Deal delivers 7 per cent ’cost of living’ pay rise

Distribution centre workers In Melbourne have also won a $800 ‘Covid appreciation bonus’ and increased redundancy entitlements for long-serving employees 

United Workers Union national secretary Tim Kennedy.

Distribution centre workers in Melbourne have secured an upfront 7 per cent cost-of-living pay rise, an $800 “Covid appreciation bonus” and increased redundancy entitlements under a deal that ends strike action at the Wesfarmers-owned Australian Pharmaceutical Industries.

The four-year agreement delivers pay rises of 4 per cent in the second year and 3.5 per cent in the third and fourth years for 190 workers at API, which makes emergency medical supplies including rapid antigen tests and masks for the Priceline retail chain.

When the workers went on strike last month calling for annual 7 per cent pay rises and higher pay for labour hire, employer groups expressed concern the dispute was emblematic of unions pursuing inflation-linked pay rises and so-called “same job, same pay” claims.

Acknowledging its claim for four 7 per cent pay rises was “ambit”, the United Workers Union said it failed to secure a step-up clause providing same job, same pay increases for agency casuals.

As a compromise, API agreed to convert 10 existing casual workers to permanent employment, and lifted its pay offer from 5 to 7 per cent in the first year, and by 0.5 per cent in the fourth year to 3.5 per cent. Workers will get pay rises totalling 18 per cent over the four years.

UWU national secretary Tim Kennedy said the workers were owed catch-up pay rises from the pandemic when they agreed to a 2 per cent rise in the belief they would get more when conditions improved.

Workers will receive an $800 “Covid appreciation bonus” and the higher increases in two of the four years, accepting the company would drop its original offer to pay increases in line with the consumer price index if the inflation rate was higher during the final two years of the deal.

Mr Kennedy said the agreement translated into an average hourly increase of $2.25 for the average worker at API. “That’s a significant jump. The critical issue this year was the cost-of-living element and the fact that they had 2 per cent increases through the pandemic so the 7 per cent was important,” he said.

Mr Kennedy said the increased redundancy entitlements for the workers, many of whom had more than 20 years of services, was important as there was speculation the warehouse could close and be replaced by an automated site.

“The main issue … was the cost-of-living issue this year and to actually get wage increases in the out years that we believe, on balance, are going to keep people in good shape,” he said.

“The second element was that we know this facility may close with long-term workers there and we wanted to make certain they had a secure redundancy payment so they had some dignity because they probably will not find work at that stage of their career again in that industry.”

Mr Kennedy said the redundancy improvements reflected the conditions of a small number of workers who came from another site in a site consolidation.

“The entire site will now enjoy the condition of 4 weeks’ pay for each year of service uncapped,” he said. “For some workers, based on their service they will now receive a 120 weeks’ pay on redundancy as opposed to the current entitlement of 60 weeks’ pay.

“In addition the new redundancy entitlement will pay out all unused sick leave for everyone made redundant.”

On the same job, same pay claim, Mr Kennedy said the agreement reflected a “halfway house” position. “The company is playing a political role in resisting the government policy of same job, same pay,” he said.

An API spokeswoman said: “We are pleased to have reached in-principle agreement, which means protected industrial action has been withdrawn and all team members are now back at work.”