Community and Public Sector Union national secretary Nadine Flood. The union opposes a longer working week. Photo: David Tease
On March 28 this year, the government released its new workplace bargaining policy, setting out the framework for negotiations with Australian Public Service employees over new enterprise agreements. Whatever happens during the negotiations, one thing is clear: public servants should not expect guaranteed pay increases in their next enterprise agreement.
It is far too easy to say the public service is a different creature to the private sector, and that setting performance standards that have measurable outcomes will never work.
This position is unsurprising given Employment Minister Eric Abetz's public statements about enterprise agreement terms and conditions, particularly in the context of the Ford and Holden industrial disputes. At a recent Sydney Institute address, Abetz noted: ''It is of great concern to the Coalition that unions and employers have inserted unproductive and expensive clauses into enterprise agreements, particularly where the taxpayer is subsidising the sector.''
This is a cautionary tale for government agencies, who should be prepared to stand strong in the face of ambit union pay claims that may jeopardise job security. Considering the greater good in the context of what is affordable with current government funding will be the key to ensuring job security, rather than securing a future for a minority, albeit with an ever so slightly higher annual pay increase.
It is pay that is likely to be the hardest-fought battle as agencies negotiate their new agreements.
The workplace bargaining policy requires that any increases in salary:
- are funded through existing budget allocations without redirecting program spending;
- are offset by genuine productivity gains, which must not be achieved by arbitrary reductions in staffing levels; and
- are not backdated.
The relevant minister has no discretion to approve an enterprise agreement if the proposed agreement is not affordable within existing budget allocations.
It will also be interesting to watch how the unions approach these negotiations. Historically, unions in all sectors have taken the position that an increase in benefits is the primary focus, even if that results in job losses.
Abetz drew attention to this approach in his Sydney Institute address: ‘‘I have also wondered why the union bosses continue to push the envelope in making unsustainable demands, even when they know that it will ultimately end in their own members losing their jobs. The thing is that the union bosses who push the envelope too far don’t actually have anything on the line personally and will have job security regardless of what happens, like at the Burnie paper mill in Tasmania in the 1990s, where ultimately all the workers lost their jobs with the mill closing, and all the union officials found their way into Parliament.’’
The challenge for the APS will be how to achieve the pay increases it would like to offer employees. The APS has been subject to a number of efficiency dividends over the past few years that have already forced agencies to be creative in performing their work with fewer resources.
The workplace bargaining policy provides some guidance on the types of things that agencies could do to improve productivity – such as reducing absenteeism and excess leave liabilities, and making better use of technology. Agencies that have not already made significant inroads into these types of efficiencies might find it easier to justify salary increases.
But for agencies that have already picked the lowest-hanging fruit, the challenge will be to make better use of their existing staff. Two obvious mechanisms by which this could be achieved are through the implementation of a 38-hour week (to replace the current minimum 36.75-hour week) and clearer performance expectations that identify the outcomes staff are expected to achieve to progress through pay points and receive salary increases.
Both mechanisms are permitted under the workplace bargaining policy. Both mechanisms are likely to be contested by the public sector unions, which have already foreshadowed their opposition to a 38-hour working week in response to the government’s application to modernise the APS award.
Agencies must, however, give serious consideration to how to productively use existing staff. The luxury of hiring further staff is not a reality in the present economic climate. A rigid adherence to the 36.75-hour working week is also out of step with community expectations. The standard working week for most Australians is 38 hours and they might rightly ask: why should public servants be treated differently?
Agencies must also resist the temptation to avoid dealing with the hard issue of performance expectations. It is far too easy to say that the public service is a different creature to the private sector, and that setting performance standards that have measurable outcomes will never work. The new work level standards being prepared by the Public Service Commission should make this easier. The challenge for agencies will be to ensure that they then tighten the expectations for progression through pay points and avoid pressure to include terms in their enterprise agreements that accelerate salary progression.
Pay will by no means be the only battle in enterprise agreement negotiations, but it certainly presents a significant challenge. Agencies that are unable to readily identify productivity gains will have no choice but to offer zero pay increases. This is likely to draw the charge from public sector unions that the agencies are not serious about bargaining in good faith. Good faith, however, doesn’t require agencies to make concessions or agree to union demands.
The government has made its position clear. The unions and APS are on notice. Bargaining will be hard and gains in pay, terms and conditions will need to be clearly offset against productivity improvements. The challenge that awaits is how the APS will achieve this.
Jennifer Wyborn is the partner leading the employment, industrial relations and safety team, and Nathan Moy is a lawyer at Meyer Vandenberg Lawyers. meyervandenberg.com.au