Staff at the government postal business will receive a 3 per cent pay rise for the next three years.

The decision removes postal staff from a government wage policy that was introduced last year, tying public sector wage growth to the private sector.

It comes days after Australia Post announced it would be temporarily pausing parcel delivery in COVID-affected areas of the country.

It said it was dealing with a surge in business coinciding with a large number of employees being forced to isolate after coming into contact with exposure sites.

The Community and Public Sector Union said it was a huge win for the public sector but wanted the policy removed for the rest of federal public servants.

Deputy national president Brooke Muscat said workers deserved fair pay, especially during the ongoing pandemic.

"The Australia Post decision is a dramatic departure from the current Morrison bargaining policy and shows just how broken it is," Ms Muscat said.

"By giving this exemption to Australia Post, the APS Commissioner has recognised that workers deserve fair pay and conditions, and they wouldn't have gotten that under the Morrison bargaining policy."

The Coalition government replaced the public service's 2 per cent wage rise cap with a floating limit tied to private sector pay increases in November last year.

Under the new policy, government business enterprises, like Australia Post, and the Reserve Bank of Australia are supposed to apply the policy to the extent practicable.

The government was asked for comment over the union's claims but did not respond in time.

During the announcement last year, Assistant Public Service Minister Ben Morton said public servants would benefit from wage growth not being fixed to a particular rate.

"This new policy means Commonwealth public sector employees will directly benefit from ensuring the government's plan to strengthen the economy, create jobs and deliver private sector wages growth succeeds," he said.

"Unions, businesses and the wider community have long argued that public sector wages should reflect wage movement in the private sector.

"In the past, the government setting a cap on Commonwealth public sector wage growth can send the wrong signal to the private sector. Commonwealth wages policy should not be used as an excuse or signal to restrain private sector wages growth.

"This policy will address that."

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Ms Muscat said with stagnant wage growth and a struggling economy, the policy made little sense in the existing environment.

"The government has abandoned the broken policy in Australia Post, and it should do so for the rest of the federal public sector," she said.

"The government's wage policy is asking workers to sign up to unknown deals, with no scope for improved conditions. It is a farcical situation you would never see in the private sector.

"The public sector has undoubtedly delivered for our community and deserve a fair wages policy."

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