Taoiseach Brian Cowen checking Irish cheese in Limerick on Sept 05, 2009

IBEC, the Irish business lobby group, says today that any expectations of Irish pay rises in 2010 are unrealistic. Meanwhile, the Government Chief Whip warned on Sunday night of an impending “significant lowering” of salaries for high public sector earners.

IBEC reiterated its call for a formal suspension of the pay terms of last year’s national agreement which, it says are no longer sustainable. IBEC is calling on the Government to bring the social partners together for a final effort to conclude an agreement on national recovery with a focus on tackling our unemployment crisis.

IBEC director general Danny McCoy said: "Lack of jobs is the single biggest issue facing our economy, but only competitive businesses can sustain and create employment. It is in everyone’s interests that we work on our competitiveness. IBEC is willing to make a final push to conclude an agreement on national recovery with ICTU and the Government, but such a deal must recognise the fact that businesses cannot give any pay increases in 2010 and that many enterprises will in fact be reducing their pay bill.”

McCoy concluded: “If consensus cannot be reached in coming weeks, IBEC will take its own decision in relation to its continued participation in the pay agreement, taking account of the pressure on most businesses to do what is necessary to survive and retain jobs.”

Government Chief Whip Pat Carey warned on Sunday night of an impending “significant lowering” of salaries for high public sector earners, expected in the report due from the Review Body on Higher Remuneration, in the next 10 days.

“I think it is likely to recommend significant lowering of salaries in that sector,” Carey said on RTÉ’s The Week in Politics programme.

In 2007, the body recommended huge pay increases including 36% for the Dublin City Manager who was less than 2 years in the job and 25% for the Secretary General of the Department of the Taoiseach, who was in charge of the infamous benchmarking programme on public pay in the early years of the decade, when an average pay and pension hike of 9% was made on the basis that Irish public sector staff were underpaid compared with private sector counterparts.

SEE:

Finfacts report Oct, 2009:  National Employment Survey: CSO says Irish public sector/private sector pay premium was 19.1% in 2007 for comparable jobs

Finfacts report Feb 2009:  Lenihan says total cost of State pension for an Irish public sector worker hired after 2004 is 26.1% of pay

Finfacts report Jan 2009: IBEC calls for ending of pay parity link in Irish public sector pensions that gives them a six-star standard status

Finfacts report Oct 2007: Where is the Outrage? Gombeenism thrives at home while in Paris, OECD staff work on proposals for Irish public service reform - -  article following recommendation that Ireland's Cabinet be the best paid in Europe. Recommendations for 1,600 senior staff in the public service were for minimum pay hikes of 14%. Pensions for 2 retired Dublin City Managers jumped 36% because of the direct link with pay of incumbent.

Pat Carey on The Week in Politics said the latest report on pay for high earners, would  provide a template for pay negotiations across the public service. “I think if that is the case we should seriously look at a proportionate reduction in wages right across the broader public sector, and I include this organisation and universities and others,” he said.

He said the Government had committed itself to finding an additional €4 billion in savings in the budget. “Now it would be preferable that it could be worked out by agreement. But the bottom line is that everything including pay has got to be looked at.”