The long-running public sector wage stoush, headed for arbitration, may take months to resolve.
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Community and Public Sector Union general secretary Tom Lynch said he was hopeful it would be settled before Christmas, "but we need to be realistic and it could drag on into the new year".
Premier Will Hodgman cancelled the 117th meeting on the dispute - set down for Thursday - telling unions on Wednesday that he would refer the matter to the Tasmanian Industrial Commission for private arbitration.
First steps
The first step to resolve the pay dispute, which has dragged on for nearly 12 months, is for the government and unions to agree to the terms of reference for the arbitration.
Once the terms of reference are agreed to, a joint request must be made to the president of the Tasmanian Industrial Commission.
A government spokesperson said the length of time to arbitrate would "depend on what is agreed by both parties in the scope of the terms of reference".
"There are currently no workload issues at the Tasmanian Industrial Commission that would delay this matter being heard," she said.
In a letter to unions on Wednesday, Mr Hodgman, said the parties would seek arbitration under section 61 of the Industrial Relations Act 1984 because they had been unable to "reach agreement on a fair and reasonable salary increase for State Service employees".
His draft terms of reference limited the arbitration to consider only an agreement with a term of three years.
"That negotiations on all other matters contained within the relevant agreements, are suspended until the completion of the arbitration," the draft said.
"That all industrial activity including work bans, relating to the agreements listed above are ceased from the date of agreement of these terms of reference."
It would cover 14 agreements for public sector workers.
As there are only two industrial commissioners, a third would have to be added to the full bench to consider the pay case.
There would then have to be hearings and submissions before the commissioners make their decision.
Mr Hodgman said he had agreed with the unions that arbitration was a good option.
"We think it's a good one because now there's an opportunity for independent experts to make a determination," he said.
Mr Hodgman committed to abiding by the commission's decision but did not rule out job cuts if a big pay rise was handed down.
"We can make a strong case for what is fair, affordable and sustainable," he said.
Unions, however, are wary and are considering legal advice on the draft terms of reference.
Mr Lynch said he would have preferred to have negotiated a settlement.
"If we had negotiated we could have taken it to our members but with it going to the Industrial Commission members won't get a say," he said.
"A red flag has gone up because the draft terms are only about wages and not conditions which our members want looked at and which will also drag on."
Health and Community Services Union secretary Tim Jacobson said he too was keen to get an agreement with negotiation.
"Our members haven't had a pay rise since December 2017 and they were keen for us to get agreement," he said,
"They have also directed us to continue an industrial campaign."
Work value case
In 2014, the Tasmanian Industrial Commission granted ambulance officers a 14.1 per cent pay rise as part of a work value case.
The government appealed the decision to the Supreme Court but reached an agreement before the court decided on the appeal.
Mr Jacobson said he hoped Mr Hodgman would uphold his promise to accept the Industrial Commission's decision.
"As shown in 2014, they don't have a good record of accepting the umpire's decision," he said.
"As child safety staff explained they are under enormous stress and this government insults them with a wages offer that is less than the cost of inflation."
Labor leader Rebecca White said the government had walked away from talks and simply "thrown in the towel".
"Union members do not take industrial action lightly but the government has refused to listen to their concerns," Ms White said.
"The government has failed to negotiate for people such as nurses and firefighters who are among the lowest paid in the country."
Greens leader Cassy O'Connor said the government's failure to negotiate a wage increase showed "utter gutlessness".
Mr Hodgman said the government's offer of 2.1 per cent "would have provided our employees with a salary increase while we continued to negotiate on other matters, including future year salary increases and employment conditions".
Unions have 10 days from Wednesday to respond to the draft terms of reference.