Stephen O'Neill
Economics, Commerce and Industrial Relations Group
14 September 1998
Contents
Introduction
A secret conspiracy?
Commercial Restoration
Industrial Developments
Conditions of settlement
Redundancy deal between PCS and its
employees
Delay to the settlement
Some Conclusions
Endnotes
Appendix
Media comment on the dispute
Some academic and practitioner views
This Current Issues Brief provides an update to
the earlier Outline of the Waterfront Dispute(1). That
paper reported on events of the waterfront dispute up to the High
Court's decision (4 May 1998), which dismissed appeals against
Federal Court orders of Justice North. Those orders required
restoration of the commercial and industrial situations which
applied at the four labour hire companies of Patrick Stevedoring
prior to 7 April (the date when the labour hire companies were
placed under administration and some 1400 Patrick employees were
locked out). While it is prudent to regard the waterfront dispute
as not being finalised until the settlement is certified by the
Australian Industrial Relations Commission, and this and other
agreements are presented to Justice Tony North, this paper reports
on events since the High Court's decision (4 May 1998) on the
waterfront up to the time of the terms of settlement of the dispute
in September 1998.
The waterfront dispute has been an extraordinary
event in Australian industrial relations and there have been many
components to its settlement. Among these have been:
-
- a settlement of working issues between Patrick and the Maritime
Union of Australia (MUA) in a framework industrial agreement and
subsidiary local agreements
-
- certification of these agreements by the Australian Industrial
Relations Commission
-
- legal action by the Australian Consumer and Competition
Commission against the MUA for alleged boycott activity being
settled
-
- action by the Melbourne Port Corporation against the MUA to be
withdrawn
-
- MUA legal action against the Minister for Workplace Relations
and Small Business, the Hon. Peter Reith MP (and others) to be
withdrawn
-
- redundancy funds released by the Minister to pay out redundant
wharf labour (withheld until legal action against the minister was
withdrawn).
Since 4 May there have been four primary
features of the dispute with which this paper deals:
-
- Government involvement in the dispute. Since 4 May, certain
Government documents highlighting strategies of achieving
waterfront reform have appeared in the media. They were used by the
Federal Opposition in Parliament in June 1998 to substantiate
claims that the Government had orchestrated key events of the
dispute and that it had sought to identify the issues and context
which would provoke a national waterfront strike and canvassed mass
sackings of a workforce. Much planning appeared to have had largely
taken place by July 1997. A sequence of events might lead to the
replacement of the current workforce with a non-union, or at least
non-MUA workforce, thus bringing about waterfront reform. The
documents would be of considerable value in assisting to prove the
conspiracy charges brought by the MUA against Patrick Stevedores
and the Minister for Workplace Relations and Small Business, the
Hon. Peter Reith MP (and others).
- Restoration of the commercial positions of the Patrick labour
hire companies. The finesse required of all parties-employer,
union, Government, the banks and others-to facilitate restoration
(rather than liquidation) should not be underestimated. It has to
be appreciated both in the context of the High Court's variation
orders which allowed the administrators greater freedom to manage
the companies, against the demands of creditors (primarily demands
of the group of banks) to continue the process of liquidating the
labour hire companies. One element of this restoration is
implementation of the stevedoring levy by federal legislation,
which will finance redundancies in the stevedoring and maritime
industries and thus reduce stevedoring costs.
- The industrial developments flowing from the 4 May decision,
which have also played a part in moulding the outcome. These
include some early proposals of the non-union labour hire firm,
Producer and Consumer Stevedores (PCS), to operate out of a number
of ports so that there would be 'union' ports and 'non-union'
ports. As well, there have been the industrial responses to the use
of non-union labour, which have had serious financial consequences
for shipping users.
The paper also outlines the terms of settlement,
the principal framework agreement between Patrick and the MUA. As
the Government, employer and unions make conflicting claims about
'winners and losers' in this dispute, it is too early to draw
conclusions about its outcome. The paper therefore concludes by
canvassing a number of industrial implications of the dispute now
that dust from the dispute is beginning to settle. These
implications follow from and build on those considered in the
earlier CIB. The paper also contains an appendix of media comment
on the dispute, including comment by industrial practitioners and
academics, and further considers the industrial implications which
are coming to light.
Four Government documents, two of which have
been made public since the High Court's decision, have been used by
the Federal Opposition to allege complicity of the Government in
orchestrating the waterfront dispute. The documents were prepared
in 1997. Briefly, they reveal:
10 March 1997: Departmental
officers outlined circumstances in a memorandum by which employees
could be terminated for illegal strike action:
stevedores would need to activate well-prepared
strategies to dismiss their workforce and replace them with another
quickly... a dispute would not, of itself, remove or alter MUA
coverage, remove or suspend registration, or cancel the award or
terminate any agreement ... What would be needed for the MUA's
influence on the waterfront to be significantly weakened would be
for a range of affected service users and providers to take
decisive action to protect or advance their interests.(2)
14 April 1997: The Government
is advised again by departmental advice that Patrick is considering
corporate restructuring and the wholesale termination of its
workforce. Interestingly, P&O Ports did not choose the same
option. It had sought independent legal advice. By June 1997,
according to The Age, P&O Ports had decided not to
participate in removing the MUA from wharves.(3) Its advice
compared the secondary boycott reforms of former British Prime
Minister Thatcher to the boycott provisions now restored to the
Trade Practices Act 1974 (Cwlth). This advice
appears to have found that the secondary boycott provisions were
inferior to those introduced by the Thatcher Government and
cautioned against over-reliance on the new legislation.
