What to know about the deal that will see workers’ pay freeze in Australia

More than a million Australians have been told they will have to forfeit their job for up to a year as part of the biggest wage freeze in the country’s history.

Key points:More than a quarter of all workers in Australia have been made redundant since the industrial action beganMore than 200,000 workers will lose up to 10% of their wagesThe Government says workers will be notified about the new pay system within two weeksIt will also force businesses to make significant adjustments to their compensation packagesThe Australian Workers Union (AWU) has been urging businesses to prepare for a pay freeze, with the organisation claiming the Government’s plans will cost up to $1.2 billion.

Key point:More workers than ever before will be made redundant from January, when the industrial strike is due to endMore than 25,000 Australians have already been told their jobs will be lost if they don’t agree to a wage freeze.

It is the largest wage freeze the country has seen in nearly a century, with many businesses refusing to negotiate with workers.

“It is going to be a huge cost to businesses,” AWU chief executive Ian Young said.

“We know the Government is making it clear that the new wage system is going be the most expensive thing in the world for businesses to do.”

What to know:The new pay rules will make Australia the first country in the developed world to end a workers’ strike for more than a yearThe Government has confirmed it will offer compensation packages of up to 15% of the workers’ wage to those who sign up to the new system.

“This is the first time we’ve ever had a permanent pay freeze for workers,” Agriculture Minister Richard Wynne said.

“There is a lot of anger in Australia.”

What businesses can expect:Employers will be required to offer an extra $2,000 to employees who opt for the new systems, and a small business owner will be allowed to choose to take a hit of $1,000.

The Government said it would allow businesses to choose between the new rules and a new system that has no impact on their compensation.

However, it has also said that businesses will be asked to make adjustments to compensate for the changes.

“Employers who don’t make the changes to the proposed compensation will face a pay penalty,” Mr Wynne said, adding that businesses would be able to choose whether to pay their workers more or less.

“The Government is committed to helping businesses meet their business needs, but it is clear that a significant amount of the work that businesses are doing is about managing costs and providing for their employees and it is critical businesses are able to do that.”

What’s next?

Businesses will have until February 14 to make the required adjustments to ensure they are eligible for the pay increase.

There are also restrictions on businesses with more than five workers and a minimum of 10 employees to apply.

Mr Wynne said businesses had already been advised to make major adjustments to compensation packages.

“There are some very big changes that have to be made,” he said.

Topics:business-economics-and-finance,business-group,workers,labour,australiaContact Lisa YoungMore stories from Victoria