The country's largest public sector union, Impact, has warned that the expected recommendation for zero increases under the benchmarking process for many workers in the public sector would present the Government with a major challenge in relation to future public service modernisation.
A spokesman for Impact said yesterday that since the benchmarking system was established five years ago, pay policy had been the main driver of change in public service working practices and working conditions.
"This also happens in the private sector where big changes in banking, finance, telecommunications, aviation and other sectors have been oiled by pay settlements above those set out in national agreements.
"The public still expects and deserves better services, and the Government may have to rethink its entire approach to public service modernisation if it doesn't have that oil," the Impact spokesman said.
Impact said that developments under the modernisation programme in the public service such as the introduction of pay-related performance management, more open recruitment and promotion, and longer opening hours for some facilities have been directly linked to benchmarking payments.
It is now generally expected that the second report of the Public Service Benchmarking Body will recommend no rise in pay for very many public service employees, although there will be increases for some specialist and senior grades.
It is unclear as yet whether increases will be recommended for principal officer grades in the Civil Service to which the pay of TDs is linked.
The report is expected to point to the high value of public sector pensions, against those in the private sector, as a reason why pay increases are not justified on this occasion.
The previous benchmarking body, which reported in July 2002, awarded public servants an average increase of 8.9 per cent. This was paid in addition to the increases agreed in national pay talks.
Impact also said yesterday that if the benchmarking body did recommend mostly zero awards, it would present the Government with a big challenge going into next month's talks on a new national pay deal.
The union said that in this scenario the new national pay talks "will then be the only mechanism to protect living standards for all workers - public and private - against a backdrop of higher than expected inflation".
"Failure to produce a satisfactory outcome to those negotiations would then present a real risk of rejection from unions that have been the bedrock of social partnership," an Impact spokesman said.
The benchmarking report is expected to be given to unions tomorrow afternoon.
The benchmarking body, which includes employer and union representatives, reviewed the salaries of 300,000 public sector employees, including civil servants, gardaí, teachers and nurses.