Commonwealth’s approach to reduce pay fragmentation
The Chief Negotiator for APS Bargaining Peter Riordan PSM has tabled the Commonwealth’s initial approach towards addressing decades of pay fragmentation that has developed across the Australian Public Service.
The proposed approach would reduce current average fragmentation across APS1-EL2 classifications from 26% to 18%.
“Pay fragmentation that has emerged over decades affects employee attraction, retention and mobility. It will take time to address this. We’re confident this proposed approach takes an important and meaningful first step,” said Chief Negotiator Peter Riordan.
The proposal defines a minimum base salary that agencies must meet or exceed. Employees whose wages would be below the new minimum will receive an additional pay rise to address this, in addition to the APS-wide proposed pay offer.
The proposal would also set a base maximum salary for each classification. Salaries below the new base maximum will reach it over time through salary progression.
The proposed approach is expected to benefit employees across 48 APS agencies. Agencies delivering important services for First Nations communities, and agencies in the cultural sector will be among those to benefit.
Under the proposed approach, no salaries will go backwards or be frozen. Agency pay scales won’t drop to the new base salary. It has been designed with long-term structural integrity to support salary progression, and to permit scalability over time to include more agencies.
The below table illustrates the proposed salary structure as they will be at 31 August 2023:
|Current lowest salary ($)||Proposed
base salary ($)
+ 4% pay increase
The approach and how it is applied to APS pay scales will be a matter for bargaining with unions and Individual Bargaining Representatives (IBRs).
In addition to the steps to address pay fragmentation, the Commonwealth has proposed a pay offer of 10.5% over 3 years with the following breakdown:
- 4 per cent in the first year
- 3.5 per cent in the second year
- 3 per cent in the third year.
The proposed approach to address pay fragmentation will be applied first, and the Commonwealth's pay increase will be added on top of any salary structure changes.
The Chief Negotiator aims to achieve progress as efficiently as possible, with an expectation that most enterprise agreements be operational before the end of March 2024, with some finalised by the end of 2023.