Public Sector Backpay

It has come to our attention that a number of members have raised concerns over the issue of backpay as part of the current public sector negotiations. The following discussion seeks to provide some clarification on the issue.

The state government’s wages policy expressly prohibits retrospective payment. That is, backpay is explicitly prohibited by governmental policy—this position is strongly put by the Department of Health and Human Services on behalf of the government.

We have nonetheless made a claim for a lump sum payment (or sign-on bonus) that we believe is fair and reasonable. Such sums are not abstractly determined but are premised in a specific and clear logic. That logic seeks, in line with government policy, to avoid directly attaching any sign on bonus to employee wages. Historically the sum has been determined by multiplying a flat dollar figure by the number of weeks between the nominal expiry date of the current agreement and the date of in-principle agreement of the new agreement. The flat dollar figure has traditionally been determined by applying the relevant percentage increase to the wage rate at the top of UG1 Grade 2—for example 3% of $1556 or $46.70.

It is important that members also understand that where percentage increases are applied—as is the norm for our sector and many others—those at the lower end of the salary schedule receive the same percentage wage increase as those at the upper end of the salary schedule but as a consequence of such receive a lower dollar outcome. Thus, over many years, salary schedules tend to stretch and the gap between lower income earners and higher income earners widens.

One means by which this distortion may be moderated is via the allocation of a fixed dollar sign-on bonus to all employees (rather than a percentage of weekly wage arrangement at each tier).

Members should also be aware that there is nothing compelling any employer to pay a sign-on bonus. This is something that tends to be negotiated as part of an overall package. As such an increase in the sign-on bonus may have an impact on other benefits negotiated as part of an overall package. It is also worth noting that our preference is to allocate money to wages rather than to lump sum payments wherever possible. This approach is beneficial to employees due to the resultant compounding effect.

At this stage we are only able to determine any sign-on bonus based on historical precedent and an estimate of the date of in-principle agreement. At this stage there is no agreement with the hospitals or with the government on any wage outcomes—there have of course been detailed discussions on the question but, as noted, agreement has not yet been reached.

VAHPA is committed to ensuring that the negotiated package is as good as we believe it can be given the plethora of relevant factors. Members will of course have the final say on any deal or offer and will have the opportunity to direct the union to accept the deal or to continue bargaining for an alternative outcome.

We will of course be providing members with as much detail on the progress of negotiations as possible.