THE long-running dispute between AGL Energy Limited and its workers at the Loy Yang A Power Station in south eastern Victoria has come to a head after the Fair Work Commission (FWA) agreed to terminate the workers' enterprise bargaining agreement.
The decision comes after 18 months of bitter negotiations that included a withdrawn industrial action late last year and battles the Fair Work Commission and the Federal Court.
AGL (ASX: AGL) offered the workers a five per cent per annum pay rise over five years, but negotiations broke down over a dispute over conditions.
A plan to reduce staffing levels plus a plan to restructure the engineering, warehouse and maintenance divisions were major sticking points for the workers, says the CFMEU.
AGL, which reported a statutory loss of $408 million in FY16, has agreed to pay the 570 workers at the coal-fired power plant at Loy Yang under the current agreement for three months post 30 January, when a it is officially terminated.
Current pay rates at the power plant are between $70,000 and $180,000 per year, but that will drop 65 per cent on average under the award.
AGL Loy Yang General Manager, Steve Rieniets says AGL is "encouraged" the decision to terminate the agreement, a decision the CFMEU plans to appeal.
"The decision provides AGL with an opportunity to modernise the EBA and remain competitive amid significant challenges facing the energy industry, including the transition to a low carbon economy," says Rieniets.
"AGL remains hopeful we can reach a new agreement."
Geoff Dyke, secretary of the mining and energy division for the CFMEU in Victoria, says AGL is dictating terms, and has refused to bargain.
For the workers, it seems they can't take industrial action and if they do nothing their pay will be cut 65 per cent," he says.
The workers tried to take industrial action late last year, but withdrew the action minutes before the government stepped in to cancel it.
The union had to lodge four applications and appeal to the FWA full bench for the right to ballot workers, which took seven months and pushed the action into summer.
Dyke says the sticking points were conditions, rather than the pay.
"There has never been a pay dispute. The company offered 5 per cent per annum, but we never submitted a pay claim to the company; we said we wanted to negotiate the agreement, then submit the pay claim.
"But the company pushed us into the pay claim, and we accepted that. Our concern was always about jobs."
Loy Yang B power station is owned by French energy giant Engie, which is reportedly looking to sell the asset.
AGL is trading down 0.05 per cent at $21.970 per share in early trading on the ASX this morning.
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