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The Coalition has signalled it is prepared to fight to the bitter end in the three year industrial dispute with tens of thousand of its public servants. Public service Minister Michaelia Cash has flatly rejected nearly all of a peace plan put forward by a multi-party Parliamentary committee aimed at ending the three years of damaging industrial trench warfare in the federal bureaucracy. But at agency level, progress is quietly being made towards settlements, with negotiators from departments and unions slowly inching towards compromise positions that might be acceptable to both sides. The battles over conditions and wages have been raging across public service departments since 2014 with workers at agencies employing more than 90,000 public servants still resisting the government's attempts to impose an aggressive Abbott-era industrial relations agenda on their workplaces. The government, through its workplace enforcer Public Service Commissioner John Lloyd, that the nation cannot afford pay rises above the 2 per cent per year, up from a previous 1.5 per cent offer, or to back pay. The main public service union, the CPSU, argues the main sticking point is not money, but the attempt to strip legally enforceable rights and conditions out of enterprise agreements. Mr Lloyd denies that he and his political bosses are out to cut conditions and entitlements but that public service enterprise agreements had become too long and full of red tape. Key flashpoints in the dispute have come at the Immigration Department where Border Force officials have walked off the job and the giant Department of Human Services, which runs Centrelink and Medicare, where strikes have also been held and death threats allegedly made against senior bureaucrats. The giant Defence Department, the Australian Taxation Office and the Prime Minister's own department all remain locked in industrial strife after workers rejected multiple proposals for enterprise agreements After its inquiry, Senate Education and Employment References Committee made 17 recommendations to the Senator Cash, mostly urging the Coalition to soften its bargaining position. But in its response, tabled in Parliament this week, the government indicated that it was in no mood for compromise, rejecting 15 of the 17 recommendations including a flat no to a recommendation that specified domestic violence leave be included in agreements. Two of the recommendations were "noted" with accompanying attacks on the CPSU, accusing the union of dishonesty and betraying its members' interests. On pay, the response rules out any offer above the mandated 2 per cent per year. "The recommendation overlooks the fact that the federal budget is in significant deficit," the response states. "During this bargaining round, the Government has already lifted the wages offer once." "The current remuneration increase available to public servants is an average of 2 per cent per annum." But despite the tough talk coming from the top of the public service, sources close to talks at departmental level have told Fairfax that progress on key sticking points is slowly being made and settlements of disputes in 2017 was a real possibility. It is understood that agreements could be struck on the present pay offers with no back pay if ground can be made up on conditions and entitlements. CPSU National Secretary Nadine Flood said the government's attitude was not surprising. "It's unfortunate but not surprising that the Turnbull Government has rejected the majority of the recommendations made by this Senate committee last year to resolve this protracted dispute," Ms Flood said. "But their response doesn't change the fact that after more than three years there are still 100,000 Commonwealth public sector workers without new agreements."

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