Croke Park II is dead but the €300 million savings problem remains

“The proposition is dead; that is democracy.” With those words Siptu president Jack O’Connor pronounced the demise of the Croke Park II agreement and, with it, for the present, the Government’s hopes of securing by agreement a €300 million reduction in its public service pay bill for this year.

The permutations of the system used by the trade union movement for considering such deals with the Government meant that once Siptu had rejected the Croke Park II proposals, they no longer had any chance of securing sufficient support for ratification at a planned meeting of the public services committee of the Irish Congress of Trade Unions today. So what happens now?

Target of €300m
The Government has no agreement with the public service unions and the clock is ticking towards the beginning of July when, by its own calculations, it will have to begin implementing savings if the €300 million target is to be achieved by the end of the year.

There are, in reality, a number of scenarios that could play out. The Government could, as Taoiseach Enda Kenny has signalled, simply introduce legislation to give effect to the cuts to secure the €300 million in savings for this year and the €1 billion it is seeking over three years.

Such a move would obviously present its own political difficulties, most notably for Labour Party backbenchers who would have to vote on legislation to impose pay cuts as against just for legislation to enable cuts which had been agreed by the staff if the Croke Park ballots had been carried.

However trade unions have warned any move to legislate to impose cuts will be resisted.

O’Connor made it quite clear he believed that union members who voted to reject the Croke Park proposals “were resolved to take industrial action if the Government proceeded unilaterally”.

Jimmy Kelly of the Unite trade union also warned of possible industrial action.

However industrial action is not an imminent prospect. First the Government would have to take its own unilateral action to cut the pay bill and then the public service trade unions would have to ballot members on their response.

While public service staff voted comprehensively to reject the proposals, there are no guarantees they would vote in such numbers to take industrial action, specifically if that involved lengthy, costly disputes.

Another issue is that the coalition of unions which spearheaded the No campaign were united mainly in their opposition to the Croke Park II proposals. Any alternative strategy may not generate the same broad appeal.

Ideally the unions would prefer if the Government dropped its entire plan to seek the €1 billion savings on the public service pay and pensions bill and dealt with the problems in the public finances by means of the taxation system with the wealthy taking a greater hit.

Politically this seems unlikely, as does the suggestion by Minister for Education Ruairí Quinn that an alternative could be deeper cuts in frontline public services.

Back to drawing board
Renegotiating a new agreement from scratch would also seem unlikely from a time perspective, given the savings have to be generated from July. Second, the basic philosophy of the designers of the Croke Park II deal was that everyone would be affected but nobody excessively. Drawing up an alternative architecture which would attract sufficient support would not be easy as the process is a zero-sum game. Concessions made in one area would have to be offset by greater hits elsewhere.

All of this finally leads to the option of the Government and the unions re-engaging, perhaps with the help of a third party such as the Labour Court or Labour Relations Commission. This would be not with a blank sheet of paper, but to "tweak" existing arrangements to bring on board even some of the unions that voted No.

Under the rules of congress, if Siptu and, for example, the national teachers could secure sufficient changes to make them change their minds, a revised deal could get over the line. However, unions would more than likely have to ballot again and the problem would remain of what to do about a significant group of unions which would not be bound by any majority decision.

There are unlikely to be any easy options.