Ministers are requested to bring this Memorandum to the attention of public service departments and other public sector organisations and services coming within or associated with their portfolios, including State Owned Corporations.

From today, all NSW public sector organisations must comply with the NSW Government Policy: Negotiating Public Sector Wages, Salaries and Employment Conditions attached to this Memorandum. The policy provides a process to ensure that all NSW public sector organisations meet the objectives of section 13 of the Fiscal Responsibility Act (NSW) 2005.

All NSW public sector organisations including public service departments, State Owned Corporations, declared authorities, independent statutory bodies and any other public sector service within the meaning of the Public Sector Employment and Management Act 2002 are required to comply.

The NSW Government Policy: Negotiating Public Sector Wages, Salaries and Employment Conditions applies to negotiations regarding wages, salaries and employment conditions that will be formalised into an industrial instrument or co-lateral arrangement pursuant to an industrial instrument. CEOs of public service Departments are reminded that local agreements pursuant to clause 10 of the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2006 must comply with these arrangements.

The Public Employment Office (PEO) and NSW Treasury will provide assistance to agencies who may be required to prepare submissions to the Cabinet Standing Committee on the Budget (Budget Committee). Further information on this matter is available from your agency's PEO client contact officer or Treasury Analyst.

Morris Iemma MP
Premier

Issued : Employee Relations and Workforce Planning Services (Public Employment Office)
Contact: Gayle Robson, Manager, Employee Relations Police and Advice
EMail: [email protected]
Telephone no: 9228 3165 Facsimile: 9228 4056
File no: PSM/05413
Date: 30 March 2006
This memorandum replaces Memorandum No: M1996-04

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NSW Government Policy: Negotiating Public Sector Wages, Salaries and Employment Conditions

PURPOSE

To ensure that Fiscal Principle No 3, set out in section 13 of the Fiscal Responsibility Act (NSW) 2005) is achieved. Section 13 states that:

Fiscal principle No 3-managing public sector employee costs

(1) Fiscal principle No 3 is that government policy with respect to negotiating rates of pay and related conditions of employment of general government sector employees is to be consistent with the fiscal targets.

(2) In negotiating rates of pay for employees, public trading enterprises are to take into account conditions in their industry and the government's policy for negotiating rates of pay and related conditions of employment of general government sector employees.

ORGANISATIONS COVERED

All NSW public sector organisations including public service departments, State Owned Corporations, declared authorities, independent statutory bodies and any other public sector service with the meaning of the Public Sector Employment and Management Act 2002 are required to comply.

NEGOTIATIONS COVERED

All negotiations and claims regarding wages, salaries and employment conditions that will be formalised into an industrial instrument or collateral arrangement pursuant to an industrial instrument are covered by the policy.

CEOs of public service departments are reminded that local agreements pursuant to clause 10 of the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2006 must comply with these arrangements.

PROCESS

Process for all organisations except State Owned Corporations

All organisations covered by the policy, except for State Owned Corporations, must comply with the following steps.

1. Consultation and approval of bargaining parameters

All organisations must consult the Public Employment Office (PEO) in the Premier's Department on any proposal that may result in changes to wages, salaries or employment conditions prior to entering into negotiations with unions.

All NSW public sector organisations must provide a detailed assessment of the proposal as per the attached schedule 1

The PEO will consult with NSW Treasury in formulating a response to a proposal. The PEO and NSW Treasury may request that organisations meet with them to further consider the proposed negotiations and cost and other implications.

The PEO and NSW Treasury will, in appropriate cases, endorse an organisation commencing negotiations with unions within approved bargaining parameters. In some cases, organisations may be required to seek approval from the Cabinet Standing Committee on the Budget (Budget Committee) of bargaining parameters.

Substantial variations to approved parameters will require further approval.

2. Negotiations with unions and approval of proposed offers of settlement

Organisations will undertake negotiations with unions in accordance with approved parameters. In appropriate cases, the PEO will provide assistance to organisations with negotiations.

Organisations are to provide the PEO with details of settlement proposals prior to any final offer being made to unions.

In matters that are consistent with the Government's wages policy and general standards on employment conditions, the PEO and Treasury may approve the settlement offer being formally made to unions.

For settlement proposals outside of general Government policy, a formal request for approval must be made to the Budget Committee.

Budget Committee approval is required even where no supplementation from Treasury is requested and it is proposed to meet costs from within the existing agency budget.

The process for obtaining Budget Committee approval is via a Cabinet Minute endorsed by the relevant portfolio Minister.

The PEO and NSW Treasury will provide assistance to organisations preparing Budget Committee Minutes. Agencies should note that the preparation of Minutes require Financial Impact Statements approved by the Secretary of NSW Treasury and appropriate liaison to occur between the agency and the relevant Minister's office as the Minister will "sponsor" the Minute before the Committee.

The current Government wages policy was announced in the 2005-2006 Half-Yearly Budget Review available at http://www.treasury.nsw.gov.au/.

3. Award lodgement / approval

Public Service Departments must seek PEO approval before lodging any application with the Industrial Relations Commission or other body to make or vary an award or other industrial instrument, whether relating to wages, salary or conditions matters.

Public Service Departments must provide to PEO formal agreements negotiated under clause 10 of the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2006 for endorsement.

All other organisations must advise the PEO of the outcome of negotiations and provide a copy of the final form of the industrial instrument to the PEO.

Process for State Owned Corporations

State Owned Corporations (SOCs) should undertake the following steps.

1. Consultation prior to negotiations

All SOCs should conduct consultations with NSW Treasury and the PEO early in the process of formulating bargaining parameters on award/enterprise agreement negotiations.

In particular, SOCs should seek input from the PEO on the Government's wages policy and other general government standards of employment conditions.

All SOCs should provide a detailed assessment of the proposal as per the attached schedule.

2. Advice prior to agreement

SOCs should advise NSW Treasury and the PEO of the outcome of negotiations in advance of any final agreement.

3. Award lodgement

SOCs should advise NSW Treasury and the PEO of the outcome of negotiations and provide a copy of the final form of the industrial instrument to the PEO.