The Government has rejected proposals put forward by unions for public sector workers to take 12-days unpaid leave as an alternative to pay cuts and talks between the two sides have broken down.
Irish Congress of Trade Unions (Ictu) chief negotiator Peter McLoone claimed the Government had “changed its mind” following the controversy surrounding the unpaid leave proposals. He said he was “deeply disappointed and astonished that an opportunity like this has been lost”.
At a press conference this afternoon, Taoiseach Brian Cowen said that because the amount of savings to be gained from the proposed plan was less than the minimum amount required, "it did not provide a basis for agreement" and the Government reserved its position
"The Government considers that the proposals do not constitute a basis for agreement. This is because of the combination of the requirement that the pay savings in 2010 be accompanied by a reduction in days worked, albeit over an extended period, and that there would be no certainty about the specific basis upon which the necessary savings would be achieved in 2011 and thereafter," he said.
"The Government has made it clear that the fiscal adjustments to be made in 2010 must stabilise the public finances, must reduce on a permanent basis the structural element of the deficit, and must form part of an overall package of adjustment measures which are balanced in terms of their certainty and effect," he added.
Mr Cowen said the Government would now proceed to implement its plan to reduce the public service pay and pensions bill including cuts in the region of 5 to 6 per cent in next weeks Budget.
Under the unpaid leave proposal put forward by unions, public sector workers would have agreed to take 12-days unpaid leave next year and would then later come up with a separate proposal to cover fiscal 2011.
According to estimates, the unpaid leave deal would have entailed public service staff earning €50,000 having 4.6 per cent of their income deducted next year. For workers earning more than this amount the cut would have been equivalent to up to 7 per cent of income.
Ictu general secretary David Begg said the Government had missed the best opportunity it had to conclude a deal. He said public sector workers would not accept change being forced upon them when they were being told to take pay cuts.
"I think it is a most profound decision and I think we will regret that for a long time to come. I think there was a great opportunity to make huge change," he said.
"Clearly we have been played off the pitch now by the Government, we have no possibility of achieving that kind of social solidarity in the budget so it looks as though we will find ourselves in a position of pretty serious opposition to the Government in relation to this Budget."
Union leaders had earlier confirmed they had reached a draft transformation agreement with Government officials for the health services following marathon talks overnight.
According to sources close to the talks, the Government had today said it would consider an agreement if savings of €1billion could be agreed between the two sides. Previously it had stated that savings of €1.3 billion from the public sector pay bill were required.
Under the draft transformation agreement for the health services which was agreed earlier today, an expanded core working day from 8am to 8pm, during which no overtime rates would apply, would have been introduced from early next year.
Staff could have also been rostered for five out of every seven days – a move which would have reduced overtime and allowances costs. There is also to be a review of staffing ratios, skill mix and rosters.