Government pockets $350m in unpaid wage increases for public servants amid turmoil

Staff at the largest government employers went without the pay rises when they knocked back proposed deals that would have cut conditions as fraught negotiations escalated to strike action in some agencies.

Under the government's workplace rules, public servants who agreed to new deals were denied back pay, despite waiting up to four years for wage rises amid the prolonged industrial battles that followed the Coalition's new workplace bargaining rules.

Estimates released by the Australian Public Service Commission show that $343.5 million in wage rises offered to public servants at the Tax Office, Human Services, Agriculture, Defence and the former Department of Immigration and Border Protection went unpaid during the turmoil.

The sum emerged after figures released last year showed top-heavy pay growth in federal departments, where the highest-paid roles have seen wage rises almost double those of the rank-and-file since 2006.

Community and Public Sector Union acting national secretary Michael Tull said it was the Coalition's plan to leave workers out of pocket and to "starve them out" with a wage freeze as it tried to force them to sign up to unreasonable agreements.

"Bargaining has only been resolved in agencies large and small when management have shifted their position, recognising belatedly that retaining hard-fought workplace rights and conditions is the key issue for workers," he said.

The wage freeze showed that enterprise bargaining rules needed fixing, Mr Tull said.

"It's unacceptable for any employer to freeze the pay of workers and then refuse to participate in any meaningful negotiations."

The public service commission denied the agreements eventually voted up departed materially from deals offered in the first instance, saying active "no" campaigns run by unions had caused "adverse outcomes" for many members and non-member employees in agencies.

"In a number of cases the CPSU and other unions pursued an industrial agenda that resulted in protracted negotiations," a spokeswoman said.

"Union campaigns to reject agreements were a feature of most agency negotiations. Eventually most staff recognised that such a strategy was achieving little, except to delay the timing of pay increases."

The CPSU rejected the blame, saying public servants had voted against enterprise agreements when they would be left worse off, and not because the union told them to.

Public servants at the 34,000-strong Department of Human Services, which runs Centrelink, Medicare and Child Support, missed $114.6 million in wage rises after knocking back a wage deal offered in 2016, the public service commission said.

Australian Taxation Office staff, numbering more than 20,000 government workers, lost $85.3 million in pay rises rejecting a 2015 offer, while staff at Defence ($69.1 million) and Agriculture ($18 million) also went several years on less pay than offered in new deals.

At the Department of Immigration and Border Protection, now absorbed into the Home Affairs mega portfolio, an industrial fight has entered arbitration at the workplace umpire but the public service commission estimates staff lost $56.5 million in pay rises between March 2016 and October 2017.

Deals reached during a series of industrial ceasefires in 2017 kept to the Coalition's 2 per cent average annual cap on wage increases, offering 3 per cent upfront, followed by a 2 per cent rise in one year and another 1 per cent six months later.

The Human Service department said it bargained in good faith over three years to finalise its new agreement and consulted widely with staff and their representatives, while Agriculture said each offer it put forward was the maximum allowable under the government's bargaining policy.

A Home Affairs spokeswoman said the claims the CPSU had proposed in bargaining with the department were far in excess of what other agencies had agreed to.

"The additional cost to the department of the CPSU claims have been estimated at over $600m, which would require reductions in excess of 1,900 full time equivalent staff," it said.

"With claims in this order, it is difficult to speculate on whether a different mix of conditions would have made a difference to voting outcomes."

The public service commission said the ban on backpay had been a longstanding principle in Commonwealth workplace bargaining across successive governments.

Mr Tull called for the public service commission to take a more constructive approach to the next round of bargaining, and said new rules were needed to prevent tactics used over the last four years.