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Around 20,000 public servants chances of getting a one-week increase in their annual leave have been sharply reduced after State Services Minister Tony Ryall ordered a clamp down on state sector pay.
Mr Ryall has told public service chief executives any pay increases for staff will have to be met within existing budgets.
Labour say that amounts to a pay freeze across the public service.
Mr Ryall yesterday released the Government's Expectations for Pay and Employment Conditions in the State Sector which set out expectations that pay changes not lead private sector pay, be value for money and be made in consultation with the State Services Commission (SSC).
There are 43,000 core state sector staff.
Mr Ryall also rescinded the previous government's directive to move to five weeks' leave across the state sector and instead replaced this with a maximum of five weeks' leave.
"Introducing common leave provisions represents a significant non-wage cost which in several cases is unaffordable within baselines," Mr Ryall said.
"In future, any changes to leave provisions within the maximum are to be agreed by the relevant public service chief executive within baselines."
The SSC said about half of the 43,000 people in the core state sector were not yet on five weeks' leave.
Mr Ryall said the SSC would hold chief executives to account for meeting expectations in their performance reviews.
Labour MP Grant Robertson said the moves amounted to freezing public sector salaries.
"And in some cases, where departments are looking at big budget cuts, pay cuts," he said.
"Chief executives are being given the message, reduce salaries or cut jobs."
Crown entities were expected to keep their responsible Minister informed about proposed actions not in line with the expectations.
Mr Robertson said executives could show leadership and restraint in tough economic times rather than penalise front line workers.
Mr Ryall said the public sector had to recognise the pain the private sector was facing.
"We're entering quite a difficult economic period, everybody from families to communities to businesses are tightening their belts and we're saying to the public service chief executives pay conditions are going to have to be negotiated within the resources they have."
Mr Ryall said pay increases had been met within baselines before and some people would still get pay rises.
"They (chief executives) have to make sure that doesn't flow through into greater pressure in the private sector."
Mr Ryall also said the Government would drop two pay and employment equity investigations - considering why female social workers at Child, Youth and Family are paid 9.5 per cent less than their male colleagues, and inequities in female school support workers pay - because they would cost too much.
However, departments were expected to continue to address equality issues as part of being a good employer.
Mr Robertson said National was saying pay equity for women was unaffordable.
"Labour supports getting value for money in the public sector, but what we've seen from National today on pay freezes and earlier in the week with public sector job cuts is an assault on state sector employees."
National was hypocritical as it was paying more than a $1 million on 10 media advisors, he said.
The Public Service Association national secretary Brenda Pilott said the moves were negative and showed the Government did not want to fix pay equity problems.
- NZPA
