Wage rises remain capped, consultant use protected in new APS bargaining rules

Prolonged workplace battles with its own employees have failed to soften the Coalition government's new bargaining rules for public servants, keeping a cap on pay growth and continuing policies blamed for the industrial strife.

A two per cent ceiling on yearly wage rises for public servants since 2015 has capped rank-and-file pay growth ahead of predicted inflation, while the public service commission's previous workplace policy was singled out as a major cause of the bitter industrial impasses.

Australian Public Service Commission boss John Lloyd.

Photo: James Davies

Under a policy released on Wednesday that will cover the next round of bargaining, the government has maintained its wage growth cap and added a rule stopping enterprise agreements from restricting agencies' uses of contractors and consultants.

Public service commissioner John Lloyd said the policy reflected a cabinet decision that the pay rise cap remained appropriate and said unions had exaggerated the scale of industrial disputes across the bureaucracy under the 2015 bargaining rules.

Unions lashed the new policy, saying the Coalition was continuing a "destructive approach" and that public servant salaries would keep falling behind. Many public servants went several years without pay rises in the last round of bargaining.

The Australian Services Union representing tax officials said the policy was worse than its predecessor, while Community and Public Sector Union national secretary Nadine Flood said it barred government workers from genuinely bargaining for decent wages and conditions.

"The Turnbull government's demand through this policy for 'wages restraint' for workers who've just endured a three-year wage freeze is obscene," she said.

The pay rise cap will remain despite the government's predictions that inflation will climb from 1.9 per cent to 2.25 per cent next year, and Prime Minister Malcolm Turnbull's comments on Sunday that wage growth wasn't high enough.

Rising costs of living are set to squeeze public servants' household budgets as wage rises fail to keep pace with growing inflation expected to bite next year.

Mr Lloyd said a rule in the 2015 policy that wage rises needed to be affordable, and within agencies' budgets, remained appropriate and that the government would continue attracting high-quality candidates regardless of the pay rise cap.

The bargaining rules require Mr Lloyd to approve proposed pay rises before they are discussed with staff and unions, and the commissioner's approval is needed for draft agreements before agencies can table their final position with employees.

They also enshrine a new rule against changes to enterprise agreements restricting agencies from using contractors, labour hire or "contingent workers".

Mr Lloyd denied the addition was a response to growing scrutiny of contractors' roles in government work, saying it emphasised agencies needed access to different types of employment.

Unions said the rule was designed to continue growth in spending on contractors and labour hire.

Agencies will have to fund pay rises using their existing budgets, and will have to find "productivity improvements" supporting the wage increases without resorting to cutting services or hiking fees.

The policy also encourages individual agreements, a move the CPSU said undermined enterprise bargaining, and wages and conditions.

"It bears a frightening resemblance to the bad old days of WorkChoices and AWAs," Ms Flood said.

While the government has replaced its 2015 rules, industrial disputes blamed partly on the previous policy remain live at several agencies including the Department of Home Affairs, where a bitter industrial stoush has reached Fair Work Commission arbitration.

Workplace battles lasting several years only ended at the ATO, Department of Human Services, the Defence Department, Prime Minister and Cabinet, and the Agriculture Department last year as new agreements were voted up.

Mr Lloyd said unions had exaggerated the level of industrial turbulence in the Australian Public Service, and said he hoped agencies would reach new enterprise agreements "smoothly" and without protracted negotiations under the new bargaining policy.

"It's a matter for the unions and the attitude they take," he said.

"The downside of entrenched opposition to agreements is it increases the delay and the employees suffer."

Ms Flood described the last bargaining round as the most protracted and messy in 30 years.

"This new policy shows they've learned absolutely nothing."

The Department of Foreign Affairs, Treasury and the Department of Social Services are among several agencies that agreed quickly to new deals in the last bargaining round and are due to begin negotiating agreements soon.

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