The Minister for Public Expenditure and Reform, Brendan Howlin, T.D, today announced the terms of a Government Decision for the introduction of pay ceilings for higher posts across the public service and for CEO posts in Commercial State Companies.
The Minister stated "in light of the ongoing severe economic conditions facing the country there is a need for leadership to be shown by those who hold high office across the public sector. The Government supports a strong policy of pay restraint within the public sector, including the application of pay caps. On assumption of office the Taoiseach, other members of the Government and a number of other officeholders have, in line with that commitment, voluntarily reduced their salary rates, with the Taoiseach’s salary now set at €200,000.
I gave much consideration on how to best implement a reduction in pay to CEOs in a fair and balanced manner. I decided that instead of just applying a €250,000 cap - which is a crude instrument that only affects pay rates above that figure – that I would reduce the salary ranges that apply to CEO salaries which has the effect of both reducing the salary for all CEOs in an proportionate manner while maintaining the "weightings" between each Company.
This Government is not going to shy away from the tough decisions needed to get our public finances in order but we are going to ensure that these actions are taken in a fair and equitable manner."
On foot of proposals brought to Government by the Minister, The Government has agreed to the introduction of:-
a general pay ceiling of €200,000 for future appointments to higher positions across the public service;
a general pay ceiling of €250,000 for future appointments to CEO posts within Commercial State Companies
Where legislative amendments are required to give effect to these decisions (i.e. for Statutory Office Holders such as the Judiciary) the Minister is to bring forward legislative proposals shortly to the Oireachtas.
While the above provisions will apply to new appointments to posts, the Government has given detailed consideration to the potential legal and contractual issues arising from the imposition of an immediate reduction of salaries on current incumbents (other than the Judiciary) whose salaries are in excess of the proposed salary ceilings. The Government has decided to seek, in the first instance, voluntary waivers of salary of 15%, or by a lesser amount if the application of the full 15% reduction would bring the salary levels of such individuals to below the proposed pay ceiling of €200,000 for the public service and €250,000 for CEOs of Commercial State Companies.
In imposing the pay ceilings for new appointees, the Government recognises that in a small number of cases exceptions may be necessary. Such exceptions will be limited to instances where the exception is for a role of substantial importance in the public service or a Commercial State Company and the person whose appointment is sought brings exceptional or scarce expertise and/or qualifications to the proposed role. Any such exceptions are subject to the prior approval of the Minister for Public Expenditure and Reform.
Minister Howlin will review the current system of Performance Related Award Schemes for CEOs of Commercial State Companies in conjunction with Ministers with Commercial State Companies under their aegis to consider improved input and oversight by Ministers of such schemes and to assess generally the operation of the Schemes.