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‘Near impossible’ for agencies to prove productivity, win pay gains

John Wilson
John Wilson

It is “nigh on impossible in practical terms” for any public service agency to win pay increases when tied to productivity improvements, one Canberra employment lawyer warns.

As Defence Force personnel fume over their below-CPI agreement, and staff from the departments of Human Services and Veterans’ Affairs vote on whether to walk off the job over stalled negotiations, the federal government is maintaining a hard-line approach to public sector pay, with agencies forced to mount a case for increases based on the productivity of their workforces.

That’s a challenge for government agencies in a “non-widget producing environment”, according to Bradley Allen Love managing legal director and industrial relations specialist John Wilson. Especially when departments already operate under ongoing efficiency dividend obligations.

And Wilson says the “complex” documentation process through the Australian Public Sector Commission to demonstrate efficiency dividends makes it a difficult case to mount. “I wonder who has the expertise in a department to do that,” he told The Mandarin.

Earlier this year a new workplace bargaining policy was released, stating:

“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.”

The policy describes productivity gains as:

“… demonstrable, permanent improvements in the efficiency, effectiveness and/or output of employees, based on reform of work practices or conditions, resulting in measurable savings. Arbitrary reductions in staffing are not considered genuine productivity gains.”

Productivity gains or savings made as a result of government initiatives, including efficiency dividends, won’t count. And changes to incremental salary arrangements will only be counted as employee-related efficiency improvements “where they result in cashable savings”.

“You might save money at the margins on double-sided printing and enviro-type initiatives,” said Wilson, “but relative to salaries and other costs those sort of expense items are a drop in the bucket.

“And tackling absenteeism, leave balances and other entitlements won’t pay off in the short-term because the APSC is looking at concrete ‘here and now’ productivity savings before it will press go.”

“They’re cutting off their nose to spite their face too, because it’s unlawful to pay someone when they’re on strike.”

So what can be done? “The answer in practice is not a lot,” Wilson said, suggesting co-operation among departments to share administrative services like human resource functions could be one way to achieve real savings.

Staff at Human Services and Veterans’ Affairs are being asked in a ballot whether to proceed with industrial reaction. Wilson reckons it will be “touch and go” getting up the motions, given the union must achieve a more than 50% buy-in.

“Most service-orientated people are loath to take industrial action,” he said. “They’re cutting off their nose to spite their face too, because it’s unlawful to pay someone when they’re on strike.

“What public sector enterprise agreements do is they set annual pay rises for the three-year or whatever ‘nominal’ life of the agreement, and once you hit the third year you’re stuck on that rate until a new agreement is made. That’s not generally the case with private sector agreement where there’s a constant upping of your pay at CPI or in accordance with the Fair Work Commission’s annual wage review. So, there’s an imperative for public servants to take whatever is on offer because 1.5% is better than staying at zero.”

Wilson says he’s surprised there’s no centralised bargaining in the current austere times, with the Commonwealth still having each department negotiating its agreement on its own. Negotiations are ongoing in around 70 agencies.

More at The Mandarin: Commonwealth pay unrest: a ‘return to command and control’?

Author Bio

Jason Whittaker

Jason Whittaker is managing editor of The Mandarin based in Melbourne. He has written for and edited political, business and culture publications for a decade. He spent two years as editor of sister Private Media publication Crikey.