More than 2000 of Prime Minister Malcolm Turnbull’s departmental staff have rejected a 3.5 per cent pay increase in another embarrassing body blow to the government’s lengthy public sector pay negotiations.

More than three-quarters of Department of Prime Minister and Cabinet (PM&C) staff – 78 per cent – voted to rebuff the government’s latest pay offer, an offer which was lower than the 4.5 per cent cap under former PS Minister Eric Abetz, and lower than pitches to staff in a number of other departments, including Human Services and the Australian Tax Office.

Previous analysis of the government’s offer by the Community and Public Sector Union (CPSU) uncovered other nasties besides the modest pay rise languishing on the bargaining table, including slower progression up the pay scale, lower minimum pay points at some classification levels, restrictions on salary advancements and cuts to term and conditions.

Like Treasury, the PM&C is not considered a traditionally rebellious department but turbulence and rebellion in the APS seems pretty pervasive of late. Only around 4 per cent of APS staff have voted to accept their agreements so far during 18 months of negotiations.

Last week, Public Service Minister Michaelia Cash warned public servants during senate questions that they needed to live in the “real world” where she said there were no pay rises without productivity gains.

Ms Cash also hotly denied that protracted negotiations and two bouts of public sector industrial action had morphed into chaos.

“There is no mess to clean up. There is a position that has been placed on the table by this government,” Ms Cash said.

But Ms Cash’s words came back to haunt her after the PM&C vote as unions put the boot in.

CPSU President Nadine Flood said:

“New Employment Minister Michaelia Cash said last week there is ‘no public sector bargaining mess to clean up’ and public sector workers need to live ‘in the real world’, but this strong PM&C ‘no’ vote is yet another reminder of just how messy and unrealistic the Government’s current bargaining policy is.

“The department claimed the agreement includes a 4.5 per cent pay rise over three years, but in reality this wouldn’t apply to all staff and wouldn’t be guaranteed.

“This low pay outcome, combined with deep cuts to rights and conditions and the 18-month pay freeze, meant staff were never going to support it.”

The PM&C presented several knotty problems for negotiators, who had to confront the labyrinthine pay and conditions of staff from ten different agencies dating from 2013 when the Department more than tripled in size after absorbing Indigenous Affairs.

The vote is in indication that public servants are not ready to capitulate and that the pile of some 100 APS unsigned draft enterprise agreements is unlikely to be reduced without a significant rethink of the government’s modus operandi.

PM&C contains one department of state, six statutory agencies and 12 Commonwealth companies and authorities, including the Office of National Assessments, the Tiwi Land Council, Outback Stores, the Australian National Audit Office, Torres Strait Regional Authority and the Office of the Commonwealth Ombudsman.

PM&C is the latest in a succession of departments to push back at government offers, including Human Services, Immigration and Border Force staff and the Productivity Commission.

Ms Flood argued that the APS negotiations were harsher than those experienced by employees in other sectors of the economy.

“Staff in the Prime Minister’s Department do understand the real world; they look at the Australian economy, business and public policy every day. In the real world, no other major employer is reaching agreements with their workforce, that cut a raft of their rights and conditions in return for an 18 month pay freeze and then 1.5 per cent,” Ms Flood said.

“And as for finding a real employer who is taking that package of nasties and then topping it off with actual pay cuts of $8000 a year, like in Border Force, I suspect the Minister may have quite a long hunt to find a real-world example.”