While key vertical controls persist in the employment framework, much of the service-wide ‘connective tissue’ has been removed, including ‘the concept of public office, common conditions of employment and the ‘special’ labour market arrangements that existed for the APS.’^[17] Before devolution, the public service had been characterised by common job classifications and transferable terms and conditions of employment presided over by the old Public Service Board. These, in turn, were underpinned by a highly unionised environment, an industrial determination (later award) and some generally applied industrial legislation (such as that relating to superannuation and maternity leave). From an agency point of view, employment relations were pluralist, that is, they were based on the view that employer and employee interests would not always coincide and, therefore, there was a legitimate role for mechanisms such as the Public Service Arbitrator (later the Australian Industrial Relations Commission) and union consultative forums to prevent and resolve disputes.

In 1986, the Public Service Legislation—Streamlining Act 1986, as its title suggests, streamlined appointment, promotion and redundancy procedures, giving public service managers increased control over process issues associated with staffing matters by reducing or eliminating avenues of review. The legislation had been developed without union consultation (and with minimal departmental participation, other than through the Cabinet processes), and when consultation did occur, it was undertaken essentially on the basis that the reforms, which had then been approved by the Government, were not negotiable in relation to their general tenor and key content. The following year awards were restructured and classifications simplified from over 100 to 8, enabling employees to undertake a wider range of tasks at their classification level. It meant, among other things, that employees would be expected to undertake routine work such as photocopying, filing and keying in final drafts of documents in addition to their substantive tasks, and that, over time, a number of lower-level positions would no longer be required. This was a matter of industrial and not legislative reform, and accordingly the Labor Government proceeded along the lines it was recommending to other sectors undergoing award restructuring.^[18] Departments were required to establish joint union/management committees which in turn were involved in examining improvements to work organisation made possible by the intersection of award restructuring, simplified classifications and information technology. The Management Advisory Board (MAB) reported that ‘experience with a co-operative rather than an adversarial approach to industrial relations has paid off … (and) … union organisations can positively contribute to the outcome of any organisational change initiative’.^[19]

In December 1992, the scope for workplace change in agencies was broadened when, following the introduction of the Enterprise Bargaining Principle, a framework agreement was reached that allowed for service-wide pay increases to be linked to service-wide productivity initiatives while at the same time providing for agency-based increases to be linked to agency-level initiatives. Again, the Government saw the necessity of using its own workforce as an exemplar of how productivity gains could be made, particularly in the service sector. Many public servants felt that because of their budget-dependency, all they had to trade off for wage increases under enterprise bargaining was, effectively, the jobs of other public servants. Nevertheless, enterprise bargaining was as much part of the broader union agenda as it was part of the broader Government agenda, and the public sector unions had little choice but to make the best of it, as the President of the ACT Branch of the Community and Public Sector Union (CPSU) during the period is reported to have admitted:

Following the passage of the Industrial Relations Reform Act 1993, agency-specific agreement making accelerated. The 1994 Enterprise Bargaining Report found that 24 agreements covering 33 agencies had been certified under the APS framework agreement, covering 55 per cent of employees and bringing to 73 per cent the number of employees covered by agency agreements.^[21]

With the change of Government in March 1996, and the introduction of the Workplace Relations Bill, bargaining was further decentralised. Framework agreements were no longer available. Agency heads were always able, subject to the DEWR parameters, to develop their own remuneration policies, negotiate their own rates of pay, broadband agency classifications, and to seek through negotiation to establish their preferred form of industrial instrument. These administrative changes were reinforced through the Public Service Act.^[22] The APS award became a minimum rates award, increasing the dependence of public servants on agency agreements to maintain or improve their existing rates of pay.

Like the previous Labor Government, the new Coalition Government used its position as employer to position the APS as an operational model of its industrial policy.^[23] Public servants were advised early on that ‘this Government starts from a fundamental proposition: namely that the industrial and staffing arrangements for the public service should be essentially the same as those of the private sector’.^[24] While these arrangements were nominally neutral about freedom of association, the Government as employer did not favour union involvement in any of its workplaces. Employees were advised by the minister that they had been ‘victims of workplace structures, systems and cultures which seek to control through regulation rather than through trust’^[25] and that accordingly they ‘should have an opportunity to benefit from a more direct relationship with their employers rather than be managed through rules, regulations and third party relationships’.^[26] People formerly known as union officials became union ‘bosses’^[27] and unions became ‘third parties’. Public servants were instructed that in future the process of settling workplace agreements was to be called ‘agreement making’, rather than ‘bargaining’ or ‘negotiating’, in order to convey a community of interests between employer and employee.

At the same time, consistent with the DEWR parameters, support was being offered to those employees choosing to enter into more direct relationships with their employers. Employees were advised by the Minister Assisting the Prime Minister for the Public Service, Peter Reith, that (whether or not they were aware of it) ‘in particular they want more direct relationships with their employers’.^[28] Peter Reith’s successor, David Kemp, translated:

Following the passage of the Workplace Relations Act 1996, agencies were advised of the Government’s decision that the payroll deduction of union dues should be contingent on individual employees in Australian Government employment confirming each year that in fact they did not want more direct relations with their employers but rather wished to continue to have union dues deducted from their pay. Not surprisingly, some employees discontinued their union membership; others took union advice and had their dues deducted from their bank accounts rather than be obliged to signal their continued union membership to a less than enthusiastic employer. Kemp was clearly gratified:

