What's at stake in APS wage negotiations?

Job security in the public service is declining and conditions are under assault.(Image courtesy of Canberra Times)

By Cameron Roles

As readers may know, enterprise bargaining negotiations have begun in many APS departments and agencies. Typical of these negotiations are the claims and counterclaims that accompany bargaining.

CPSU National Secretary Nadine Flood and Minister for Employment and Minister Assisting the Prime Minister for the Public Service Senator Eric Abetz have both written opinion pieces in these pages, on 29 August and 5 September respectively. Ms Flood argues that the government is trying to strip away important workplace rights and protections. Minister Abetz counters that this is incorrect, and that "[t]he government's bargaining policy simply aims for less complex enterprise agreements that do not repeat rights and conditions and responsibilities already provided for in legislation or elsewhere." 

One issue which is hotly contested between the government and the CPSU is the role of superannuation clauses in APS enterprise agreements. Many APS enterprise agreements contain clauses which, among other things, seek to fix the employer superannuation contribution rate at 15.4 per cent. Under these agreements, the Commonwealth must make superannuation contributions at the rate of 15.4 per cent to either the Public Sector Superannuation accumulation plan (PSSap), or another complying fund chosen by the employee.

Ms Flood has told the Canberra Times that the government wants to remove these clauses. She claims that if the clauses were removed, the government could "drop super to as low as 9.5 per cent. Finance Minister Mathias Cormann could then change the rules governing the main public servants' super fund, the PSSap, with Abetz telling agencies to change the rate by policy."

Minister Abetz has told the Canberra Times that removing these clauses amounts to getting rid of "duplicative content". The Minister points out that the government has no plans to change the 15.4 per cent employer superannuation contribution rate. He further argues that "the government's contribution rate is set by the trust deed – a legislative instrument subject to scrutiny by the Parliament." Minister Abetz has labelled the CPSU's claim that the government intends to "cut public servants' superannuation" as "scare-mongering".

Neither the claims made by Ms Flood nor the Minister are entirely correct. Enterprise agreement clauses dealing with superannuation contributions do more than duplicate rights contained in superannuation legislation. But the impact of the clauses is different for members of the PSSap, as compared to APS employees who have chosen to join another superannuation accumulation fund.

For those APS employees who have chosen to join a superannuation accumulation fund other than the PSSap, enterprise agreement clauses are the source of a legal entitlement to top up the employer superannuation contribution rate from 9.5 per cent to 15.4 per cent. If the superannuation clauses were removed as part of any new agreement, the government could legally reduce superannuation contributions for these employees to 9.5 per cent. Claims made to the Canberra Times by Minister Abetz that "the government's contribution rate is set by the [PSSap] trust deed – a legislative instrument subject to scrutiny by the Parliament" – whilst correct in relation to PSSap members – are incorrect to the extent that they were meant to apply to this group of employees.

The situation is different for APS employees who are members of the PSSap. Minister Abetz was correct when he told the Canberra Times that the government's superannuation contribution rate is set by the PSSap trust deed. In my view Minister Abetz was also correct when he told the Canberra Times that enterprise agreement clauses "purporting to set a certain superannuation contribution rate, can't legally constrain the rate contained in Public Service superannuation law." This is because section 40 of the Fair Work Act provides that certain public sector employment laws (defined to include the laws governing the PSSap) will prevail over the terms of an enterprise agreement dealing with public sector employment where there is inconsistency between the two. The Minister for Finance could create such an inconsistency by amending the PSSap trust deed to reduce the employer superannuation contribution rate to something less than 15.4 per cent. As such the claim made to the Canberra Times by Ms Flood that removing superannuation clauses from enterprise agreements would enable the Minister for Finance to amend the PSSap trust deed and reduce contributions to as low as 9.5 per cent is incorrect, as the Minister can already do this, subject to Parliamentary scrutiny of the amended trust deed.

But the current enterprise agreement clauses dealing with superannuation may offer some indirect protection to PSSap members in the event that the Minister for Finance did decide to amend the trust deed and reduce the superannuation contribution rate. This is because the special rules outlined earlier concerning public sector employment laws overriding enterprise agreement clauses dealing with public sector employment don't arise in relation to accumulation superannuation funds other than the PSSap. Whilst the Minister for Finance could reduce the superannuation contribution rate for the PSSap, current agreement clauses would require the Commonwealth to contribute to other accumulation superannuation funds at the rate of 15.4 per cent. As a result there is little incentive for the Minister for Finance to reduce the contribution rate contained in the PSSap trust deed whilst the current enterprise agreement clauses remain, as such a move may encourage employees to exit the PSSap.

It will be interesting to observe bargaining over the coming months, and whether these clauses are ultimately retained or removed from APS enterprise agreements.

This artricle was originally published in the Canberra Times.

Cameron Roles

Senior Lecturer

Updated:  10 August 2015/Responsible Officer:  College General Manager, ANU College of Law/Page Contact:  Law Marketing Team