Vero Update
27 July 2006
The negotiating team met with Vero on 19 and 20 July. At these negotiations Vero were proposing a change to extend the collective agreement and to introduce a new pay matrix system. After two days of negotiations, and in depth discussions with Vero we did not reach an agreed settlement as their offer did not meet member's mandate. However, we agreed to consult with members on the proposal and to conduct an indicative vote. The proposal is as outlined.
Term
Vero propose the term of the agreement will apply from 1 August 2006 and expire 31 March 2008.
Leave for Long Service
This claim was proposed by the staff association to increase the entitlement and to recognise employees who had completed 25 and 35 years of continuous service. Vero would not agree to increase the overall entitlement, but propose to adjust the entitlement so that employees at 25 and 35 years will be entitled to 10 days each. The entitlement at the completion of 10, 15 and 20 years will not change, but the 30 and 40 years has changed to 15 days for each.
Vero have undertaken for employees who become entitled to their long service leave at either 30 or 40 years service before the expiry of this collective (31 July 2006), they will still be entitled to either 20 or 30 days long service leave respectively as per the existing collective agreement. Any long service entitlement due after 31 July 2006 will be as per the new long service leave provisions.
Salary Increase
Vero propose a two step approach, the first step is to apply 2.6% increase (4% pro-rated for 8 months) to salaries, bands 1-6, allowances and those who are in a non-banded positions who are union members covered by this collective agreement. This increase is for the first 8 months from 1 August 2006 to 31 March 2007.
From 1 April 2007 through to 31 March 2008, Vero propose extend the pay range from 85% - 115%, currently the range is 85% - 100%, and apply a 4% negotiated increase to a pay matrix system based on your recent performance rating and salary bands against the market movement.
Outlined is the matrix for 1 April 2007 to 31 March 2008, the percentages in the matrix will be what your salary increase will be, which will be dependent on your performance rating and where you sit in the salary range. The 4% will apply to allowances.
To assist members in working out where they sit in the range use the following formula. You need to divide your current salary into the midpoint (100% top of the range) and then multiply that by 100% to get your percentage on the salary range, e.g.
- Suzy is in band 4, the 100% (top of the range) for this band is $40,388 and her gross salary is $37,500 per annum
$37,500 / $40,388 = 0.9284936 x 100% = 93% - Suzy is currently at 93% of the band 4
Based on the matrix below Suzy would fall into the (91%-95%) range and she received a meets expected standard in her performance appraisal she would be entitled to a 6% increase. This would take her salary to $39,750 and move her to 98% of the range.
Overall Performance Assessment |
Entry & Developing Range (85%-90%) |
Entry & Developing Range (91%-95%) |
Mid Range (96%-100%) |
Mid Range (96%-100%) |
Premium Range (106%-110%) |
Maximum Range (111%-115% Max) |
Consistently Demonstrates Exceptional Performance (CDEP) |
11% |
10% |
9% |
8% |
6% |
5% |
Consistently Exceeds Expected Standard (CEESP) |
9% |
8% |
7% |
6% |
5% |
4% |
Meets Expected Standard (MESP) |
8% |
6% |
4% |
4% |
3% |
2% |
Approaches Expected Standard (AESP) |
4% |
3% |
1% |
0% |
0% |
0% |
Needs to Improve Performance (NTIP) |
0% |
0% |
0% |
0% |
0% |
0% |
Total cost 4%
The other component to this proposal is Vero propose to incorporate an individual incentive bonus payment which will be in the collective agreement.
Individual Incentive Component |
|
Based on employees overall performance assessment |
Incentive |
Consistently demonstrates exceptional performance (CDEP) |
3% |
Consistently exceeds expected standard (CEESP) |
2% |
Meets expected standard (MESP) |
1% |
Approaches expected standard (AESP) |
0% |
Needs to improve performance (NTIP) |
0% |
They also propose a company competent which would sit in policy outside the collective agreement and the employee must achieve a minimum performance rating of MESP to receive a bonus payment if Vero achieves the return on risk based capital.
Company Incentive Component |
|
Vero RORBC targets |
Incentive |
>20% |
3% |
17%-10% |
2.5% |
15%-17% |
1.5% |
12.5%-15% |
1% |
<12.5% |
0% |
Summary
Vero clearly stated that as an employer they already recognised their employees over and above what is in legislation for annual leave and domestic leave. The negotiating team agreed to withdraw these claims, to progress negotiations.
The offer as it stands does not meet our member's mandate, however the negotiating team felt that it was important to report back to members on the offer, and for members to decide whether this is acceptable overall. If the offer is not acceptable, then the negotiating team needs to know from members what would need to change with this offer to make it acceptable. If a majority of members vote to reject members this offer then you need to consider what steps you would like to take next to encourage Vero to change its position.
What happens next?
We are proposing to run a couple of conference calls on for all delegates to discuss Vero's proposal on Tuesday 1 August at 9.30am and 11.00am. If your worksite does not have a delegate, can you please ensure a member attends one of the calls. Can delegates please fax Finsec on (04) 385 2214 by the 28 July 4.00pm.
After the conference call, delegates will need to run a meeting with all members on their worksite to discuss Vero's proposal and conduct an indicative vote. The meetings will need to be completed by the 11 August 2006 by midday. If a majority of all Finsec members who vote, vote to accept the offer then we will notify Vero of this outcome and then delegates will be asked to run a formal ratification vote.
