Australia's 165,000 federal bureaucrats will face a choice of zero pay rises for three years or deep cuts to their entitlements under the Abbott government's aggressive new approach to its employees.
The hard line on one of the nation's biggest pay deals is an escalation of the government's policy of confronting what it sees as overgenerous wage deals for workers, and it has unions warning that public service workplaces will become battlegrounds.
Employment Minister Eric Abetz, who has publicly railed against ''weak-kneed'' bosses giving in to union demands, has sought the backing of his cabinet colleagues to take the government's industrial relations hard line to the enterprise bargaining talks due later this year.
The government's employment and workplace relations policy, to be unveiled as early as Friday, caps wage increases for federal bureaucrats at 2.5 per cent a year, well short of the 4 per cent pay claim lodged by the main public sector union, the Community and Public Sector Union, last month.
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But the public servants could get as little as 1.5 per cent a year - or even nothing - unless they agree to surrender some of their 18 days combined carers' and sick leave and accept an annual cap of 15 days instead.
They would also have to agree to more work performed by fewer employees as the government pushes for ''productivity improvements''.
The tough bargaining stance sets the Coalition up for a new round of industrial battles after it blamed unions, wages and conditions for the departure from Australia of car makers Toyota and Holden, and the near closure of SPC Ardmona.
The policy also commits the government to separate bargaining processes for more than 100 departments and agencies, but with the talks conducted on behalf of the government by the Public Service Commission and closely watched by Senator Abetz's office.
Departmental bosses will be given little room to manoeuvre on the basic conditions laid out in the policy, which also calls for some rights and conditions to be stripped from legally protected enterprise agreements and redefined as ''policies'', which can then be changed by the employer.
Agency bargaining is also expected to undermine the ability of unions to play a central role in the process.
Community and Public Sector Union national secretary Nadine Flood said the government was on a collision course with public servants.
''Public sector workers are facing a double whammy: thousands of jobs are being cut and the remaining staff will get flogged harder to get the work done,'' Ms Flood said.
''Secondly, nobody is going to get a pay rise that keeps up with inflation unless they agree to have their rights and conditions cut.
''That is a bridge too far, in our view. That sort of agenda from government will simply lead to conflict in the workplace.''
Ms Flood said Mr Abetz's ''tough agenda'' would strike at ordinary workers in the public service, ''the majority of whom are on, or below, average weekly earnings''.
She accused the government of bad faith in its recent public commentary on the bargaining process.
''The Abbott government has told us they are not ready to talk about pay and conditions, yet it appears they have all but signed the fine print on this highly aggressive policy,'' she said.