On 3 June 2026, the Australian Government released the much-anticipated Public Sector Workplace Relations Policy 2026 (2026 Policy), setting out the parameters for the next round of enterprise bargaining across the Commonwealth public sector. It also includes the parameters for common law arrangements for agencies that do not set terms of employment through enterprise bargaining, as well as the terms and conditions, including remuneration of, the Senior Executive Service (SES) and equivalent, not traditionally subject to enterprise agreements.
The 2026 Policy applies to Commonwealth public sector employers in respect of both Australian Public Service (APS) employees engaged under the Public Service Act 2009 (Cth) (PS Act) and other Commonwealth public sector employees employed under other legislation (Non-APS).
Importantly, the 2026 Policy will kick-start APS-wide enterprise bargaining, ahead of enterprise agreements expiring later this year and in early 2027.
Approach to enterprise bargaining under the 2026 Policy
Similar to the approach in the Public Sector Workplace Relations Policy 2023 (2023 Policy), bargaining under the 2026 Policy involves two parts:
- Part A (service-wide bargaining): The Australian Public Service Commission (APSC) will again take the lead as the employer bargaining representative in negotiating service-wide common conditions on behalf of APS agencies. Once bargaining concludes, the APSC will issue a new Statement of Common Conditions (Statement), which will identify:
- common conditions that must be included by the APS in their enterprise agreements
- conditions referred to agency-level bargaining (see Part B below)
- conditions to be maintained in or excluded from agreements.
- Part B (agency-level bargaining): Agencies may engage in agency-level bargaining on permitted matters, including:
- conditions referred for agency-level bargaining in the Statement
- conditions specific to the unique operational requirements of the agency, subject to APSC guidance.
Key changes from the 2023 policy
While the 2026 Policy is substantially consistent with the 2023 Policy, there are some key differences.
For both APS and Non-APS agencies, the 2026 Policy requires agency heads to take all practical steps to moderate the growth of SES-equivalent total remuneration and ensure that any increases are supported by productivity growth. Agency heads of APS agencies must also ensure that SES total remuneration does not increase at a greater or faster rate than non-SES remuneration.
For Non-APS agencies, they will remain subject to the 2023 Policy until their bargaining process concludes if:
- the agency has not bargained an agreement under the 2023 Policy
- the agency commences bargaining for a new agreement by 1 July 2026
- the APSC has not advised the agency that the 2026 Policy applies.
Non-APS agencies may also request to be included in service-wide bargaining, subject to APSC approval. Where this is approved, the APS Policy will apply.
In addition, where Non-APS enterprise agreements are reaching nominal expiry, agencies must not put in place a new comprehensive collective arrangement that commences before 1 March 2027.
The 2026 Policy also encourages Non-APS agencies to recognise annual leave accruals when an employee moves from an APS agency or other Commonwealth entity in circumstances where the employee has made a request and the leave has not been paid out.
Bargaining requirements for APS agencies
Under the 2026 Policy, APS agencies will be required to:
- bargain agreements that are consistent with the Statement and include the common conditions. Agencies must seek approval to introduce a new condition, amend or remove an existing condition not covered by the Statement
- offer pay increases consistent with the outcome of Part A (service-wide bargaining). Agencies will not be allowed to bargain new arrangements that seek to provide additional pay increases to employees outside a general pay increase, including through fringe benefits tax
- consult with the APSC on significant industrial issues or proceedings at the workplace level (including FWC applications or proceedings related to bargaining, emerging or actual industrial action, significant or collective disputes arising under the terms of an enterprise agreement, and disputes about the interpretation or application of a common condition)
- submit their collective workplace arrangements (i.e. proposed enterprise agreements) for approval by the APSC prior to tabling a final version to employees and their representatives.
Exemptions from the 2026 Policy will only be considered by the APSC in exceptional circumstances, and will require a written submission supported by the agency’s responsible Minister and approved by the Minister for the Public Service.
The APS Policy also applies to negotiations by an entity with dual staffing powers (that is, employing staff under both the PS Act and other legislation) seeking to cover APS and non-APS staff under the same agreement.
Bargaining requirements for Non-APS Bargaining
For Non-APS agencies, the 2026 Policy largely mirrors the 2023 Policy, with agencies encouraged to incorporate the common conditions set out in the Statement (once available), where practicable.
Under the new Policy, a Non-APS agency may request to be included in service-wide bargaining, which is subject to APSC approval. Where a Non-APS agency is approved to participate in service-wide bargaining, the APS Policy will instead apply to that agency. Agencies with enterprise agreements approaching nominal expiry must not put in place a new comprehensive collective arrangement that commences before 1 March 2027. This is intended to align the bargaining cycles across APS and Non-APS agencies.
