1,400 Aussie jobs in limbo as looming cash deadline approaches: 'Stop the squeeze'
The Transport Workers Union (TWU) is concerned about a looming deadline for Australia's cash transport industry and what it will mean for hundreds of employees. Armaguard was given a 12-month lifeline mid-last year, and questions are being raised about what will happen when that deal expires.
RMIT's finance expert Professor Angel Zhong told Yahoo Finance that the beleaguered cash-in-transit company will likely be saved by the same industry stakeholders that propped it up in 2024. But, the TWU wants assurances sooner rather than later that that will happen.
'For years, workers in the cash-in-transit industry have borne the brunt of cost-cutting, from job insecurity to pay cuts and plummeting safety," TWU national secretary Michael Kaine said.
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"Customers like the banks and retailers have had a direct impact on that through their unsustainable contracts with Armaguard."
The Australian company is estimated to employ roughly 1,400 people, who now hang in the balance until another deal or arrangement can be organised.
The TWU is also concerned that essential services in remote and regional areas of the country that still depend on cash, like grocery stores and fuel stations, are at risk too.
The TWU made an application to the Fair Work Commission (FWC) on Monday and is using the government's new supply chain laws to ensure a new deal is organised to protect Armaguard's staff.
There has been a series of discussions recently between Armaguard and its backers about what will happen when the $50 million deal runs out in June.
The agreement was funded through the Commonwealth Bank, ANZ, NAB, Westpac, Coles, Woolworths, Bunnings and Australia Post.The laws set minimum standards and entitlements for all employees engaged in a company's supply chain, and the union is hoping to use the legislation to ensure it has a seat at the table while these discussions take place.
The TWU's application can help the FWC call an urgent conference for Armaguard's stakeholders, and force these supply chain clients into future long-term deals
"The cash-in-transit industry is in crisis with declining safety standards, unsustainable operating models and declining rates of remuneration and funding, a significant amount of which can be attributed to contracting pressures from their largest customers, including the major banks," the TWU said.
"There is an urgent need for a long-term solution given the continued necessity for cash in the Australian economy, and this must be properly funded by the company's large customers like banks and retailers."
Kaine added that a new deal will give peace of mind to more than 1,400 workers as well as those who rely on the availability of cash in their community.
'We need to see a reliable and safe operator while cash is still part of our society, and that means banks and retailers must stop the squeeze to ensure Armaguard remains viable into the future," he said.
It's unclear whether that $50 million funding arrangement will be repeated in June or if a different deal will be brokered.
Zhong told Yahoo Finance that it's a very delicate tightrope for everyone to walk.
"I would say that is more likely for an agreement of collaboration to happen," she said.
"For example, all the major banks could collectively support Armaguard and share the cash distribution burden.
"But any new agreement will also require approval from the ACCC. So it is a complex, complicated situation and a fine balance between competition concerns and also the need to maintain a critical piece of financial infrastructure."
Westpac has also reportedly been pushing for a shared arrangement with its fellow Big Four banks, as the current setup sees it solely responsible for all the notes and coins in Armaguard's depots before they are distributed across Australia.
"It's an unusual model because it actually places significant balance sheet liability on Westpac, while at the same time, other banks benefit from the distribution network without carrying the same financial burden," Zhong said.
That 20-year legacy agreement ends in mid-July this year.
Westpac told Yahoo Finance that while it can't comment directly on the discussions, the bank "recognises the importance of cash to all Australians" and "will continue to support our customers and community to ensure the circulation of cash through the economy".
If no new deal can be brokered to support Armaguard in the future, Zhong predicts the government will have no choice but to step in and provide the funding.
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