The ADF Pay Deal: Politics Again Triumphs over Policy and Process

Sue Williamson

Dr Sue Williamson, Lecturer, Human Resource Management, School of Business, UNSW Canberra

Michael O'Donnell

Michael O'Donnell, Professor of Human Resource Management, School of Business, UNSW Canberra

On 4 March 2015, the Prime Minister, the Hon. Tony Abbott MP, announced that the Australian Defence Force (ADF) would receive a pay rise of 2.0 per cent per annum. This decision effectively overturned a decision made by the Defence Force Remuneration Tribunal (DFRT) some four months earlier, which was to award the ADF a 1.5 per cent pay rise. Not only does Abbott’s action undermine established processes, it exacerbates perceptions that the mechanisms for establishing pay and conditions for military personnel are not fair.

Unlike wage negotiations in the public and private sectors, military personnel are not legally entitled to negotiate wage rises or their terms and conditions of employment. Instead, wage rises for ADF personnel are jointly determined by the Australian government and the ADF and either approved or rejected by the DFRT. Submissions are prepared and hearings attended by the Defence Force Advocate acting on behalf of the ADF, with the Commonwealth Advocate acting for the employer. Wage rises for the ADF are required to be affordable and offset by productivity gains, a policy which is consistent with the bargaining policy for the Australian Public Service (APS).

The quantum of the initial pay rise attracted considerable criticism. ADF members labelled it a ‘disgrace’ partly because the pay rise was below the level of inflation. The Defence Force Welfare Association (DFWA) – a lobbying organisation largely consisting of ex-ADF members – was also critical of the lack of consultation with ADF members. In its decision, the DFRT outlined the consultation that had been undertaken. The ADF held focus groups, issued monthly newsletters, provided written updates and held information sessions. The DRFT found, however, that 80 per cent of respondents were unhappy with the process by which the ADF and government’s position had been reached. Even though ADF personnel are not legally entitled to negotiate, the DFWA argued that members wished to be consulted about the proposed arrangement and to provide feedback.

There is nothing new in this minimalist approach to consultation with ADF members over their pay and conditions. The 1999 Pratt Review found that a paternalistic approach was evident in traditional military cultures and found that those responsible for determining pay policy did not consider it necessary and/or practicable to consult with ADF members on the introduction of new policies, or variations of existing ones. The 2001 Nunn Review also commented on the lack of communication, consultation and negotiation in the ADF. It also stated that agreement-making was not “an appropriate mechanism for effecting salary adjustments across the ADF” on the basis that the “ADF is unable to participate in a genuine manner in negotiating industrial agreements”. In many ways the 2014 ADF pay deal was consistent with past practices of providing ADF with a limited voice in the determination of their pay and conditions.

Regardless of the fairness of the process, the quantum of the increase was the main issue under contention. Senator Jacqui Lambie, an ex-ADF member, threatened to block all legislation if ADF members were not given a larger increase. This resistance placed considerable political pressure on the Coalition government to make amendments and on 1 December 2014, the government announced a revised position on the pay deal, which maintained allowances at their current level, effectively eliminating any productivity offsets.

In March 2015, however, the Prime Minister announced that the wage rise would be increased to 2 per cent, subject to the offer being ratified by the DFRT. The PM based this decision on the nature of the work of the ADF, namely, that military personnel place themselves in harm’s way in the service of the nation. This statement coincided with the announcement that Australia would send another 300 troops to Iraq. Increasing the pay rise for the ADF by prime ministerial fiat, however, undermines the established process of securing pay rises for the ADF.

Such prime ministerial – or even ministerial – intervention is extremely unusual. In previous APS enterprise agreement negotiations, ministers have been able to intervene to secure pay rises greater than the amount stipulated in policy. In the 2011 APS negotiations, ministerial approval for agencies to provide a pay rise greater than the 3 per cent government imposed cap was granted to only seven of 125 agencies, due to ‘sound business reasons’. In the current ADF case, the sound business reason appears to be a combination of Abbott’s sudden realisation that the military personnel deployed to Iraq would ‘put their personal safety at risk’ and ongoing political pressure from Senator Lambie and lobbying by backbenchers.

Following Abbott’s announcement, the Community and Public Sector Union (CPSU) called on the government to increase the pay rise for APS employees, who are currently engaged in enterprise bargaining negotiations. In particular, the CPSU is lobbying for an increase greater than the reported 1.05 per cent per annum being offered to Department of Defence employees. The different pay rises on offer for ADF personnel and Department of Defence employees is likely to increase the wage gap between the two groups and threatens to undermine long-standing efforts to integrate military and civilian personnel. Relatively low pay rises and the likelihood of increased friction between military and non-military staff is unlikely to improve the morale or commitment levels of ADF personnel. The latest ADF pay rise will also do little to mollify dissatisfied Defence employees, who have undertaken industrial action.

The ADF pay deal highlights both a lack of communication with ADF personnel over the manner in which their pay and conditions are determined and unjustified prime ministerial intervention. The quantum of the deal also highlights the differential positions adopted in regards to the two workforces, which may have lasting implications on interactions between civilian and military personnel.

 


This article has been adapted from an earlier article published in The Conversation: http://theconversation.com/adf-pay-deal-sets-dangerous-precedent-38499

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