Government to reverse some Public Secor Pay cuts

Head The Wall

Sheldons Brain wrote: »

No doubt the normalisation of things will help further increase confidence in the Bond markets.

You reckon Ireland is back to normal? Ha ha ha

kippy

Looks like general European consensus is tax cuts are the way forward. That being said, it may not apply here:
http://www.rte.ie/news/business/2014/0822/638827-draghi/

Godge

Head The Wall wrote: »

Can you tell us what this statute/contract law that the government supposedly broke is

Here is the detailed explanation from three days ago.

Godge wrote: »

It is a bit more than that.

Contract law is very important and it is extremely difficult to resile from contracted agreements. However, that is what the Government did with the Financial Emergency Acts. At the time, there were fears that such cuts to contracted pay could be found to be unconstitutional because of the protection of contractual rights in the Constitution. This was never challenged fully in the Courts and the Government would have resisted a challenge anyway. The basis of any resistance would have been the public interest defence based on the financial challenge that faced the State and that these cuts were necessary to save the State from going bankrupt. It is likely, in my opinion, that the Government would have managed to defend any challenge. However, one of the main planks of their defence would have been the following legislative provision which was included in each of the Acts.

http://www.irishstatutebook.ie/2009/en/act/pub/0005/sec0013.html#sec13

"Before 30 June in 2010 and every year after 2010, the Minister shall—

(a) carry out a review of the operation, effectiveness and impact of this Act, having regard to the overall economic conditions in the State and national competitiveness,

(b) consider whether or not any of the provisions of this Act continue to be necessary having regard to the purposes of this Act, the overall economic conditions in the State, national competitiveness and Exchequer commitments in respect of public service pensions,

(c) make such findings as he or she thinks appropriate consequent on such review and consideration, and

(d) cause a written report of his or her findings resulting from the review and consideration to be prepared and laid before each House of the Oireachtas."


The purpose of this Section was to demonstrate that the Government wasn't breaking contracts forever but was only doing so temporarily at a time when the country faced an unprecedented crisis and that the necessity for the cuts would be revisited in years to come.

What this does is create a legitimate expectation, maybe even a contractual right that once we are in a situation where the country's finances have eased, that the pay cuts and pension levy will be reversed. Yes, there are clauses to give the government some escape but if say, a public service union sought a judicial review in 2016 of tax cuts or extra payments to farmers on the basis of the provisions of this Act, the Minister would have to clearly justify why he wasn't giving the pay cut back. In the circumstances of a clearly improving financial situation, the union would have a very strong case.

This case would be supported by references to the Dail debates at the time in which such commitments were made clear.

To sum up, the cuts were never meant to be permanent (except possibly the pension levy), and the Acts and the Dail debates made that clear. In seeking the restoration, the unions are only acting on what was promised and agreed. And let us be clear, the unions are only seeking this on the basis that the deficit drops below 3%.

Godge wrote: »

We will hit 3% next year.

Already this year, the finances for the first seven months have us €800m ahead of target (about €1.3 bn for a full year).

Add in the water charges of €300/440m and we are most of the way to the €2 bn needed to get us to 3%.

It is likely therefore that the question of restoring public service pay cuts will become a live issue this time next year and be a huge political football in the run-up to the next election.

Ralphdejones

Funny how public servants were public enemy no. 1 in the media just 6 months ago, now there is not a ripple about them, and the government is talking about giving them payrises and there is not a whimper of complaint from the media. There is something very funny going on with the media in this country.

Godge

kippy wrote: »

Looks like general European consensus is tax cuts are the way forward. That being said, it may not apply here:
http://www.rte.ie/news/business/2014/0822/638827-draghi/

Read what he says:

"Speaking at a conference of central bankers in Jackson Hole, Wyoming, (USA) Mr Draghi said that despite the constraints of high debt levels, and the aftermath of the sovereign debt crisis, European governments have some room to use government tax and spending policy to restart their economies."


And first in line will be public sector workers, like it or not.

chopper6

Ralphdejones wrote: »

There is something very funny going on with the media in this country.

Yes...it's Shiite and controlled by the Govt.

Ralphdejones

chopper6 wrote: »

Yes...it's Shiite and controlled by the Govt.

Yes, it's shyte, but worse than that I would suspect its controlled by the people who really control the government, hint, that's not the ordinary taxpayer or voter

kippy

Godge wrote: »

Read what he says:

"Speaking at a conference of central bankers in Jackson Hole, Wyoming, (USA) Mr Draghi said that despite the constraints of high debt levels, and the aftermath of the sovereign debt crisis, European governments have some room to use government tax and spending policy to restart their economies."


And first in line will be public sector workers, like it or not.

I read what it said. Spending policy is a huge area. As Ive stated elsewhere increased capital expenditure (roads, infrastructure etc)is the only thing I can see the EU allow us to do especially when our public sector wages compare far more favourably,even now, with those in other EU states.
Spending on public sector wages does not restart anything.

chopper6

kippy wrote: »

I read what it said. Spending policy is a huge area. As Ive stated elsewhere increased capital expenditure (roads, infrastructure etc)is the only thing I can see the EU allow us to do especially when our public sector wages compare far more favourably,even now, with those in other EU states.
Spending on public sector wages does not restart anything.

Public sector spend their wages in the economy...more money=more business and more trade.

kippy

chopper6 wrote: »

Public sector spend their wages in the economy...more money=more business and more trade.

All workers spend their wages in the economy. Tax cuts benefit ALL workers and implemented correctly the economy in general.

carpejugulum

chopper6 wrote: »

Public sector spend their wages in the economy...more money=more business and more trade.

by that logic minimum wage should be 1 million or more

golfwallah

chopper6 wrote: »

Public sector spend their wages in the economy...more money=more business and more trade.

Where did I hear that argument before?

Ah, yes, I remember. It was Joan Burton describing Welfare as a driver of the economy!

Most Government spending happens in the Irish Economy. By your logic we could fix the economy by just having more and more Government spending.

Unfortunately, this ignores that all taxpayers have to finance Government spending. Government doesn't generate wealth and money they receive just doesn't appear out of nowhere.

sarumite

Godge wrote: »

Here is the detailed explanation from three days ago.

Not being a lawyer I don't want to get into the nitty gritty of the subject, but contracts can be changed without agreement through parliamentary acts of legislation. If the government were to increase the minimum wage, an employers contractual rights would not be protected (nether in common law nor the constitution). My layman understanding would be that ss long as the legislation itself was not found to be unconstitutional, then there is not conflict with contract law.

Little CuChulainn

golfwallah wrote: »

Where did I hear that argument before?

Ah, yes, I remember. It was Joan Burton describing Welfare as a driver of the economy!

Most Government spending happens in the Irish Economy. By your logic we could fix the economy by just having more and more Government spending.

Unfortunately, this ignores that all taxpayers have to finance Government spending. Government doesn't generate wealth and money they receive just doesn't appear out of nowhere.

The difference being that you get a return on wages in the form of production or service provision in addition to the spending in the economy whereas with welfare you only get the latter.

Head The Wall

Godge wrote: »

Here is the detailed explanation from three days ago.

sarumite wrote: »

Not being a lawyer I don't want to get into the nitty gritty of the subject, but contracts can be changed without agreement through parliamentary acts of legislation. If the government were to increase the minimum wage, an employers contractual rights would not be protected (nether in common law nor the constitution). My layman understanding would be that ss long as the legislation itself was not found to be unconstitutional, then there is not conflict with contract law.

Really Godge, I'm surprised that you actually believe this. What you have supplied is some legislation stating that contracts are contracts which no one is arguing with but to try and connect that to a statement which holds as much weight as an election promise is borderline ridiculous

As Sarumite has said above and let me quote the govt's own website here

Changes to your contract of employment can occur due to a change in the law, but otherwise, changes must be agreed between your employer and yourself. Neither party can unilaterally decide to change the contract.

The bit in bold is what has happened and the govt can change the law again to bring your wages up or down, that is their choice/prerogative. If you want to think that you can challenge it in court then go ahead.

You vehemently defend the PS at all costs on here while you claim to now work in the Private Sector. You may do this of course but it sounds to me like you are very concerned with the finishing salary of your grade as ultimately this is what your PS pension is going to be based on and hence you try to defend the PS to the last on here.

If you love them that much why did you leave

golfwallah

Little CuChulainn wrote: »

The difference being that you get a return on wages in the form of production or service provision in addition to the spending in the economy whereas with welfare you only get the latter.

Sure, you get services in return - this is consumption on the current account, as distinct from creation of future wealth earning capacity on the capital account.

But all of this has to be affordable to all taxpayers and not financed excessively from borrowings.

