Tax Commissioner Chris Jordan is expected to deliver a revised enterprise agreement to 21,000 ATO staff next week, promising to reinstall controversial entitlements and conditions stripped in an earlier version.
The compromise comes after more than 18 months of negotiations with unions and staff representatives. Last week, Community and Public Sector Union members at the ATO launched strike action to break a deadlock.
"After listening to your concerns and feedback in the last couple of months, and considering the continuing good performance of our organisation, I have instructed the EA Bargaining team to revise and put on the table a new proposal," Mr Jordan said.
The proposal will not require staff to work an additional 9 minutes a day as previously planned and deliver eight days of personal leave, rather than five.
Health and wellbeing allowance will be reinstated along with a part day travel allowance. More detail will also be included regarding rostering, performance management and capability development.
"I am committed to reaching agreement with you and hope we proceed to a vote as soon as possible," he said. "This is a significant shift from the last offer and I hope it shows we have listened to you."
Rank-and-file staff rejected an annual pay increase of 2 per cent in December just hours before 200 bosses secured a 3 per cent pay rise.
Australian Service Union tax branch secretary Jeff Lapidos said he expected the deal would involve a 4 per cent pay increase immediately, followed by two 1 per cent increases in consecutive years.
"The Commissioner will want to make the upfront instalment as high as he can in the hope that it will distract employees' attention from the fact that the very low overall pay rise will be the only plus for us in his proposal," he said.
Last week, the ASU applied to the Fair Work Commission for bargaining orders against Mr Jordan because the office planned to hold a vote during the school holiday period in late April, when many staff members take leave. The previous vote was held in late December.
"Both the ASU and the CPSU believe that further bargaining discussions are needed during April and that the voting process should not occur during the school holiday period," he said.
In a letter to staff, Mr Lapidos said a vote in late April would deny those employees the opportunity of participating in the enterprise bargaining process.
He also told members the union was seeking an obligation for the office to find duties for employees who are not medically fit for their own job, but are fit for other duties.
"This is a big problem when employees run out of paid personal leave," he said.
Mr Jordan has denied the claims and insisted no voting date had been set and has accused the union of trying to delay a vote on the revised agreement
"I am committed to reaching agreement with you and hope we proceed to a vote as soon as possible, he told staff.