The launch of the new Home Affairs agency has been far from a fresh start, with pay negotiation issues dogging the launch of the mega-department.

The Fair Work Commission rejected a pay rise for former Immigration staff now working under the Home Affairs banner, meaning their pay will remain at 2013 levels as negotiations stall and a strike looms.

Community and Public Sector Union national secretary Nadine Flood said the government was only hurting itself.

“Our DIBP members have watched their cost of living rise over the past four years while their pay packet hasn't moved at all,” she told Fairfax.

“The department's nasty proposals to cut take-home pay and rights and conditions, which it's still pushing in Fair Work, mean it's never offered anything that would leave workers anything but worse off.”

Fair Work said it was uncertain how an industrial determination would cover workers as they move over to the new Home Affairs department.

“We consider that granting an interim increase would effectively be a leap into the unknown given that there is no material presently before the commission regarding the terms and conditions of employment of those employees who will be covered,” it said.

The commission wants a meeting with unions and government officials early this year to work out how the establishment of the Department of Home Affairs affects the long-running industrial dispute. 

Home Affairs wants Fair Work to expedite its final decision on the dispute.

“It is the CPSU's October 2016 request for bargaining to be terminated that brought about this arbitration,” a department spokesperson said.

“The department is aware of the financial impact that this inability to bargain or vote for a new enterprise agreement has had on its staff.

“We have and will continue to engage fully and in good faith in arbitration proceedings to assist in finalising this important matter as quickly as possible.”

Home Affairs criticised the CPSU’s “simplistic view” that the department could raise wages through a determination.

“It fails to recognise that at least some reforms such as flexibility to deploy officers to where their services are needed or standardisation of employment conditions are critical for the department to deliver the important services that we are entrusted to deliver for the community.”

Unions and departmental lawyers are not expected to close their cases in the dispute until March.