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2015-10-23

Pay packet

Bargaining: federal government relaxes wage rise cap

The federal government has relaxed the cap placed on Commonwealth employees’ wage rises, raising it to 2%. 

Under the Abbott leadership, the government imposed a 1.5% ceiling on any wage rise gained through enterprise bargaining by Commonwealth employees. The policy also required there to be productivity “offsets” i.e. trade-offs of working conditions for any rise at all. 

Needless to say, bargaining has ground to a halt under this regime with only a very small number of agreements being voted up by employees since the policy was introduced. 

The Community and Public Sector Union (CPSU) which represents many Commonwealth public sector workers, estimates that some 150,000 such employees have gone without a wage rise since 2013.

The new federal Employment Minister, Michaela Cash, says that the changes are designed to encourage agreements to be made both "quickly and efficiently". It remains to be seen, though, whether employees will be persuaded to accept agreements on these new terms.

The 2% limit is still below the average annualised wage increases (AAWI) in public sector agreements, which reached 3.9% a year in the June quarter and also well below pay rises in private sector enterprise agreements, which have been growing at an average of 3.1% a year ( a low rate, historically).

And while substantial trade-offs are still being demanded in return for the rise, it is likely that many employees will continue to resist agreements they regard as unfair and unacceptable.

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