The Law and the Labour Market
WIRA and Weariness Turning the First Corner
The efficiency or otherwise of the Australian waterfront
is well known internationally. In fact, Australia's
international reputation as an undependable supplier
has become entrenched.
So it is with particular interest that the world is
watching our current reform efforts. They will judge
us against similar efforts made by New Zealand, the
UK and Italy and I suspect if we fail to come up with
the goods, they will judge us harshly.
From my experience, the rest of the world believes
Australia is not only inefficient, they believe we
are self indulgent.
I am forced to agree in some areas.
Let us examine the topic of waterfront reform.
In August, Conaust set the 30th September as a deadline
after which we would have to begin compulsorily retrenching
everybody left on transitional labour lists on the
1st October---unless enterprise agreements in
Sydney and Melbourne were completed. Our decision
to take such a firm stand was an attempt to alleviate
the critical financial position created by the ongoing
funding of idle time.
Intense lobbying and frank exchanges characterised
the month of August and miraculously, in the first
few weeks of September, we started seeing a new attitude
from the unions.
It appeared as if the 30th September deadline and
Mr Bull's guarantee that it could and would be met,
You'd think we would have learnt.
Almost overnight we returned to the "good old days"
---or should I say the more customary days of union
intransigence. A crucial issue, central to all of our
agreements, was firmly back on the table.
It is clear that while the rest of the country has
been viewing waterfront reform as a vital and long
overdue task to make Australia more competitive in
the global market, Mr Kelty and Mr Bull have always
seen it as little more than power politics and empire
Backing this up, Kelty, in his opening address to
the 28th Waterside Workers' Annual Conference said
that waterfront unions should not give any further
concessions during the current process---that
they had given up enough ground already.
Kelty reportedly also said that they had been trying
to halt the waterfront reform process---they would
have embraced the National Wage Case decision and stopped
the development of enterprise agreements.
I can only say that Mr Kelty has one of the most exquisitively
developed selective memories in the business. It was
Kelty after all, who held the waterfront to ransom
after the Wage Case decision in April, with his irresponsible
moratorium. A moratorium which the Prime Minister
saw as enough of a threat to the country to personally
Graciously he is allowing the waterfront unions to
meet their commitments as laid out in the WIRA sponsored
"In Principle Agreement".
Mr Kelty seems to be locked into a duelling mentality
about who will win the fight on points. If only he
would stop treating this as some sort of Machiavellian
game and realise that at the moment there are only
losers---the biggest being the Australian economy.
Mr Bull has proved incapable of meeting his commitments
and keeping agreements. In short, he can't keep his
word or deliver the goods.
It is our belief that compromise---an easy option
all too often resorted to in the past---is simply
no longer a choice if we are honestly attempting to
be internationally competitive. At all times, Conaust
has steadfastly refused to compromise and has remained
committed to achieving the most advantageous commercial
environment in the industry.
We have worked hard to counter the current, aimed
at maintaining the status quo.
Our decision to withdraw from the industry body, The
Association of Employers of Waterside Labour, last
year, gave probably the clearest signal to the Government,
unions and other employers that the games of old were
over. Conaust had, with my unqualified endorsement,
made the decision at the beginning of the WIRA process
that we would not be constrained by the lowest common
denominator that the industry seemed all too eager
The WIRA sponsored reform process has taken
too long. It has been too expensive. It has
been dogged by union intransigence and at times it
has lacked the force of Governmental will and without
a doubt, it has fallen prey to two of the greatest
political plays of recent years.
I refer of course to the ongoing Hawke/Keating leadership
struggle and the like battle between Kelty and
the IRC's Barry Maddern.
This Government has regrettably chosen a consultative
approach to reform rather than a legislative approach.
It seemed too much for the Government to learn from
other Governments who successfully changed their waterfront
industries virtually overnight---New Zealand,
Britain, Italy, Spain and others.
New Zealand reduced its waterfront labour strength
by 50% and it cost 40 million dollars---an average
of A$24,000 per man.
The British Government reduced their labour strength
by 6,000 people at A$70,000 per man.
We have spent two and bit years of a 3 year process
which will cost $300 Million, or an average of $100,000
per man---and unlike the others, it involves
The Waterfront Industry Reform Authority established
by the Federal Government to oversee the reform process,
was a body with;
- no life
- no authority
- no responsibility/accountability.
