Australia’s richest person has told her employees to take a pay cut or lose their jobs. Gina Rinehart’s Roy Hill project will cut pay rates for its employees to avoid job losses.
The $10 billion company will be deducting 5 to 10 percent from the salaries of about 60 percent of its workforce in a bid to save its employees. It will also offer lower salaries to new workers. The move is expected to affect about 540 workers, with the upper management group taking the biggest cut, though it will spare existing employees in the lower remuneration bands.
According to Barry Fitzgerald, the company’s chief executive, the decision was made after reviewing the cost base. The pay cuts, which he said was approved by the workers through a survey, was to maintain the “family-friendly roster,” which is 14 days on with 10 days off, and 14 days on with 11 days off. He said the roster was what attracted a number of people to join the company recently.
“We felt it was more important for our people to retain their job rather than pursue workforce reduction as a cost-saving strategy in response to market conditions,” Fitzgerald, who will be getting a 10 percent cut from his pay, said. He further explained that cutting salaries was a practical decision they agreed on to keep the company competitive over the long term.
The iron ore mining project’s labour costs eat up about 30 percent. About 600 people are currently employed in the company, with the number expanding to 2,000 during operation.
The oversupply of iron ore and the waning demand from the Chinese market triggered the downward drive of the company and the Australian mining sector as a whole. In 2011 when supply was tight and demand was unquenchable, iron ore registered around $200 per tonne.
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