Circular 2026/04: Genuine and effective consultation in Commonwealth agencies

Purpose

1. The purpose of this Circular is to inform agencies about the Australian Government’s policy concerning genuine and effective consultation with employees and relevant unions on matters that affect them in Commonwealth workplaces.
2. As a model employer, the Government expects agencies to positively engage in genuine consultation with employees and relevant unions on workplace matters that affect them. Agencies should ensure managers are aware of these consultation requirements.
3. This Circular outlines consultation requirements to apply in Government workplaces, noting that agencies are not required to do anything that would be inconsistent with their legal obligations (for example ensuring they comply with privacy laws).
4. This Circular reflects updated outcomes following the implementation of the Statement of Common Conditions (the Statement) as an outcome of Australian Public Service (APS) wide bargaining in 2023/24 and replaces Circular 2022/08.
5. This Circular focusses on consultation under the Fair Work Act 2009 (Cth) and agency enterprise agreements.
6. These consultation requirements operate alongside agencies' obligations under the Work Health and Safety Act 2011 (Cth), including requirements to consult workers (and their representatives) on matters that may affect their health and safety.

Benefits of genuine and effective consultation

7. Genuine and effective consultation with employees and relevant unions is sound management practice. It fosters a positive and inclusive workplace culture, where the views of employees are considered and taken into account before decisions that substantially impact them are made or implemented.
8. The benefits to agencies of genuine and effective employee and union consultation include enhanced employee engagement and morale, increased productivity, access to new ideas, better outcomes in change implementation, stronger employee commitment to agency goals and objectives and improved staff retention.

Key expectations

9. The Government expects that agencies will adopt genuine and effective consultation arrangements that enable employees and relevant unions to have a voice on matters that affect them in the workplace.
10. APS agency enterprise agreements incorporate common clauses on consultation and consultative committees. Agencies should ensure managers are familiar with, and follow, these consultation requirements.
11. The Government also recognises that final decisions on matters, particularly those that are significant, will continue to rest with decision makers (i.e. the agency head).
12. Consistent with the common condition, genuine and effective consultation involves:
    
    1. providing employees and relevant union(s) with a genuine opportunity to influence the decision prior to a decision being made;
    2. providing all relevant information to employees and the relevant union(s) in a timely manner to support consideration of the issues;
    3. considering feedback from employees and the relevant union(s) in the decision-making process;
    4. advising employees and the relevant union(s) of the outcome of the process, including how their feedback was considered in the decision-making process;
    5. respecting the rights of employees to be represented and for unions to be engaged in a consultative process.
13. Consultation prior to a decision may not be practicable where a decision is made by Government or is required due to matters beyond the reasonable control of the agency. In these circumstances, consultation regarding the implementation of the decision will occur as early as is reasonably practicable.
14. Agencies may be limited in the information they can disclose due to confidentiality, commercial sensitivity, security, privacy, or other legal obligations. Where such limitations apply, the agency will provide as much relevant information as reasonably practicable to support effective consultation.

General consultation

15. The Government expects that agencies, as model employers, will facilitate consultation with employees and relevant unions on workplace matters that affect them.
16. This could be achieved by establishing workplace relations consultative forums (if none presently exist), digital forums, email inboxes, hotlines, or suggestion boards/boxes.
17. All consultative arrangements should be inclusive and respectful and take into account the diverse needs of employees, including means by which employees can access information and anonymously provide views where appropriate.
18. Unions speak on behalf of their members and have an important role to play in supporting employees and facilitating communication on workplace matters. Agencies should develop collaborative relationships with relevant unions in the workplace, including by ensuring that there is union representation on workplace relations consultative committees.
19. The minimum representation rights of employees are protected under the Fair Work Act 2009 (Fair Work Act). The role of employee representatives, including union delegates, are to be respected and facilitated as they perform a vital role in consultation processes.
20. Recognising the role of unions does not replace the need for agencies to consult broadly and directly with all employees, including those who are not represented by a union.

Further information and advice

21. Should you require further information or assistance on this matter, please contact your APSC Relationship Manager or workplacerelations@apsc.gov.au.

Appendix A - Consultation - AI in the workplace

The increasing adoption of AI in the workplace is leading to transformations in the way we work, including by automating routine tasks, augmenting human capabilities, and creating new and more data-driven ways of working.

The APS is committed to ensuring the increasing adoption of AI technologies is undertaken in a way that is transparent, ethical, consistent with Circular 2026/04 and the consultation obligations contained within APS agency enterprise agreements.