21 April 1997: Advice from the
Prime Minister, the Hon. John Howard, to the Hon. John Sharp,
Minister for Transport and Regional Development which read:
I refer to our recent discussions on maritime
reform. I support the interventionist strategy you have outlined.
It would be appreciated if you and the Minister for Industrial
Relations could proceed expeditiously to establish a contingency
planning group. Funding issues will be addressed by Cabinet in due
course. ERC has been informed of the need to provide funding for
this purpose.
7 July 1997: This Cabinet
Submission showed that Cabinet endorsed an 'activist' strategy
proposed by Ministers Sharp and Reith for waterfront reform in
preference to the alternative evolutionary approach. The submission
suggested that the Government would assist in beating any resulting
dock strike by facilitating the use of foreign skilled labour and
the use of foreign registered tugs. Cabinet agreed with the
proposal and formed a four-minister sub-committee, which could
authorise spending for the purposes.
The process of tracing an underlying strategy
for waterfront reform was assisted with information provided in
response to a question on notice. On 13 February 1997 Mr Laurie
Ferguson MP asked the Minister for Transport and Regional
Development (the Hon. John Sharp) how many consultancies had been
let by the Department at a value of $5000 or more since 1 April
1996. The Department's response identified a contract undertaken by
ACIL Economics and Policy Pty Ltd for the purpose of providing
policy advice to the Minister and the department regarding an
industrial relations strategy for the implementation of waterfront
reform. Further questions regarding consultancies and the
waterfront strategy followed, particularly at Senate Estimates
hearings.(4) However, the Government has been reluctant to make
documentation available.(5) Yet, as early as August 1997, the
Australian Financial Review was able to report:
A radical plan to crack the power of the
Maritime Union of Australia has been secretly drafted by the
Federal Government in readiness for the next time the union shuts
down the docks.
Those who have helped draft the proposals over
the past year include David Trebeck, a director of the consultancy
firm ACIL and a former senior economist at the National Farmers
Federation, and Paul Houlihan, an industrial relations consultant
and former industrial director of the NFF....
The ministers for Transport, John Sharp, and
Workplace Relations, Peter Reith, have worked quietly for a year on
strategies to manage confrontation on the waterfront and reduce
what the Government and the stevedores regard as the Maritime
Union's stranglehold on the business of the wharves...
The linchpin of this strategy to confront the
union are the Government's controversial laws which promote the use
of non-union labour and re-introduce bans on secondary
boycotts...
The plan includes provisions dealing with the
legalities of forcing strikers to return to work, as well as the
hiring of new workers on the docks.
Work has been done to determine what union
assets could be seized in the event of fines and to assess which
unions would support the wharfies.
Other plans involve how to keep some cargo
moving during a strike and what specialised non-union labour would
be needed to operate computer equipment and to drive the massive
cranes on the docks...
Already at least one stevedore has indicated to
Government that it is prepared to fight hard to achieve a permanent
routing of the union's power...
It is understood P&O has warned the Federal
Government that in the event of a major industrial dispute the
company would seek financial assistance to help meet any legal
costs with sackings and rehiring...
(But) Richard Setchell (P&O) is not
optimistic about the prospects without government support. He
believes Australia still needs explicit legislation to open up
dockyard employment.(6)
On 23 September the same newspaper reported that
senior ministers had criticised stevedore employers for their
unwillingness to use avenues, under the industrial relations
legislation, for making non-union agreements with their employees.
Canvassing the possibility of major industrial confrontation, Mr
Corrigan (CEO of Patrick Stevedoring) responded to the alleged
criticisms:
If they are talking about things on that scale,
they would have to do more than point to industrial legislation
reforms of a fairly modest nature ... Things that have led to
confrontation in the past have tended to involve some kind of
Government support in one form or another. If the Government was
really keen on going down that path, there are no doubt avenues
they could use to go down it, but instead of that they are really
encouraging us to take on the unions. One needs to tread very
carefully in taking such encouragement too enthusiastically because
at the end of the day we wear the responsibility for anything that
happens.(7)
At the same time (September 1997), P&O
Australia managing director, Richard Hein, also responded to the
allegations of inactivity on the employers' behalf:
(The Government) had no proper understanding of
the whole subject. I don't think they can blame us for the current
state of inaction of reform of the waterfront ... and there needs
to be a plan in place which can see it solved.(8)
September 1997 is also the month in which the
two key ministers apparently agreed to the idea of a new stevedore
entering the waterfront and the National Farmers Federation was
consulted. Reports of these meetings appeared in December 1997, at
about the time that the Dubai training plan unravelled. Writing in
The Australian Financial Review, Pamela Williams deduced
that there was however a new development, namely a labour supplier
having an ongoing role on the waterfront, rather
than providing a replacement workforce in the event of a major
dispute:
The revelation of the NFF's talks with the
Government throws a different light on the mystery training
operation for stevedores in Dubai. The project has been assumed to
be part of a plan to provide strike breakers to the existing
stevedores in a major dispute.
