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A company responsible for producing Australia’s bank notes and making a key security feature of passports is locking workers out of its Melbourne factory, the manufacturing union says.

The Australian Manufacturing Workers Union says Note Printing Australia, a subsidiary of the Reserve Bank, is retaliating against workers’ earlier call for a 3.5 per cent wage increase.

The note printing business embeds microchips in the centre of passports, which uniquely identifies travellers.

“NPA is the only facility in Australia that is able to do this crucial section of Australian Passports, so this lockout is highly likely to delay the printing of banknotes and also of Australian Passports,” the union said.

A spokesperson for the RBA said there were “adequate supplies to continue to meet demand for cash” but did not confirm union reports of Friday’s lockout.

The Department of Foreign Affairs and Trade, which issues passports, denied the lockout would delay its processes.

“Australian passport production, including printing of passports, is not affected by strike action at Note Printing Australia,” a DFAT spokesperson said.