Loy Yang A at Dispute with Employees

Question: Discuss about theLoy Yang A at Dispute with Employees. Answer: A for The Australian Power plant workers of Loy yang A are at the face of huge pay cuts. Fair Work Commission decided to terminate enterprise agreement leading to a huge blow on power plant workers. The agreement currently governs the remunerations of 570 workers and according to Geoff Dyke, secretary of The Victorian mining and energy division, CFMEU, these workers may face about 65% pay cut (Lazaro Wright, 2016). There had been a long-standing dispute between the union members of CFMEU working at the company and AGl Loy Yang A regarding pay raise. These workers rejected about 20% pay raise twice as the conditions of the agreement would reduce number of staff at the workstation in weekends. In response to these arguments, the CFMU called for a strike in December last year and during Christmas Eve the stopped work for an hour (Toscano, 2016). General Manager of AGL Loy Yang A, Steve Rieniets said in his earlier statements that it was astonishing that Union could encourage its members to reject a pay raise of 20% in such economic conditions. Mr. Rieniets also rejected the claims of 65% pay cut and said that the company do not plan to cut wages below market rate. According to him, the dispute is not about the wages but is concerned with the working conditions (PALMER, 2016). The dispute had been going on for 18 months and the FWC had been called multiple times to intervene. The question arises is that how much fair the judgment was towards the union employees? The termination of the agreement would undoubtedly put the employees into jeopardy as they lost security from the agreement. This power station supplies about 30% of the total power supplied to Victoria State. In the context of these arguments, AGL threatened to lock out the employees entirely after which the union abandoned their plans for continued strike. Had they carried out their plans Victoria State would have faced huge power cuts (Toscano, 2016). Although according to energy market expert, Bruce Mountain the strike would not have affected the power supply significantly as schools and business organizations are closed during Christmas holidays. The planned strike would have ensured the Australian Energy market that they would successfully import power from other states to Victoria. In additi on, other working plants would have supplied electricity to the state as well. However, during peak season such a strike would have had a huge impact on the state (Asher, 2017). It had been unwise for the union members to not take the proposed pay raise as they have lost the argument and the agreement that provided them protection is now null and void. They are now facing possible pay cuts despite companys assurance of maintaining market price rate for wages. The termination of old agreement provides AGL with new opportunity to revise new terms with the union. This will help them to stay in market competition as well. Deputy President Richard Clancy said that he is hopeful about the new agreement condition and that the terms will take account of the benefit of both the company and the workers ("Union action takes state closer to power disruption | AGL", 2017). In the wake of Latrobe Valley power plant shutdown plan set in March, there had been an increased pressure on Loy Yang A company already. Such a shutdown would leave hundreds of workers unemployed. These conditions may influence the union and encourage the members to negotiate new terms keeping in mind the interest of both parties. It is left to see what terms and conditions the parties come up with to maintain good faith between union and company. EDITORIAL B for the Financial Review AGL wins Industrial Dispute: Workers to face Pay cuts. A long standing industrial dispute between power giant AGL Loy Lang A and the Construction Forestry Mining and Energy Union (CFMEU) had been resolved on a winning note for AGL. The fair work commission of Australia ruled that the previous agreement providing protection to 570 workers at the power plants who are also union members would be cancelled and order for new agreement to be created has been passed (GALLOWAY, 2016). For past 18 months, the union members were at a state of argument with Loy Yang A company over wages and working conditions. They repeatedly rejected AGLs offer of 20% pay raise and reduced work force in such a declining economic condition (STEVENS, 2016). According to Geoff Dyke, secretary of The Victorian mining and energy division, CFMEU, these workers may face about 65% pay cut. The highest paid unit controllers who earn about $3,000 per week, their pay may be reduced to $1,000 per week, leading to a loss of $100,000 per year. Last December the union threatened to strike for 24 hours but abandoned the plans as the company threatened to lockout the entire