The agreement was made to help Bluescope Steel to meet its objective of saving $54 million per year.
The two-year deal – which has been described as “a very good outcome” of a collaborative process – will also see employees take just a 1% pay rise while it is in place.
"[The new contract] wasn't due till next May,” Andrew Garey, NZ Steel’s CEO, told BusinessDesk.
He added that projections had shown “the business was facing a pretty dire scenario”.
In August, Bluescope announced that huge losses meant it was seeking “game-changing” restructures in its Australian and New Zealand operations.
Last week, it was announced that the company, together with the Engineering, Printing and Manufacturing Union, had settled on a new employment contract.
This would “allow the company to focus on becoming sustainable and resilient for the future, protecting jobs and the steel-making industry in New Zealand,” said Joe Gallagher, the EPMU organiser for NZ Steel.
However, the company is still looking to cut up to 100 jobs in its blue and white collar workforces, BusinessDesk reported
It was targeting between $20 million and $25 million in savings from workforce changes. Half of this would be delivered from the new collective agreement, while the other half was to be sourced through further restructuring.
Garey said that the prospect of finding savings was looking increasingly positive – but he remained “cautious not to get too far ahead of [himself]”.
Workers in New Zealand’s steel industry have reportedly agreed to disregard bonus payments during unprofitable years.