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Part 2 - Remuneration policy

APS agencies are to observe the following remuneration policies:

2.1 Improvements in remuneration are to be offset by genuine, quantifiable productivity improvements;.

2.2 Salary advancement for individuals within classifications and broadbands is subject to at least satisfactory performance;

2.3 Remuneration increases are to apply prospectively, other than in exceptional circumstances

2.1 Improvements in remuneration are to be offset by genuine, quantifiable, productivity initiatives

2.1.1 The Australian Government requires improved remuneration and conditions for APS employees to be underpinned by improved productivity and performance.

2.1.2 The government encourages the introduction of new methods of increasing productivity in APS agencies. Examples of initiatives that agencies may introduce include (but are not limited to);

  1. improved training processes to increase the skills base of the workforce for improved efficiency,
  2. development of new technological processes to streamline agency processes and as a consequence increase output.

2.1.3 In this context, APS agencies are able to negotiate productivity-based salary increases that meet their business needs, subject to affordability parameters as described under Part 3. However, as APS salaries are publicly funded it is important to ensure that APS salary increases are consistent
with community standards and principles of fiscal responsibility.

2.1.4 To this end, and without seeking to limit the capacity of agencies to bargain in good faith, the APSC recommends that salary increases in APS workplace arrangements not exceed 3 per cent on a NED to NED basis. Table 1 (below) provides some examples of NED to NED AAWI calculations. On request,
the APSC will also provide accompanying material to assist agencies in calculating the NED to NED AAWI of their workplace arrangements.

2.1.5 The NED-NED-AAWI is calculated by dividing the total pay increases provided under the agreement, by the agreement duration (based on the time elapsed between the NED of the previous agreement to the NED of the proposed new agreement).

NED-NED AAWI - examples

Example 1

Total Pay Increases over length of agreement = 9.0%

Previous Nominal Expiry Date 30 June 2011

Commencement date of new agreement 28 July 2011

Current Nominal Expiry Date 30 June 2014

AAWI

No of Days from 28 July 2011 – 30 June 2014 = 1068

AAWI= 9.0 /1068 x 365 = 3.07% (rounded) 3.1%

NED-NED AAWI

No of days from 30 June 2011 – 30 June 2014 = 1096

9.0 /1096 x 365 =2.99% (rounded) 3.0%

Example 2

Total Pay Increases over length of agreement= 9.75%

Previous Nominal Expiry Date: 11 November 2011

Commencement date of new agreement 13 January 2012

Current Nominal Expiry Date: 30 June 2014

AAWI

No of Days from 13 January 2012 – 30 June 2014 = 899 days

AAWI= 9.75 /899 x 365 = 3.95 % (rounded) 4.0%

NED-NED AAWI

No of Days from 11 November 2011 – 30 June 2014 = 962 days

9.75 /962 x 365 = 3.69% (rounded) 3.7%

Salary threshold

2.1.6 Subject to affordability and in order to facilitate a reduction in remuneration dispersion across the APS, where agencies have employees who would be paid below the 5th percentile of APS salaries for their classification upon commencement of a new enterprise agreement or other workplace arrangement, those agencies may bring forward a higher wage increase for those employees. Any such measures taken to increase the remuneration of employees below
the salary threshold will not be counted towards that agency's NED to NED AAWI.

2.1.7 The APSC will publish and advise agencies of the salary threshold for each APS and EL classification, expressed as an annual salary rate. The salary threshold of APS salaries for each classification will be based on salary data collected from agencies by the APSC, and will be updated from time
to time.

2.1.8 For the avoidance of doubt, this salary threshold applies at the point of commencement of a workplace arrangement. Should certain employees subsequently fall below the salary threshold during the life of the agreement, agencies will not be expected to provide further additional 'top ups' of salaries
beyond that provided in the workplace arrangement, however they may choose to subject to affordability.

Demonstration of productivity improvements

2.1.9 Agencies will need to ensure that they are able to demonstrate that proposed improvements to the terms and conditions of employment for agency employees are underpinned by quantifiable productivity initiatives.

2.1.10 For the purposes of the APSC assessment, agencies will satisfy this requirement by completion of the template declaration at Attachment D.

2.2 Salary advancement for individuals within classifications and broadbands is subject to at least satisfactory performance

2.2.1 Salary advancement through a classification and/or broadband is only to occur where an employee's performance has been assessed at least at the satisfactory level in accordance with;

  • the work level standards for their classification;
  • the terms of their individual performance agreement; and
  • other applicable employment instruments under the Public Service Act.

2.2.2 Agencies are entitled to set additional performance management requirements at their discretion.

2.2.3 Agencies have the flexibility to develop performance management systems that meet the particular needs of their organisation and employees, noting that the Public Service Commissioner's Directions 1999 (Chapter 2.12) require agencies to put in place a fair and open performance management system
that:

  • covers all employees; and
  • guides salary movement and
  • is linked to agency organisational and business goals and the maintenance of the APS Values; and
  • provides employees with a clear statement of performance expectations; and
  • provides employees to comment on those expectations.

2.2.4 Advancement within a broadband should also be guided by work availability and application of the merit principle.

2.3 Remuneration increases are to apply prospectively, other than in exceptional circumstances

2.3.1 Should an agency consider exceptional circumstances exist such that it is necessary to include a remuneration clause in an enterprise agreement or collective arrangement which applies retrospectively, the agency should consult with the APSC.

2.3.2 The inability of the negotiating parties to reach agreement through good faith bargaining would not be considered an exceptional circumstance.

2.3.3 Salary increases should not be scheduled to take effect after the proposed NED of an enterprise agreement.

2.3.4 Bonus payments, including where a bonus is payable on commencement of an agreement, are increases in remuneration and, in accordance with Government policy, must be linked to improvements in productivity and performance. Individual bonus payments must be linked to individual productivity and
performance; while collective or group bonuses must be linked to collective productivity and performance improvements.