Light on the Hill: Industrial Relations Reform in Australia
Working and Work Practices in the Brewing and Electricity Supply Industries
Although my address is primarily directed at the most recent experiences of the Queensland electricity dispute, let me first say something about restrictive work practices in the brewing industry, with which I was associated until 1983.
What are some of the restrictive work practices in brewing that come to mind several years on? Certainly the most difficult I remember is what is called 'one-in-all-in' which was an agreement, like most work practices, which emerged some time ago and was condoned (or at least not actively misted) by management and whose abolition was strenuously resisted by the workforce.
'One-in-all-in' means that if overtime is required for any section of the workforce, then the whole body of workers must be offered overtime. A case that immediately comes to mind occurred at the Kent Brewery in Sydney when we were seeking to resurface the floor and it was necessary to disconnect the bottle-packing lines to move them a few feet, so that a new floor surface could be put down, and then to move the lines back again. The work involved bringing into the brewery over a weekend several electricians and probably half-a-dozen fitters. But because of 'one-in-all-in', 250 people were brought in with absolutely nothing to do and paid at overtime rates for all-day Saturday and all-day Sunday.
Then there was the matter of contracting. Generally speaking, there was a ban on contractors coming onto the brewery site unless they possessed skills or equipment which it was not possible for brewery day labour to possess. Furthermore, by agreement, contractors would not be allowed on the site unless one week's advance notice had been given to the shop stewards. During the late 1970s and early 1980s, this meant that it was virtually impossible, except for very specialist functions, to have contractors on the site; the day labour force consequently built up to include paviours, painters, builders, welders, tilers and virtually all manner of trades that could conceivably have occasion to be used, regardless of whether they needed to be employed consistently or continuously.
Another bête noire of mine was fork-lift drivers. In a brewery fork-lift drivers have had enormous power because of their ability to halt production and distribution immediately. This power was used to telling effect at Tooths when I was there, until I managed to get rid of such drivers. But for the purpose of this discussion, I'll restrict my observations to one or two points.
The fork-lift drivers at the Resch's Waverley Brewery in South Dowling Street had years ago demanded, and been given, the right of an exclusive fork-lift assigned to each driver. This was said to be on grounds of safety and of machinery care, as individual forks were alleged to have their idiosyncrasies and a fork-lift driver to be most productive if he was acquainted with the quirks of his machine. It was also said by management as part justification for this crazy practice that if only one fork-lift driver drove a machine, then he was more likely to look after it. The upshot of this was that there was always a pool of machines on standby as a result of absenteeism; that there were far more machines available than required for the job and these all needed servicing, which built up the labour force as servicing was done in-house; that over the years the particular variety of fork-lift employed became the most super deluxe model of the most expensive and exotic brand available in this country; and, as a crowning glory, that because the men were said to have such a pride in their one-man per machine fork-lifts, they needed to wash them as a safety measure each week and that the best time to do the job was on a Saturday morning, so that each Saturday morning every fork-lift driver came in at time-and-a-half for a four-hour minimum engagement period to wash their fork-lifts. In fact, of course, the washing took about 8-10 minutes and then the men adjourned to the bar.
Which brings me to one of the most insidious features of the breweries although, once again, I should qualify my remarks by saying that it is 3-4 years since I have been associated with the brewing industry and conditions today may well be different. But certainly the drinking on the job was extraordinary at Tooths in 1978, when I first came to Sydney to take responsibility for their brewing operations.
First of all there was a wet canteen at each brewery which was staffed by shift barmen; the bar was open 24 hours a day whenever the brewery was working, which tended to be five days a week during most of the year and seven days a week over the summer peak. Although the rules provided for two beers at change of shift, this was almost impossible to administer, particularly when the barmen were typically the shop stewards, and it became interpreted as two 10 ounce pots whenever the employees felt like it; and with a workforce on site of about 1,000 at each of South Dowling Street and Broadway, it was virtually impossible for management to police a system limiting persons to two beers (especially during the night or shift operations). But that wasn't the end of the matter. On the kegging plant, which accounted for about half the operations, custom and practice determined, in the days when wooden kegs were used, that a certain proportion of such kegs---one in 1,500, or something of that order were leakers, and so from 1978 to 1981 the requisite proportion of stainless steel kegs were removed from the production line, opened and put aside for on the job consumption by those who worked the kegging line or those who were within reasonable proximity. Clearly the only method of rationing was the individual's ability, capacity and willingness to consume.
