within Ireland. We’re looking at pay restoration rates of the tune of 1.7 and 10%.

“Is the timing great? No, it’s not but the legal advice is very, very clear.

“We’re a government who will stand over the agreements that we make.

“We’re not in the position of just ripping up agreements, one would imagine what that would look like when we’re in the process of actually trying to negotiate a new public sector pay agreements.

“It’s important that we stand over what we said we would do.

“Many of the people in this area are very important.

“Public health consultants and others who will have their their pain restored.

“We need them working in the system.”

Away from the issue of pre-crash wage restoration, Mr Varadkar also revealed the Government is poised to make a new offer to public sector unions in a bid to break the impasse over current pay rates.

A Government proposal that would have seen a 2.5% pay increase this year, following by a similar rise the following year, was rejected by the unions during talks involving the Workplace Relations Commission (WRC) last week.

Mr Varadkar said the Government intended to re-engage with the negotiations and table a further offer.

He said the proposals would see lower paid workers offered a bigger increase.

Workers above a certain wage threshold would get a smaller increase but the Tanaiste said the difference would be made up by way of tax reforms.

He said the Government package would also involve measures such as reducing childcare costs.

“The economy is very good condition,” he said.

“More people at work than ever before, more people earning more than ever before, record trade numbers.

“We do have financial firepower that we didn’t have in the past and some of that, that not all of it, some of it can go towards public sector pay.”

The Tanaiste again defended the Government’s decision not to introduce any further cost-of-living support measures until October’s budget.

“We’d like to move when we think it will be most effective and it is going to be going into the autumn period when energy bills are going to bite even harder than they’re biting now,” he said.

Mr Varadkar said he could not 100% rule out fresh measures before October though he made clear he did not anticipate that.

“We’ve no plans for further intervention until budget day and the budget will happen in the autumn,” he said.

“But you know, as is always the case, I’m reluctant to definitively rule anything out 100%, because this is a rapidly changing situation.

“I think if we were to see, you know, further dramatic escalation to fuel prices, we’d have to give consideration to an intervention then.”

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