The consultation clauses in APS agency enterprise agreements require agencies to engage with employees and relevant unions where certain types of change are proposed. For example, major change that is likely to have a significant effect on employees, or where changes to work practices will materially alter how an employee carries out their work.

Not all AI implementation will require formal consultation. Agencies should assess each AI proposal against the consultation provisions in their enterprise agreement. Agencies will have regard to the scale and impact of proposed changes when determining whether consultation obligations might be enlivened. As an example, small-scale or low-impact uses of AI that do not materially alter roles, conditions, or workplace practices may not require formal consultation, while larger initiatives with significant implications for employees will.

Genuine and effective consultation on matters related to AI will ensure adoption is both responsible and trusted, while supporting a constructive dialogue with employees and relevant unions.

The below scenarios illustrate ways in which agencies might approach consultation on AI proposals. They are not prescriptive, nor are they intended to impose any additional obligations. Where AI implementation may affect work health and safety, agencies must ensure compliance with applicable work health and safety consultation duties, including consultation with affected workers and Health and Safety Representatives where required.

The scenarios integrate the requirements of:

• Circular 2026/04 - which requires consultation to be genuine, timely, and effective.
• The common consultation clauses in APS agency enterprise agreements - which require genuine consultation on proposed major workplace change or other matters that are likely to significantly or materially impact employees, including through introduction of technology.
• The AI Plan for the APS - which emphasises trust, transparency, capability building, and ethical use. The AI Plan for the APS recognises the importance of providing APS employees with access to contemporary tools and technology, consistent with workforce priorities to remain a model and competitive employer.

The below scenarios illustrate ways in which agencies may approach consultation on AI proposals. The scenarios are illustrative only, are not prescriptive and do not establish minimum procedural requirements. Consultation should be proportionate to the nature, scale and likely impact of the proposed change, and agencies retain flexibility to determine the most appropriate mechanisms for meeting their enterprise agreement obligations. When approaching consultation on matters relating to AI, agencies must also consider consultation obligations arising under applicable work health and safety legislation.

Scenario 1: Incidental usage of AI

Proposal: Access to existing AI-based systems features

Consultation approach: Consultation not required

Why consultation is not required

• This is a procedural update to existing technology infrastructure
• It does not materially impact how employees carry out their work
• Use of the additional tools is voluntary.

Scenario

An agency is looking to upgrade their ICT offerings, which could include providing access to existing AI-based systems features such as grammar checks and formatting suggestions in Microsoft Word, email spam filters, calendar scheduling suggestions, auto-save and version recovery options.

The agency assesses the proposal against the Policy for the responsible use of AI in Government’s in-scope criteria and determines that it is out of scope because it relates to an incidental use of AI that does not meet the criteria.

Proportionate risk assessments show no impact on work practices, privacy, security, records management or work health and safety. Any use of the additional AI tools would also be at the discretion of employees.

This type of AI use is viewed as an extension, or enhancement, of existing capabilities in systems such as GovAI, Microsoft 365 and Copilot. In addition, the changes are incidental in that they:

• Are optional aids or enhancements, such as spelling/grammar suggestions, rewrite/summarise prompts, spreadsheet formula suggestions and auto‑captions.
• Do not alter work practices, job design, regular duties, performance expectations, rosters or hours of work.
• Do not introduce new monitoring or productivity requirements, new data handling, external sharing, or security/privacy risks beyond those currently managed.

The agency considers the risk assessment outcomes, the incidental and optional nature of the changes, and the consultation clauses in their enterprise agreement. As the upgraded ICT offerings will not materially alter how an employee conducts their work, the agency determines that consultation is not necessary.

Implementation

The agency updates employees on the proposal, letting them know where they can find more information. The information is added to the intranet, linked in the next ‘All Staff’ email and presented on noticeboards around the office. The information includes confirmation that the features and functionality:

• Operate within existing ICT systems including GovAI, Microsoft 365 and Copilot.
• Do not alter core business processes, job design, duties, hours or rosters, workload, performance expectations, or monitoring/metrics.
• Do not impact existing privacy, security, work health and safety or records management requirements.
• Use of the features and functionality would be optional and could be disabled where preferred.

Scenario 2: AI Automation for Case Management

Proposal: Deploying AI to triage and prioritise casework

Consultation approach: Focused consultation process

Why post-decision consultation is required

• The Machinery of Government (MoG) decision is made by Government, beyond the agency's reasonable control.
• Consultation on the MoG decision was not possible.
• Part of the MoG implementation involves an AI Automation change that significantly impacts how employees carry out their work.
• Consultation on implementation is required as early as reasonably practicable.