But this is not all. Because breweries extend over a fairly large site (two or three hectares in each case), over the years it came to be regarded as inefficient for the men to have to knock off from their place of work and walk to the nearest bar or leaker; it would therefore be in everyone's better interest if there were a number of so-called honey pots around where people who felt that they were unreasonably distant from the bar or leaker could have a session and these of course proliferated. I set about to change this situation because the bars, by whatever name, were the power base of the shop stewards and understandably, the accident record and the productivity record were appalling. While I was aware that in effect unlimited on-the-job drinking was regarded as a hard-won right, I nevertheless advised the workforce and their unions that it was proposed to replace the practice of drinking at the brewery with a free issue of one carton of cans per week for off-premises consumption. After implementation of the scheme, all drinking on the site, other than for medicinal purposes (and that under the control of the occupational health and safety nurses) would be banned and instances of drinking or drunkenness on the job would result in disciplinary action. To their credit the workers at the Kent Brewery accepted the proposition. The bar was closed down and dismantled, and the free issue of beer initiated. From that time there was a marked improvement in all facets of working life at the Kent Brewery.
However, at the Reschs Brewery in South Dowling Street the men decided that their hard-won rights were fundamental. Some weeks went by and after a strike, for reasons unconnected with this matter, the men returned to find that I had disconnected the bar equipment. They immediately walked out and ultimately I was summonsed to appear before the NSW Industrial Commission. I was castigated before that Commission for not having conducted meaningful discussions with the employees and for removing rights and privileges which 'pre-dated the very existence of this Commission'. So the bar was reconnected and work returned. Some weeks later there was another unconnected dispute and at this time I actually removed the bar equipment. (In the meantime, I should add, any attempt at discussion with the union officials or the shop stewards proved absolutely fruitless.) Dragged back before the Commission again, I was accused of being almost in contempt of the Commission and ordered to reinstate the equipment; and, as I recollect, the Company was ordered to pay the men for the time on strike as a result of the removal of the drinking privileges. I said to the Bench at that time that there were reporters outside and I would be surprised if community standards would condone the Bench instructing an employer to provide alcohol on the job in a potentially hazardous work environment Some months later there was a major dispute at the South Dowling Street Brewery lasting 8 weeks; it was not, if memory serves me right, directly connected with the wet canteen issues. When the workers eventually returned, they found that the whole bar area had been bulldozed. And that, together with the fact that they had been 8 weeks on the grass, was the end of that issue.
Turning now to the more serious question of overmanning. I have already alluded to fork-lift drivers; but even more preposterous was that when I came to the brewery in 1978, there was still one or more patmen---a patman is the person who used to clean up after the horses when beer was delivered by horse and dray. There had been no horses at Kent or Resches for 20 years and yet there were still several patmen engaged.
And although they were my friends in those days, electricians had a special role too. It was decreed that only electricians could start electric motors and only electricians could turn on lights at the beginning of the day. The electricians were required each morning to start up the plant--- which meant that the plant either had to have additional electricians on hand or the plant had to be started up in sequence (and, of course, if a duty electrician was called out or failed to turn up, then the plant didn't start).
Even at the very end, in 1983, I can recall the Transport Workers' Union resolutely refusing to allow the introduction of semi-trailer vehicles for beer delivery, either from the brewery to its bulk storage-point in the western suburbs of Sydney or from that storage-point to its customers---because it would result in fewer drivers being employed. On similar grounds, no covered pantechnicons were permitted notwithstanding a major re-equipping program and the fact that this is the standard method of transport for beer throughout the world. It was held by the TWU to be taking a hard-won right away from its members---i.e. the right to spend the best part of 40 minutes after loading to tarp up and tie down.
I can't speak about the management attempts to get rid of these practices in earlier days, but certainly in my time we pursued all conventional means of negotiation involving the State Industrial Commission as well as direct action as illustrated by the anecdote about the bars. While a firm stand on my part eventually led to the removal of most undesirable practices, the tragic truth is that directly as a result of disputes related to their removal, the company lost about 5 per cent of market share. Being forced to modernise to the highest degree and to shed 1,500 jobs, it was financially weakened to such a degree that it had to sell to an interstate competitor. That competitor has never looked back because it bought a brewery at the right price without any adverse work practices.
I turn now to my more recent experience which the South East Queensland Electricity Board. The brewery days were more fun in many respects because the practices were so bizarre and so indefensible that even now it seems preposterous that it took 5 years of concerted effort, non-stop debate and very frequent strikes to get rid of them.
