Formal talks on a new public sector pay deal get under way at the Workplace Relations Commission (WRC) on Monday, with the two sides still hundreds of millions of euro apart.

The talks follow Wednesday’s national strike, the first of its kind in 17 years, when around 300,000 public servants walked out.

A second 24-hour stoppage planned for this Wednesday was suspended on Friday after both sides agreed to talks.

Public Service Strike 1
Public sector pay talks begin at the WRC this week. The Government set aside €1.2bn, but unions say much more is needed. Pic: Sam Boal/Collins Photos

At the heart of the dispute is a simple question: how much money is on the table?

What the Government has set aside

In Budget 2027, Minister for Public Expenditure Jack Chambers allocated €1.2 billion for public sector pay next year.

That must cover what is still owed under the last deal, which expired on June 30, any new agreement and the pension costs that come with it.

A separate €1.6 billion contingency fund could also be drawn on. Minister Chambers has described the €1.2 billion as a starting point for discussions.

What unions say is needed

Unions have not formally tabled a figure, but some have indicated that more than €2 billion will be needed to settle the dispute.

The Dail has been told that a 5% pay rise in 2027 alone would cost €2.1 billion. That leaves a gap of at least €800 million.

Public sector pay: the numbers
Government
€1.2bn
Set aside in Budget 2027 to cover the old deal, any new deal and pension costs
Plus a €1.6bn contingency fund that could be drawn on
Unions
€2bn+
Needed to settle the dispute, according to some unions
A 5% rise in 2027 would cost €2.1bn, the Dail has been told
The gap
At least €800m
Unions say the Budget figure means about a 2.5% rise next year, with inflation at 4.1%

Fórsa general secretary Kevin Callinan, who leads the union side, says the Budget allocation works out at about 2.5% at best once pensions and old commitments are included, with inflation running at 4.1%. He has called it ‘no credible starting point’. The Irish Times has estimated the figure could allow a rise of 3% to 3.5%.

Unions also want increases covering this year. They say a gap of at least 5% opened up between pay and prices over the past five years.

The Government’s case

The Government says pay has broadly kept pace with prices. It says public servants received increases of 22.5% over six years, rising to 36% for the lowest paid, and that the last deal delivered 9.6% against inflation of 6.6%.

The new agreement will cover around 400,000 State employees, including civil servants, nurses, teachers, Gardai, local authority staff and Defence Forces personnel.