The wage deal rejected by Defence Department public servants in Wednesday's knife-edge ballot result was the best they could get under the government's public sector bargaining policy, their boss says.
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Departmental Secretary Dennis Richardson said a 2 per cent a year wage increase was the "best possible" proposal that could have been made while satisfying the strictures of the bargaining policy.
But public servants at the giant department voted to reject the pay offer, the latest in a string of no-votes, prompting immediate calls from unions and the Labor opposition to call for the "failed" bargaining policy to be dumped.
Attention will now turn to the outcome of another big ballot in another politically sensitive department with Immigration and Australian Border Force officials currently voting with a result due early next week.
The Defence Department announced on Wednesday that it had come within less than 2 per cent, or about 279 votes, of getting its 18,000 civilian employees to accept the contentious pay deal.
The vote came after the department went on an unprecedented marketing blitz in an effort to persuade its restive workforce to accept a long-awaited wage proposal.
But the campaigning effort fell agonisingly short of the line, with 50.9 per cent voting no against 49.1 per cent giving their approval to the deal.
About 81 per cent, or 15,342 of Defence's public servants cast ballots, a figure that may encourage management to try again, and hope that a larger turnout will get their proposal across the line.
Mr Richardson told employees on Wednesday morning that workplace laws now required more talks between management and unions but said a better deal was unlikely under the government's tough workplace bargaining guidelines.
"Consistent with what is now required in legislation, Defence will return to bargaining with unions and employee representatives," the secretary wrote.
"I would note earlier advice that the offer just voted on was the best possible within the framework of the government's Bargaining Policy.
"We would welcome, however, any constructive suggestions within that framework.
"We will seek to work through the next steps as quickly as possible."
Shadow parliamentary secretary for Defence Gai Brodtmann called upon the Coalition to live up to the rhetoric in the Defence White Paper and treat Defence workers with respect.
"The Abbott-Turnbull government needs to back down from its aggressive industrial agenda and honour its commitment to treat Defence staff fairly and with respect," Ms Brodtmann said.
"If the government fails to live up to its rhetoric, it will reveal its commitment to Defence staff was not worth the White Paper it was printed on."
CPSU National Secretary Nadine Flood said the "line ball" result showed the government's policy was causing deep divisions within the ranks of its workforce.
"It's good that Defence staff will keep their workplace rights, but line-ball votes like this show just how divisive the Turnbull government's approach to bargaining is.
"Defence staff have told us they were not prepared to give up the consultation rights in the agreement, particularly when the agency is facing yet another massive restructure and more potential job losses."
Another Defence workplace union, Professionals Australia, said the vote showed a lack of confidence in Defence's political leaders.
"A week after the launch of the Defence White Paper this is a massive vote of no confidence in this government's approach to agreement making and to working people and their families across the Defence family," union official David Smith said.