The SEQEB experience is different, the practices being less obvious but far more significant. First, custom and practice had dictated that there were effectively no jobs at all done by independent contract. The only exceptions were occasional civil building works for sub stations and structures of that sort. All other jobs, without exception, were done by day labour and the industry was 100 per cent unionised. Unions had a complete monopoly on the provision of work to the electricity industry.
To protect that monopoly there was a whole variety of demarcation limits---demarcation limits within a trade, demarcation limits between trades, demarcation limits on geographic areas and demarcation limits on functions.
First, take demarcations within a single trade. As a tradesman, say a fitter, attained more skills in his trade, it was held by the union that it would be infra dig for him to apply his initial skills in his employment. In other words, if a man had obtained experience in a particular class of work, then he would refuse to do any other class of work even though it was normally done by people of his trade calling. This resulted in the absurd situation, when a street light failed, of a tradesman replacing the light fitting but if there was a fault in the switch, refusing to repair that fault; instead another tradesman would be called whose speciality was switch repair.
And then there was the demarcation between trades where a fitter/mechanic would refuse to do the work of a linesman, or a truck driver who, being a member of TWU, would not be accepted as an offsider to a tradesman who was an electrician. As most of the truck drivers in our employ were members of TWU, this meant that they were de facto chauffeurs for the tradesmen; and a crew that could have comprised 2 tradesmen and 2 assistants (anyone who had a driving licence and could drive) had to become 2 tradesmen, 2 assistants and a driver.
A combination of the above two demarcations meant that typical truck gang sizes were 5; now they are 2.
The next level of demarcation was between boundaries: if people in suburban depot A were working on a line and it crossed into suburban district B, they would declare that not to be part of their job and a separate crew from district B would be called out. This was particularly pernicious in night-time repair work when, in border regions, crews would be called out on overtime and minimum engagement periods to attend to a fault, only to find that it was on the border and in the next region. They would then return to their base and arrange for another crew from the adjoining depot to be called out with another minimum engagement.
A variant of this scheme was when a crew on weekend or overtime work received a further call to another job which they would ignore (the Nelson touch), return to depot, clock off, and then proceed to accept the call and of course receive a further 4-hour minimum engagement. This widespread gem of an arrangement delayed customer service and added to cost.
F'inally with demarcations of function, there is the classic case in SEQEB of having an emergency repair unit based in Brisbane covering the whole of the metropolitan area whose job it was, when a truck hit a pole or lights were out for any reason, to get supply back as quickly as possible. They held that their function was to do just that and not to effect repairs of any sort even though, in most cases, it is practical to get the lights on by effecting the permanent repair. These people made it a rule that they would get the lights on by doing temporary repairs, thus ensuring that the next day a crew would be called out from another depot to effect the permanent repairs.
Speaking about demarcation barriers, one of the most remarkable examples I came across related to the fitting and erection of a replacement pole. Without boring you with the exact details, it took 20 men and 8 vehicles to complete the job, sometimes spanning 2 days. I must point out at this juncture that we had, and still have, the most up-to-date equipment in Australia, if not the world, to carry out this type of job. The reason that it took 20 men and 8 vehicles was because of the ETU's and their shop stewards' insistence that strict demarcation lines be drawn and adhered to. Since the SEQEB dispute, we have encouraged, within the very strict bounds of safety, multi-skilling, and I am pleased to report that the same job is now completed with 2 vehicles and 4 men at a maximum.
Next in the scheme of restrictive practices is what I would call output limits and there were two instances of these that I became aware of within SEQEB. The first is that we have a large number of domestic kilowatt hour meters; and whilst these have a very long life, they need to be repaired and serviced and the people we employed to repair them decided that a limited output per day was appropriate to protect the old and the slower from exploitation. We said, well if you can't do better than that, we won't repair the meters because it is hardly worth doing so under new technology, new meters costing only $50 each. The output increased by no less than 300 per cent overnight! I well recall another instance where a graduating apprentice who was put on the job of installing hot-water switching devices had been told by his colleagues that he wasn't to do more than 3 a day. This naive young man came to see me and said that he really found the time too boring and that 7 or 8 a day was what he would like to do but he would be sent to Coventry if he did this number; he forthwith resigned. This work is now done by private contract and 10 to 12 a day per contractor is normal.
