Victorian public sector wages policy draws anger from one union, silence from another

By Stephen Easton

Friday April 26, 2019

The Victorian government’s somewhat confusing new public sector wages policy, which came into effect last Wednesday, has met an angry response from the Australian Services Union while the main public sector union kept its powder dry.

The new pay policy comes with a new enterprise bargaining framework. The government presents the process of negotiating with its workers over pay and conditions as one of several “delivery tools” that allow the public service to do a good job while being a “fair and best practice employer” that sets a high standard for others to follow.

“Both the Wages Policy and the Enterprise Bargaining Framework aim to encourage public sector agencies to take a more strategic approach to enterprise bargaining, focused on the Government’s operational and public sector priorities that deliver real benefits for the public sector and for all Victorians,” Treasurer Tim Pallas writes in the document.

The ASU does not see it that way. It calls it “the most regressive, anti-worker wages policy in decades” and has told its members there will soon be a “major fight” for higher pay, noting the state premier Daniel Andrews marched alongside them as part of the general nationwide “Change the Rules” campaign.

“This fight will be first seen in upcoming bargaining with VicRoads, Melbourne Water, Barwon Water, and at other public sector workplaces,” the union said in a statement.

Most Victorian public sector employment agreements don’t expire until the end of December, and there was no comment on the new policy from the Victorian branch of the Community and Public Sector Union.

Paramedics and ambulance support staff are in enterprise bargaining, however, and earlier this year heard the government’s opening position was a 2% pay increase due to a slowing economy.

One of three “pillars” of the new wages policy is pay growth limited to 2% per annum over the life of new agreements, but it also holds out the possibility of a single 2.5% annual pay rise through a “secondary pathway” that is available for workers whose agreements expire any time before June 30, 2020.

This requires unions to essentially give up on bargaining and quickly lock in new 12-month agreements with almost all the same terms and conditions rolling over from the existing deal.

This part of the new policy purports “to encourage public sector agencies to take a more strategic approach to enterprise bargaining” on the basis that “for various reasons, some bargaining parties may prefer to agree to a wage increase in a new enterprise agreement without disrupting any terms and conditions agreed during their previous bargaining round.”

The ASU argues it tips the scales firmly in favour of the government and is “a kick in the guts to its own workers” and points out annual pay rises of 3% and above were achieved under the previous policy.

“The policy also states that any agreements currently being negotiated under the old wage policy must be finalised before May 20th this year, or they will revert to this new, draconian policy. In effect, this has handed all the aces to employers, who now have no reason to reach agreement on any outstanding matters,” argues the union.

This week, Pallas told journalists the state government would “ensure that public servants get a better-than-CPI increase” in pay while he was out on the federal election campaign trail.

His promise may not mean much more than the 2% or one-off 2.5% pay rises on offer, however, with the latest Consumer Price Index data showing the cost of living stayed the same when averaged across the capital cities in the last quarter, and crept up by just 0.1% in Melbourne.

The CPI for the Victorian capital only increased 1.2% over the preceding 12 months, but the ASU argues the government could help stimulate slightly more wage growth in the wider economy with its own payroll.

“Stagnant wages growth is an anchor on the economy, and this new policy will only exacerbate the problem. Treasurer Pallas knows this, so for him to lead this attack on workers is all the more inexplicable.”

The two other legs of the new wages policy tripod are:

  • “Pillar 2: All public sector agencies will be required to make a Best Practice Employment Commitment which will outline measures to operationalise elements of the Government’s Public Sector Priorities that reflect good practice within Government and can be implemented operationally or without significant costs.
  • “Pillar 3: Additional changes to allowances and other conditions (not general wages) will only be allowed if Government agrees that the changes will address key operational or strategic priorities for the agency, and/or one or more of the Public Sector Priorities.”

There are various longer explanations of what these could mean in practice, although it’s not exactly clear how they will play out in bargaining. Pillar 2 aims to lock in agreed measures towards “improving gender equity, ensuring secure employment and access to flexible working arrangements” in agreements.

The third pillar is about securing agreement over changes aimed at improving public service delivery and organisational performance in general that would have significantly higher costs.

The policy also states all agreements must be “fiscally sustainable and fully funded from capped indexation, revenue and/or appropriate cost offsets” and that wage rises cannot take effect retrospectively.

Top image: ASU Victorian and Tasmanian Authorities and Services Branch.

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