Scenario

A large operational agency has successfully implemented an AI ‑ enabled case management system that enhances workflow management, strengthens reporting and compliance, and improves client outcomes. The system has been used effectively across the agency’s casework division and is embedded into agency’s operations.

Following a Machinery of Government (MoG) change, casework functions and 20 caseworkers are moved into the agency. The functions carry statutory compliance and reporting obligations aligned with the capabilities of the existing case ‑ management system. As part of the MoG change, the new case workers will be required to use the agency’s existing case-management system. This will ensure that there is a smooth integration of casework, teams and continuity of critical services.

Before the system was originally introduced, the Assessing Officer conducted a full assessment of the use case as required under the AI Impact Assessment Tool. The Assessing Officer re-validated their assessment to consider the change in intended use of the case management system.

Having reviewed the consultation obligations in its enterprise agreement, the agency decides to undertake consultation on the proposed implementation of the case management system, as early as is reasonably practicable.

The agency considers how the nature and extent of consultation should be adapted to the likely impact this change will have on the new casework teams that will be required to use the case-management system as part of the MoG change.

Use of the system will materially alter how the incoming casework teams will perform their work, so consultation will occur. The consultation will focus on how the agency will operationalise use of the case management system for the new function, ensuring the new caseworkers and their representatives are informed, able to contribute feedback and supported throughout the transition.

Early and meaningful consultation

The agency commits to consulting early and meaningfully with the caseworkers and relevant unions, including:

• Outlining the purpose of the proposed change, and intended benefits to casework and service delivery.
• Providing clear information about how caseworkers currently use the system, and how the tool will be deployed across teams.
• Outlining likely impacts on roles, workflows, training needs, and performance expectations.
• Seeking feedback on the proposed change and the impact on the case work functions recently integrated into the agency.
• Seeking feedback on implementation timings, integration with existing systems, user experience, and any operational risks.
• Ensuring transparency on data use, privacy safeguards, and how AI‑supported outputs will work with human oversight.
• Reiterating employees’ ongoing access to programs such as the Employee Assistance Program for confidential support throughout the process.

Following discussions with impacted teams and unions, the agency decides that consultation will occur via briefings and workplace meetings with unions, feedback channels, and targeted discussions.

Purpose and benefits of the system

During initial discussions, the agency provides contextual information to the caseworkers detailing the intended purpose and benefits of the system. The information clarifies that:

• The system is intended to streamline case handling, reduce administrative burden, and provide decision‑support capabilities to frontline caseworkers.
• The system is not intended to replace human decision‑making but instead would assist caseworkers by identifying relevant information, suggesting next steps, and flagging potential risks or inconsistencies.
• Implementation in existing casework teams has improved workflow efficiency, supporting quality service delivery and overall client experience.

What the agency will do

The agency receives feedback from employees and relevant unions during the consultation period and indicates how that feedback has been considered in the implementation decision-making process. The agency determines there will be a phased rollout to ensure stability and minimise disruption. Impacted caseworkers and unions are updated on planned activities, which include:

• Comprehensive training packages, including e‑learning modules, hands‑on workshops, and guidance materials explaining system capabilities and limitations.
• Clear operating procedures that articulate responsibilities, expectations for human oversight, and escalation pathways.
• Implementation support, including help desk services, subject matter experts and regular check-ins with managers and employees.
• Monitoring and evaluation mechanisms to assess effectiveness, address unforeseen impacts, and adjust processes where necessary.
• In response to reservations raised during the consultation process, the agency offers additional support in the form of tailored training, regular check-ins and conversations.

What employees can expect

As part of early preparation, the agency sets up an intranet page. Updates are published regularly, including confirmation that:

• Caseworkers will be engaged regularly throughout the transition and provided with the information and support to adapt to the new system.
• Workflows may be more streamlined, with routine tasks automated or assisted by AI.
• Decision-making accountability will remain with caseworkers, and the system will work as a support mechanism rather than a replacement for professional judgment.

During briefings and meetings, practical questions are asked about workload, accuracy, and how the system might manage complex cases. Caseworkers who are experienced in the use of the system talk through the queries and ask clarifying questions. The responses are published on the intranet to provide broader visibility and easy access.

Implementation

The agency works with impacted caseworkers to schedule training ahead of any requirement to use the system. They provide opportunities for feedback during training and post‑transition periods, clear communication of changes to procedures or expectations and support for the new casework teams throughout implementation.

The agency keeps caseworkers and unions informed throughout, actively incorporating feedback into the training manuals and best practice guides.

Scenario 3: Implementing a redesigned grants assessment and approvals framework

Proposal: Implementation of a redesigned grants assessment and approvals framework.

Consultation approach: Structured pre-decision consultation on the proposal.

