The Labour Court pay agreement promises the introduction of new productivity measures that will “transform the profession”.

In return for the gains in productivity, a new enhanced nurse practice” (ENP) salary scale is to be established. Nurses, with “certain qualifications”, on points 4-13 on the current scale, can migrate to the new ENP scale.

Nurses on points 1-3 will benefit from a revised “new entrants measure”. This entails the skipping of point 2 on the current scale. Point 2 on the scale is now redundant.

The Location/Qualification allowance will also be extended to the nursing and midwifery staff working in “medical and surgical areas”.

Consider first the productivity issue. Labour productivity in the public sector is a critical issue that has largely been ignored. Linking pay to productivity is a long overdue incentive that is to be welcomed.

A productivity-based pay award does not contravene the Public Service Stability Agreement (PSSA), as the PSSA does not contain any monetary incentives to promote productivity.

But how are nurses going to “transform the profession”? The productivity measures cited in the agreement mention shifting work to the community, flexibility of rosters, a review of staffing and the skill mix, and an integration of care organisations. This does not sound like a “fundamental change in the role of the staff nurse”.

Nurses are a key component of a multidimensional team and cannot, independently, increase labour productivity. One of the reasons nurses went on strike is because they perceive work conditions to be unsafe due to understaffing. The extent of understaffing is reflected in expenditure on agency staff.

Last week, the HSE announced agency staff costs of €318m in 2018, up 9% on 2017. Of this, the cost of agency nurses was €76m, up 19%. University Hospital Limerick had the highest general agency spend on €11m.

The only realistic way of increasing nurse’s labour productivity is through a significant restructuring of the entire health sector involving significant investment in new capital, technology, education, and new work practices. The timeframe could be as long as 10 years or more.

In New Zealand, Australian personnel were employed to create a world-class health service based on the principles of prevention, access, equity, and integration.

The Labour Court makes it clear that the productivity measures are expected to result in cost savings. These savings will be subject to an “independent verification mechanism”. Failure to achieve these savings by the end of 2019 will lead to a “pausing” of the new agreement.

But verify what? No specific targets are identified and the deadline of end-2019 is totally unrealistic. If “pausing” really means “stopping” the pay award, there will be only one outcome: Nurses back on the picket line in mid-winter 2020.

The unspecified productivity targets, in effect, undermine the entire agreement.

Turning to the pay award, the Labour Court agreement does not specify what will be the average annual increase in nurses’ pay. However, immediately after the agreement was announced, a figure of 2.5% per annum appeared in the media. The source of this figure was not identified.

As with all averages, some nurses will be above and others below. But an average pay rise of 2.5% seems particularly low given what is expected from nurses.

The first drain on this pay rise will be inflation. The Central Bank of Ireland is forecasting an inflation rate of 1.4% in 2020. Hence, in 2020, 56% of the 2.5% pay award will be wiped out by inflation.

The second drain is the income tax rate. A new-entrant, single-status, nurse on a salary of €32,000 will move into the 40% tax bracket and will also pay an additional 5% in USC.

There is not much of an incentive left to transform the nursing profession. Overall, the Labour Court agreement appears to offer very little monetary incentive to the “average nurse” and is built on achieving unattainable productivity targets.

However, the 2.5% figure could be a misleading under-estimate. For reasons outlined below, it is currently not possible to calculate the annual, average payment to nurses.

The majority of nurses are on points 4-13 on the current scale. Should they transfer to the new ENP scale, the average pay increase will be 6.5%. Nurses on point 5 of the current scale will receive a 9.1% increase. These pay rises do not include the location and qualification allowances worth €2,230 and €2,791 respectively.

What of new-entrant nurses? On its website, the INMO outlines the progress of ‘Siobhán’, a newly qualified staff nurse. The storyline is as follows:

“After 16 weeks on the first point of €29,346, Siobhán skips the second point and goes straight to the third point of €32,171. A location allowance of €2,230 brings her salary to €34,401.

“One year later, she will be eligible to move to the new ENP scale. If she is successful her new salary will be €38,036 including the location allowance. This is €5,865 or 18% more than the current arrangement.”

The INMO also cites examples where Deepa’s salary will rise by 9.5%, Moira’s by 9% and Angelica’s by 12%. All of these awards are on top of the pay awards in the PSSA.

Do these potential pay rises explain the convoluted nature of the award? Normally, all nurses would be treated equally and a simple uniform pay award would prevail across the profession. Here there is a suspicion that the pay awards are being camouflaged or disguised to prevent knock-on wage demands in other public sectors.

Siobhán’s example illustrates one critical point. That is, nurses’ eligibility to transfer from the current pay scale to the new ENP scale. This transfer is not automatic. If a nurse does not transfer to ENP, she will receive little or no increase in pay.

The Labour Court agreement is vague on this issue. The document merely states that nurses must have “certain qualifications” and the “final details” have yet to be resolved. Currently, Irish universities are offering a full-time, four-year BSc degree in nursing. The “qualifications” necessary over and above this degree are not specified in the agreement.

The INMO website does not mention this issue. Nurses are being asked to vote on an agreement that does not clarify the critical transfer issue.

As we do not know how many nurses are eligible to transfer to the ENP scale, it is not possible to calculate their average annual salary. Hence, the 2.5% figure mentioned earlier is inaccurate.

How should a nurse vote in March?

A resounding yes if you have the qualifications. Otherwise, vote no. And if the agreement is ratified, expect very serious implications for wage demands in other public sectors.

- Dr Anthony Leddin is professor emeritus and former head of Economics at University of Limerick