If a new stevedore were to emerge, the Dubai
trainees could provide a workforce for recruitment.(9)
By June 1998, Pamela Williams ascertained that
Mr Corrigan had also attended the meeting with Ministers Reith and
Sharp and officials of the National Farmers Federation on 18
September 1997(10). Nevertheless, most of the detail of the reform
strategy was public knowledge by December 1997. By then it was
clear which of the two major stevedores was interested in following
through with the reform strategy. P&O Ports had already
discounted the likelihood of a reform action (that is a dispute,
leading to a strike, leading to termination of the permanent
workforce) withstanding legal contest.
The first trigger that Patrick would use to
initiate its reform strategy would be the settlement of its legal
action against the Melbourne Port Corporation. The MPC agreed to
Patrick accessing a new area of Appleton Dock which, in turn,
allowed the freeing up of Patrick's Webb Dock No. 5 (in late
January 1998). This space was leased to the newly registered
company PCS, allowing the training of a stevedoring workforce after
the cancellation of the Dubai training exercise in mid-December
1997.
The second trigger was exercised on 7 April
1998. This was the clause in contracts between Patrick Stevedores
and its four labour supply companies, which allowed the principal
to terminate the contract for any halt to the supply of labour.
Various forms of industrial action followed both the arrival of the
PCS workforce at Webb Dock, and following the notification of
bargaining processes to secure enterprise agreement/s. Such action
formed the evidence needed for those contracts to be
terminated.
The tabling of certain documents in Parliament,
particularly the Cabinet Submission (tabled on 4 June 1998), have
had an important bearing in inducing the parties to settle the
dispute. This is evident in the train of events (reported next
section), where the initial inertia preventing settlement lessened
after 4 June 1998.
On 11 May 1998, the Federal Government
re-activated its pressure to force a resolution of its choosing. It
made its offer of redundancy finance conditional upon the MUA
agreeing to non-union labour being used in some ports and on the
MUA accepting outsourcing and less prescriptive work practices.(11)
The Government later sought to have these arrangements accepted by
a meeting of Patrick creditors.
On 14 May Justice Beach found the MUA guilty of
contempt of charges for failing to promptly notify through
newspapers an injunction granted against the Melbourne port
pickets. The advertisements which were printed appear to have been
made after the High Court's 4 May decision. The
decision added to the financial pressure on the MUA to seek a
settlement.
The accounting firm Grant Thornton was appointed
as administrator of the four Patrick labour hire companies by
Patrick Stevedores prior to the 7 April contract termination. On 18
May, an assessment of the state of the Patrick labour hire
companies was tabled by the administrators at a meeting of
creditors. Called: Report and Plan for the Future of Patrick
Labour Companies, it found:
-
- No evidence that the corporate restructuring revealed any
breach of corporate law.
-
- Clauses of the labour hire contracts (between the principal,
Patrick Stevedores, and its four labour hire companies) were
'onerous' and probably not a commercial arrangement. This referred
to the ability of the principal to terminate the contract due to
any cessation in the supply of labour. The
administrators noted the possibility of industrial action on the
wharves. Thus the clause was considered too onerous, in light of
the level of industrial activity on the waterfront.
-
- A one-month review period was warranted to assess manning
levels and the numbers for redundancy. A business rescue plan would
call on the Government's redundancy proposal.(12)
An 'alternative' MUA deed of arrangement, also
put to the administrators, proposed that the due creditors meeting
be deferred for 60 days to allow negotiations between the MUA and
Patrick to resume. Such a meeting is required to take place by the
corporations legislation within two months of a company being
placed under administration. The union argued that it represented
the largest group of creditors-the former employees and,
importantly, had their authorisation to represent this block of
creditors.
As well, Patrick directors drew up it's survival
strategy for the consideration of creditors. It proposed re-hiring
650 of its former workforce and would place another 250 in contract
positions (for example, maintenance and cleaning), making redundant
about 750 full-time workers. It proposed wage cuts of about 30 per
cent in return for a possible $21 500 profit share
arrangement.
The deadline for the required meeting of Patrick
creditors, to take place by 25 May, was deferred by two weeks, i.e.
to 8 June. Nevertheless by the end of May, there seemed little
willingness to settle the matters. It appeared to Patrick
Stevedores that the MUA would not withdraw its conspiracy charges.
On 22 May, Patrick commenced it's conspiracy charges (alleging that
the MUA had sought to harm Patrick companies) and commenced
deregistration proceedings against the union. The MUA responded by
commencing actions to replace the administrators of the four labour
hire companies with a court appointed receiver. On 25 May Minister
Reith withdrew the Government's offer to fund waterfront
redundancies, since commitments were not given by the MUA to agree
to government demands for reform.