It has lacked initiative, and in my view, contributed
little to accelerating the reform process---(except
for the grain loading reforms)---although it is
fair to say it has been a vehicle to set standards
---several proposed EBA's have been rejected---
after the disaster of the NTAL Agreement.
However, changes are happening and to give you an
indication of the recent breakthroughs mentioned earlier,
I will briefly outline the work practice and productivity
gains made at our Container Terminal facility at Port
Botany in Sydney.
Since the implementation of our first enterprise agreement
in August, we have consciously endeavoured to test
as many of the elements of the agreement as possible.
Productivity at the Terminal is already 60% better
---and that is with a 34% reduction in the number
of employees. On average, in September, we handled
about 600 vehicles a day and they were serviced in
an average time of 15 minutes, against an IPA target
of 30 minutes. Average crane rate per hour since the
productivity incentive scheme was implemented in early
September is now approaching 20 per hour.
This unique productivity scheme we have in our agreement
is not triggered until 18 boxes are moved per hour.
This is a 60%---80% increase on historical levels
of performance and we are confident that this level
of performance will be achieved on a consistent basis.
We welcome it!---and importantly so do our customers.
Some specifics .....
- We have selected the men for various
grades and key operators in accordance with the agreed
classification structure and without union involvement;
- We have reduced manning, especially on weekend
and midnight shifts, and introduced changed work practices;
- We have manned equipment on the basis of three
men for two machines and eliminated the infamous 2
drivers to one machine;
- We have changed rosters, eliminated equalization
of wages and introduced the use of casual labour and
- We have introduced specialization and eliminated
- We have also recruited two trades persons (one
a female) without union involvement.
These are but a very limited selection of the changes
we have made, and to an audience who are used to these
practices as the norm, they may seem trivial, but what
they signify to us is the delivery of the most comprehensive
change in the code of employment in the waterfront
industry to date.
For the first time for many decades, management finally
has the right to select their employees---a fundamental
cornerstone in providing managers with the right to
We now have flexibility in our manning levels. We
have tackled and won the battle against many of the
distasteful anomalies of our work place. The outcome
of the reform process will depend upon the ongoing
quality and resources of our managers.
Our Agreements supersede all previous awards, agreements,
work practices and arrangements, written or unwritten.
The implementation of our Sydney Terminal Enterprise
Agreement has closed a chapter in one of the longest
and most hard fought industrial sagas in the turbulent
history of the Australian waterfront.
Some of my management can't believe their luck that
they have lived long enough to see these days of change.
This is where the good news stops.
We thought we had reached agreement on the enterprise
agreement for Conaust Melbourne. That appears now
to be some way off.
We still have almost thirty enterprise agreements
to be finalised around the country.
Two and a bit years into the 3 year process, we would
certainly expect to be further along.
The work practice changes I alluded to earlier and
the resulting productivity improvements, whilst setting
new waterfront industry standards, can in no way be
seen as being radical. They are just the beginning
of the changes in attitude needed to really achieve
basic and meaningful reform. We have extracted all
the changes achievable through the "In Principle Agreement"
---now the really challenging work must begin.
We are rapidly improving workforce efficiency---but how do we extract the maximum benefit?
We will continue to press for further reform on the
docks but it is important to get into focus that the
waterfront is but one link in Australia's import and
export chain. If we are serious about keeping our
markets and gaining ground in the evolving global market
place---waterfront reform, while in its infancy,
must be seen as only one element of the reform process.
Certainly, Conaust has invested a great deal of effort
into furthering specific reforms we can effect within
the transport sector-very much the links of the chain
on each side of ours.
Each sector must examine its structure
- its work practices
- its skills
- training effort
- technology and attitudes
- standardisation of documentation and procedures and
electronic messaging which will enable importers and
exporters to make better use of our terminal services.
Referring now to shipping lines and Terminals, waterfront
reform creates an opportunity for our terminals to
provide a national, integrated and reliable service
which will generate downward cost pressures and thus
a genuine improvement in international competitiveness.
However, Conaust cannot do it alone. We need more
accurate and timely ship and cargo information. We
need more co-operation in cargo stowage efficiencies
and we need better inter-action with importers and
We believe the reforms:
- could generate a reduction in ship time on
the Australian coast by 30-40% ;
- could lead to fixed day scheduling;
- could make every dollar spent appear a worthwhile
investment, that is, see a return generated.
In essence, reform must move us from an industrial
focussed industry to a quality service focussed industry.