The closed-shop system enables organised labour to grossly abuse its position. The refusal by the majority to work with an individual who elects not to be in a union or who elects to do more work than the others think reasonable is not uncommon. The best case I can recall was in the lead up to our dispute when notwithstanding an overtime ban, one of our supervisors went out and effected repairs when a storm resulted in 1,000 people in a suburban area of Brisbane being without power on a Saturday. On the Monday (and this precipitated the total strike) the people at that depot said that the only basis they would come to work was if this man were disciplined, was reduced to rank from supervisor to standard employee and signed an undertaking never to do such a terrible thing again. To our credit and to the credit of the Government, we stood firm. The man has now had a promotion and he is just the sort of person we want to have---rather than being disciplined, people like him should be given every encouragement.
I would like to relate another anecdote about trucks, and as you will see it has its humorous side. As you will be aware, there are many workers in this country who are required to work outside, without any permanent readily available convenience. Indeed, many sections of our workforce, such as meter readers, are required to walk around and from time to time they have to answer the call of nature---and of course being reasonable people they have little difficulty in attending to that bodily function. But not so the ETU men in the trucks---particularly line trucks. It was a widespread custom to duck work and to delay jobs if one of the group of 6 employees said that he needed to go quickly to the toilet, something which could easily be effected like the hundreds of thousands of outside workers today. But no---the uncomfortable worker had to be driven in the truck to the nearest sub station which had a toilet. Now because the truck was gone, the whole crew had to stop and accompany this poor chap to the nearest sub station where it could wait for the man and probably telephone the union from the sub station to discuss union matters. That in itself was bad enough, but when you multiply that by 6 on the truck and the fact that it is possible for a worker to need to visit the toilet more than once a day, the situation for us was ludicrous, costly, and not obviously in the best interests of our customers. The men and the ETU thought that this was a magnificent tool to use with complete impunity to thwart any attempt to work harder.
Nowadays, of course, there is a far more sensible approach taken, one which the average person right across the country would deem reasonable. As you may imagine, the last thing I could be accused of being is a supporter of the Industrial Relations Club. In this context there is another example which I will relate that was caused by the Club and an organisation not properly structured or accountable. It has to do with an allowance called 'working in the rain'. Now, as a result of long and continuing disputes years ago, the Industrial Commission and Court forced on us a payment for working in the rain which resulted in up to 6 times the rate of pay for men so employed. This practice, of course, was extremely expensive (well over $0.5 million a year) and it was also subject to widespread abuse. Employees fiddled the system to such an extent that they would claim the allowance for working through dew-laden grass or for getting their clothes wet through perspiration. Prior to the 1985 dispute, attempts were made to rationalise the allowance to a more acceptable level. However, every time an approach was made to do this, there would be strike action or other forms of industrial activity by the unions (particularly the ETU) as this was a very well cherished rort supported by the industrial system.
Nowadays things of course are a lot different. We have decentralised industrial relations and local managers are accountable (with the assistance of employee relations officers) for the practices that creep into their depots or branches. No longer can they say that they are directed centrally; no longer can they fall behind the veil of non-accountability.
Since the dispute, we have rationalised the payment of rain allowance and it is interesting to note how that took place. The employees themselves knew it was a rort and local managers merely said to them---'for goodness sake let's be sensible; let's get back to what is normal and proper'---and they did just that. We even offered to take the matter for interpretation before the Tribunal. They did not want that because the Tribunal has jurisdiction over us now and acts in a far different way from the traditional Industrial Relations Club Tribunal. I believe that every employee knows when and where rorts exist and I am proud of our people because they have accepted the commonsense, fair and equitable approach to the payment of allowances such as this. The 'working in the rain' matter is perhaps the last of the inherited bad practices borrowed from the past and I am glad to be rid of it. In our case, I think the fundamental cause for all of these restrictive practices was the abuse of monopoly power by the principal union, the ETU. I believe that the union, if it ever thought about these matters, felt that it was doing the right thing by its members in creating job security and job opportunities because it certainly resulted in a huge level of overmanning. Although the principal issue in the lead-up to our major dispute was the absolute refusal by the unions to allow the use of private contractors and to introduce contracting, the second item on the unions' agenda was that if they did come to some agreement about contracting, then they considered SEQEB was grossly undermanned and wanted a commitment in advance to upgrading the manning to what they thought was appropriate; this was to be initiated by a job-by-job examination throughout SEQEB.
