CSL (ASX: CSL) says a union demand for an 11.5 per cent pay rise over three years is unsustainable as it prepares to put a 9.75 per cent offer to employees for a second time.
According to Australia's largest and only global biopharmaceutical company, unions are instructing employees to hold out for more while ongoing industrial action starts to impact the export of haemophilia products into Europe.
“With limited growth prospects in Australia, rising costs and constrained healthcare spending, we need to make absolutely sure our Australian-based businesses are not only sustainable but also internationally competitive,” said Chief Financial Officer and Chair of CSL’s Australian Operations, Gordon Naylor.
“We’ve examined the financial performance of our local operations very carefully, and when we look at industry benchmarks and general economic conditions, we think our offer is more than reasonable. It also comes with a commitment to maintain allowances that are already high by industry standards.
“The unions say they deserve more than that based on CSL’s global profit, but in reality our Australian operations contribute very little to the Company’s Group profit. What’s more, their claims are higher than the salary increases provided at CSL’s equivalent sites in the US, Germany and Switzerland,” he added.
This latest issue with CSL's Australian operation comes against the backdrop of the company, and Mr Naylor in particular, calling for policy change to make Australia a more attractive destination for investment.
In a recent speech to CEDA in Melbourne, Mr Naylor said securing advanced manufacturing investment is tantalisingly within reach if Australia made a genuinely strategic effort.
“The problem is, we are not strategic, when other countries are, in seeking to make Australia a commercially attractive location for investment in advanced manufacturing. So other countries secure the investment and Australia does not," he said.
In a statement, CSL said its put its offer to an employee vote in August without union endorsement.
CSL’s vaccine and pharmaceutical business, bioCSL, voted in favour of the offer, while a majority of voters from other parts of CSL’s Australian operations rejected it.
“The bioCSL outcome was very pleasing, particularly as bioCSL begins the integration process with the global flu business we recently acquired from Novartis. It shows the bioCSL workforce understands the competitive challenges the business faces into the future,” said Mr Naylor.
“While we were disappointed with the result for the other parts of our Australian business, we remain resolute that our offer is fair, especially given that bioCSL employees have agreed to virtually the same terms and conditions,” he said.
CSL will put its offer to a second employee vote todat, the outcome of which will be known on 14 September.
Ongoing industrial action is expected to continue throughout the vote period, mostly at CSL Behring’s plasma manufacturing site in Broadmeadows, it said.
One of the outcomes of recent action was the loss of a batch of haemophilia products for Europe.
“We respect the unions’ right to take protected industrial action, but having to unnecessarily destroy lifesaving medicines which are important for patients is not in anyone’s interests, particularly for Australia which continues to be viewed as an undesirable location for manufacturing investment,” said Mr Naylor. “We hope this next vote will enable us to reach agreement so we can refocus our efforts on creating a sustainable future for our Australian operations within CSL’s global network.”