AGL Loy Yang applies to terminate expired enterprise agreement

AGL Loy Yang has applied to the Fair Work Commission to terminate its current enterprise agreement (EA) following 12 months of negotiations with unions to determine a new agreement.

AGL Loy Yang General Manager, Steve Rieniets, said the company regrettably had no choice but to apply to terminate the existing agreement as unions have refused to negotiate more modern, competitive and rational terms and conditions in an industry undergoing significant change. 

“Despite AGL Loy Yang’s commitment to moving forward, after a year of negotiations and over 30 bargaining meetings, negotiations have not progressed as needed and we remain apart on a number of key issues.

“AGL Loy Yang and the entire electricity industry are facing unprecedented change that requires a more modern enterprise agreement. We must be able to operate our mine and power station more efficiently to effectively compete in the market,” Mr Rieniets said.

The “Loy Yang Power 2012 Enterprise Agreement” expired on 31 December 2015, however, under the Fair Work Act an EA operates indefinitely until it is replaced by another agreement or is terminated by the Fair Work Commission. 

The Fair Work Commission can terminate an expired enterprise agreement if it is satisfied that:

  • It is not contrary to the public interest to do so; and 
  • It is appropriate to terminate the agreement taking into account all the circumstances, including the views of the parties covered by the agreement and the effect that the termination will have on each of them.

Mr Rieniets said a conciliation process on the EA is currently underway with the Commission and that AGL Loy Yang has pledged to continue to fully participate with a view to achieving a reasonable outcome.

“AGL Loy Yang has sought to work with unions and workforce representatives to redress the restrictive practices that hamper the competitiveness and viability of the business.  

“We’ve offered a 21.5 percent wage increase over four years in a proposal which included incremental change, however, the unions urged the workforce to reject this offer.

“Not only did unions reject the offer, they tabled unreasonable claims that would result in increased employee numbers, insourcing of a number of non-core activities, reduced productivity and higher overall costs to the business, in the order of $16 million per annum. 

“One union – the CFMEU – has now signaled its intention to attempt to take protected industrial action,” said Mr Rieniets.

About AGL
AGL is one of Australia’s leading integrated energy companies. It is taking action to responsibly reduce its greenhouse gas emissions while providing secure and affordable energy to its customers. Drawing on over 175 years of experience, AGL serves its customers throughout eastern Australia with meeting their energy requirements, including gas, electricity, solar PV and related products and services. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, solar, landfill gas and biomass.