Why pre-decision consultation is required

• This change materially alters how employees carry out their work
• It is likely to have a significant effect on employees
• The nature and extent of impact is uncertain and requires employee input.

Scenario

Following an audit identifying inequitable outcomes, limited transparency and compliance risks, a policy agency proposes to implement a redesigned grants assessment and approvals framework.

The proposed, purpose-designed framework is intended to improve consistency, fairness, transparency, and the management of assessment and approval processes. Use of the framework would primarily affect one branch across three assessment hubs. The Assessing Officer has determined the use case is in scope of the Policy for the responsible use of AI in government and a full AI use case impact assessment is required.

What might consultation look like in this scenario?

The proposal to implement a redesigned framework could significantly affect employees with respect to their workload distribution, assessment and approval processes. Given the significance of the change and the likely impact on employees, the agency considers the nature and extent of consultation required under the enterprise agreement, and discusses a thorough and sequenced pre-decision consultation process with employees and relevant unions.

Step 1 - Concept and initial engagement

Advice is provided to employees and relevant unions confirming:

• The proposal to implement the redesigned framework, and its intended scope and objectives.
• Expected impacts on roles and workflows, and
• A commitment to consult on the proposal, implementation, and safeguards.

Employees and unions seek clarity on proposed workload allocation, consistency and transparency of decision-making. The agency provides supplementary information and invites input to:

• The framework at a high level.
• Proposed implementation stages.
• Early concepts which could include matters such as workflow design, workload allocation, quality assurance, and review processes.

A Consultation Log may be established and regularly updated to capture issues raised by employees and unions. Workplace meetings with the union are facilitated, and the agency receives feedback from the union following those meetings. This feedback informs the themes of collaborative engagement at step 2.

Step 2 - Collaborative engagement

Information and engagement sessions are held with employees, managers and unions to explore key aspects of implementation. The sessions focus on:

• Fairness and workload distribution - how assessments would be allocated across teams.
• Quality, consistency and decision-making - how the framework would improve consistency while maintaining professional judgement.
• Transparency and review processes - ensuring clear visibility of how assessment and approval decisions would be made.

Step 3 - Further consultation, response and refinement

Supporting materials are circulated to employees and unions for feedback, including;

• Draft workload allocation principles.
• Draft Guidance materials and templates.
• Training and capability development.

Feedback themes include:

• Risks of increased workload pressure during implementation.
• The need for stronger safeguards.
• Requests for clearer guidance.

The agency reviews the feedback and makes refinements including:

• Strengthened workload allocation principles.
• Clearer role definitions, responsibilities, and decision authority.
• Enhanced quality assurance processes.
• Expanded training and implementation support.

Issues and Responses Tables may be prepared to demonstrate how consultation feedback has influenced the final implementation design.

Revised supporting materials are released and unions brief their members and eligible employees independently on the updated approach.

Step 4 - Implementation commencement and continuous improvement

The agency commences a staged implementation. Staff engagement continues with a focus on:

• Transition arrangements.
• Sequencing of implementation across hubs.
• Training delivery and support.
• Early identification and resolution of issues.

The agency supports ongoing engagement through regular updates, open feedback channels and monitoring workload, fairness, and quality indicators.

Additional Resources

1. AI Plan for the Australian Public Service 2025 - the plan provides a framework for integrating AI into government, with a focus on trust, people and tools.
2. Policy for the Responsible use of AI in government - this policy aims to ensure that government plays a leadership role in embracing AI for the benefit of Australians while ensuring its safe, ethical and responsible use, in line with community expectations. The Policy is supported by the AI Impact Assessment Tool .
3. Staff guidance on public generative AI – developed by the Digital Transformation Agency, the guidance provides information on how to safely and responsibly engage with public generative AI tools.
4. Guidance for AI adoption - developed by the Department of Industry, Science and Resources, the guidance sets out practices for responsible AI governance and adoption.
5. Voluntary AI Safety Standard - developed by the Department of Industry, Science and Resources, the Standard offers practical guidance on safe and responsible use of AI.
6. Governing with Artificial Intelligence - produced by the Organisation for Economic Co-operation and Development (OECD) the document outlines the state of play and the way forward in core government functions.
7. Statement of Common Conditions - details the consultation clauses included in APS agency enterprise agreements.
8. AI Proof of Concept to Scale Guidance - developed by the Digital Transformation Agency, the guidance provides practical advice for successfully scaling AI proof-of-concepts, moving from experimentation to enterprise-scale deployment.
9. AI and Digital Technologies – Safe Work Australia Resources – landing page for Safe Work Australia AI work health and safety resources.