Hundreds of workers at Coca-Cola Amatil's warehouses around the country will cop a pay freeze and new hires will receive pay of 38 per cent less to do the same job under new pay deals that provide a stark warning of the pressure on wages across the economy.

In the latest move in a national strategy to lower wages, beverage giant Coca-Cola Amatil sealed a new pay deal this week with its Victorian warehouse workers that locks in a pay freeze in 2015, followed by pay increase of about $30 in 2016.

The national rate of inflation of 3 per cent a year means these workers' wages will effectively go backwards. But more unusually the agreement also enabled a two-tiered pay system that will see new hires receive about 38 per cent less than their encumbent colleagues doing the same jobs.



A spokeswoman for Coca-Cola Amatil said the deal brought wages closer to market rates.

The Mentone and Moorabin-based workers in Melbourne are part of a wider program of wage crunches across Coca-Cola Amatil's warehouses. Workers hired either directly or by contractors in Queensland and Western Australia have also experienced significant wage cuts of about $5 an hour this year.

Most of the company's warehouse workers are managed by Programme Integrated Workforce, which confirmed it managed the majority of the staff involved, but declined to comment.

The trend of limiting or reversing wage increases goes beyond Coca-Cola Amatil, which reported a 15.6 per cent drop in net profit down to $182.3 million in August, as corporates try to cut costs.

Stephen Smith, director of national workplace relations at the Australian Industry Group told Fairfax Media it was seeing similar agreements nationwide.

"We are seeing very modest wage outcomes across most sectors at present, given the economic circumstances, and wage freezes are certainly not uncommon."

Mr Smith said several recent enterprise agreements included lesser wages and poorer conditions for new staff as many companies sought legitimate and sensible ways to correct generous conditions granted to staff in more prosperous times, fuelled by the mining boom.

According to data released by recruitment site SEEK, wages for mining, construction and engineering jobs have declined slightly this financial year.

But it's not just industries propelled by the mining boom that are capping wage rises.

Unions claim several food manufacturers are working to drop wage increases below inflation including Simplot, which produces such as Birds Eye and Lean Cuisine, and Kelloggs, which Fairfax Media understands it threatening to shift local production to Thailand if workers don't agree to lower increases.

All state governments have implemented wage policies that cap wage increases below inflation

A spokesman for the United Voice union, which represented some of the 90-odd workers at Coke's Victorian warehouses, said it had no idea why workers would accept such an agreement.

"We supported our members throughout the process and advised them to vote against the agreement. The problem is we have about a quarter of the workforce as members, and our members were outvoted," the spokesman said.

ACTU president Ged Kearney said the slowing wages and fiercely contested enterprise bargaining agreements were leading to more insecurity and fewer rights at work.

"Australian workers know all too well there is no wage explosion despite misleading claims by the Abbott government and big business," Ms Kearney said.

Diminishing wages lead to a population less willing to spend what is left of their income after paying rising utility bills and property prices.

This weighs heavily on consumer sentiment and business confidence. Both sagged in August, with consumer sentiment plummeting four percentage points this year, down to a cumulative total of 15 points lower than a year ago.

HSBC chief economist Paul Bloxham told Fairfax Media wage growth was likely to continue to slow and the decline would hit consumer sentiment, house prices and GDP.

"It is a trend, we've seen slowing wage growth for about two years and in some cases, real wages are falling," Mr Bloxham said. "The big risk is this will mean less spending, and lower demand growth will mean lower GDP."


Read more: http://www.smh.com.au/business/the-economy/cocacola-amatil-slashes-wages-with-new-employees-to-work-for-less-20140910-10exj8.html#ixzz3CyPrxsvS

I'm surprised there hasn't been marching in the streets over this one.
Coca-Cola fuelled violence at least.
You'd think this would be more of an inducement for Bill Shorten to get up on a truck than worries about Jap submarines sinking our ships 70 years ago.

This sort of thing is going on all over the place.

This is the result of a conservative government. wage levels are being deliberately pushed down and is a secretive government supported push on wage levels. It is related to the failure of workchoices - working within the fair work system to achieve the same type of results.

This is not related to the economy or business requirements it is just conservative dogma in action. This lines up with the attack on penalty rates etc.

To have work choices you need work available. Sorry 'bout that.... the end game in IR is either total control over the serfs or nothing at all..

I say buggar off then and let us get things going our way for a change... get in some Mice to run the show instead of Cats....

Dnarever wrote on Sep 11^th, 2014 at 3:08pm:



who knows... maybe this is why unemployment is dropping???

longweekend58 wrote on Sep 11^th, 2014 at 3:38pm:



It has been going up till the last result which has gone back to where it was - i.e. back to just a bad result 6.4% or so.

King FriYAY II wrote on Sep 11^th, 2014 at 3:54pm:


you can put wages down when expenses come down ... until then, piss off.

Dnarever wrote on Sep 11^th, 2014 at 3:08pm:


Load of horseshit. Wages are under pressure because productivity has been allowed to slip for the last 17 years. Sooner or later it catches up. Without productivity growth, wages will not grow and only match inflation. Once productivity dips below zero, real wages will decline.