What is the maximum remuneration increase available under the Workplace Bargaining Policy 2018 (the Policy)?
The Policy allows for remuneration increases to be negotiated up to an average of 2.0% per annum. Two percent is deemed to represent a fair pay offer which is competitive with economic indicators such as CPI and state and territory public sector wages policies.
Remuneration includes all salary-related payments made to employees. Examples include base salary, salary-related allowances such as first aid allowance, and casual loading.
Where the increase is averaged across the workforce, an agency may potentially offer higher pay increases to one group of staff but less to another. This may occur following a machinery of government change where there are pay parity variations across classifications. The average increase across the workforce must remain within the 2.0% per annum cap.
Are agencies given additional funding to cover remuneration increases?
No. Agencies can only offer remuneration increases which are affordable and funded from within their existing budget.
What is considered a reasonable spread of pay increases under the Policy?
Pause on public sector wage increases
Update: On 9 April 2020, the Assistant Minister to the Prime Minister and Cabinet, the Hon Ben Morton MP, announced Government’s decision to pause general wage increases in Commonwealth agencies for six months.
It is the Government’s expectation that over the next 12 months remuneration proposals made by APS and non-APS agencies include a six-month pause on increases to salary and salary-related allowances over the period. This is a change to what is considered a reasonable spread of pay increases under the Policy.
For APS agencies, the Minister made a determination under subsection 24(3) of the Public Service Act 1999 effective from 14 April 2020, which automatically pauses any wage increase occurring within the 12-month period.
For non-APS agencies, the APS Commissioner will only consider approving remuneration proposals, which incorporate a six-month pause for any wage increase occurring within the 12-month period.
For agencies preparing to put in place a new workplace arrangement, in effect, it is considered reasonable for remuneration increases to be averaged across the life of the workplace arrangement as follows:
- 2.0% 6 months from commencement;
- 2.0% 12 months from commencement; and
- 2.0% 24 months from commencement.
Spreading out wage increases over time assists in affordability and ensures employees have pay increases to look forward to in the final year. By doing so, agencies can avoid the perception that employees have not had a reasonable pay increase in the period leading up to the time when the next workplace arrangement is being considered.
Can agencies trade conditions for higher remuneration?
No. Conditions may not be traded off in exchange for a higher salary increase.
The Policy allows agencies to trade-off conditions or entitlements of similar value as long as conditions are not enhanced overall and the trade-off is cost neutral.
The capacity, under the Policy, to trade-off conditions or entitlements of similar value is intended to encourage agencies to develop arrangements that best suit business needs rather than as a means of obtaining increases to remuneration.
Are agencies required to show detailed productivity calculations?
No. The Policy only requires agencies to broadly identify productivity improvements in support of proposed remuneration increases. It is not necessary to provide underpinning calculations.
Is back-pay available?
No. The Policy requires remuneration increases to apply prospectively, meaning back-pay is not available. This is a long-standing principle adopted by successive governments.