In hindsight, it can be seen that these actions,
if followed through, would have led to the winding up of the
Patrick group. Such an outcome presumably would have mainly
benefited the secured creditors (the banks), and the Government.
Removal of such a large slice of the MUA membership from the
waterfront would have facilitated the re-entry of the PCS non-union
workforce, and perhaps others. The Government's offer to organise
redundancy finance would not have been necessary, and the adverse
financial and employment consequences for the MUA's membership in
Patrick Stevedoring were fairly obvious. Clearly, a settlement,
which would satisfy creditors, Patrick directors and the
administrators (and the Government), was vital.
Neither of the protagonists' counter legal
strategies was in their best interests. At the same time, the
Australian Competition and Consumer Commission (ACCC) commenced its
actions against the MUA for secondary boycott actions. The ACCC
alleged that the MUA helped organise international bans of ships
loaded or unloaded by non-MUA labour in Australia and domestic
boycotts of Patrick operations.
It appears that the event that brought the two
parties together was the tabling on 4 June 1998 in Parliament of
the Cabinet document of 7 July 1997. It prompted contact by Chris
Corrigan with Greg Combet of the ACTU:
Corrigan wanted to know one thing: was the union
serious about negotiating a settlement. The answer was yes.(13)
On 9 June the once-deferred creditors' meeting
was again deferred to 20 July to allow ongoing negotiations between
Patrick and the MUA. The option of pursuing restoration (thereby
avoiding liquidation) was decided in a close vote of the creditors,
with the administrators resolving the impasse.(14) The way was thus
open for the settlement (outlined below) to be structured. Given
that a draft of the terms of settlement were reported in the media
around 13 June, it appears to have taken less than a fortnight to
fashion.
One important ingredient of the deed of
arrangement revitalising the Patrick companies, was the scheme to
finance industry redundancies. It constituted one of the last
components of the restoration jigsaw. The mechanism to finance
maritime redundancies is a loan secured from the banks by the newly
registered Maritime Industry Finance Company. Bills to impose and
collect levies on the container and general stevedoring trade (to
repay the loan) were referred to the Senate's Rural and Regional
Affairs and Transport Legislation Committee, which reported at the
end of June. Although the MUA and ACTU supported an industry-wide
redundancy scheme, they did not support the structure of this
financial arrangement as they perceived that this scheme could be
used for financing purposes beyond the scope of the immediate
dispute.(15) The Stevedoring Levy (Collection) Bill 1998
and the Stevedoring Levy (Imposition) Bill 1998
nevertheless passed both Houses of Parliament on 30 June 1998.
The industrial developments of May and June
centre around the efforts to reactivate the Patrick operation using
MUA labour, the attempts of the non-union labour supplier, PCS, to
establish itself as a waterfront operator, and the industrial
activity which took place against Australian exports loaded by
non-union labour.
Two disputes in May highlighted the desire for
the Patrick workforce to regain some of its lost work. Simsmetal
had contracted Patrick to deliver an export load of scrap metal to
the USA, but switched the contract at the height of the dispute to
P&O Ports. P&O agreed to hand over the loading of Handy
Athea to Sea-Land in Adelaide, because P&O was prevented
from using its own workforce. After negotiations, Sea-Land agreed
to use only Patrick labour for the work.(16)
In another action, the vessel Bay
Bonanza was left in the port of Newcastle (NSW) for almost two
weeks due to industrial action of P&O Ports employees who had
refused to cross picket lines (since 8 May). The ship was under
contract to be stevedored by Patrick. Patrick sub-contracted this
work to P&O Ports in light of the industrial action it was
facing. Injunctions against the MUA were granted on 19 May to stop
interference at the Newcastle port. The MUA wanted its Patrick
members to do the work. The contract was eventually lost to
Newcastle Stevedores who agreed to use Patrick labour on the
ship.
These setbacks notwithstanding, progress was
made on moving the backlog of containers. By 11 June, Patrick was
in a position to honour the release of $4.75 million to pay wages
for time worked since the reinstatement. Information as to who was
on the Patrick payroll was needed by the administrators, prior to
pay being distributed, which added to the delays.
The international response to the use of
non-union labour in Australian ports is also a component of the
settlement. The Columbus Canada (loaded by non union
labour in April) returned to Sydney on 17 June to be relieved of
its 'black' cargo. It was also reported that the US ILWU
(Longshoremen's union) had struck a deal with the Columbus line to
unload all but non-union loaded cargo.(17) Some cargo was to be
returned to the USA via the Columbus Star due to arrive in
the USA on 11 July. Some containers were to be returned to
shippers who had sold their contents elsewhere; other container
contents were to be destroyed. Presumably, US waterside workers
resented the earlier snub proffered by the NFF's Donald McGauchie
that the ITF was a 'paper tiger', given the ILWU's affiliation to
the ITF.(18)
Paralleling these actions were the efforts of
the labour supply firm PCS to either retain a role on the
waterfront or expand its operations. Shortly after the High Court's
decision, a director of PCS, Mr Paul Houlihan, proposed a plan to
the ACTU to allow non-union operations on to the docks, which,
briefly, was: 'they have some ports and we have some ports'. He
added:
I think it is beyond dispute that there will be
a non-MUA operator somewhere on the Australian docks. And that
doesn't mean non-union, it means non-MUA.(19)
This turnaround reflected the now weakened
position which PCS was in, arising from the court decisions. It
also seemed to be at odds with the position of the Government,
which was adamant on a non-union (not just
non-MUA) operation in stevedoring. For Mr Houlihan's proposal to be
effective, he would need an available host union, although a new
enterprise union would also be suitable. A possible candidate would
be the Australian Workers Union, given its limited coverage of
maritime-related occupations. It was revealed in early June that
PCS had approached both the Transport Workers Union and the
Australian Workers Union to see if they would 'cover' PCS employees
in certain ports.(20)
In any event, the costs of maintaining the 350
PCS workforce which was blocked from working the docks by court
orders, apparently forced a change on any further PCS expansion. On
12 June it was reported that PCS would not move into container
operations. A split on policy between co-PCS directors Ferguson and
Houlihan was mentioned, with Mr Ferguson's view prevailing. This
was that if waterfront productivity increased without the need for
a third operator, then there had been success. It was also revealed
by Mr Ferguson that PCS used financial assistance from the
Australian Farmers Fighting Fund to establish it's
operations.(21)
The terms of the framework agreement, which
settle the dispute between the MUA and Patrick Stevedoring, were
reported in the media in mid June. It stipulates:
-
- Patrick would retain 645 employees at its terminals.
-
- Salaries would range from $42 500 to $62 000
(terminal port) or between $48 000 to $65 000 (general
stevedoring, depending on the port being major or regional), based
on 35 ordinary hours and 5 hours overtime, in lieu of other
arrangements; plus three four per cent (3 x 4 per cent) pay
increases each year to 2001. No double header shifts to be worked.
Shifts to be eight hours and non-continuous with a single paid
break of 45 minutes.
-
- Some work (security, cleaning, line marking) to be contracted,
but it allows retrenched employees not to be precluded by a new
employer. Sub-contractor will employ union labour. Target crane
rate would be 25 lifts per hour.
-
- Patrick to resume operations in all ports, subject to each port
being viable. Patrick would not then be able to sell or sub-lease
or close any of its ports for 12 months.
-
- Patrick to pay outstanding wages and entitlement liabilities
for the period before 7 April, and for the period since the
dispute began.
-
- MUA agrees to drop all litigation. Agreement to be reached on
the terms of a Deed of Company Arrangement for the four Patrick
companies under administration. The MUA is seeking the payment of
its legal fees by Patrick, as well as two weeks pay lost by its
members when Patrick appealed Justice North's order. Legal action
against the MUA to be dropped.
-
- Patrick employees employed under the four labour hire companies
to be transferred to Patrick Stevedore Holdings, with the four
labour companies to be wound up.
Stop-work meetings to approve the deal commenced
in Melbourne on 23 June, and have approved the deal. Within three
weeks of the framework agreement being signed, enterprise
agreements at each port operation would be negotiated.
Mr Reith's office claimed that the agreement
appears to satisfy the terms spelt out in Seven
Benchmarks:
There appears to be a number of reforms which
will satisfy the seven benchmark objectives which is very
important. (22)
The detail of the settlement compared to
previous employment arrangements was reported in the Sydney
Morning Herald using a table of comparisons of new and old
work arrangements.
|
OLD DEAL
|
NEW DEAL
|
Wages
|
$36,000 + shift and overtime penalties
|
a band of salaries from $42,500 for a general hand to $62,000
for team leaders
3 x 4% pay increases
|
Productivity
|
|
$20.00 bonus for crane rates of 20 lifts per hour, up to $120.00
for 27 lifts p.h.
|
Hours:
Shifts
Per Week
Overtime
|
7.5
35
offered to permanent staff regular o/t: 10-25 hours
|
8
40
overtime is limited. casuals can be used instead of paying
overtime to permanents
|
Numbers:
Permanents
Contractors
Casuals
|
1315
0
600
|
687
200
600
|
Work Practices
|
up to 10-11 in work teams including 3 crane drivers
union controls allocation of individuals to tasks and rigid
rules around rosters
no outsourcing
|
up to 7 in each team including 2 crane drivers. lashing of
vessels by casuals
company directs work and runs rosters
160 maintenance jobs outsourced on 3 year contract; about 40
security, cleaning and linemarking jobs outsourced
|
(Source: 'Victory of sorts, but was it really
worth the price?' Sydney Morning Herald, 17 June 1998)
The non-union labour supply firm PCS sacked most
of its 350 workforce on 16 June.
PCS proposed a $2000 redundancy offer to its
employees and all entitlements to be paid.(23) PCS will assist
staff to find new employment. However the grievance aired by PCS
employees was that the AWAs entered into with the employees were to
last for three years.
