Minister for Public Expenditure and Reform Brendan Howlin said that he looks forward to a new agreement with public servants next year that will see them into a new era beyond pay cuts.
Addressing SIPTU's Health Division Conference at Liberty Hall, he acknowledged the contribution of public servants to Ireland's recovery.
He told delegates that while the journey was far from over, a sound foundation had been laid.
Mr Howlin said public service unions had made it crystal clear that they would be seeking a discussion on restoration of pay cuts next year, adding that he hoped they would be able to come to an agreement that would see them into a new era beyond fiscal crises.
Speaking to reporters, Mr Howlin described the moratorium on recruitment, the end of which was announced in the Budget, as draconian, resulting in the public service being downsized by 10%.
He said they now want to give budget lines to each State agency and government department, so that they could decide the skill mix necessary.
However, he warned that as recruitment resumes, not all jobs would be fully permanent and pensionable.
He said that some would be short-term contracts, adding that that flexibility should be devolved to the frontline decision-makers.
Replying to the minister's speech, SIPTU Health Division Organiser Paul Bell welcomed the ending of the moratorium, saying front line staff and the service they provide had been crucified by it.
He also praised the minister's comments on the need to reduce the use of agency staff, and called for more efficient use of direct employment.
Mr Bell said this was costing €250m at a time when union members were being "chased around various hospitals for further reductions in their pay".
Mr Bell added that public servants were not in that space any more, and that it was time for income recovery, without any further threats of outsourcing or pay cuts.
He called on the Government to bring to an end the emergency FEMPI legislation, which gave ministers unacceptable powers to unilaterally vary terms and conditions of employment.
