After the 2008 financial crash, a number of pay reductions were enforced on state workers due to a controversial financial emergency law. However, according to the Minister for Public Expenditure, Paschal Donohoe, this law has now been entirely reversed.
In his yearly analysis and report regarding the Financial Emergency Measures in the Public Interest Act (Fempi), which has been recently presented to the Oireachtas, Mr Donohoe stated that this law achieved its end goals. The last part of the restoration regarding reductions which were implemented as a result of this law was related to the pay cuts that were set for state service workers who earned more than €150,000. This took place in July 2022.
The funds saved through the Fempi law allowed the government to reconcile conflicting societal requirements. According to him, it enabled meeting the requirements for enhanced public services by employing over 107,000 extra workers over the decade leading up to the start of 2024, including 16,369 teachers, and 14,055 nurses.
Trade unions for public service had demanded the whole and final reversal of the financial emergency law during the negotiations that resulted in the recent pay agreement for the 400,000 workers on the state’s payroll.
Union leaders claimed that it was essential to conclude Fempi in order to re-establish regular industrial relations in the public service.
Following the 2008 public finance collapse, several financial emergency laws were passed by the Oireachtas.
The 2009 Fempi law included the public service pension levy and a decrease in professional fees paid to external providers by State bodies.
Another Fempi law allowed for pay reductions of between five and 20 per cent for public service personnel, including members of the Oireachtas and some public office holders.
In 2010, a law was enacted permitting reductions in public service pension costs and to the National Minimum Wage.
Further pay cuts for public service workers earning over €65,000 were effected by another Fempi law enacted in 2013.
The legislative provisions put forth in 2015 set the path for steadily dismantling the measures established by previous acts. In 2017, the Act of Public Service Pay and Pensions laid down a legally binding plan for the systematic withdrawal of the outstanding Fempi measures.