We have to live within our means and not devote too high a proportion of government spending on consumption (i.e. p.s. pay), particularly when p.s. pay rates are way ahead of the private sector.

Head The Wall

Some more figures and links here for people to peruse, I've selected the pertinent points

PUBLIC sector workers have received more than €1.4bn in incremental or length-of-service pay rises since the recession began in 2007.

Although the Government continued to borrow more than €1bn a month to run the country, length-of-service pay increases continued across all departments, agencies and organisations in the public sector throughout the duration of the economic collapse.


For each of the years 2007 to 2011, the department said the total cost of increments across the entire public sector was €1.25bn, or €250m a year.

That figure fell to €150m in 2013 due to mass retirements from the system and some State employees hitting the top end of the salary scales.

This is not really what I would call progress, the govt and their spin doctors may be trying to convince people that everything is good but it's painfully obvious it isn't


Irish Economy 2014: Public pay and pensions bill down 6% since 2007

The data below are net values for each year after deducting staff pension contributions.


2001 €10.2bn
2006 €16.2bn
2007 €17.6bn
2008 €18.7bn
2012 €16.9bn
2014 €16.6bn
2015 €16.4bn

The pay and pensions bill rose by 59% in the period 2001-2006.

Increases in public sector over the period 2001-2006 due to

- general pay rounds total €2.479bn (or 24.3%);
- “special” pay increases (primarily Benchmarking) total €1.328bn (or 13%), - - other factors (such as extra numbers of 38,000 and rising pensions for retirees) total €2.193m (or 21.6%).


Full-time equivalent numbers in the public service fell from 279,000 in 2009 (no earlier data available on FTEs) to 264,000 in 2012.


The Irish Independent reported this week that data it was provided shows that a total of €1.4bn in incremental or length-of-service pay rises pay, has been paid in the public sector since 2007.

The PER's databank shows gross pay falling from €15.3bn in 2012 (total including pensions was €18.4bn) to €15.1bn in 2003 and €14.5bn in 2014.

The full-year savings of the 'Haddington Road' public pay agreement in 2013 has a target of €1bn - - €210m relates to pay of earners on €65,000+ €130m relates to increments and the rest is productivity and related measures but in the health area, budget limits are already being breached.

So €500m in savings would likely be a best outcome.

Sometimes you have to question the govt's maths, there was all this talk of reduced numbers and all they would save

It seems they have 15,000 less staff (all people on contracts obviously and probably the obligatory two a year that get fired) and gained another 34,000 pensioners.

Public Sector Pension cost has increased from €1.5 Billion in 2007 to €3.1 billion today. This is a number that is only going to go one way as well. This cost is what the current PS Pension Levy pays for and they want to get rid of it. Where will the funds come from then. Surely not the taxpayer????


Average Public Service Numbers* (Current and Pensoners)

2007 - 356,448
2012 - 384,800


Average Public Service numbers*

2007 - 269,668
2012 - 264,421

Average Pensioner numbers

2007 - 86,780
2012 - 120,379


Maybe I'm reading this all wrong, please correct me if I am

chopper6

Head The Wall wrote: »

Some more figures and links here for people to peruse, I've selected the pertinent points





This is not really what I would call progress, the govt and their spin doctors may be trying to convince people that everything is good but it's painfully obvious it isn't


Irish Economy 2014: Public pay and pensions bill down 6% since 2007




Sometimes you have to question the govt's maths, there was all this talk of reduced numbers and all they would save

It seems they have 15,000 less staff (all people on contracts obviously and probably the obligatory two a year that get fired) and gained another 34,000 pensioners.

Public Sector Pension cost has increased from €1.5 Billion in 2007 to €3.1 billion today. This is a number that is only going to go one way as well. This cost is what the current PS Pension Levy pays for and they want to get rid of it. Where will the funds come from then. Surely not the taxpayer????


Average Public Service Numbers* (Current and Pensoners)

2007 - 356,448
2012 - 384,800


Average Public Service numbers*

2007 - 269,668
2012 - 264,421

Average Pensioner numbers

2007 - 86,780
2012 - 120,379


Maybe I'm reading this all wrong, please correct me if I am

How can you have 'average' public sector numbers?

The number of employees is an absolute.

And since 2007 numbers are down by 30,000.


Where did you copy and paste that tripe from?

Head The Wall

chopper6 wrote: »

How can you have 'average' public sector numbers?

