Public Service Stability Agreement 2018 – 2020

Article by a public sector worker on why they are voting No to the PSSA as it increases the working day, intensifies work with insufficient return for workers and has wider negative implications for all private sector workers

Every so often I think has Karl Marx’s analysis of capitalism any relevance today? Then I come across the following from Volume 3 of Capital:

“The level of exploitation of labour, the appropriation of surplus labour and surplus value, can be increased by prolonging the working day and making work more intense”

The Public Service Stability Agreement 2018-2020 carries out both these actions. The public service which employs 300,000 workers may not be seen by those in the private sector as being subject to the same laws of capitalist exploitation as the private sector but in fact both are connected. The capitalist class used the financial crisis to attack the pay and conditions of the public sector and try to drive a wedge between workers in the public and private sectors. The attacks on the public sector were a useful diversion to avoid debate on the whole austerity programme and the distribution of wealth in the country. Weak governments in place since 2007 acquiesced in these attacks, reduced pay, lengthened the working day and then introduced the FEMPI legislation. This agreement locks in those worse pay and conditions. It effectively copper-fastens longer working days, career average pensions, later retirement dates and lower wages while claiming to restore pay.

Outsourcing

This is really the only positive part of this agreement and even it is pretty basic. Before any further outsourcing takes place public sector unions will have to be consulted. The original Lansdowne Road provisions remain in place. More importantly outsourcing decisions cannot be based on lower labour costs of the private sector. Private sector employers would like nothing more than to grab public money while offering the minimum wage and zero hour contracts to employees.

Hours

Following the rejection of Croke Park 2 the Haddington Road Agreement was negotiated. Under the terms of that agreement the working day was increased by an average 2.5 hours a week. This was in effect an unpaid prolonging of the working day by 7% or a decrease in pay by the same amount. There have been 15 million unpaid additional hours across the public service. The prolongation of the working day is now effectively embedded. When the reduction in public sector numbers is factored in, the work has become more intense as there are fewer people to do the same work. The deal offers 2 options which make it clear that the additional hours are a pay cut: the option of working the pre-HRA hours with a cut in pay and pension or more insidiously sacrifice a portion of holidays above the statutory minimum. These options will mainly affect those with young children and force them to either take a cut in pay or have less leave.

Pay & Pensions

The whole point of this agreement was to unwind FEMPI and restore pay. It was well highlighted in the media and the Public Services Pay Commission Report what would be on offer. The gross public sector pay bill fell 9% between 2007 and 2016. Average private sector pay was 3% above 2008 levels by 2016 whereas average public sector pay was 8% below for the same period. Effectively this deal will restore gross pay figures for 90% of public servants to where it was in 2009 by 2020. For the other 10% by 2020/2021. By 2020 73% of public servants will have had a gain of 7% over current levels. Roughly 25% will exit the FEMPI pension levy. On the face of it this does not appear to be too bad until you realise that on average the working week is 2.5 hours longer which is about a 7% pay cut so the gain of 7% on the headline figures is not a gain at all. In fact by 2020 not only will there be no gain but as average inflation since 2010 has been 0.5% it is a pay cut on the headline figures. If inflation increases further there is no provision in the agreement to address that issue.

The other major change in unravelling FEMPI occurs around pensions. Under FEMPI there was a Pensions Related Deduction which had absolutely nothing to do with pensions, despite the name. This was a special levy that only applied to public servants. This is now being renamed as an Additional Pension Contribution. Public servants currently pay €1.2 billion made up of €500 million in occupational pension contributions and €720 million in Pension Levy. Post 95 entrants also pay Class A PRSI. Once the Pension Levy is converted to the Additional Pension Contribution public servants will be paying 15% plus towards their occupational pensions without any improvement in pensions. This APC is purely to appease the neo-liberals who oppose defined benefit pension schemes. Post 2011 entrants will be on a career averaging pension scheme which in practice will be comparable to a defined contribution scheme. There is also another stealth provision for those paying Class A PRSI to keep working until you are entitled to the State Retirement Pension.  This will push the retirement age from 65 to 66 and further out in subsequent years. You will be a wage slave for most of your life.

Conclusion

Overall this is a bad deal for the working class. ICTU likes to claim that there is about a 6% dividend in terms of pay and conditions by being a union member. However, this deal does not maintain that. For new entrants to the public sector their pay is on a par with the private sector. The value of the pension scheme has been eroded and is now little different from a defined contribution scheme in the private sector. Instead of setting a benchmark for private sector employers the Government has lowered pay and conditions for its employees to that of the private sector. This deal buys stability for the Government from the most organized section of the working class until the end of 2020. The current Government is highly unstable. The two main parties of Fine Gael and Fianna Fail are like mangy gadhars sniffing around a piece of meat and waiting for the other to make the first mistake. The water protests and the failure to criminalise political protest at the Jobstown Trial rocked the Establishment. The last thing they want is an election at the present time. The unions could have pursued a more radical programme with the threat of industrial action which would have brought down the Government. The Establishment has bought time with this agreement during which it hopes to consolidate its position. There is growing evidence that new entrants to the public sector are not joining trade unions. The main pitch of the unions to new recruits are various discounts on financial products. The unions have become complacent. If union membership declines management will use this as an excuse to attack unions as has happened in the UK. This deal shows that the capitalist class has been successful in undermining and overturning the Report of the Benchmarking body of 2002.

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