“Shared Commitment to Addressing Public Sector Pay Erosion through Constructive Engagement”

The Government and all public sector Unions say they acknowledge the genuine concerns that have arisen in recent years regarding the erosion of public sector purchasing power, driven by global inflation and successive economic shocks. All parties agree that this reality must be addressed responsibly and collaboratively, in the interests of public servants and the wider community.

A statement continued: “The parties recognise that this year’s public sector pay award, announced in the 2025 Budget, represents only the beginning of a process to correct that imbalance. Nonetheless, it is an important step: the second largest public sector pay rise in Gibraltar’s history; although it is agreed that the parties would have wanted to see the public sector pay proposal for 2025/26 to have gone further had it not been for financial constraints.

“While constitutional and fiscal constraints limited the breadth of consultation in this year’s process, all parties recognise the need for deeper, earlier engagement in future. The Unions have been briefed on the Government’s intention to approach public sector pay over a longer horizon and welcomes the commitment to sustained, structured dialogue.

“To that end, all parties commit to a clear timeline of constructive monthly meetings with engagement and negotiations beginning in September up until the 2026 Budget session, with the shared commitment of restoring real-terms value in public sector pay. A revised roadmap of milestones will be shared and agreed with the Unions, and will form the basis of future Public Sector Pay Rise negotiations.

“Above all, all parties remain committed to ensuring that Gibraltar’s public servants are supported, valued, and fairly rewarded for the vital work they do, now and in the years to come.”