11/05/2026
Delays in negotiating a new Employment Regulation Order (ERO) for about 30,000 workers in the childcare sector, have raised the possibility of using a different pay mechanism, the Registered Employment Agreement (REA).
However, for this to work, the Department of Children, Disability and Equality (DCDE) would have to be willing to provide the same funding for wage increases it has offered to the whole sector, conditional on an ERO being agreed, to the parties to an REA instead.
While an ERO sets minimum pay and conditions for all employers and workers in a sector, an REA only has legal effect on the employers and workers who have signed up to the agreement. (This is the current legal meaning of an REA, and is not to be confused with the sector-wide REAs that existed before they were ruled unconstitutional in 2013.)
DCDE has said it is willing to allocate €45 million in ringfenced funding for pay increases for workers covered by the ERO over the 12 months from September 1, 2026, provided that a new ERO is in place by then, to ensure the money is used for wage increases.
This would be on top of the €45 million that was available for the same reason over the 12 months from September 1, 2025. Since an ERO was not implemented until early October 2025, €5 million of this €45 million had to be returned to central Exchequer funds.
THREAT TO FUNDING
The main union in the sector SIPTU, which represents about 6,000 workers, has expressed concern that even more funding will be lost to the sector this year.
Last month, the union’s head of strategic organising, Darragh O’Connor, said: “If a new deal is not agreed, providers will lose out on €45 million of funding, educators will miss out on a pay increase, and parents will find it even harder to find a place for their child. We are calling on the employers' groups to get real, to take responsibility and negotiate the new deal that services, staff and parents want and deserve.”
The National Community Childcare Forum (NCCF), which represents community-run creches, which account for over 30% of childcare providers, also recalled the return of €5 million in funding last year, saying: “We cannot allow this to happen again.”
Its chairperson, Marie Daly, said in late April that the NCCF “respectfully requests that the relevant organisations sitting on the Joint Labour Committee prioritise the commencement of negotiations to ensure the allocated funding is secured”.
The two employer groups who sit with SIPTU on the Joint Labour Committee (JLC), the forum for agreeing a draft ERO (which then has to be approved by the Labour Court and the Minister responsible for employment) are Ibec affiliate Childhood Services Ireland (CSI) and the Federation of Early Childhood Providers (FECP). CSI declined to comment, as there is a process ongoing, while FECP was contacted for comment.
IRN understands that the employer bodies are concerned about the caps on parental fees which are another condition of the ‘Core Funding’ for the sector, of which the funding for pay increases is a part. They are seeking a relaxation of these fee caps, citing their members’ financial difficulties.
‘PLAN B’ FOR PAY
However, union sources now say that if it becomes clear that an ERO will not be in place in time for September, alternatives such as the REA mechanism may have to be considered.
REAs are collective agreements which are registered with the Labour Court under the 2015 Industrial Relations (Amendment) Act and are legally binding only on the parties which sign them (as opposed to an entire sector, like an ERO).
Over the 10 years since this version of an REA has been available, just seven such agreements have been registered, with only three of these involving multiple employers: one covering employment guarantees for Dublin Bus and Bus Eireann drivers affected by route tendering; and two involving a small group of less than 10 overhead power line contractors, who employ less than 1,000 workers between them.
An REA covering a significant proportion of the childcare sector, which has over 4,000 providers employing over 30,000 workers, could be a more complex undertaking.
An employer body would be required to co-ordinate that side of such an agreement, but even then, each individual member employer would be required to sign up individually, as is the case with the overhead power line contractors.
If the NCCF shares SIPTU’s concerns about lost funding, it could be such a body. Its members cover less than a third of the sector, although other providers could sign on as well.
PAYMASTER’S ROLE
However, the main reason for engaging in such a process would be to secure the DCDE funding for pay increases, which would require the Department to divert the funding from the whole sector to just part of it.
It remains to be seen if the Department would be willing to take such a step, although if no ERO emerges from the JLC process, the alternative would be to hand back the full €45 million in extra funding.
The Department told IRN this week that the JLC parties have since 2022 successfully negotiated three EROs, adding that recently the Minister met with JLC representatives to outline the Government’s continued support for improved pay in the sector and the JLC process.
Also, the Department continues to support the JLC and the negotiation process “by fulfilling data requests which it has received from the Committee members”.
“The Minister believes that it is vitally important that the Committee engage in productive negotiations, ensuring that the high level of investment being made through Core Funding for improved pay is maximised. The Minister looks forward to the negotiated outcomes of the Joint Labour Committee.”
GOVERNMENT STRATEGY
The Department also referred to the Government’s strategy for the sector, ‘Shaping the Future: The Early Years Action Plan, Phase 1 Report’ (2025). Key objectives include reducing parental fees to a maximum of €200 per month, increasing the supply of childcare places through strengthened funding, improved staff wages and the introduction of State-led facilities, and expanding inclusion.
These actions will be delivered in two phases: Phase 1 in 2026 using existing mechanisms, and Phase 2 from 2027–2029, informed by public consultation and analysis.
“The development of Phase 2 is in progress. Among the issues for examination in developing Phase 2 (including through a public consultation process that is underway) are whether there are alternative mechanisms that could achieve improvements in staff wages and working conditions more effectively than the current mechanism of Employment Regulation Orders.”
This suggests that the Department is willing to consider alternatives to the ERO mechanism in the medium term rather than in the short-term immediate situation facing the sector this year.
UP TO 50% HIGHER PAY
Separately, the Minister for Children, Disability and Equality, Norma Foley, told Labour Party TD Robert O’Donoghue in the Dáil last month that since 2020 (two years before the first ERO was implemented in the sector in 2022), wages for the lowest 20% of workers have risen by 41% for the key entry grade of Early Years Educator and 50% for the first promotional grade of Lead Educator.
This applies to the lower-paid employments on the ERO minimum hourly rates of €15 for Early Years Educators and €16 for Lead Educators.
Separate figures from community body Pobal, which monitors the sector, show an average rate of €15.86 for Early Years Educators in 2025. The average wage for this grade in 2020/21, immediately before the first ERO, was €12.10, implying an increase of 31% at this higher-paid level.
Original article available at https://www.irn.ie/article/33152
