Carmaker that Laid Off Workers Grants 22% Pay Hike

  @ibtimesau on

While hundreds of jobs continue to be shed across Australia since the start of February as businesses complain of the strong currency and weak consumer confidence, workers in Holden would enjoy up to a 22 per cent wage increase spread over the next three years.

Ironically, Holden is the same carmaker that also laid off workers in the same month and lobbied the federal government for a taxpayer-funded assistance package.

For the lucky remaining 4,000 Holden employees, they will be given an 8 per cent salary increase on the first year, prompting union leaders to call the deal spectacular. The average pay hike is 18.3 per cent spread until 2014, but some could get a pay increase of up to 22.3 per cent.

In 2013 and 2014, Holden workers would receive a guaranteed yearly 5 per cent wage adjustment which could go up by 2 per cent more. That's on top of a $1,750 assured hardship recognition payment on the first year and $1,000 more on the second and third years.

The hardship recognition payments are meant to offset the layoffs and pay reductions made during the global financial crisis.

While the deal certainly made Holden workers happy, the Opposition warned employees in the country's industries supported by taxpayers to moderate their demand for wage hikes after the record-breaking deal made by Holden.

Taxpayers are entitled to ask if companies such as Holden, which is seeking a fresh government assistance package, are spending the funds wisely, said Opposition workplace spokesman Eric Abetz.

"When the trade union bosses boast that they've got huge wage rises without productivity trade-off and they are well above CPI, taxpayers are entitled to ask whether they are getting value for money and whether the company is genuinely engaged in transforming itself to stand alone," The Australian quoted Mr Abetz.

"Given the huge job losses the car industry is facing, one is perplexed to understand how this wage increase could have been sought and justified, let alone granted," he added.

However, Australian Manufacturing Workers Union National Secretary Dave Oliver explained that the wage hikes were not excessive since part of it is a catch up component after many of the workers took up to 40 per cent pay cut during the 2008 global financial crisis.

The news also came amid massive layoffs in banks, mines, retail establishments and other manufacturing firms in Australia.

Commenting on the bank layoffs which are concentrated in Victoria, Premier Ted Baillieu said the job cuts are matters for employers to decide while the state government could only focus on maintaining a strong budget.

Besides the 1,000 jobs to be lost at ANZ Bank, another 350 will be axed at Toyota's Altona plant and 600 more at Alcoa's Point Henry smelter in Geelong. Qantas reportedly is also shedding jobs, particularly among aircraft engineers.

"It is a simple message. The banks are making their decisions - I don't make their decisions for them - and I think a lot of people will be disappointed and I share that disappointment," 9 News quoted Mr Baillieu.

Due to the ongoing axing of jobs across different sectors, the Australian Confederation of Trade Unions (ACTU) pushed priority for jobs creation and protection as the focus of the 2012-13 federal budget.

In its submission to the Budget, the ACTU said the government must be prepared to alter its debt reduction targets if economic conditions worsen which would place more jobs at risk.

ACTU Secretary Jeff Lawrence said the government must support industries that are suffering from the strong currency for these sectors to transform and remain competitive.

"To secure the gains from the boom for the next generation of working Australians, we need to put long-term sustainable job creation at the centre of economic policy. Secure jobs that pay decent wages and have workplace rights can be built on our economic strength," Mr Lawrence said in a statement.

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