workforce from the unit in return (Toscano, 2017). General Manager of AGL Loy Yang A, Steve Rieniets, declined the claims of 65% pay cuts and said that the company plans to maintain the current market rate for wagers in next three months until a new agreement is devised. On a previous occasion, he accepted that it was astonishing for him that union could encourage the workers to reject offers of 20% pay hike in such tiring economic times. When the Victorian Labor government of Joan Kirner started privatization of power plants in 1990, in the Latrobe Valley, 15,000 jobs were lost. From 1990 to 2005, jobs declined from 21,500 to 8000. The union was destroying the jobs in the state for decades and continues to do so in the present times. The company is looking for reducing its overtime remuneration by half the previous value from $20 million per year to $10 million. They also proposed reduction in workforce in order to maintain workforce related costs. This was a huge blow on the workers. However, due to the fact that the previous agreement is now void, there are opportunities to negotiate new terms with the workers. Deputy President Richard Clancy is hopeful about the new agreement condition and the prospect that the terms of the new agreement will take account of the benefit of both the company and the workers (Grenfell, 2017). The remunerations of the power plant workers stand between $70,000 and $180,000 per year and according to Mr. Rieniets, the wages are well within the market price. Hence, it was unreasonable for the workers to reject the proposal of 20% pay raise from the company ("Union action takes state closer to power disruption | AGL", 2017). Undoubtedly, it had been a foolish move by the workers seeing that they lost the dispute in this case and new agreement require to be formed. It is yet to see what new agenda the company has in its sleeves while forming the agreement and what reaction the union would give to it. The plant provides 30% of the states university and strikes would have lead to significant energy deficiencies and increased power cuts. In turn the locking out of entire workforce would have led to redundancy in jobs in the market as well. The FWAs decision to disregard the previous agreement and order for new agreement helped in avoiding such issues. Stipulations of workfore reduction still stay in the picture due to the cancellation of the previous agreement. It is yet left to see the terms and conditions the parties come up with in order to maintain good faith between union and company. References: Asher, N. (2017). Loy Yang A power plant workers face huge pay cuts after AGL wins industrial dispute. ABC News. Retrieved from https://www.abc.net.au/news/2017-01-13/agl-loy-yang-a-workers-face-huge-pay-cuts-after-fair-work-ruling/8180302 GALLOWAY, A. (2016). Loy Yang power plant workers told by CFMEU to reject total 20 per cent pay rise over four years. Herald Sun. Retrieved from https://www.heraldsun.com.au/news/victoria/loy-yang-power-plant-workers-told-by-cfmeu-to-reject-total-20-per-cent-pay-rise-over-four-years/news-story/5b22fa02c593e0f4d5168729cf1aa408 Grenfell, O. (2017). Industrial court endorses massive pay cuts at Australian power station. World Socialist Website. Retrieved from https://www.wsws.org/en/articles/2017/01/13/loyy-j13.html Lazaro, K. Wright, P. (2016). Planned union strike at Victoria's Loy Yang power station called off. ABC News. Retrieved from https://www.abc.net.au/news/2016-12-15/planned-strike-loy-yang-called-off/8122784 PALMER, D. (2016). AGLs Loy Yang dispute escalates. The Australian. Retrieved from https://www.theaustralian.com.au/business/agls-loy-yang-dispute-escalates/news-story/26629b61bb67190a4bece12214fbd2f9 STEVENS, G. (2016). Jobs under threat at Loy Yang. Latrobe Valley Express. Retrieved from https://www.latrobevalleyexpress.com.au/story/3502091/jobs-under-threat-at-loy-yang/ Toscano, N. (2016). AGL power plant dispute 'threatens energy supplies. The Sydney Morning Thread. Retrieved from https://www.smh.com.au/business/workplace-relations/agl-power-plant-dispute-threatens-energy-supplies-20160924-grnkux.html Toscano, N. (2016). Christmas Day power strike threat: Loy Yang staff vote for action. The Sydney Morning Thread. Retrieved from https://www.smh.com.au/business/workplace-relations/christmas-day-power-strike-threat-loy-yang-staff-vote-for-action-20161220-gtf59p.html Toscano, N. (2017). AGL victory at power plant serves up massive pay cut to workers. The Sydney Morning Thread. Retrieved from https://www.smh.com.au/business/workplace-relations/agl-victory-at-power-plant-serves-up-massive-pay-cut-to-workers-20170112-gtqk4y.html Union action takes state closer to power disruption | AGL. (2017). Agl.com.au. Retrieved 30 January 2017, from https://www.agl.com.au/about-agl/media-centre/article-list/2016/october/union-action-takes-state-closer-to-power-disruption