Rio Tinto workers trade pay rises for job security

Australian Workers Union national secretary Paul Howes has praised the agreement. Photo: Alex Ellinghausen / FairfaxMining giant Rio Tinto has struck a significant workplace agreement with the Australian Workers Union that forgoes guaranteed pay rises in exchange for better job security and protection of conditions.

The deal – reported by The Australian newspaper – which Rio and the AWU last night both applauded for its flexibility, covers workers at the company’s Bell Bay aluminium smelter in Tasmania which, in 1994, was the first major plant in the country to be de-unionised.

The agreement, approved by a ballot of workers, retains common law contracts and a performance pay structure that does not provide for across-the-board annual wage increases.

While the AWU had previously argued that process operators at Bell Bay were paid significantly less than mainland workers doing the same job, the union modified its approach given the struggling state of the aluminium sector.

AWU national secretary Paul Howes said the agreement promoted certainty for Bell Bay employees “without creating any adverse working conditions that would damage the company’s performance”.

“It’s actually really a model for how workers and employers can work together during tough economic times to make these plants more productive,” Mr Howes said.

“This is an agreement and arrangement which demonstrates that the union movement is able to move with the times.”

Rio agreed last year to end two decades of hostilities and resume bargaining with the AWU after the union succeeded in using the Fair Work Act to demonstrate a majority of the smelter employees wanted to be covered by an enterprise agreement.