On the basis of redundancy standards in awards,
certainly in those awards which the Productivity Commission
suggested in its waterfront reports provided a 'fair' standard by
which to judge waterfront awards, PCS employees should be entitled
to:
-
- one week's pay ($1000) for notice
-
- severance pay is not payable to employees with less than 1
year's employment service; therefore no severance pay
-
- two weeks pay for annual leave since PCS workers have been
employed for almost half a year, sick leave is not payable upon
termination by industry awards unless otherwise provided for
elsewhere
-
- about $3000 would be a fair termination sum for the equivalent
of award entitlements, plus pay for any time worked.
The boycott action brought by the ACCC against
the MUA which commenced on 11 June was heard, again, by Justice
North. The ACCC sought guarantees about future conduct of the MUA
and sought compensation on behalf of those injured by the delays to
the transport of containers and goods. Justice North, at a later
hearing, suggested that the action be held-over to another date,
since evidence to prove the case appeared scant. If the evidence
thus far given proved correct, it, according to Justice North:
was an inevitable conclusion that the ACCC is
pursuing an injunction application which is of very little
practical purpose ... and that could be fairly characterised as a
waste of public money.(24)
This view notwithstanding, the ACCC continued
its efforts to seek redress and commitments against any future
boycott action. This matter was resolved to ACCC's satisfaction on
3 September 1998. The arrangement allows Patrick Stevedores to
eventually pay $7.5 million to be used as a compensation fund for
those companies financially harmed by the events.(25)
As well as the comments of the dispute provided
in the previous CIB, additional implications have come to the fore
as many commentators have aired their thoughts on the events,
allowing more informed views (see appendix). No doubt there will be
further reflections on these events. However it might be helpful to
consider the following additional implications arising from the
1998 waterfront dispute.
While workplace training is not as fashionable
as it used to be, workforce training has been a
central element of this dispute. Were stevedores able to be trained
outside the industry, the need for the Dubai adventure, and the
'training' period at Webb Dock in February would have been averted.
In any case, the costs of training are significant as noted in the
course of this dispute:
Despite PCS's training program, there are not
enough trained non-union employees able to operate Patrick's
Australia-wide container terminals. The cost of having facilities
without an operating revenue stream and no return on assets, while
training up new 'wharfies' is not something that would bring a
cheer to the shareholders of any company considering purchasing
Patrick.(26)
From a broader industrial perspective, the
dispute is really a key test of the union
restructuring moves over the 1980s-1990s which were
designed to respond to a potential coalition of hostile
employer/government forces. The formation of 20 or so large unions
has been strongly espoused by ACTU Secretary Bill Kelty. One needs
to go back to 1987 and the Future Directions for Trade
Unions strategy of the ACTU to understand the importance of
the present outcome.
After the Mudginberri dispute (1986) in
which Mr Houlihan (Director of PCS) then represented the NFF, union
resources were mobilised and amalgamated into larger organisations,
such as the MUA. The purpose was in part to better use union
resources, and in part, to prepare them for financial challenges
arising from protracted disputes. In practical terms this
waterfront dispute has been brought on within 12 months of the new
industrial legislation taking effect. In this dispute there has
been little or no reference to the Waterside Workers Federation,
nor the Seamen's Union of Australia - the main constituents of the
MUA. After this dispute, it is highly unlikely that MUA members
will want to have their union 'disamalgamated' into the previous
entities (now allowed under the Workplace Relations Act). The MUA
has clearly established its persona, and at the end of the day,
Patrick employees will be employed under an agreed and certified
collective industrial instrument.
As well, the ACTU has mobilised
financial resources through its Trade Union Industrial
Campaign Fund. One report revealed an early total of $7
million.(27) The ACTU will want to keep this sort of reserve for
any future difficult protracted, litigated disputes which appear
now to be a feature of the 'new industrial relations'.
Finally to assume that third
parties have been removed from industrial relations is, at
best, a big ask and if anything this dispute proved the reverse.
Indeed the most patent example of the recourse to third parties
(that is, apart from to the courts during the dispute) has been the
sacked Dubai workers seeking assistance for the loss of income and
security which they were caused when the Dubai training exercise
was cancelled in December 1997. Documentation concerning the
relationship between Fynwest and Patrick Stevedoring was leaked to
the Age in early May 1998. It was interesting to note the
sequence of events in this.
-
- The first party was Fynwest. It employed serving and former ADF
personnel. (Copious detail on each of these individuals has been
provided to the Senate Foreign Affairs Defence and Trade
Legislation Committee(28)).
-
- These personnel, individually form the 'second' party. But, the
ADF personnel (upon their termination) sought assistance of an
association which represents ex-SAS (Special Air Services)
officers.
-
- It was executive members of this third-party association
(particularly Andrew Harris) who represented the 'industrial'
interests of the dismissed Fynwest employees by seeking financial
redress from Patrick Stevedoring. When Patrick did not agree to its
demands, documents were leaked to the media.
There is also the example of the PCS workers
commenting on the relative effectiveness of unions and awards at
the time when they were made aware of their pending
termination.(29) In short, the lesson is that it is hard to deny a
role for third parties in industrial relations. These are some of
the repercussions of the 1998 waterfront dispute. At the Appendix
may be found an additional section of the views of media and
industrial relations practitioners on the significance of this
dispute.
