Workers at its Rosebery and Renison operations were asked this week to consider a 10 per cent pay cut with Barminco looking to reduce expenses by $18 million nationally.

The move, if successful, could mean a multi-million dollar blow to the Tasmanian economy.

Barminco is understood to have already made 40 employees out of 103 at its Perth headquarters redundant, with similar wage cuts proposed in Western Australia and Queensland.

Last month the company also cut about 10 workers from the Renison operation.

Australian Workers Union assistant branch secretary Robert Flanagan confirmed on Friday that talks were underway with the company, which put its proposal to workers early in the week.

Mr Flanagan said the union was looking at whether the proposal was lawful in a Tasmanian context.

‘’They have some different pay structures and agreements around the country compared to Tasmania,’’ Mr Flanagan said.

The announcement prompted discussions with workers at both sites, which will continue next week.

‘’The company is proposing a 10 per cent cut to wages and we have been advised by Barminco that they need to achieve $18 million in savings over the life of the financial year,’’ he said.

A range of other measures including cuts to discretionary expenditure were also being implemented.

Mr Flanagan said he would wait to see what came out of discussions with the workforce, but he didn’t believe the cuts were lawful in Tasmania.

‘’Whether or not the workforce is prepared to have the discussion is part of developing a new enterprise agreement as part of the meetings with workers next week,’’ he said.

The union and company will resume discussions in mid-September with the cuts proposed to take effect in the first week of October.

The Advocate is seeking comment from Barminco.