Australia Post EBA 2017 – A Case Study in Incentivising Productivity
Australia Post has successfully negotiated a new Enterprise Bargaining Agreement (“EBA”) with 74% of its workforce approving the new EBA.
The 2017 EBA is the third agreement reached under the leadership of outgoing Managing Director & Group CEO, Ahmed Fahour. Despite the ongoing controversy over the CEO’s own remuneration and bonus package, the negotiations with union representatives continued a long and positive tradition of EBA negotiations that since 2010 have not resulted in any lost productivity due to industrial action.
The new agreement will provide annual pay rises of 2% for workers for the next three years which is down from the 3% per annum under the previous EBA. Instead all fixed and permanent full time Award level employees of the Australia Post Group will be entitled to an annual 1% (or $250 whichever is greater) bonus under the ‘One Team Reward’ scheme.
The One Team Reward will be tied to Australia Post’s KPIs of achieving delivery service performance of at least 94%, achieving a financial year profit and approving the 2017 EBA. The bonus will be calculated off gross taxable income for the previous year including penalty rates and overtime however it will also be taxable. The bonus will also be superannuation exempt and replace a traditional annual gift of a $100 Load&Go card which was not subject to tax.
By tying the new bonus scheme to KPIs, Australia Post has provided additional incentives to its workers to maintain productivity and profit growth in a fiercely competitive industry that is undergoing significant disruption with the imminent arrival of online retail giant Amazon.
The new EBA will also preserve other conditions from previous EBAs including how sick leave is calculated and the way in which work trials are conducted.
Message for Employers
All employers who are negotiating or planning to negotiate a new EBA should remember that these agreements can work for the mutual benefit of employer and employees alike.
By providing attractive conditions to ensure a productive workforce employers can maximise the potential of their businesses. EBA negotiations can be an opportunity to revitalise a workplace and be a driver for growth if managed well.
We recommend that employers seek legal advice when negotiating an EBA to ensure that the process goes smoothly and that a positive outcome is reached.