After eight months of gruelling negotiations over a pay rise for federal public servants, there is still no deal on the table.
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A surprise move by the Community and Public Sector Union to reject the Albanese government's offer of 11.2 per cent over three years saw talks grind to a halt in early October.
Both sides will want to reach a deal by early 2024, nervous about the temperament of a workforce of 170,000, wearied by successive cost of living hits. Failing to do so would delay the first scheduled pay rises in March, and risk serious backlash.
But neither is willing to give up the game just yet.
Emboldened by a leadership threat from within its own ranks, the CPSU's refusal of the government's second pay offer has irritated Public Service Minister Katy Gallagher.
Deviating from a self-proclaimed hands-off approach, the union shot it down despite narrow support from members, expanding industrial action to four agencies, and mobilising others to join.
But with her own political reputation in mind, the Public Service Minister last week hinted the government may be prepared to muscle through a deal in the interest of ensuring timely pay rises.
![CPSU national secretary Melissa Donnelly, left, and Public Service Minister Katy Gallagher have tough choices to make on pay. Pictures by Elesa Kurtz, Gary Ramage, Sitthixay Ditthavong CPSU national secretary Melissa Donnelly, left, and Public Service Minister Katy Gallagher have tough choices to make on pay. Pictures by Elesa Kurtz, Gary Ramage, Sitthixay Ditthavong](/images/transform/v1/crop/frm/143258707/d71261f3-b1ef-4a6a-9277-b62e427df40f.jpg/r0_0_2400_1349_w1200_h678_fmax.jpg)
It would mean going over the union's head and testing the pay deal by letting staff in several agencies vote on their enterprise agreements.
The threat is not unusual in the theatre of bargaining, nor did it surprise the union, but delivering on it would risk a CPSU campaign against enterprise agreements.
Australian Services Union tax branch secretary Jeff Lapidos suspects this is a risk the minister is prepared to take.
He believes the Public Service Commission, the government's representative in bargaining, is preparing to authorise several agencies to vote on their individual enterprise agreements, in a play to test the pay offer.
"Katy's going to play it hard," he said.
Mr Lapidos' union, which represents about 1100 Australian Taxation Office staff, is one of several involved in the talks, but does not have the weight of the 40,000-strong CPSU to throw around.
Staff at the ATO missed out on pay rises between 2014 and 2016 when the union voted "no" on the government's proposal - a scenario the CPSU and other unions will be eager to avoid.
Associate Professor of Human Resource Management at UNSW Canberra Sue Williamson agreed the government appeared unlikely to budge any more on pay.
"While the conditions that have been negotiated are very good, it really is coming down to the wire and union members and APS employees do want to see a better pay offer," she said.
"Which I don't think will be forthcoming ... it seems as if the government has dug its heels in on this."
The stakes are higher now
Both the Public Service Commission and Senator Gallagher remain coy about whether they will take the bold step of authorising enterprise agreement votes.
Spokespeople for the commission and minister said agency-level bargaining was progressing and the Commonwealth wanted to see public servants receive their pay rises. They remain hopeful of reaching a resolution.
It appears the Public Service Minister's patience with the union is wearing thin. She has expressed frustration with the CPSU - her former employer - for standing in the way of a deal which would constitute the biggest APS pay rise in a decade.
It is an offer the minister has also noted is "affordable", on several occasions
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Significant improvements to workforce rights would also be established through a package of more than 50 common conditions, which will include lifting paid parental leave to 18 weeks for primary and secondary caregivers, and guaranteed flexible working arrangements.
To the Albanese government, these should be lauded outcomes from a historic return to service-wide bargaining, resurrected after nearly three decades, to make the APS a cohesive workforce with more consistent rights across its 102 agencies.
And on the other hand, the Finance Minister has her own political agenda to consider.
More than halfway through her term, a pay deal would allow the Albanese government to claim it has reformed the APS, in the way it has loudly promised to do since coming to power.
The stakes are higher now, too. Where the APS was once a Canberra bubble issue, the public has now felt the impact of a service with gaping capability holes.
The confronting failures of the unlawful robodebt scheme, and bloated spends on consultants, are not just on the radar of the average public servant, but the average taxpayer.
Heightened pressure on the CPSU
For its part, the union has been driven to dispute the offer to stifle discontent within its own ranks.
A loose group of roughly 100, now known as Members United, claimed success for the CPSU's move to reject the 11.2 per cent offer despite a member poll of about 15,000 people returning 51.9 per cent support.
The union likely bowed to their warnings of broader discontent with pay, especially given the same group - which includes Greens and Labor political staffers - is challenging all six of the union's executive committee seats in elections currently under way.
But the CPSU already faced a hard sell on an offer which was revised up by just 0.7 percentage points, during a round of bargaining which comes, in national secretary Melissa Donnelly's words, after "a decade of attrition at the hands of Coalition governments".
The union's move to scale up industrial action, including a 24-hour strike in Services Australia, was an interesting move in the context of the first service-wide bargaining round since 1995, Associate Professor Williamson said.
"Under previous rounds of bargaining, being conducted under a Coalition government, it was fairly standard that unions and agencies would take industrial action," she said.
"But this occurring under a Labour government and in the context of common conditions and service-wide bargaining, where the conditions that have been negotiated are very good makes this a really interesting case study."
In late September when the refusal was made, there was still time for showmanship, but now the clock is rapidly running down to the first scheduled pay rise in March 2024, one which the CPSU will be wary of interfering in.
It is understood the union expects the government could dress up its pay offer with perks, such as a sign-on bonus, and it would put such an offer to members to vote on.
This scenario would be ideal for the CPSU, which could claim a small win on pay, and shift the focus to the long list of common conditions it has helped amass.
Senator Gallagher, meanwhile, is weighing up whether she can afford to get tough on public servants, and forge ahead with enterprise agreements.
Broad CPSU campaigns for "no" votes in that scenario would be unlikely, given the pressure for cost-of-living relief, though some agencies like Services Australia, might back the fight. The union hasn't commented on what its position would be in that scenario, saying it is instead purely focused on the fight for a better pay deal.
Either way, it is public servants, who will cast their votes on the government's bid to rebuild the APS.
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