-
- Steve O'Neill, A Preliminary Outline of the Waterfront
Dispute, Current Issues Brief No.15 1997-98, Department of the
Parliamentary Library, 12 May 1998.
- An account of this report appeared in 'Dock plot: how to kill a
union' The Australian Financial Review, 16 December 1997.
- 'The Docks', The Age, 10 June 1998.
- See for example Senate, Estimates Committee Hansard, Department
of Industrial Relations 18 August 1997; Department of
Workplace Relations and Small Business, 27 February 1988 and 3 June
1988.
- Sen the Hon. R Alston, Senate, Debates, 23 October
1997, Statement on ACIL Economics.
- 'Coalition's secret waterfront strategy', The
Australian Financial Review, 15 August 1997.
- 'Corrigan attacks dock failings', The Australian Financial
Review, 23 September 1997.
- 'Put up or shut up, bosses tell PM', The Australian,
23 September 1997.
- Pamela Williams, 'Secret plan to cripple dock unions', The
Australian Financial Review, 12 December 1997.
- 'Ministers discussed dock plans with Corrigan', The
Australian Financial Review Weekend Edition, 6-7 June 1998.
- 'Reith pressures administrators', The Sydney Morning
Herald, 15 May 1998.
- 'Patrick administrators want more time', The Canberra
Times, 19 May 1998 and 'MUA sinks dock reform timetable',
The Australian Financial Review, 19 May 1998.
- 'Leaks go union's way', The Australian, 5 June 1998.
- 'Patrick creditors' meeting adjourned again to July 20',
AAP 9 June 1998.
- Mr Coombs representing the MUA appeared before the Senate's
Rural and Regional Affairs and Transport Legislation Committee on
15 June 1998. There he contended:
Clearly (the bills) could be interpreted as not
only paying for the redundancies, but also paying for the Dubai
exercise, the Cairns exercise, the Webb Dock exercise, the farmers
... It is intended for those sort of costs to be funded out of this
bill.
- 'P&OP battles MUA over "lost" contracts', Daily
Commercial News, 14 May 1998.
- Workforce, No. 1164.
- Interview with Donald McGauchie: in 'Waterfront crisis as
National Farmers Federation takes possession of a berth at Webb
Dock' 7.30 Report, ABC Television, 29 January 1998.
- 'P&C offers surprise deal on the docks' The Australian
Financial Review Week-end Edition,
9-10 May 1998.
- 'Farmers woo unions', The Australian, 10 June 1998.
- 'Non-union rift on role at docks', The Australian Financial
Review, 12 June 1998.
- 'Docks deal appears to meet criteria for Govt funding',
AAP, 16 June 1998. The seven benchmark objectives refer to
a number of efficiencies such as targeted crane lifts and other
changes to work arrangements.
- 'Farmers' dock company sacks non-union workers' The Sydney
Morning Herald, 17 June 1998.
- 'Judge queries waste of cash', The Australian Financial
Review, 12 June 1998.
- 'Patrick pays $7.5m. to ensure peace' The Australian,
4 September 1998.
- 'Corrigan: Crusader or capitalist?' Daily Commercial
News, 31 March 1998.
- 'Fight Fund nudges $7m.', The Australian, 29 April
1998.
- Senate Foreign Affairs Defence and Trade Legislation Committee,
Additional Information Received vol. 9, May 1998.
- 'Farmers' stevedore pays it's people off', The
Australian, 17 June 1998.
Media comment on the dispute
He (Chris Corrigan) was sold a pup. It's not
house-trained and every time he hits it on the nose with a
newspaper it makes an even bigger mess on the carpet. It's not a
very clean pet, and not at all appropriate for a merchant
banker (quote of an 'industry source' in Daily Commercial
News, 31 March 1998)
The chance of an entirely new workforce
becoming efficient in the short term is extremely remote. The
chance of accidents and enormous damages claims as a result of
using this new workforce is extremely high. Insurance rates must
increase... During the progress of negotiations that led to recent
agreements between Patrick and the Maritime Union of Australia,
union officers were outvoted several times on matters that would
affect Patrick's operations. Although union officials were well
aware of the necessity to change and improve, the members were not
... (Business Review Weekly, 25 May 1998, report written by a
former Patrick manager)
Prime Minister Howard really put his foot in
it, when in answer to a question as to why wharfies in Cairns,
Burnie and South Australia - workers who had a good relationship
with their company and were performing effectively - were sacked,
his response was: 'Because they were members of the MUA'. This
answer not surprisingly put a lot of people off-side with the
government ... certainly the three wins by the MUA in the courts
will undoubtedly influence some workers into thinking that it could
be of benefit to belong to a union. (Industrial Relations and
Management Newsletter, May 1998)
The union had caused the company to take
drastic action, as more reasonable methods had not borne fruit
(but) that does not excuse Patrick's actions. In particular it did
not excuse the heavy-handed approach taken by Patrick's after the
MUA workers were dismissed with guards and dogs on the wharves. The
other party was the Government and its Minister for Workplace
Relations, Peter Reith. From documents tabled in the Parliament, it
seems reasonable to conclude that the Government had a fair
knowledge of Patrick's manoeuvres ... the Government went too far.
