Small increase in the Wage Price Index will impact enterprise agreement negotiations
Unionised bus and coach industry workers will have trouble negotiating high percentage increases, if the latest Wage Price Index figures are anything to go by.
WPI rates in the private sector increased by just 2.4 per cent in the 12 months to last year’s December quarter.
This represents the lowest annual rate since the ABS began reporting on the WPI in 1998.
Australia Public Transport Industrial Association (APTIA) national industrial relations manager Ian MacDonald says pay rises unions try to achieve for their members during contract negotiations are often tied to the Wage Price Index (WPI), and so this becomes a key indicator of how pay negotiations might pan out.
“There are a number of enterprise agreements in the works in NSW and Queensland,” he says.
“All are linked to the WPI as this is often the foundation of [wage] negotiations.”
Essentially, any wage rise negotiated that exceeds the WPI, will eat away at the margin of bus and coach operators and limit their potential to expand their business, give staff more hours, or hire new drivers.
“It will come out of the margins of operators (if an increase of more than 2.4 per cent is successfully negotiated by workers this year),” MacDonald says.
The lower than expected WPI rate will mean that any wage increase those employed by the bus and coach industry do manage to negotiate will be limited.
“In NSW, most of the metro enterprise agreements are up for negotiations and the Transport Workers Union (TWU) will try for a wage increases over and above the WPI,” MacDonald says.
“No doubt, they may be seeking to negotiate a higher percentage increase in wages, but if they get it the additional per cent will come out of operator’s bottom line.”
NSW enterprise agreements expire on June 30 and usually the goal is to have these negotiated well in advance of this deadline.
However, it is not unusual for these pay negotiations to become drawn out as employers, unions and union members dig their heels in – often at the detriment to the community as they are left with reduced or in some cases no services, as drivers’ take protected action.
Across the economy, rates excluding bonuses increased by 2.5 per cent annually in trend terms, equal to the record low recorded in the September quarter.