The number of employees is an absolute.

And since 2007 numbers are down by 30,000.


Where did you copy and paste that tripe from?

Typical PS response when they don't believe the figures in front of them

The source of the "tripe" is an actual govt document which you can download and look at your self

Analysis of Exchequer Pay and Pensions Bill
2007 - 2012


I presume you will provide us with figures showing the drop in staff numbers of 30,000 since 2007

My figures come from a govt body so it will need to contradict that

I await your info

Sheldons Brain

Head The Wall wrote:

Some more figures and links here for people to peruse, I've selected the pertinent points

Quote:
PUBLIC sector workers have received more than €1.4bn in incremental or length-of-service pay rises since the recession began in 2007.

Although the Government continued to borrow more than €1bn a month to run the country, length-of-service pay increases continued across all departments, agencies and organisations in the public sector throughout the duration of the economic collapse.


For each of the years 2007 to 2011, the department said the total cost of increments across the entire public sector was €1.25bn, or €250m a year.

That figure fell to €150m in 2013 due to mass retirements from the system and some State employees hitting the top end of the salary scales.


This is not really what I would call progress, the govt and their spin doctors may be trying to convince people that everything is good but it's painfully obvious it isn't

Head The Wall, do you accept the question I posed in Post #195 that the payments of increments means that the PS paybill remains the same.

I presume you will provide us with figures showing the drop in staff numbers of 30,000 since 2007

You are moving the goalposts by using 2007, not the peak year of PS employment. But then this is par for the course.
The document you mention above states that PS employment will have fallen by almost 35,000 in 2014.

woodoo

Ralphdejones wrote: »

Funny how public servants were public enemy no. 1 in the media just 6 months ago, now there is not a ripple about them, and the government is talking about giving them payrises and there is not a whimper of complaint from the media. There is something very funny going on with the media in this country.

The sindo had a full onslaught in last weeks paper about the public sector. They had 5 or 6 journalists all going hell for leather against any payrise.

We have passed the days of PS cuts now. That storm has passed. There will be no more cuts, no increment freezes etc. It will be improvements now whether that is a reduction in the pension levy or a direct pay rise. About time too the public sector has suffered enough.

Gumbo

Head The Wall wrote: »

Typical PS response when they don't believe the figures in front of them

Typical generalisation at its best. One persons Responce = the whole of the PS now? Maybe in London, but not here.

Ralphdejones

woodoo wrote: »

The sindo had a full onslaught in last weeks paper about the public sector. They had 5 or 6 journalists all going hell for leather against any payrise.

Irish journalists only write on themes their puppet masters tell them to.
Maybe there is a split in the camp so, or perhaps they are a bit behind, or perhaps there is an election coming in the next couple of years, or a combination of all three.

Godge

sarumite wrote: »

Not being a lawyer I don't want to get into the nitty gritty of the subject, but contracts can be changed without agreement through parliamentary acts of legislation. If the government were to increase the minimum wage, an employers contractual rights would not be protected (nether in common law nor the constitution). My layman understanding would be that ss long as the legislation itself was not found to be unconstitutional, then there is not conflict with contract law.

Rubbish.

The government cannot break agreements it has entered into without just cause.

In this case, the agreement (i.e. contracts of employment with its staff) were broken with just cause because of the temporary financial emergency which of course means that once that temporary financial emergency has passed, the ability to maintain and prolong the breach of the agreement no longer exists because the just cause has disappeared.

Your example of the minimum wage also misses the point as it increases the wage of the minor party in the contract - the employee.

A better example is the cut in the minimum wage back in 2010.

http://www.rte.ie/news/2010/1210/295369-budget/

This applied to private sector workers but it became clear, soon after its implementation that it only applied to new workers as the cut could not be applied to existing private sector contracts.

Godge

Head The Wall wrote: »

Typical PS response when they don't believe the figures in front of them

The source of the "tripe" is an actual govt document which you can download and look at your self

Analysis of Exchequer Pay and Pensions Bill
2007 - 2012


I presume you will provide us with figures showing the drop in staff numbers of 30,000 since 2007

My figures come from a govt body so it will need to contradict that

I await your info

Once again public service critics use out-of-date data. If you are so au fait with government reports, maybe you could provide us with a more up-to-date report than 2012

Godge

Head The Wall wrote: »

Some more figures and links here for people to peruse, I've selected the pertinent points





This is not really what I would call progress, the govt and their spin doctors may be trying to convince people that everything is good but it's painfully obvious it isn't


Irish Economy 2014: Public pay and pensions bill down 6% since 2007







Sometimes you have to question the govt's maths, there was all this talk of reduced numbers and all they would save

It seems they have 15,000 less staff (all people on contracts obviously and probably the obligatory two a year that get fired) and gained another 34,000 pensioners.

