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ISME Support For Minister Donohoe on Public Sector Pay Talks

January 15th, 2024:  ISME has today voiced its support for Minister for Public Expenditure and Reform, Paschal Donohoe TD, in the ongoing public sector pay talks.   Minister Donohoe is right to stand his ground in the public sector pay talks and must continue to hold firm against unreasonable expectations from the trade union sector.

ISME, the Irish Small & Medium Enterprises Association, represents more than 10,500 direct and affiliated SME businesses throughout the Republic of Ireland, employing more than 245,000 people.

Neil McDonnell, Chief Executive, ISME, said: “While the economic situation Ireland faces now is far better than that faced by his Government predecessors in 2009, that is only the case because Brian Cowen’s Government and Ibec heeded the ISME call at the time to suspend the social partnership talks because unions were unable to agree to measures to stabilise the economy.

Irish people should never again be subjected to the record unemployment levels that followed the austerity measures and the €100bn bailout of the public sector at the time.

While all workers have suffered the effects of inflation over the last two years, workers in the public service have enjoyed the greatest levels of protection and job security, while being consistently paid a 25% premium over workers in the private sector. This gap between public and private sector is not seen anywhere else in Europe beyond Portugal, Spain and Italy, where private sector wages are far lower than here. For several years, ISME has called for Government to reduce this gap to 10% by 2025, something that now looks unachievable.

Despite changes to public sector pensions in 2013, they remain far more generous than those available to private sector workers, and they are paid for by taxpayers. The latest evaluation of the liability for public sector pensions puts the funding deficit at €176bn, equivalent to 79% of our current national debt of €223bn.

ISME acknowledges that trade union officials have a difficult job to do, and that they face loud calls from their members on a daily basis. However, a one-size-fits-all solution is no longer appropriate in dealing with our public sector. We acknowledge that there is a recruitment and retention issue in some areas of the public service, but not in all.

Resources must therefore be prioritised to those with greatest need. Government and taxpayers are also entitled to productivity, change and value for money in the delivery of public services. The market forces productivity and efficiency on private sector workers. It in incumbent on Minister Donohoe to do the same for the public sector.

Before pay talks resume, as we know they will, Minister Donohoe should complete a rapid audit of the delivery of commitments in the Public Service Reform Plan completed by his predecessor Minister Brendan Howlin in November 2011. This might stimulate a more realistic approach to negotiations. It does not appear to ISME that many of the structural reforms promised in Health, Education, Justice and Local Government have in fact been delivered upon.

Lastly, in order to put an end to the theatre of late-night negotiations in the Workplace Relations Commission, ISME has long called for the establishment of a standing public service pay commission, as exists in the UK. Rather than deal with complex issues of remuneration for over 315,000 public sector workers who perform radically different jobs, this would impose a discipline and structure on the pay-setting process, which is currently absent, resulting in the usual sabre-rattling threats of widespread strikes by trade unions. This is unsustainable.

The taxpayer and small employers are denied a voice at the public sector pay talks. It is Minister Donohoe’s duty to represent that voice and we wish him well.”


Issued on behalf of ISME by Heneghan

For information

Neil McDonnell / ISME – (087) 299 5658 (available for comment)

Nigel Heneghan – (086) 258 7206