An industrial showdown is looming between Westpac and the Finance Sector Union after the bank rejected a demand for a six per cent pay rise this year.
The FSU put the 6 per cent pay claim to Westpac during enterprise talks last week, but the bank responded on Monday with tiered pay offers of between 3.25 per cent and 3.5 per cent.
Under the bank’s offer, Westpac’s lowest paid staff would receive a 3.5 per cent increase this year while other employees covered by the agreement would get a 3.25 per cent boost.
“We have commenced negotiations for a new Enterprise Agreement and will provide an update in due course,” a Westpac spokesperson said.
“Our focus for enterprise bargaining is on competitive pay, simpler terms and conditions and continuing to offer employees great benefits.”
Westpac’s offer is almost certain to result in a decline in the purchasing power of staff incomes.
While the headline measure of inflation is currently at 5.2 per cent, the bank’s pay offer is also lower than the underlying inflation benchmark that soared to 3.7 per cent in the March quarter.
The union is justifying its pay claim on projected further rises in headline inflation, which is expected to climb as high as 7 per cent by the end of the year.
The FSU yesterday cited the Fair Work Commission’s decision on Wednesday to boost the minimum pay benchmark by 5.2 per cent to fortify its argument for a 6 per cent hike for bank workers.
FSU national secretary Julia Angrisano said the commission based its rulings on an analysis of current economic indicators that all point to the need for wages to increase.
“Anything less than a six per cent increase at Westpac will represent a real wage cut,” Angrisano said.
“Bank profits are up, productivity is up and unemployment is down, which should drive wages up.
“But employers like Westpac still can’t accept that cost of living pressures on families require a decent pay rise.
“Now that the Reserve Bank Governor has predicted inflation will hit 7 per cent by the end of the year, employers in the finance sector must respond with wage rises that keep workers’ pay ahead of inflation.”
The union has scheduled meetings with Westpac members and workplace representatives this morning to determine a course of action in response to the bank’s pay offer.
The FSU is also about to enter enterprise negotiations with National Australia Bank and the Bank of Queensland.