I could go on for quite some time describing the irrational actions of the ETU. Sometimes I have got to pinch myself to remember what used to happen in the bad old days because it struck me as so ludicrous that a union would seek to control the SEQEB operations through industrial activity. During the deregistration case (and perhaps more importantly during the section 41(1Xd) application by the industry against the making of a Federal Award) many of my staff climbed into the witness box and told the Full Bench of the Commission of the sorts of practices and rorts that used to go on in SEQEB . The most insidious of all, to my mind, was ETU's closed-shop attitude. I have mentioned its abhorrence of independent contractors; but it bears remembering in reference to that that every type of contact was banned---even tree-trimming where the union insisted that the chain saw had to be wielded by a fully qualified linesman or electrical fitter. Demarcation barriers were set and strictly adhered to and the only reason for this was to increase the membership of ETU---sometimes even at the expense of their brother unions.
Regardless of what we did, there were instant bans imposed on the sorts of things we thought reasonable and proper. For example, we spent many hundreds of thousands of dollars investigating the proper use of chemicals for protecting our poles against all types of rot and termite infestation. We set up working parties with the unions to explain fully the nature of the chemicals to be used and we developed safety programs and techniques in the use of these chemicals---but to no avail. Bans were immediately imposed regardless of logic. The fact was that a major asset was daily exposed to risk because the poles were not being treated. Ludicrously, every day that poles were not so treated, the possibility of infestation with rot or termites became greater and there was a real possibility that employees' lives---and the public's---would be placed at risk if a pole fell over whilst workmen were aloft.
I have never believed that safety has any relevance to industrial relations or vice versa. This view was not supported by the ETU. We tried on many occasions to get the union to support us in enforcing the wearing of proper safety clothing. They persistently refused to take any part in that program. When employees were chastised for not wearing safety clothing in potential risk situations, a ban or a strike would ensue. It was apparent to me that the State Industrial Commission was powerless in settling these types of disputes because whatever recommendation came forward or whatever was stated by SEQEB (and experienced witnesses), the unions would merrily continue to stick to their own philosophy of doing exactly what they wanted. It is a recognisable fact that electricity is a dangerous commodity and one that has to be handled with expert care and attention. With the unions assuming control of safety and working practices, our safety record was not an enviable one. Now we have the best safety record of any electricity authority in Australia. The new breed of unionism in our Board (notably QPWA) fully supports our safety programs and is helpful and constructive in its attitude towards safety.
My last comment on industrial brigandry by the ETU can be briefly summarised as follows. Whenever a problem surfaced or a claim was made, ETU, through its shop steward network, would immediately impose a ban or call a strike prior to the matter being discussed with SEQEB. Continuous hearings before the State Industrial Commission took place in matters that should have properly been resolved by discussion. While I've been told that there was never an occasion where SEQEB was found to be totally correct and the dispute eventually settled on our terms, I don't believe this to be fair and I don't thank the State Industrial Commission for what they did.
At the time our major dispute climaxed, we employed 4,313 permanents; we now employ 3,000---down 1,313 or 30 per cent. In fact, today, the total reduction in full-time equivalent is over 1,400 people because the overmanning in the outdoor workforce, which was of the order of 850 people, was also matched to a lesser degree by an overmanning in the indoor workforce, and of course as the number of employees reduces so does the required number of support staff.
The removal of this overmanning has saved SEQEB $16m a year; also the elimination of the work practices to which I have referred has saved us another $9m a year; as well, use of competitive private contract has saved another $3.6m. Thus management changes that were resisted by the unionised workforce have resulted in annual savings of just on $30m and have resulted in our having the lowest rate of price increase (3.5 per cent per annum) of any electricity authority in Australia. Our price increases are now half that of other authorities; and largely because of both the lower price rise and the continuation of the savings, our Government has given an undertaking that price rises for the next three years will not exceed half the Brisbane CPI. We also have a commercial and industrial growth rate double that of other authorities.
As a consequence of our dispute, we now have a workforce that is approximately 50 per cent unionised through traditional unions, some further 20 per cent belong to a company or enterprise union, and the remaining 30 per cent are non-union members.
Our industrial performance, however measured, is superior
to any other electricity authority in this country
in terms or efficiency, notwithstanding the fact that
from 1977 when we were formed to 1984 there were 35
threats of actual rationing or load-shedding of power
---an average of 5 a year. Since our major dispute in
February 1985, there has not been one minute lost to
an industrial dispute anywhere in the industry. As
a result of removing the work practices---and it was
indeed painful surgery---the morale of our employees
has skyrocketed and career paths have opened up. Our
employees generally have a real commitment to serving
the customer whereas previously they were interested
in getting all they could for themselves. Our image
with the public has improved enormously. Our growth
rate has improved and we have found an ability to reduce
real prices when other authorities throughout the country
are struggling to avoid real price increases.