Unions will push for pay rises this year even as the country flirts with recession, but workers will offer more flexible work hours and pay structures in return.
Tough wage demands by unions could worsen unemployment, already at a four-year high of 5.2%, and hurt the political fortunes of the Labor government, which is drawing public ire for not doing enough to protect jobs.
"We are not seeing wages cut. What we are seeing is some flexibility,'' Sharan Burrow, president of the Australian Council of Trade Unions, or ACTU, told Reuters.
"The real question is how much will wages rise this year, and not how much wages will be cut,'' she said in a phone interview.
Ms Burrow said some employees were working fewer hours to help firms save costs, while others had agreed to stagger pay hikes and leave bigger salary increments for next year.
She expects between 200,000 to 250,000 Australian jobs to be lost this year. She said unions had no plans for strikes right now, but did not rule it out.
"If an employer is using the global financial crisis to rip off workers, we will look at all our options,'' she said.
Ms Burrow said salaries for teachers, traffic controllers and workers in the construction sector have risen by about 4%.
She declined to say what wage increases unions would bargain for in future talks, but said one union plans to ask for a rise in line with inflation in an upcoming negotiation.
Consumer price inflation in Australia rose 3.7% last year.
Australia's economy is starting to feel the strains of the global economic crisis after escaping nearly unscathed for most of last year.
The economy shrank last quarter for the first time in eight years and some analysts expect unemployment to rise to as high as 8%.
The Federal Government warned unions against higher wage claims in January after mining workers asked for pay hikes of up to 33%, despite the mining industry facing falling demand abroad.
But the Rudd government could find it hard to temper union demands since the ACTU supported its election.
The ACTU ran a multi-million dollar advertising campaign to support Labor's run for power in 2007. That drew attacks from the Liberals, which said ties between the ALP and ACTU were too close for comfort.
Ms Burrow said ACTU had had more influence on government policies since Labor came to power, and talks have been held on "policy settings''.
"John Howard smashed the partnership. He didn't encourage businesses and unions and governments to work together at all,'' Ms Burrow said.
Union membership in Australia has been falling for years and now only covers about 20% of the workforce.
Reuters
