The purpose of this Circular is to advise you of developments in negotiations for the proposed Crown Employees (Public Sector Salaries 2000) Award.

As you are aware, in principle agreement on wage outcomes up to 30 June 2004 has been reached with the Labor Council of NSW, Public Service Association of NSW, NSW Nurses' Association and the Health and Research Employees' Association. This agreement provides for the following increases:

Effective Date Increase

1 January 2000 2%
1 January 2001 2%
1 January 2002 3%
1 January 2003 4%
30 June 2003 5%

For budget dependent agencies, the first two 2% increases will be fully budget funded. Budget funding of the remaining increases will be limited to 2% on each occasion. That is, a total of 6% will need to be funded from efficiencies to be achieved from workplace reforms. The Treasurer's advice to NSW Ministers dated 21 January 2000 refers (copy attached).

The industrial parties have now signed a Memorandum of Understanding (MOU) outlining the commitments by the various parties (copy also attached). Consent Awards will now be made with each union covering the first two 2% increases, that is, Awards that expire on 31 December 2001. Subsequent Awards will be made for the remaining increases. This overcomes a technical issue concerning the maximum time period for Awards under the Industrial Relations Act, 1996. Separate advice will be forwarded to authorise payment as Awards are made or varied.

The MOU acknowledges the need for specific workplace reform both sector wide and in agencies which reflects agency needs and priorities. Five key sector wide priorities are identified in the MOU. These are:

• Service Delivery;
• Review the Legislative and Employment Framework;
• Advance NSW as a Digital State;
• Continue Corporate Services Reform efficiencies; and
• Modernise Structures and Pay Systems.

The Public Sector Management Office (PSMO) is working to further develop the key sector wide priorities in consultation with a range of agencies and the unions. Details will be forwarded to agencies as soon as practicable.

Briefing sessions for agencies will also be arranged by the PSMO. In respect of the key sector wide priorities, these briefings will be designed to explain the specific objectives, outcomes and processes including timeframes. Examples of demonstrated achievements in the specific sector wide reform areas will also be addressed.

In terms of action to be taken by agencies, it is expected that agencies will:

• Prepare a draft management agenda (for later discussion with the relevant union/s) that delivers efficiency benefits of sufficient value to fund the unfunded component of the wage increases;
• Give consideration to workplace reform and service delivery enhancement initiatives;
• Give consideration to the short, medium and long term objectives of the agenda;
• Acknowledge savings generated from these proposals over the first year of implementation and subsequent years; and
• Forward a brief outline of the management agenda to the PSMO by 31 March 2000 using the attached proforma titled Management Reform Agenda.

In accordance with the Treasurer's advice of 21 January 2000, the Industrial Relations Steering Committee, chaired by the Director-General Premier's Department will review agency proposals and authorise agency level negotiations with the relevant union/s. These negotiations should proceed on the basis that formal endorsement of proposals by the Budget Committee of Cabinet is required by 30 June 2000.

Further planning should be based on the requirement for agencies to submit implementation strategies by 15 September 2000. These strategies will be reviewed/endorsed by central agencies and the Budget Committee by 15 December 2000.

Please note that in accordance with Clause 10 (Reporting) of the MOU, the parties are required to compile progress reports as at 31 May and 30 November each year during the term of the agreement. Agencies will be reminded as and when these reports become due.

The PSMO is available to assist agencies in the development of individual proposals and to elaborate on sector wide reforms contained in the MOU.

Any enquiries or requests for assistance may be directed to Wendy Barrett (9228 3568), Doug Cowell (9228 3575) or Elizabeth Casey (9228 3564).

C. Gellatly
Director-General

Supersedes 97-30. Superseded by new award