DON KR Castlemaine casual employees believe they are being “blackmailed” into signing an enterprise bargaining agreement, with fears they could lose their jobs in December if they vote it down.

But their union says it is only logical for the company to replace casual employees with cheaper contract workers if they do not accept a pay cut.

Union members will vote on the EBA in October, which could include a cut in lowest level casual pay of up to $4 per hour, but with a one-off $1100 payment.

Seventy-three per cent of union members voted against the latest offer earlier this month, forcing the parties back to the negotiating table.

Permanent staff are being offered at least a four per cent pay rise over two years, and the company has promised to make 200 casuals permanent.

One Don KRC casual employee told the Bendigo Advertiser there was a lot of unease about the agreement.

“If we don't agree, all Don KRC casuals will be let go by the December 7, we’ve been told,” the employee said.

“It’s basically like being blackmailed. In the 21st century, I don’t think something like that should be used in EBA negotiations.”

The company increasingly uses workers from employment agencies instead of its casual workers, as they are paid at a lower rate.

Australasian Meat Industry Employees Union Victorian secretary Paul Conway said it made sense from the company’s point of view to use cheaper workers.

“If the offer is rejected again, they will continue to up the ante on the casual workforce by using more and more workers from employment agencies,” he said.

“This is a two year agreement, so it’s not out of the ball park. If their competitors – like Primo – produce a better agreement, then it will be easier to use that to negotiate in two years time.

“From our point of view, this company employs 1000 people, it needs to be sustainable. But people do need a liveable wage.”

Earlier this year, Don KR Castlemaine executives addressed staff outlining its plan for a more “flexible” model for its workforce, including greater numbers of contract labour and changes to permanent contracts.

The company had encountered criticism from Member for Bendigo Lisa Chesters and the union for its use of 417 visa workers.

Don KRC managing director Stuart Grainger said the company had been upfront about the changes it wanted to make.

“The big part of the long term view is that we want to have a much bigger permanent base,” he said.

“We struggle to get the flexibility we need out of our current employment structure.

“We think we now have an offer that works for all parties.”

The company made “significant losses” in the last financial year, due in part to its inability to respond to slower periods during the year.

Mr Grainger said they had moved towards a rostered days off scheme as part of negotiations.

“It will allow us to be able to control labour during slower periods,” he said.

He did not rule out replacing casual staff with contracted workers should union members vote against the new deal next month.