THE Department of Finance climbed down on major pay cuts for 650 senior civil servants and other highly-paid public workers, primarily because they feared a costly legal action.
Legal advice had been sought by the Association of Assistant Secretaries and Higher Grades, which found that performance-related awards were in fact part of a “core remuneration package”.
The Minister for Finance Brian Lenihan eventually decided to scale back the pay cuts for senior civil servants to take into account these bonus payments, which had already been stripped from their salaries.
A series of documents released under the Freedom of Information Act detail the to-ing and fro-ing that went on between the Department and the civil servants, as early as last May.
A letter sent by Bryan Andrews of the Association of Assistant Secretaries and Higher Grades said: “Our membership is also strongly of the view that for the purpose of any exercise being contemplated as part of a reform of public service pay, Performance Related Awards must be seen as part of our core remuneration package.
“Such a position is strongly borne out by the legal advice now available to the Association. As you will appreciate from the foregoing, the Association has considerable concerns about this review exercise.”
Mr Andrews said his association represented an “important cohort of senior management” and that they were acutely aware of the deterioration in public finances.
He said: “We are also keen to emphasise that we are more than willing to make our contribution to restoring the health of the public finances subject only to the proviso that it is done in a fair, equitable and transparent manner.”
The Association also made a separate submission to the Review Body on Higher Remuneration in August of last year, arguing that the current debate about high level of pays was “driven by ill-informed media comment”.
Mr Andrews said that on a comparison with the private sector; pay for senior civil servants was just 53 per cent of what it should be.
He wrote: “There can be no justification for a further decrease in current remuneration levels for the assistant secretary grade.
“Indeed, in other more favourable economic circumstances, this data would overwhelmingly support the case for an increase.”
In October of last year, Mr Andrews wrote to the Minister for Finance requesting a meeting as a “matter of urgency” to discuss pay cuts.
He said: “While we have made a very considered, reasonable and detailed submission to the Review Body on Higher Remuneration … we have had no indication to date, other than through various media comments and conjecture, of the recommendations contained in their report.
“We are deeply concerned, for example, regarding the level of consideration, if any, give within those deliberations to the status of the performance-related awards scheme which we regard — and this is supported by legal advice — to be an integral part of our remuneration package.”
It said that the removal of the bonus scheme had put the senior civil servants at a “serious financial disadvantage” relative to others.
Mr Andrews said: “In your announcement to abolish the performance related element of our remuneration, you stated that this would be subject to discussions on the implementation of this decision.
“Such discussions have not taken place in any meaningful way and the abolition summarily of the performance related element represents a 10 per cent reduction across the board.”
The Minister for Finance agreed to a meeting with the Association in November and a briefing note prepared for Brian Lenihan outlines the compromise reached.
It says that the removal of the performance related bonus would be taken into account and that a much smaller pay cut of three per cent would apply instead.
Ciaran Connolly, Secretary General at Public Service Management, wrote: “There is a risk that the proposed approach will attract criticism from news media or from unions representing lower paid public servants, which could focus solely on the reduction in the salary scale while ignoring the reduction through the suspension of the awards scheme.
“It is important that the presentation of this issue refers to the full reduction incorporating the effect of the suspension of the awards scheme resulting in overall reductions of 11.8 per cent for Assistant Secretaries and 14 per cent for Deputy Secretaries.”
The relevant documents are attached and make interesting reading [some have not been released and that explains the numbering]:
