The Law and the Labour Market

WIRA and Weariness Turning the First Corner

Richard Setchell

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, were genuine.

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 preservation.

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 intervene.

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 to accept.

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 bargaining.

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 sub-contractors;
  • We have introduced specialization and eliminated job rotation;
  • 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 manage.

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 exporters.

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 waterfront performance.

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 in business.

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 supposedly grants.

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 reform.

Asia, our neighbour and competitor will continue to prosper.

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.

Why HR Nicholls?

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