Apple Inc. (AAPL) Signs Deal With Australian Staff to Improve Wage Bill

Apple Inc. (NASDAQ:AAPL) and the Australia retail staff have entered into a new pay deal that will lock in the starting rates at lower level than the supermarket checkout workers, and for the coming four years pay cuts in real terms will take place every year, according to Sydney Morning Herald.

Details of the deal

 It was also decided that a rise of 2% per year will take place in the pay rates of all the staff that includes the customer help staff too. This rate is very much less than the current inflation rates. Salespeople, people stacking the shelves, people doing the repairs and those who provide technical assistance are all included in the agreement. A senior human resources executive at Apple Inc. (NASDAQ:AAPL) signed the deal on behalf of employees and it was struck without involving a union. For approving the deal, a staff ballot was conducted in which 1916 employees of 2372 employees had cast a vote, and only 200 were against the deal.

The deal price was slightly above the standards of minimum awards and though surprising had set a benchmark that was new and also welcomed, said Russell Zimmerman, the executive director of Australian Retailers Association. “It is perfectly realistic and one we should be looking forward to seeing in the future from other retailers,” he said. Retailers have been struggling to improve the services and a big burden on them was that of wages.

Australian an expensive market

Revenue worth $6.1 billion and profit of $88.5 million was recorded by Apple Inc. (NASDAQ:AAPL) from its operations in Australia, which on a YoY basis is lower. About $154 million was paid to US parent firm as dividend. The net profit after tax was $58.5 million in 2012 and declined to $52 million in 2013. The Fair Work Commission on Thursday ratified the new pay deal and the lowest paid staff of Apple will be paid at a base hourly rate of $20.55 starting November.

The costs in the Australian marketplace are exceptionally high. The basic wage has been equated to $750 per week and as per the industry standards cannot be considered high according to Joe De Bruyn, the national secretary of Shop, Distributive and Allied Employees Association. He also informed that for shop assistants the basic minimum award was $703.90 and for bottom retail workers at Coles the bottom rung was $773.70 a week.

“I would say that $750 a week is not a princely sum given that Apple is a multinational company,” he said.