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Dublin: 10 °C Monday 22 September, 2014

Damien Kiberd: ‘Top-up’ payments part of a game whose rules need to change

“The model of social partnership promoted since 1987 relies for its internal cohesion on permitting people at various levels within the system to milk that system for their own benefit.”

Damien Kiberd

FREEZE A WORKER’S pay by edict and he will wait in the long grass for an opportunity to recover his lost living standards. Cut the pay of a generation of workers and freeze their living standards indefinitely and they will strike back in the most convoluted ways.

Intelligent employers know the score. Work is essentially a commodity that’s bought and sold in a marketplace. Pay peanuts, get monkeys.

Years ago I worked for prolonged periods as a ‘track maintenance labourer’ on the British railways. The work was hard and dangerous, the pay was great.

Each week I got two pay packets – one for a fictitious Patrick O’Sullivan

Each week I got two pay packets, one made out in my name, the other in the fictitious name Patrick O’Sullivan. Like me, fictitious Pat had a tax number and paid income tax and social insurance. But I kept his net pay.

I was working for a major civil engineering firm whose shares were (and still are) quoted on the London Stock Exchange. They were supplying services on contract to 100% state owned British Rail.

The British government of the time was obsessed with keeping a lid on pay. The number one aim of economic policy was to wipe out the other English disease-inflation.  It imposed a pay freeze.

My employers felt this did not make sense. Workers had to ‘make up their (real) wages’ somehow. Therefore there were ‘dummy’ workers all over the rail network. The situation became so crazy that fictitious Pat and I would do ‘emergency shifts’ on double time every Saturday night, even when there were no ‘emergencies’.

I found three men lying fast asleep in sleeping bags

On one such night the ganger sent me to collect thirty-two fishplates from a hut a mile up the track. As I entered the pitch black hut I heard a pronounced rustling noise. For a moment I thought the hut was full of rats but when I switched on a torch I found three men lying fast asleep in sleeping bags.

All three were managers employed directly by British Rail, one a senior area manager. Unlike me they did not get ‘top-up’ pay but they ‘worked’ nights by choice. But they had basically lost interest in their jobs. They slept most of those nights.

Expenditure Minister Brendan Howlin should not be at all surprised that last week’s trawl of the health sector turned up 36 new types of special allowance being paid to 190 different individuals, mostly top apparatchiks.

He’ll be rightly annoyed that the payments were not revealed two years ago when he uncovered 1,400 different special pay allowances across the public sector as part of a review of the Croke Park deal and its effects. How many more of these arrangements are still lurking in the woodwork?

The ‘justification’

In some cases the ‘justification’ advanced for the payments is threadbare, the methods used to fund them very shabby indeed. Health sector chiefs claim that the recipients of the payments are performing tasks ‘over and above’ their normal contractual obligations. Hospitals are accused of tapping the cash flow of sweetshops and car parks on their campuses to finance the payments. Meanwhile sick people wait in queues as hospital chiefs protest loudly about the underfunding of the health service.

The discovery caused a predictable wave of moralising across government and media. In Dáil Éireann, Fianna Fáil leader Micheál Martin became apoplectic and lashed out at “disturbing, under the carpet” payments. There are no carpets in hospitals, Mick.

The Irish Times fulminated about the culture of “perceived entitlement”, about people who were “detached from social and ethical obligations”.

Humbug

This is mostly humbug. It’s not so long since reporters on Dublin daily newspapers got Revenue-approved ‘outdoor clothing allowances’ in case their clothes got splashed with Chablis or Puligny-Montrachet at some press reception.

And when it comes to special payments for customised services you could not hold a candle to Fianna Fáil. In government the party saw half its backbench TDs getting top-up payments for chairing Oireachtas committees. It imposed a completely alien culture of financial reward on tiers of local government that had for decades been performed on a voluntary basis. And in certain instances it permitted its public representatives to fill out expense claims that might have made it onto the shortlist for the Impac award for short works of fiction.

Howlin faces an immediate legal problem about how to deal with the latest batch of special payments. In many cases there may be a contractual obligation on government to continue the payments which can account for half of an individual’s remuneration.

An appalling message

Yet simultaneously the payments may contravene both the Croke Park and Haddington Road agreements. Failure to clamp down on them would send an appalling message to public servants on modest incomes, however.  Is there one law for the top layers of bureaucracy, another for ordinary workers?

Financial controllers across the public service appear to have been using all kinds of imaginative schemes to remunerate senior staff. There are obvious ways to do this such as the payment of car allowances, mileage allowances and health insurance premiums.

Other less obvious means include tasking staff members with ‘posts of responsibility’ such as serving on boards of directors of subsidiary enterprises, chairing special committees, acting as company secretary and so forth. In many cases too, it appears that senior managers are given automatic entitlement to ‘extra years of service’ in calculating their final pension entitlements.

This may all be reprehensible when judged in the context of six years of Troika-imposed austerity. But does central government possess the moral authority to launch an all-out attack on top-up payments?

Milk the system

The model of social partnership promoted since 1987 relies for its internal cohesion on permitting people at various levels within the system to milk that system for their own benefit. Senior public servants became what in the old Soviet Union were referred to as Nomenklatura, essentially upscale paid hangers-on of the regime. Trade union officials got sucked in too, in some cases.

Dismantling the system may mean dismantling the process whereby we have controlled our labour markets for a quarter of a century. Ireland’s Nomenklatura are in many cases the authors and executors of the current six-year pay freeze.

Many rank and file workers might prefer at this stage to change the rules of the game. And all economists agree: an improvement in domestic spending is a necessary pre-condition for full economic recovery.

Last week: Why we need to deliver an Irish version of the NHS>
Find all of Damien Kiberd’s columns for TheJournal.ie here>

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