Local authorities are having difficulties recruiting and retaining staff in their water services division because of fears that employees will be transferred to the Irish Water semi-state, and will lose their public service status.

That is according to a report published today by the Workplace Relations Commission (WRC), which was commissioned to assess the problem by the Minister for Housing, Planning and Local Government Eoghan Murphy.

Since 2013, national water services have been overseen by commercial semi-state Irish Water, but are delivered through 31 Service Level Agreements (SLAs) with individual local authorities employing around 3,500 workers in their water divisions.

When those SLAs expire in 2021, Irish Water now wants all local authority water staff to move into its semi-state as a single public utility.

It says that without such a unified utility, the structures are too complex and inconsistent, and cannot deliver the required improvements in cost, customer service and efficiency.

In her assessment, WRC Director Genral Oonagh Buckley says it is clear that the SLA system delivered many benefits, including the effective transition of water service delivery to Irish Water, and that the continued involvement of specialist staff with expertise is essential for continuity of service.

However, she notes fears voiced by the Local Government Management Association that uncertainty about the next phase of transformation appears to be causing difficulties in staff retention and recruitment to water and waste services at local government level.

Although current legislation protects the pay, pensions and conditions of local authority staff if they transfer to Irish Water, it is understood that some local authority employees are choosing to work anywhere but the water division to avoid the risk of being moved out of the public service.

Ms Buckley says that additional delay in clarifying the future structure for the delivery of water services could exacerbate this situation, and consequently increase the risks to the safe and effective delivery of water and waste water services over the medium term.

The report notes that since Irish Water took over, there have been significant cost reductions, a major capital programme has been ramped up and there has been improved incident and management reporting.

In its submission to the WRC, the Irish Congress of Trade Unions defended the SLA model, and called for water services to continue to be delivered through direct labour in public service local authorities.

It said forcing staff to transfer to Irish Water would be the equivalent of "conscription" - adding that it could facilitate privatisation of water services.

Congress also raised fears that Irish Water would outsource work to contractors rather than using direct labour.

Irish Water argues that the existing SLA system cannot deliver the transformation required to build an effective modern public water utility, deliver further reductions in operating costs or improvements in operational performance and customer service.

Irish Water told the WRC it was committed to creating a national public water industry workforce with a "core insourced model" for core operational activity, supported by a competent and efficient supply chain for specialist services and delivery of its capital programme.

Irish Water has insisted that there will be no compulsory redundancies, and that it will develop career development opportunities for staff.

The future relationship between Irish Water and local authorities would be managed through a Local Water Liaison Office.

Meanwhile, the Local Government Management Agency raised concerns that the transfer could impact on their financial resources - including in relation to pension liabilities.

The WRC notes that issues of public policy are outside its remit, but says it has been told that work on legislation or a possible referendum to protect the public water system in public ownership is ongoing.

The future relationship between Irish Water and local authorities would be managed through a Local Water Liaison Office.

The Department of Housing has said that Minister Murphy will reflect on the findings by the WRC, and will consider the next steps to be taken.