Posted on 08 Oct 2015
BlueScope Steel employees have voted to accept a three-year pay freeze and hundreds of job losses under concessions that their union hopes will prevent the closure of the Port Kembla steelworks.
About 95 per cent of workers meeting at Port Kembla on Thursday voted in favour of the deal between BlueScope and the Australian Workers' Union.
The dramatic concessions, which also in effect include a strike freeze, follow BlueScope's warning in August that $200 million in costs, including 500 jobs, would have to be cut at Port Kembla or it would close the plant and import commodity steel.
Under the agreement, almost half of the 500 job cuts will come from union ranks and 228 operational staff will lose their jobs. It is estimated that 147 company staff will be cut, as well as 136 contractors.
The agreement will be backdated to July 1 this year. The wage freeze, which will apply to AWU members and staff, will result in some employees losing more than $20,000 a year.
The concessions are part of a new three-year enterprise agreement and contingent on the BlueScope board deciding to keep the steelworks operating.
Sources said the agreement achieved $170 million in cuts and would require an injection of about $30 million from the NSW government to reach the company's target.
The agreement meets the company demand that the union delivers $60 million in savings, but there was no guarantee that the BlueScope board would still not opt for closure.
The agreement also means that any industrial action over the next few years would be extremely unlikely. The union has not formally agreed to not go on strike, but sources said industrial action was not likely to happen because no wage claims would be pursued.
Wayne Phillip, the AWU's Port Kembla secretary, said on Thursday that workers "had accepted real pain and sacrifice in order to keep the Illawarra steel industry viable and it was imperative for government to meet them halfway".
"Today was a vote as to whether or not the steelworks stays open or whether it shuts. It required courage for the result to go the way it did today. It's a tough moment, no doubt, but I'm at least satisfied that workers have voted to fight another day," Mr Phillips said.
"We simply can't roll the dice and allow the steelworks to shut. But here's our demand of the Baird Government: the workers here today have accepted very real pain - real sacrifice. So meet us halfway. Help support our jobs and back a Victoria-style local steel procurement plan.
"Mike Baird and his government are selling the Illawarra's public power lines to pay for billions of dollars worth of infrastructure for Sydney. The very least they could do is use Illawarra steel in the process."
A ballot of workers will be conducted through the Australian Electoral Commission to seek formal approval for the new agreement.
A BIS Shrapnel report commissioned by the AWU has found a local procurement policy would represent an extra 778 kilotonnes of steel sold, worth $989 million a year.
Given BlueScope's share of the market, a projected drop in residential steel sales, and the fact that local steel would have to come down closer to import cost, BIS Shrapnel projected that a local procurement policy would be worth $367 million a year extra to BlueScope.
