The Australian Gas Light (AGL) Corporation logo is seen on buildings in north Sydney March 20, 2006. Reuters/Will Burgess

Loy Yang employees would receive deep cuts to their take-home pay and superannuation after the approval of AGL's termination application on its current enterprise agreement. AGL has applied the termination of the Loy Yang Power 2012 Enterprise Agreement in July 2016 at the Fair Work Commission (FWC).

The agreement expired on December 2015 but has continued to operate as another agreement has not been concluded. AGL Loy Yang general manager Steve Rieniets said in July 2016 that negotiations and bargaining meetings have not progressed as needed, which made the termination necessary. AGL's offer was rejected twice, where one offer was a 22 percent wage increase to the workforce.

Loy Yang workers were flabbergasted on the final decision. One Loy Yang worker said that they didn't have extravagant salaries similar to other plant operators in Australia. After the termination of agreement, workers would receive a salary known as the award, which cost less favourable minimum rates for basic electricians. However, the Loy Yang worker said that they were operating a major power station and they were not basic electricians.

Reniets said that they were encouraged by the FWC to terminate the old agreement. He added that FWC's decision opened an opportunity for AGL to modernise the agreement. It would also help the company to remain competitive and to face challenges including a low-carbon economy transition.

AGL complained that the agreement prohibited compulsory redundancies. It informed the commission that it wanted to reduce its overtime bill to $10 million from $20 million. However, deputy president Richard Clancy said that AGL should continue paying the workers for three months under the former deal. AGL has not issued response on Clancy's statement.

Clancy said that he was satisfied that the dispute was intractable. He said that the change in the agreement would better support the new agreement that would deliver productivity benefits.