There will be limited exceptions for Non-APS agencies that have not yet put in place a collective agreement under the 2023 Policy and that commence bargaining under that Policy before 1 July 2026. The APSC has advised that they will be releasing further guidance on interim arrangements for agreements expiring before 1 March 2027.
Non-APS agencies will also generally not be permitted to put in place determinations in lieu of bargaining for a collective agreement, other than where approval is obtained from the APSC in special circumstances. Under the 2026 Policy, Non-APS agencies will be required to:
- seek approval from the APS Commissioner prior to any proposed increases in remuneration or changes to conditions with a financial impact being discussed with employees and/or their representatives. This involves agency heads submitting a Funding and Remuneration Declaration to the APS Commissioner. Remuneration and conditions adjustments are to be within government parameters, as advised by the APSC. Changes must be affordable and funded from within the existing agency budgets, without the redirection of program funding and not otherwise funded by reductions in output/services, or increases in fees, charges, levies or similar (other than ordinary indexation practices). Increases are only to apply prospectively
- consult with the APSC in the event of significant industrial issues or proceedings at the workplace level (including FWC applications or proceedings related to bargaining, emerging or actual industrial action, significant or collective disputes arising under the terms of an enterprise agreement and disputes about the interpretation or application of a common condition the agency has adopted)
- submit their draft enterprise agreement or collective arrangement to the APS Commissioner for approval prior to the agency tabling its final position with employees and/or their representatives.
In addition, the 2026 Policy requires Non-APS enterprise agreements to:
- be consistent with the consultation requirements of the Fair Work Act 2009 (Cth) (FW Act). Agencies should implement arrangements that go beyond the requirements of the FW Act, noting that agencies are not required to include content that would be inconsistent with their legal obligations (for example ensuring compliance with privacy laws)
- include an individual flexibility term consistent with the requirements of the FW Act, varied to include remuneration
- include a dispute resolution term consistent with the FW Act. However, agencies should be cautious in considering any proposal to broaden the scope of the dispute resolution clause beyond matters that arise under their enterprise agreement and the National Employment Standards (NES)
- include a delegates’ rights term consistent with the requirements of the FW Act.
The Non-APS Policy also permits Non-APS agencies to amend the employer contribution method of superannuation calculation to Ordinary Time Earnings (OTE), consistent with contemporary remuneration practices. Under this policy, Non-APS agencies must:
- not allow for the cashing out of personal/carers’ leave
- ensure long service leave is consistent with legislative requirements
- incorporate family and domestic violence support
- not enhance existing redundancy, redeployment and reduction entitlements unless otherwise advised by the APSC
- not reduce ordinary hours of work to less than 37.5 hours per week
- not increase superannuation contribution rates beyond the default Commonwealth superannuation fund rate under the Public Sector Superannuation Accumulation Plan (currently 15.4%), although they may amend the employer contribution method of superannuation calculation to OTE, consistent with contemporary remuneration practices
- not allow an employee to advance through a classification or broadband pay scale if they have not achieved at least a satisfactory (or equivalent) level of performance.
Non-APS agencies are also encouraged to implement workplace arrangements that:
- enable sustainable, high performing public sector workplaces, and promote principles that respect and facilitate the role of employee representatives, workplace union delegates and other union officials
- facilitate support for the release of Defence Reservists for peacetime training and development
- recognise paid personal leave accruals where an employee moves to a non-APS agency from an APS agency or other Commonwealth entity
- recognise annual leave accruals where an employee moves from an APS agency or other Commonwealth entity, in circumstances where the employee has made a request and the leave has not been paid out
- in respect of redundancy and redeployment, include a mechanism that will reduce a retention period by the equivalent number of weeks that an eligible employee would be entitled to under the NES.
How APS and Non-APS agencies can prepare
The APSC will now commence bargaining for a Statement of Common Conditions and pay offer, which will underpin bargaining across the Commonwealth public sector.
APS and Non-APS agencies should begin preparing for bargaining, including by:
- engaging with managers and executives to inform their approach to bargaining, including establishing reference and steering committees to inform the agency’s position, as well as a bargaining team to represent the agency at the bargaining table
- developing a bargaining strategy
- considering how they will most effectively communicate with employees in relation to bargaining
- preparing for any industrial action that may arise
- ensuring they have support in place to consider claims and that their bargaining for the proposed agreement complies with the requirements under the 2026 Policy and the FW Act.
If you have questions about your agency’s bargaining strategy or would like more information, please contact us here.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
Share this
