12 September 2018

Fair and reasonable EBA for future success

For 55 years, Alcoa of Australia has operated bauxite mines and alumina refineries in Western Australia, along with aluminium smelters in Victoria. Our business comes with shared benefits for all Australians. Alcoa Economic and Social Contribution Poster

More than 65 per cent of our revenue stays in Australia – last year we paid $400 million in government taxes and royalties, invested $1.7 billion with Australian suppliers and paid $655 million in wages and benefits for our 4,275 employees across the continent.

Alcoa has one of the most stable workforces in the country – the average length of service for an Australian Workers' Union member at our WA operations is almost 20 years. Offering above award and market wages and conditions are key to this stability along with the value we put on diversity, inclusion, training and development. In our 55 years, we have taken on more than 2,000 apprentices, trainees and graduates.

Alcoa wants to continue to be an important and valued Australian employer for many generations to come. That is why we need modern workplace provisions that allow us to manage our operations efficiently and productively. Global market and operating conditions are increasingly volatile and to survive and provide opportunities into the future, we must be unshackled from outdated and restricted work practices. Recent downturns in our industry demonstrated this imperative.

We are not seeking to downsize or casualise our workforce: it simply does not make sense for our continuous 24-hour a day, 365-days a year operations. But what we are seeking is the ability to manage our business according to market conditions and without unreasonable restrictions. This includes having the ability to employ the right number of people to run our operations safely and efficiently.

The union movement is seeking an absolute guarantee that no employee can ever be forcibly made redundant. This is not a reasonable expectation and in today's competitive market, something few workers anywhere in the economy enjoy.

Alcoa has recently reached agreement on new Enterprise Bargaining Agreements with the AWU in Victoria and with our mechanical and electrical trades unions in WA and Victoria. We have been trying to do the same with the AWU in WA for more than 18 months. Negotiations have included more than 50 meetings and two mediated processes facilitated by the Fair Work Commission. Despite these efforts, we have been unable to reach an agreement.

The EBA we put to the AWU in August offered above award and market provisions including 14 per cent superannuation and income protection for up to two years. It offered income growth on our already generous rates of pay – a shift worker, who enjoys the benefit of living locally and returning home after every shift, currently earns about $120,000 per annum for working a 36-hour week. It also addressed employee concerns about job security with a range of measures including a commitment to call for voluntary redundancies first if changes to the workforce were ever needed.

Our desire has always been and remains to negotiate a fair and reasonable EBA.

But we also need other options to overcome the ongoing existence of an EBA that does not suit our business needs – the current EBA expired in March 2017. 

That is why we have applied to the FWC – the recognised independent umpire – to terminate the current agreement. The FWC and Federal Court have recognised terminating an EBA can assist in reaching a new agreement. The FWC is scheduled to hear our application next week.

If the FWC decides that the EBA we have with the AWU should be terminated, we have committed to maintaining employees' current rates of pay and other key conditions for six months. This commitment will protect our employees from financial impact while a new modern EBA is established – which is our goal.

The industrial action being taken by the AWU at our WA operations will not assist in reaching a new agreement. We are concerned about the impact it is having on our employees, their families and communities. We have repeatedly encouraged our employees to return to work so they can restore their livelihoods while we bring this matter to a resolution. And we are pleased that some of them have.

Our sincerest thanks go to everyone from across our operations and support functions who are maintaining safe operations during the action. Their efforts are very much appreciated.

We look forward to resolving this matter soon so we can provide certainty to all parties, and return our focus to remaining internationally competitive, attracting ongoing investment and providing jobs for future generations.

Michael Parker 
Chairman and Managing Director
Alcoa of Australia Limited