Affordability and genuine productivity gains shape the new APS workplace bargaining policy

On 28th March, Senator the Hon Eric Abertz launched the new Commonwealth Public Sector Workplace Bargaining Policy. In his press release, Senator the Hon Eric Abertz emphasised that the new and improved Government Bargaining Framework is designed to enable taxpayers to receive greater value for money at a time where the nation has been left its worst ever financial mess by Labor.  The fiscal challenge leaves little room for wage increases.

Senator the Hon Eric Abertz stated that public service conditions must not only be in line with community expectations, but they must be affordable and sustainable and that it is no longer possible for the Government to fund new pay rises by borrowing more money from overseas.Under the improved framework, agencies will be required to negotiate genuine productivity gains to offset public sector wage increases.Consistent with past practice, programme and service funding cannot be used or redirected to pay for increases in pay and conditions. Any such increases must be funded from within existing budgets.  For more on the press release go to:

Ministers will direct (or where they are not able to direct, strongly encourage) the non-APS agencies in their portfolios, including Government Business Enterprises, to apply the same policies that apply to the APS, so far as this is practical within the context of operations. The new arrangements exclude the Australian Defence Force.

The Policy

  1. Employment Arrangements
    1. Terms and conditions of employment for non-Senior Executive Service employees should be set out in enterprise agreements at the APS agency level, unless otherwise agreed by the Ministers.*
    2. Enterprise agreements should be at least three years’ duration.
    3. APS agencies are required to maintain classification structures and work level standards consistent with the APS Classification Rules issued under the Public Service Act 1999, as updated periodically.*
  2. Affordability and Funding
    1. Improvements in pay and conditions are to be funded from within existing budgets, without the redirection of programme funding.
    2. If the total cost of a proposed agreement is not affordable within an agency’s existing budget, the Ministers must not approve the agreement.
  3. Remuneration and Productivity
    1. Agencies can only negotiate remuneration increases which are affordable, consistent with Australian Government policy, and offset by genuine productivity gains which satisfy the Australian Public Service Commissioner.
    2. Agency Heads are accountable for ensuring that the annual remuneration increases for senior executive employees are consistent with Australian Government policy.
    3. Remuneration increases should apply prospectively unless exceptional circumstances apply and have the approval of the Ministers.
    4. Sign-on bonuses should not be offered during bargaining unless approved by the Ministers.
    5. Existing pay scales should not be modified to provide for new top pay points, removal of existing pay points, or other mechanisms to accelerate salary advancement.
    6. Changes to incremental salary arrangements may be counted as productivity improvements where they result in cashable savings. Such changes may include more rigorous rules covering advancement of employees to higher increments.
  4. Employment Conditions
    1. Core APS terms and conditions of employment should not be enhanced unless otherwise approved by the Ministers.*
    2. In recognition that the new Australian Government scheme will apply to all Commonwealth agencies, agencies should not seek to vary current paid parental leave entitlements, pending commencement of the new scheme.
    3. Under legislated provisions, APS agencies and the parliamentary departments will ensure the portability of accrued paid leave entitlements where employees move between APS agencies, the Parliamentary Service and the Australian Capital Territory Public Service, providing there is no break in service.*
    4. Long service leave should only be granted in blocks of at least seven calendar days per occasion and should not be broken by other forms of leave.
    5. Workplace arrangements should incorporate leave provisions that support the release of community service volunteers for emergency services duties and Defence Reservists for peacetime training and development.
    6. APS agency workplace arrangements should include compulsory redeployment, reduction and retrenchment arrangements for employees identified as excess to requirements.*
    7. Redundancy provisions, including severance pay and retention periods, should not be enhanced beyond existing arrangements, unless otherwise required by legislation, or approved by the Ministers.
  5. Employee Relations
    1. All arrangements will comply with relevant legislation, this policy and other relevant Australian Government policies.
    2. The right for an employee to belong to a union will be respected, as will the right for an employee not to belong to a union.
    3. Agencies should make provision for consultative arrangements with employees (and where employees choose, their representatives) regarding employment and employee relations matters.
  6. Performance Management
    1. It is expected that all employees (other than probationary employees) will have a formal annual performance agreement in place which clearly identifies key performance expectations and related indicators of performance and the required workplace behaviours expected of the employee, and contains learning and career development goals.
    2. Performance management clauses in enterprise agreements should contain clearly defined principles and entitlements. Any procedural or descriptive content should be confined to policy documents outside of an enterprise agreement.
    3. An employee is not to advance through a classification or broadband pay scale if they have not performed at a satisfactory level at a minimum.
  7. Enterprise Agreement Content
    1. Enterprise agreements should:
      1. Be streamlined, clear and easy to read and contain clauses that either:
        1. are required by legislation and support the effective operation of the instrument; or
        2. provide entitlements to employees; and
        3. do not impose restrictive work practices and other arrangements that confine operations of the agency, or in the case of the APS, the Service as a whole, or curb the effective operation of legislation.
      2. Include:
        1. a dispute resolution term equivalent to the model term in the Fair Work Regulations;
        2. a consultation term equivalent to the model term in the Fair Work Regulations; and
        3. an individual flexibility term that allows employees to enter individual flexibility arrangements in respect of certain listed matters. Agencies are encouraged to bargain for a broader range of matters over which employees can enter into individual flexibility arrangements.
      3. Not include:
        1. Unlawful and/or objectionable terms as outlined in the Fair Work Act 2009;
        2. Terms that contradict, alter or limit the effect of provisions in the Public Service Act 1999 or relevant employing legislation.
    2. Agencies must not supplement or enhance the right of entry provisions in the Fair Work Act 2009.
  8. Approval Requirements for Enterprise Agreements and Other Collective Arrangements
    1. Agencies are expected to comply with any instructions issued by the APSC in relation to this policy.
      1. Agencies must not offer a proposed remuneration increase until the Australian Public Service Commissioner is satisfied that proposed remuneration increases are affordable and offset by genuine productivity gains, in consultation with the Secretary of the Department of Finance.
      2. Before making any wages offer, an Agency Head must be satisfied that the proposed remuneration increases, and any other enhancements to terms and conditions which have a fiscal impact, are affordable from within existing and known future budget allocations and would not require the diversion of programme funds or additional supplementation.
        All agreements proposing remuneration increases need to be supported by the agency’s Minister. Where the Department of Finance and/or the APSC indicates that it considers an agency’s proposed workplace arrangement is not affordable or not supported by appropriate productivity gains, the agency must revise the proposal to ensure it is affordable.
      3. Agencies are not permitted to reach agreement, including˜’in-principle agreement’, with bargaining representatives on any matters that are inconsistent with Government policy unless the Ministers have approved exemptions in relation to those matters.

      At the conclusion of bargaining

      1. A draft enterprise agreement, or other collective arrangement, must be provided to the APSC for assessment against Government policy prior to an agency seeking the Ministers’ approval of the agreement. Such drafts are to be accompanied by a Remuneration, Funding and Productivity Declaration signed by the Agency Head.
      2. Agencies will be required to provide the APSC with evidence that the proposed agreement has met the Government’s policy objectives, including:
        1. the total cost of the proposed agreement;
        2. productivity initiatives arising from the agreement; and
        3. the extent to which objectives relating to the removal of restrictive work practices and the maintenance of the core APS terms and conditions of employment have been met.
    2. The Ministers’ approval of the agreement must be received before the agreement is put to a vote of employees.


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