Staff at the Fair Work Ombudsman will be given an incentive to take fewer sick days under a new pay offer that includes cutting 12 jobs.
On the table is a 1.25 per cent pay increase in the first year, with one per cent in each of the following two years, officials told a Senate committee in Canberra on Tuesday.
A further one-off bonus of 0.25 per cent is being proposed if the 700-strong workforce reduces unscheduled leave days by two.
"You'd have to come to work sick?" Labor senator Sue Lines asked the officials.
Deputy ombudsman Michael Campbell said he was not looking to encourage a sick workforce.
"It's also about making the workplace a workplace that people want to come to and not feel sick."
The offer, which is yet to be put to workers, also includes a proposal to cut 12 positions.
"Reductions in staff obviously create savings," ombudsman Natalie James said.
Labor senator Doug Cameron questioned how workers could be asked to take a below inflation pay increase, as well as agreeing to see some of their colleagues sacked.
"I object to that characterisation," Ms James said, insisting negotiations were still "fluid" and it was hoped the jobs would be lost through natural attrition.
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