The Government and unions are to look at a new model for gain-sharing in the public service which could benefit up to 250,000 State employees.
Talks are to take place on gain-sharing in parallel with those on bench-marking, which will compare public-sector pay rates with those in the private sector. The gain-sharing talks, which will be the first attempt to introduce such a scheme across the public service in any EU state, are expected to take longer than the June 2002 deadline for the bench-marking review.
Unions and the Department of Finance have agreed on the desirability of a gain-sharing model to mirror similar deals being negotiated in the private sector. Criteria agreed for beginning negotiations include provision for the National Centre for Partnership to audit the savings on which gain-sharing deals would be based.
Unions have accepted in principle that schemes must be based on measurable savings or improvements in service. If these criteria are met then public-service employees can hope to enjoy extra payments based on a percentage of the exchequer savings achieved.
The extra payments would be invested in a trustee fund similar to Employee Share Option Trusts (ESOTs) in the private sector. The fund would have joint management-union representation and could not be accessed by employees for at least three years. Tax relief will be granted on the basis that funds are frozen for at least this period.
The general secretary of the Civil and Public Service Union, Mr Blair Horan, confirmed yesterday that agreement had been reached on criteria for negotiating public sector gain-sharing schemes. He said these were based on a feasibility study commissioned by his own union in 1998.
He commissioned the study after the Taoiseach, Mr Ahern, signalled that the Government would be interested in such an approach, when he addressed the Irish Congress of Trade Unions biennial conference in 1998.
Mr Horan said the agreement to examine gain-sharing was based on "a recognition by the Department of Finance of diminishing scope for tax cuts to compensate civil servants for low basic pay. I'm confident the model we have now adopted will secure improvements for the overall economy as well as incentivise members."
While he said that talks could be difficult he believed they would ultimately be successful. Besides addressing discrepancies over gain-sharing between the private and public sectors, he felt that such schemes could also tackle the growing gap in earnings between higher and low-paid public servants.