DEMANDS for a £5 minimum hourly wage for staff at West Devon Borough Council were rejected by the authority's personnel committee on Tuesday.
The public sector union Unison were also asking for a five per cent increase in pay and an increase in the annual leave entitlement of five days to 25.
However, the authority says the increase in pay is not affordable and it can only afford a three percent rise — it also disagrees with the £5 minimum wage.
As far as holidays are concerned, staff at the borough are given 20 days holiday for the first five years of service, which rises to 25 thereafter.
In addition, a flexi-time system is in operation and the authority allows bank holidays and an additional two extra local government holidays.
Catherine Milton, borough personnel manager, said: 'It's not actually what our council is agreeing, it's what we are asking the national Employer's Organisation to consider on our behalf.'
She said the bargaining process was under way — the results will be implemented from April 1st.
West Devon has to abide by the national agreement irrespective of whether the borough can afford it, which is why officers believe it is 'crucial' the national organisation knows the borough's position.
Claire Fryer, union representative said she was not surprised by the committee's decision.
'It's understandable when budgets are so tight — but as with all things, you ask for the earth and hope you get something.'
Mrs Fryer said gaps were beginning to occur in parts of the public sector where some wages had increased disproportionately to others.
'It's really trying to draw everything back in line, otherwise it gets difficult to recruit people,' she said.
The current minimum hourly rate in local government is £4.47 below the age of 21, which rises to £4.96 at age 21 and above.