In its legitimate concern that workers should have a freedom to
choose and to be able to choose not to join a union, it attacked
union membership. (The Canberra Times, 17 June 1998).+
On the face of it, the agreement struck
between the Patrick stevedore company and the Maritime Union of
Australia (MUA) to end the waterfront dispute falls short of the
complete overhaul of work practices many people thought would
result ...(t)his is an outcome that vindicates both Patrick and the
Federal Government in taking on the MUA in the first place, because
without their impetus the union would have never given anything
like the ground it has given ... (The Sydney Morning Herald,
17 June 1998)
The waterfront peace deal should reduce the
rorts and overmanning in Australia's ports and may be the best that
Patrick Stevedores could get ...(t)he overtime culture which
encouraged wharfies to deliberately go slow so they could pick up
exorbitant overtime payments will be replaced, apparently leaving
productivity bonuses tied to crane rate targets as the main means
by which labour can fatten its paypacket ... (t)he courts failed to
properly protect Patrick from illegal MUA picketing and strikes
when the company simply decided to lease some of its unprofitable
capital to the farmers' stevedoring company. (The Australian
Financial Review, 17 June 1998)
Critics say the dispute raised huge doubts
about his (Reith's) honesty, with a series of leaks undermining
Reith's explanations of his involvement with Patrick, the PCS group
and the ill-fated Dubai scheme. Other questions linger over the
morality of using a strategy for dealing with 'illegal' union
behaviour, when the unions actually stayed within the rules
(The Weekend Australian, 20-21 June 1998)
There is ... agreement on the 25 lifts and
hour, the target set by Workplace Relations Minister Peter Reith,
although cynics might suggest it has more to do with Patrick
getting its hands into the Government's coffers than productivity
The union, of course, does not believe its monopoly is a barrier to
change. Indeed, they argue there is no such monopoly - and in
theory that's right An essential part of making it (the agreement)
work is getting co-operation from the very workforce it recently
sacked ... But no-one trusts Patrick. (The Australian, 23 June
1998)
Wage cuts and speed-ups: Patrick wharfies
will move to a 40-hour week, based on 35 hours plus five hours of
overtime, with the highest rate set at around $62,000 to 65,000 a
year-up to 30% less than existing pay. The only way to maintain
existing annual earnings is through bonuses based on accepting
Reith's benchmark of 25 crane moves an hour as a productivity
target rate, long rejected by the union as impossible or achievable
only through ruining working conditions... it (the settlement) also
betrays the massive outpouring of support for the MUA struggle, the
sacrifices of those who stood on the picket lines in the rain,
collected the money from other workers, argued the MUA's case with
their friends over dinner, demanded that their politicians take a
stand or simply sent in their messages of support to MUA HQ. Was it
all for this "mess of pottage"?... why such a meagre result? Some
say that the problem was the decision to suspend the mass pickets
once the courts had found the Patrick lockouts illegal. They argue
that had these been maintained and the 100,000-strong turnout for
May 6 in Victoria spread to the whole of Australia, then Corrigan
and Reith would have been forced to retreat even further.
(Green-Left Weekly, 24 June 1998)
Some academic and practitioner
views
Ron Callus (Director of the Australian Centre
for Industrial Relations Research and Teaching):
The waterfront dispute highlights that
industrial relations disputes are better resolved in the industrial
tribunals rather than the civil courts where the aim is to win
rather than compromise.
Reg Hamilton (Australian Chamber of Commerce and
Industry): The crucial issue is how we change the waterfront so
that its performance in terms of cost and efficiency is reasonably
comparable with other industrialised nations. At the moment its
performance in terms of cost and efficiency is well below what it
should be, and in addition the penalty rates and shift loadings in
the Stevedoring Industry Award are well in excess of those received
by other Australian workers.
Peter Punch (Solicitor with Carroll &
O'Dea): The events on the nation's docks since Easter have been
a watershed in the history of Australian industrial relations. The
following are some initial observations:
-
- The dispute highlights just how fundamentally the Workplace
relations Act 1996 has emasculated the traditional Australian
system of compulsory arbitration of disputes by an independent
tribunal
- Despite the changes to the federal system, employers must
realise that there are still no real short cuts to improving work
practices and productivity
- There will be now some irresistible pressure for some level
of protection of employees' accrued and termination entitlements in
circumstances of 'corporate restructuring', not involving genuine
insolvency.
Joe Riordan (NSW Workcover Authority): The
conduct of certain of the parties left a lot to be desired. There
are important principles involved which need urgent attention. The
public interest needs to be protected in IR disputes and that can
be best done by an effective Industrial Relations
Commission.
(Source: CCH, Australian Industrial Law
News, May 1998)
Paul Houlihan, Director PCS: I'm not going
to gild the lily - we were done; we were beaten ... but we were
done more in respect of the immediate future than of the medium
term. And in five years it could well turn out that we weren't done
at all. The settlement didn't break the union's closed shop, but
it's still the biggest change we've seen yet on the waterfront ...
we were let down by the shipping companies, who weren't prepared to
patronise our facility and risk the union's wrath. (The
Land, 2 July 1998)