Public Sector Pension cost has increased from €1.5 Billion in 2007 to €3.1 billion today. This is a number that is only going to go one way as well. This cost is what the current PS Pension Levy pays for and they want to get rid of it. Where will the funds come from then. Surely not the taxpayer????


Average Public Service Numbers* (Current and Pensoners)

2007 - 356,448
2012 - 384,800


Average Public Service numbers*

2007 - 269,668
2012 - 264,421

Average Pensioner numbers

2007 - 86,780
2012 - 120,379


Maybe I'm reading this all wrong, please correct me if I am

Thank you for this information, whether you are reading it properly or not, it clearly proides that public service numbers and pay have been reduced consideraly. What is your problem with this?

kippy

Godge wrote: »

Rubbish.

The government cannot break agreements it has entered into without just cause.

In this case, the agreement (i.e. contracts of employment with its staff) were broken with just cause because of the temporary financial emergency which of course means that once that temporary financial emergency has passed, the ability to maintain and prolong the breach of the agreement no longer exists because the just cause has disappeared.

Your example of the minimum wage also misses the point as it increases the wage of the minor party in the contract - the employee.

A better example is the cut in the minimum wage back in 2010.

http://www.rte.ie/news/2010/1210/295369-budget/

This applied to private sector workers but it became clear, soon after its implementation that it only applied to new workers as the cut could not be applied to existing private sector contracts.

You dont believe a 200 plus billion national debt with associated interest payments is just cause?

sarumite

Godge wrote: »

Rubbish.

The government cannot break agreements it has entered into without just cause.

In this case, the agreement (i.e. contracts of employment with its staff) were broken with just cause because of the temporary financial emergency which of course means that once that temporary financial emergency has passed, the ability to maintain and prolong the breach of the agreement no longer exists because the just cause has disappeared.

Your example of the minimum wage also misses the point as it increases the wage of the minor party in the contract - the employee.

A better example is the cut in the minimum wage back in 2010.

http://www.rte.ie/news/2010/1210/295369-budget/

This applied to private sector workers but it became clear, soon after its implementation that it only applied to new workers as the cut could not be applied to existing private sector contracts.

Now who is talking rubbish. The point about acts of legislation is not my opinion, its a fact. The question of whether the legislation is constitutional requires someone with knowledge in the area. The contract was changed as a result of legislation.

As to your 'better example' a decrease in the minimum wage doesn't have any impact on any existing contracts so its not even an example of where an act of legislation would change a contract.

Godge

kippy wrote: »

You dont believe a 200 plus billion national debt with associated interest payments is just cause?

Yes, I have always said that the pay cuts were legally sound because of their temporary nature in response to the financial emergency.

The implication of that is that once the financial emergency has passed (budget deficit under 3%) and money is available, they are not legally sound. It doesn't matter whether our situation is merely serious rather than an emergency, if there is money available, public servants will come looking for it.

sarumite wrote: »

Now who is talking rubbish. The point about acts of legislation is not my opinion, its a fact. The question of whether the legislation is constitutional requires someone with knowledge in the area. The contract was changed as a result of legislation.

As to your 'better example' a decrease in the minimum wage doesn't have any impact on any existing contracts so its not even an example of where an act of legislation would change a contract.

Well, give me an example, any example of where legislation has disimproved the existing terms and conditions of employment between an employer and employees as set out in a contract. other than the financial emergency acts, there are none because of the contractual and constitutional legal implications.

sarumite

Godge wrote: »

Well, give me an example, any example of where legislation has disimproved the existing terms and conditions of employment between an employer and employees as set out in a contract. other than the financial emergency acts, there are none because of the contractual and constitutional legal implications.

Now you are just shifting the goal post. Either a contract can be changed without agreement through acts of legislation or it cannot despite acts of legislation. There are no contractual legal implications if a contract is altered through an act of legislation. IF the legislation in question is constitutional then there are no constitutional legal implications either. This is not my opinion it is a fact.