Unions Agree to Wage Freeze, Job Cuts at Australian Steel Works
10/08/2015 - Employees at an Australian steel works have accepted concessions in a bid to keep the operation afloat.
Under a three-year agreement, union employees at BlueScope Steel Ltd.’s Port Kembla Works have agreed to a wage freeze, suspension of a bonus plan and elimination of 500 positions – 300 manufacturing jobs and 200 support and service jobs.
The agreement follows more than a month of negotiations between the unions and the company, which had said it needed to achieve AU$200 million in cost cuts, or it would have to close the country’s largest steel works.
In a statement, BlueScope managing director and CEO Paul O’Malley said the agreement is a major step toward achieving that target.
“But we still have a lot of work to do in the coming weeks, as steel prices remain under pressure from the global steel glut,” he said.
“I feel that the positive vote from employees today is a significant step change improvement in our workplace, one that will result in a more cost-efficient and flexible steel works.”
He called the agreement a “game-changing approach” to the company’s workforce structure.
However, the company has not committed to keeping the steel works open. Its board of directors is to meet in late October and once more in November before the final decision is made, reported The Sydney Morning Herald.
That puts pressure on the New South Wales government to approve BlueScope's request for relief from state payroll tax and from compliance costs associated with the Environmental Protection Agency and Work Cover, the newspaper said.
According to the Australian Financial Review magazine, the union agreement will yield AU$170 million in savings; therefore the government would have to contribute about AU$30 million to reach the company's target.
A spokesman for New South Wales Industry, Resources and Energy Minister Anthony Roberts told the magazine that the "government remains in productive discussions with BlueScope in advance of the board's consideration of the ongoing viability of the steel works."
The agreement follows more than a month of negotiations between the unions and the company, which had said it needed to achieve AU$200 million in cost cuts, or it would have to close the country’s largest steel works.
In a statement, BlueScope managing director and CEO Paul O’Malley said the agreement is a major step toward achieving that target.
“But we still have a lot of work to do in the coming weeks, as steel prices remain under pressure from the global steel glut,” he said.
“I feel that the positive vote from employees today is a significant step change improvement in our workplace, one that will result in a more cost-efficient and flexible steel works.”
He called the agreement a “game-changing approach” to the company’s workforce structure.
However, the company has not committed to keeping the steel works open. Its board of directors is to meet in late October and once more in November before the final decision is made, reported The Sydney Morning Herald.
That puts pressure on the New South Wales government to approve BlueScope's request for relief from state payroll tax and from compliance costs associated with the Environmental Protection Agency and Work Cover, the newspaper said.
According to the Australian Financial Review magazine, the union agreement will yield AU$170 million in savings; therefore the government would have to contribute about AU$30 million to reach the company's target.
A spokesman for New South Wales Industry, Resources and Energy Minister Anthony Roberts told the magazine that the "government remains in productive discussions with BlueScope in advance of the board's consideration of the ongoing viability of the steel works."
