Unions will consider legal or industrial action after a "diabolical and disgraceful" decision by the NSW Industrial Relations Commission to award a 0.3 per cent pay increase to public servants.
The IRC made its decision on Thursday after hearing the NSW government's controversial bid to freeze pay rises for public sector employees for 12 months.
The Berejiklian government wanted to freeze pay rises to guarantee jobs for public servants amid the COVID-19 pandemic and to free up funds for job-creation projects.
The wage policy was opposed by unions and frontline workers, including paramedics, nurses, police officers and teachers, who had been seeking to get their 2.5 per cent annual pay rise.
The policy headed to the IRC after it was blocked in state parliament in June when Labor and crossbench MPs united to pass a disallowance motion in the upper house.
The commission on Thursday found public servants are entitled to maintain the real value of their earnings as is consistent with the government wages policy and a pay freeze would see a 0.3 per cent reduction in the real value of their earnings.
"The commission proposes to make awards and variations to avoid such a reduction, by awarding increases of 0.3 per cent," the IRC said in its published decision on Thursday.
"We recognise that it will do little to alleviate the concerns of those witnesses and any like-minded co-workers who see the employers' position in these proceedings as failing to recognise, let alone reward, their efforts."
But the IRC noted the government sector had been shielded from some of the significant employment-related consequences of the COVID-19 pandemic that have hit other industries hard.
"There is no evidence that the pandemic has resulted in forced redundancies or other job losses in the government sector in NSW," the commission said.
The decision was slammed by unions, with many describing it disappointing and a slap in the face.
"Today is a kick in the guts for every public sector worker that got us through not only bushfires but COVID," Unions NSW secretary Mark Morey told reporters on Thursday.
Mr Morey said the unions will be reviewing the decision and will consider their legal and industrial options.
Public Service Association general secretary Stewart Little said the outcome affects workers who have stopped the pandemic from overwhelming hospitals, schools, prisons and the community.
"We see this decision as absolutely diabolical," he told reporters.
NSW Nurses and Midwives' Association general secretary Brett Holmes said it's a "disgraceful" outcome for nurses who have been putting their lives and their families at risk amid COVID-19.
NSW Teachers Federation president Angelo Gavrielatos described the ruling as "nothing short of an insult".
NSW Labor leader Jodi McKay said she was "bitterly disappointed" by the decision.
"I am thinking of 400,000 public sector employees who have been ripped off," she told reporters.
