CPSU cold on voluntary demotion offer to avoid retrenchments

By Julian Bajkowski

The conspicuous collapse of the Coalition’s promise to slash 12,000 federal public service jobs through natural attrition has been quickly followed by revelations that parts of the bureaucracy are looking at radically redefining job structures and pay grades in an apparent bid to limit forced retrenchments.

The Community and Public Sector Union (CPSU) has successfully sought to enter consultations with the Department of Health following confirmation that a range of voluntary workplace flexibility options – including reduced hours and voluntary demotions – have been put to staff as a way of cutting budgets and potentially reducing the need for redundancies.

The tactics by Health open a bold new front in the bid to reduce the staff costs in the Australian Public Service because they are likely to act as a frontrunner for similar initiatives in other departments.

Employers are normally legally restricted from forcing pay cuts or diluting the conditions and entitlements of staff under industrial laws, one of the likely reasons that Health is calling for volunteers.

There are two big immediate implications in terms of making a voluntary move down the seniority ladder and pay scales.

The first is how long a downgraded job will last – and if the new lower grade will stick when calculating a future redundancy. The second is how future superannuation payments and holdings will be affected in relation to the pay scale.

The CPSU says it is deeply wary of the voluntary downgrade option.

“People are being asked to take a demotion and pay cut to keep their job. It’s an unusual method and we would advise our members to approach this proposal with extreme caution,” said CPSU Director Beth Vincent-Pietsch.

“It is a measure of just how bleak the situation is when people are being encouraged to take a job at a lower level in order to keep their job. And there is no guarantee that you get to keep your job.”

Ironically, the downgrade option that is being put to Health staff has come about as a result of the previous Labor government’s loathed efficiency dividend that opened a trapdoor under the Coalition’s job reduction pledge.

The Coalition this week finally caved on its ‘natural attrition’ target of 12,000 staff after the Senate estimates process flushed out more official calculations from the Department of Finance that the impact of the funding reduction would claim as many as 14,500 jobs.

Although the Abbott government and its Finance Minister Mathias Cormann have hit out at Labor for supposedly keeping the 14,500 estimate a secret, the estimated impact of efficiency dividend was reported by The Canberra Times a year ago.

The jobs toll the efficiency dividend is extracting has been further driven home by the Australian Taxation Office at Senate Estimates this week after officials gave evidence they are contemplating retrenching up to 900 staff.

Meanwhile, the progress or otherwise of Health, and its high profile secretary Jane Halton, in attracting volunteers to its cost-cutting initiative is certain to be closely watched by other departments and large employers.

A possible ‘middle road’ for some agencies might be redesignating volunteers into part-time positions that become active during cyclical busy times for agencies – for example getting some employees to work for nine or six months of the year rather than 12.

That option could prove appealing to some bureaucrats if they were able to take four months off as a block, for example from December to April.

Some APS staff have indicated to Government News such a prospect may be worthwhile if it was matched with both a guarantee of ongoing employment part-time employment and a partial redundancy payout – a mechanism that the corporate sector has sometimes used when trying to retain or transfer corporate memory during times of change.

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