Agency heads and managers were put on notice that providing opportunities for more direct relations would ‘be a key responsibility of agencies and a major test of leadership’.^[31] By June 2004, the parameters were advising that consistent with the Government’s legislation uninvited ‘third parties’ would find that their access to workplaces had been constrained.^[32]

The Howard Government’s clear preferences regarding the state of unionism in their workplaces had the effect of foregrounding the either/or argument at the more doctrinaire end of ‘soft’ HRM. The rhetoric assumed that, in the absence of third parties, employment relations would be unitarist rather than pluralist, meaning that there would be ‘one set of objectives common to all members of an enterprise … usually defined in terms of the goals of senior executives’. Organisational goals cascaded down from the top to employees, who were encouraged to enter into direct relations with their senior management consistent with the minister’s vision for the APS of the future. For most employees, ‘direct relations’ meant being offered non-union collective agreements by the agency head; for more senior employees, it meant individual contracts.^[33] For employers, it meant increasing employee dependence on managerial prerogative—referred to in ‘soft’ HRM language as ‘building a culture based on trust’—and increasing the role of managerial prerogative in workplace agreements as well as in overall agency management practices.

One of the few analyses of the embedding of HRM principles in agencies is in a study of the Australian Taxation Office (ATO) conducted by Anderson, Griffin and Teicher between 1999 and 2002. By that time cultural change and the institutional arrangements required to support it were sufficiently mature to show the initial impact of HRM principles. The researchers found that although agency agreements had been formalised, the major policy defining the employment relationship at the ATO was its People Strategy: ‘an HRM strategy that defines the employment relationship in terms of desired values and behaviours [and] … seeks to achieve a cultural shift from a dependent workforce with an entitlement culture and requiring close supervision, to a self-managed workforce that exhibits flexibility and responds to continuous change within a performance culture’.^[34] Consistent with the progressive management of that cultural shift, the Senior Executive Service were on individual contracts and executive level 2 employees were on a non-union collective agreement, while staff at lower classification levels remained on union-negotiated collective agreements. Overall, the authors concluded:

While APS human resource practices in agencies continued their nominal progress toward a unitarist, individual, high-trust model of employment relations, employees themselves did not find the transition so seamless. Apparently they were not all convinced that they really did want more direct relationships with their employers, or that the outcome of such relationships had always justified their trust: over time, numbers of non-union agency agreements in the APS fell. According to the Public Service Commissioner’s State of the Service reports, the percentage of agency agreements made with unions under section 170LJ of the Workplace Relations Act 1997 grew from 55 per cent in 1999 to almost 70 per cent in 2005,^[36] including DEWR’s own union agreement, made in that year after a considerable and high-profile struggle. For its part, DEWR’s Secretary, Peter Boxall, sought to institute direct, high-trust relationships with his employees by making individual agreements compulsory for all promotions and for staff seeking to join the public service through that agency.^[37]

After 2005, the WorkChoices legislation greatly strengthened secretaries’ bargaining positions and their capacities to ‘promote the Government's interests as the ultimate employer of APS employees’. By the time that legislation had been passed:

Furthermore, agency heads had the power at any time after the nominal expiry date of an agreement made under the WorkChoices framework to unilaterally terminate that agreement so that employees would fall back onto the new ‘fair pay standard’ drawing on old award classification rates as adjusted from time to time by the Fair Pay Commission.

Table 4 shows what this would have meant, on average, if it were to apply to APS employees based on 2004 APS award rates, and their actual rates of pay under agreements current as at 31 December 2005. Executive-level staff who had their individual or collective agreements terminated could lose nearly half of their annual income (and a number of conditions). The ‘fair pay standard’ would become the new benchmark for their next ‘agreement’. Employers could choose not to settle a new collective agreement and leave employees on the ‘fair pay standard’ indefinitely, or until they were able to jump the new hurdles required to access protected industrial action, or until they accepted individual agreements.

Sources: 2005 APS Remuneration Survey (current as at 31 Dec. 2005) at http://www.workplace.gov.au/workplace/Organisation/Government/Federal/Reports/2005APSRemunerationSurvey.htm, viewed 24 June 2006; Australian Public Service Award 1998 (AW766579) (varied to 16 Dec. 2004 (variation PR954310)) at http://www.wagenet.gov.au/WageNet/Search/View.asp?docid=259460&query=%28PUBLIC+SERVICE+AWARD+1998%29&quickview=Y&page=0#dochit1

The 2005–06 State of the Service Report also indicated that the Public Service Act had been subject to a review that was likely to reinforce the WorkChoices changes listed above by ‘liberalising non-ongoing arrangements’—by which was meant increasing the scope to employ non-permanent staff and to decline to convert them to permanent after a set period of employment. According to the report, this was one of the changes identified as worthy of consideration to ensure that the Act ‘meets the future needs of agencies’.^[40] Ongoing employment has traditionally been associated with a capacity for apolitical professionalism—which in turn is one of those Westminster-based values described in Chapter 1 as having a less than seamless intersection with the NPM-based APS Values. Other Westminster-based values may also have been on the table, including ‘refining the [APS] values and Code of Conduct’, although further information was deferred until after the 2007 election.^[41]

Following that election, some of the powers made available to employers under WorkChoices will be rolled back. It was unlikely that APS employers would ever have deployed them in a wholesale way under the previous Government, although WorkChoices enhanced their capacity to target individuals who were no longer wanted in the workplace. But the fact remains that everyone would have known that the powers available under WorkChoices would have been there if they were wanted. It remains to be seen what will happen to the overall emphasis on management prerogative that has been strengthening progressively since the introduction of HRM principles into public service workplaces.