Pay deals heading upwards

By JIM EAGLES Business editor

Bluebird snack food workers last week won a pay increase of 4.25 per cent - plus a further rise of 3 to 6 per cent in 12 months time - after a seven-day strike.

The settlement of what had become a high-profile dispute not only averted the risk of a shortage of the company's potato chips, it also highlighted a modest upward trend in pay deals so far this year.

The Northern Distribution Union newsletter announcing that result - under the heading "The thrill of victory" - said: "That successful struggle ... means that our union and the other unions involved are on the 4 per cent-plus track ... but we know there will be some settlements above and below that figure."

Precise information about how the Bluebird deal fits into the general pattern - or even what the general pattern is - is difficult to establish.

But as the first wage round under the new legislation progresses three things are becoming clear:

* There is more industrial huff and puff this year with both unions and employers having to put a great deal more time and effort into bargaining.

* Multi-employer settlements are rare and deals generally do take account of the circumstances of individual firms.

* The size of settlements is going up - on average running about 1 per cent above last year - and the median rate is now around, or even slightly above, the latest consumers price index increase of 3.2 per cent.

Peter Tritt, employment relations manager with the Employers and Manufacturers Association (Northern), says that when the Employment Relations Act first came into force on October 2 last year most settlements were in the range of 2 to 2.5 per cent.

"At the beginning of this year most were around the 3 per cent mark," he says. "Now the range is generally 3-4 per cent and the trend is upwards. It's roughly tracking the CPI."

Council of Trade Unions economist Peter Conway has noticed a similar pattern. "Our records indicate that settlements this year are on average 0.5 to 1 per cent higher than last year."

Official records of settlements, while generally incomplete and behind the times, point to a similar trend.

The Department of Labour's latest employment relations report shows average wage settlement increases tracked between 1.3 and 2.1 per cent for the past few years.

But after the passage of the ERA the average jumped to 2.8 per cent in the December 2000 quarter, fell back a little in the March quarter, then rose to 4.1 per cent for the June quarter (though that figure is decidedly provisional).

What makes it difficult to get accurate and up-to-date information is the fact that the pattern of enterprise - rather than industrywide - bargaining which developed under the old Employment Contracts Act is still very much the norm.

As it happens the few multi-employer agreements that do exist are also tracking around the 3 per cent level.

For instance, the plastics contract, covering about 40 companies, was settled for 3 per cent the very day the ERA came into force.

The metal trades contract, which embraces about 200 companies, applied from March 8 this year and also settled at 3 per cent.

But, unlike the pre-ECA system when the metal trades award just about set the going rate for the entire workforce, the present contract does not even cover every company employing metal workers.

It started with a core group of about a dozen companies and has expanded from there as companies have chosen to join.

"Employers who feel it suits their circumstances just add on to the contract," said Mr Tritt. "Those who are not willing to join just negotiate their own separate contracts."

But such multi-employer agreements are very much the exception.

The huge Engineering, Printing and Manufacturing Union has settled 260 contracts since February and almost all of those have been with individual companies.

"We've seen very little multi-employer bargaining yet," says national negotiations co-ordinator Steve Hurring. "Most of our settlements have been at enterprise level and so the results have been very enterprise-dependent."

Of those 260 settlements, he says, the median point is 3 per cent.

"The contracts around the midpoint of the list would typically be, say, 3 per cent for the first year and 2.5 or 3 per cent for the second year."

But, Mr Hurring said, in some cases where a company was not doing very well settlements were under 2 per cent while at least 50 were over 4 per cent.

"Basically, if profits are up then the settlement will be higher; if profits are bad then the deal will be lower. But we also take history into account and, for instance, the following year if the company has turned around the workers might expect a bit extra."

Mr Tritt agrees that employers' ability to pay has been the key factor.

"We've had some as high as 6 per cent where companies are doing well and some as low as zero where conditions are tough."

Mr Conway believes this pattern is very healthy.

"Those industries where profits are good and which can afford to pay more - export industries such as meat and dairy - have had some quite handsome settlements.

"Other industries where the pressures are pretty tough - such as aged care - have been lucky to get anything.

"Of course cost of living is a general factor, but enterprise and industry factors, such as skill shortages and ability to pay, are having a greater influence on the level of settlements.

"That," he concluded, with an eye on the next monetary policy statement on August 15, "should be nothing for the Reserve Bank to worry about."