FedEx has promised workers a 9% pay rise, ending months of tough negotiations between logistics companies and the transport union

FedEx has promised workers a 9% pay rise, ending months of tough negotiations between logistics companies and the transport union
(Christopher Lee, Bloomberg via Getty Images
  • An in-principle agreement between FedEx and the union marks the end of negotiations with the major logistics companies operating in Australia. 
  • Bargaining led by the Transport Workers Union (TWU) has affected over 20,000 transport workers. 
  • The rolling strikes have also halted parcel deliveries in a year that has seen an explosion in e-commerce. 
  • Visit Business Insider Australia’s homepage for more stories.

FedEx workers will receive a more than 9% raise as part of a new wage agreement won by the Transport Workers Union (TWU), marking the last deal to be signed with the logistics giants after a months-long struggle. 

The global delivery giant reached an in-principle deal on a new enterprise bargaining agreement that includes a wage increase between 9.25% and 9.75%, subject to Consumer Price Index (CPI) over three years, as well as an additional 2% increase in superannuation over a three-year period, to reach 13% in 2023. 

FedEx has backed the insertion of new clauses in the enterprise agreement that ensure the “full utilisation of our current permanent workforce before engaging casual or labour hire”.

The agreement also includes a commitment from both parties to review the agreed wage increase at the two-year mark against the Consumer Price Index, capped at 3.5%.

But it is still pending final approvals from the union members and the Fair Work Commission. 

The deal marks the end of a year punctuated by worker strikes as a result of stalled negotiations between the major delivery and logistics firms and the union. 

Bargaining between the union and Australia’s major transport companies has affected over 20,000 transport workers, as well as slowing deliveries, which have seen a surge in activity this year as a result of an explosion in e-commerce activity by those impacted by lockdowns.

Over the past few weeks, the major delivery companies came to the table to sign agreements.

FedEx had until now stood out as the only major transport company operating in Australia to hold out on the union’s pay negotiations.

In early October, the union reached a deal with Toll that incorporated an industry-first 15% superannuation rate and enhanced job security protections such as the same pay for outside hires as for direct employees.  

Toll drivers will get an initial pay rise of 2.75% and a second wage increase in line with the inflation rate up to 4% before mid-2023.

On November 15, the TWU announced it had struck a three-year in-principle agreement with Australia Post’s parcel subsidiary, StarTrack, which includes a 3% pay increase and a deal to ensure staff are offered the opportunity to work before labour is outsourced to contractors. 

Linfox also announced in-principle agreements with the union, ahead of formal voting to lock in the deal.

Peter Langley, vice-president from FedEx Express Australasia, said the fact that the deal was reached ahead of Christmas was “good news” for Australian businesses. 

“We are so pleased to be able to recognise and reward all the hard work that our team members have contributed throughout the pandemic in order to support our wider community,” Langley said.

Richard Olsen, secretary of the TWU NSW/Queensland, said, “Through their three brave nat­ional actions, FedEx workers won a fair in-principle agreement which locks in their job security and provides sustainable wage increases which keep up with the cost of living.”

The TWU welcomed the end of the long-running dispute, noting that FedEx’s wage offer was the largest so far. 

However, the union also noted FedEx workers were arguably paid less than their peers. Under the current agreement, some FedEx workers can earn up to 11% less than workers in comparable roles in other transport companies, according to the union. 

Last month, FedEx locked workers out of its Sydney distribution centre as part of the escalating industrial dispute that saw the union threaten strikes without warning ahead of the bumper Black Friday to Cyber Monday online shopping event.