Global freight and logistics firm Toll Holdings (ASX: TOL) has announced an in principle agreement with the Transport Workers Union (TWU) in their enterprise agreement negotiations. It's an important milestone given that the TWU represents 10,000 Toll employees and was preparing to hold a ballot to take industrial action against the company.
The agreement reached will see wages rise by 2% for both the financial years (FY) 2013 and 2014, followed by a 3% rise in FY 2015 and 4% in both FY 2016 and FY 2017. Toll has also agreed to pay a superannuation contribution 3% above the statutory level (capped at 15%) for the financial years 2015 through 2017.
The in principle agreement hopefully will put an end to talk of any potentially disruptive strikes at Toll. In return for the pay increase and enterprise agreement, the TWU has agreed to no industrial action for four years.
As other large freight and transport firms such as Qantas (ASX: QAN) and Asciano (ASX: AIO) have discovered over the years, significant damage can be caused when a breakdown in relations between a company and its unionised workforce occurs.
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Motley Fool contributor Tim McArthur owns shares in Toll Holdings.
