Department of Immigration and Border Protection secretary Mike Pezzullo has warned a pay increase for Australian Border Force and Customs staff would inevitably result in more than 185 job losses.
More than 10,000 public servants rejected the enterprise agreement in September after it offered a pay increase of 3.4 percent over three years – one of the lowest offers in the public service.
The offer was rejected by 91 percent of employees who completed an all-staff ballot with the Community and Public Sector Union reporting an 82 percent turnout.
During a Senate estimates hearing on Monday, Mr Pezzullo said a staff survey would identify contentious issues although any further pay increase would result in additional job losses.
"The previous offer was developed with a view to keeping employee reductions to a minimum over the life of the agreement to ensure we had sufficient resources to carry out our duties as set by government," he said.
"To make the previous offer affordable, a reduction of 184 employees would have been required over the life of the agreement.
"The unavoidable reality is that any larger pay increases will require more employee reductions and I am keen to ensure that these are kept to an absolute minimum."
The Community and Public Sector Union said the rejected deal was a blow to the government's "draconian" bargaining and revealed the mess inherited by Public Service Minister Michaelia Cash.
The Immigration ballot was dogged by technical glitches on its opening day, as the voting system froze and crashed while thousands of public servants tried to cast their votes.
Many DIBP staff were involved in 10-day strike action over pay and conditions at airports across Australia between September 20 and 30.
Staff who processed passengers on international flights stopped work for two hours during the morning and afternoon peak periods.
"To help us identify what staff considered to be contentious issues within the proposed enterprise agreement, and to enable options to reshape various elements so the agreement is more acceptable to staff, we have conducted a staff survey," Mr Pezzullo said.
The secretary said he was eager to develop a new deal that would provide benefits to employees while recognising "the challenging nature of our reform and integration environment".
The Immigration Department and the Customs Service were merged in late 2014 and Mr Pezzullo said the integration was ongoing and complex.
"We are committed to building one culture and one organisation; an objective that includes continuing to consolidate and streamline all functions across the portfolio," he said.
"These activities will be a central focus for us over the balance of the financial year and indeed beyond."