Our performance criteria will no longer be raw containers
per hour, but will include qualitative measures still
being developed with industry users.
Turning now to the gate and the mayhem of queues,
to alleviate the problems Conaust is working on a Vehicle
Booking System using time zones rather than rigid time
slots. We are extending our information services to
transport companies, and we are making more flexible
use of gate servicing resources. However we cannot
make others use our 24 hour/7 days service availability.
It's there, but only our ship customers use it.
Finally, simplification and standardisation of documentation
and the transfer of information to EDI will streamline
Whilst Conaust's role will be of critical importance
in this matter, the overall success will depend on
others, and it should be remembered that WIRA does
have a role.
In the past, the achievement of any common standards
across the port and shipping industry within Australia
has proven to be almost impossible. For business and
other reasons, industry participants appear to have
considered their own interests above those of industry
efficiency and national interests.
If the Australian waterfront industry is to achieve
the reforms so desperately needed, it is essential
that every participant accept the challenge of "change".
This will require the sacrifice of a number of "sacred
cows" and a change in the "status quo". The introduction
of EDI demands that this "head in the sand" attitude
will have to change. Operational procedures, responsibility
and accountability and technical matters will all have
to be altered.
I have to reiterate that if waterfront reform is to
be of real benefit to Australia, the tough decisions
have to be taken right along the line. Change is no
longer an option or choice.
Regarding the wider industrial landscape, it should
be clear that Conaust is not pushing any particular
political barrows. Conaust has not made its stand
to score points for the Coalition or the Government,
nor have we set out to establish industrial landmarks.
We are in this to run a successful business and to
be a market leader.
Recession is real---not imaginary. It means reform
or sink further into debt---perhaps just to stay
At the beginning of the waterfront reform process
Conaust made a commercial decision to create the most
advantageous environment for our business.
Recent events have only deepened my belief in the
need to move to a deregulated labour market---
the inevitability of enterprise bargaining as the major
wage setting force---and the importance of voluntary
unionism and freedom of association are unquestionable.
What is needed in Australia's industrial system is
flexibility and this rare industrial commodity can
be achieved through:
- enterprise bargaining;
- equality in the eyes of the law for employers, ACTU,
unions and employees;
- voluntary unionism;
- freedom of association.
This will result in the freedom of the employer and
employee to create an employment contract they both
regard as being in their best interests.
Workers must no longer be compelled to join unions
and I strongly suspect they will join the growing legions
who do not feel any great need to seek the mental,
physical, economic and emotional protection union membership
The recent ACTU Congress exposed divergent views when
the issue of mega-unions was raised.
The leadership steam-rolled it through but the rank
and file voiced their anger at the notion of giving
up territory. Not only do I doubt Kelty's visionary
mega-unions will survive in the long term, I will be
surprised if more than a handful actually ever see
the light of day. Not only will empire preservation
stymie their internal reform programme, they seem to
have lost their nerve in the bigger industrial ball
park. And they are entirely inappropriate anyway, especially
in the enterprise bargaining environment being espoused
by the ACTU. I seem to recall it was none other than
Bill Kelty who only in April wanted to do away with
the IRC once and for all, and waxed lyrical about the
benefits for "all in" enterprise bargaining.
I whole-heartedly agree that enterprise agreements
are the way to achieve genuine productivity gains and
ultimately higher wages. Of course whilst employers
and employees should be free to make their own deals
without the interference of others, minimum wages
and health and safety regulations must be met.
Other major concerns must be such issues as penalty
rates, compulsory unionism and picnic/flexi days, and
particularly for our industry, non-compulsory redundancy.
All of them are industrial dinosaurs and indulgences
of an inglorious past.
With the rise of enterprise agreements, unions,
as well as employer bodies, will become less relevant.
This, of course, bodes ill for industry bodies who
choose to resist the flow, but also provides immense
opportunities for enterprises and individuals willing
to grasp the changes and many challenges the next few
years will undoubtedly present.The management of
change will deliver the measurement of success. As
a nation we must stay committed to the process of structural
Asia, our neighbour and competitor will continue to
My Conaust remains committed to waterfront reform
and playing an ongoing and pro-active role in making
sure that our industry takes on the challenge of entering
the next century with capacity to compete successfully
in the international marketplace.
The recession, the worst since the Second World War,
demands that the reform of the waterfront be allowed,
unfettered, to play its part in assisting in the turnaround
of the Australian economy.
It is not an if or a maybe. It is a must.