Insurance Australia Group Ltd (ASX: IAG) employees have voted to take protected industrial action to protest an “unacceptable” pay offer.
The Finance Sector Union (FSU) and the insurance provider started negotiations for a new enterprise agreement late last year, but the talks were paused in March when COVID-19 struck.
The union claims the two sides reached an “in-principle” enterprise agreement (EA) before the pause – and that a new proposal from the company is inferior to what was previously agreed.
The pre-COVID offer was 2% annual salary increases over 3 years, according to FSU. But IAG is now proposing 1% for the first 2 years then 1.5% for the 3rd year.
“Having reached agreement in principle, IAG has spent the last several months dragging its feet before telling staff they weren’t worth a decent pay rise and walking away from its previous offer,” said FSU national assistant secretary Nathan Rees.
“This is an appalling breach of faith by an employer which fails to understand that a company’s greatest asset is its staff, who have worked hard through difficult circumstances this year to keep IAG in business.”
IAG employees are also unhappy with the removal of clauses relating to “job security” and “working from home”.
Staff will now take their case to the Fair Work Commission to initiate protected industrial action.
It’s not easy running a business after a pandemic
An IAG spokesperson told The Motley Fool that the new EA struck the “right balance” between running its business and the needs of its staff.
“We’re not immune from the significant impacts of the pandemic – not only from what we’ve experienced this year, but into the future,” said the spokesperson.
“Importantly, we believe this agreement will see IAG better placed to be able to maintain high levels of employment as we manage through the recession.”
The Motley Fool understands the new proposal includes clauses on diversity and inclusion, and new leave entitlements such as a 13% contribution on the unpaid portion of parental leave, domestic violence leave, NAIDOC leave and gender affirmation leave.
Rees said that even though pay increases had been cut due to COVID-19, they were dependent on performance targets that had not also been amended.
“IAG staff believe those targets are unreasonable because they haven’t been uniformly adjusted even though economic circumstances have changed radically,” he said.
“Workers at IAG have been working hard through devastating bushfires, floods and now COVID-19 to maintain services to customers, only to be rewarded by a pay offer that falls short of what is reasonable.”
IAG shares are down 1.94% at the time of writing, trading at $4.80. The IAG share price started this year at $7.58.
These 3 stocks could be the next big movers in 2021
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 15/2/2021
Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.