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Standing Committee on Regional Australia
30/05/2012
Fly-in fly-out work practices

THOMPSON, Mr Glen, Assisting National Secretary and Acting National President, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, Australian Metal Workers Union

[10:59]

ACTING CHAIR ( Mr Gibbons ): Welcome. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal processing of the federal parliament and therefore has the same standing as proceedings of the respective houses. I invite you to make an opening statement. Then we will go to some questions.

Mr Thompson : Thanks for the opportunity to address this committee. Demand for skilled workers is incredibly high in this sector; so high that it is draining the skills pool of the rest of the economy. Despite the high wages frequently on offer in this sector, there is still trouble in meeting the demand. Many resources sector workers are engaged by or as contractors. Workers engaged by contractors are significantly more likely to engage as non-residents than directly employed workers as a percentage. There is further detail on this within our submission at paragraph 1.3. It is important to note that 47 per cent of all mine employees are employed on a non-residential basis and 53 per cent are residential. Of the 23.5 per cent of the total mining workforce engaged through contractors, over 77 per cent are non-residential. This is significantly higher than the 37.5 per cent of directly employed mine workers who are non-residential.

Regarding the effects on non-residential workers and local communities within the mining areas and the impact of fly-in fly-out work and drive-in drive-out workers, if the resources sector wants to be stable, socially connected and characterised by low or average levels of turnover, workers need to be connected to the community in which they are employed. Non-resident workers need to have ongoing commitment to the communities or an ongoing employment relationship. Non-residential workers are enduring work conditions that include isolation, boredom, limited living conditions and community isolation, causing in some cases increased drunkenness and violence. Local communities frequently experience conflict between the resident and the non-resident workforce and a decline in the community amenities and functions as non-resident workers bypass community engagement.

While it may be the case that non-resident workers will still be an ongoing requirement for the resources sector, the fact that there are geographically clusters of resource activities presents many opportunities for local communities if they are given appropriate support. We are all well placed to take advantage of this. Examples of clusters include the Pilbara in Western Australia, the Barwon Basin and Roxby Down in South Australia. If planned properly and if supportive regulatory processes are in place, there would be synergies that can create cross projects that will bolster local workforce participation and community building. At the same time, this would significantly reduce the necessity for non-residential workers.

Policy settings need to be geared towards economy wide sustainable skills supply. The major resources project housing policy produced by the former Queensland government in August 2011 was in our view a step in the right direction and may serve as a useful model for other states in tackling this problem. Under the policy, proponents of major projects seeking to employ primarily non-resident workforces will have to determine how much demand there is for local jobs before projects go ahead and will have to justify a non-residential workforce. They will also have to work through local community councils, unions and state governments to make sure that the liveability and sustainability of the towns are protected and that workers have a choice about where they live. The AMWU recommends that the industry, through the Resources Sector Taskforce, develop enforceable minimum accommodation standards for non-resident workers that have to be accounted for in mining licence applications. The details of further suggestions to complement the policy are contained in our submission at paragraphs 2.14 onwards. Accommodation is discussed in detail from 2.23 onwards. The keys are training and retraining, as well as the development of appropriate infrastructure, including services for fly-in fly-out workers and the local community. Training will reduce project reliance on a fly-in fly-out workers, limit the skills drained from other sectors and build opportunities for local communities. Building community infrastructure and services will support local employment, encourage relocation of mining regions, encourage training and skill formation facilities and facilitate a healthy community for fly-in fly-our workers and local communities.

The resources sector uses skilled personnel who were trained in other industries. It does not train enough of its own workforce. It has to stop using undertrained workers, reduce its reliance on fly-in and fly-out workers and reduce the importation of temporary skilled labour. There has to be a mutual obligation and benefits. The sector need to focus on training, skills and competency and engages in skills formation but recognises that skills must be broad based and portable. If they want to pick up workers during peak and high demand and discard them during lean times, then training clearly must be focused on competency outcomes that leave individuals mobile across the sector and flexible enough to deploy in the resources sector when their skills are in demand. If training costs are to be shared across the sector and the broader economy, the training outcomes must be shared.

The AMWU proposes the formation of a national engineering apprentice trust as a model to develop a broader skill based. The trust will tackle the problems of skills shortages over the long term, providing structural solutions that will provide benefits to the nation as a whole and the resources sector specifically. This is detailed in our submission at 2.10 and onwards.

There need to be means of addressing the demands on and the sometimes extreme working and living conditions of fly-in fly-out workers. These include the long shifts of hard work without breaks for weeks, the heat, the dust, the dirt, no meaningful life after work, the loneliness, the separation from family and friends. The AMWU proposes an industry wide agreement that would provide industry minimum standards for work and accommodation. Industry minimum conditions would boost productivity and would reduce the requirement for individual mine owners, operators and contractors to negotiate such agreements. Industry standards would provide a level playing field and employment certainty. The AMWU recommends that the Fair Work Act 2009 be amended to provide for industry agreement. Further details about this can be found in our submission at 2.18.

I thank that committee for the opportunity to address you.

CHAIR: Thanks, Glen. My apologies for being a bit late. One of my questions might relate to something that you have already said. In terms of the trust document, have you had any discussions with mining companies about that?

Mr Thompson : We have a number of different projects that we have engaged with in both onshore and offshore areas. Specifically, we deal with companies that provide fabrication and infrastructure work in the mining sector. I am not across the full detail, but in Western Australia there is some mutual obligation between companies around a training commitment levy and around apprentices. I am dealing with one company at present that, as part of their obligations around labour agreements, has to engage the stakeholders and have done so. This particular company was seeking to engage 760 skilled workers. As a result of those consultations, we are in the early stages of working on a joint project in Western Australia, Project 300, which is a commitment to employ 300 young people in apprenticeships. Before that agreement has been signed or dealt with, that company has engaged someone to do the mentoring and the apprentice work at this stage. It is spasmodic across the sector.

CHAIR: Okay, thanks. My second question relates to the resident and non-resident fly-in fly-out situation, particularly in terms of the 12-hour shift and the roster arrangements. We are getting a lot of evidence that suggests that where there are resident communities based on other economies as well as mining—and even in some areas where it has been based just on mining—the change in the roster and the shift hours to 12 hours suits FIFO workers because they want to get in, do a lot of work and go home but it is having a detrimental effect on resident workers and actually driving the roster system for the residents, and there is a flow-on effect in terms of community et cetera. Are you picking any of that up from your membership?

Mr Thompson : We have members on different projects that are in two categories. From my understanding, one category is those that are in camps that are within the local community, and then there are those that have camps that are isolated on mines and have no direct engagement in the community. From the feedback that I have received from our officials, which is limited, there is obviously concern about the shift patterns and the impact on the local community and permanent residents of towns. Obviously, if the father works and the kids play sport, it does have a direct impact in that respect.

CHAIR: Thanks.

Mr GIBBONS: In relation to the rosters, we have gathered evidence which suggests there is a variety over the 12-hour version—the 12-hour rosters. I think the worst example we heard was a three-week 12-hour shift where people work 12 hours, rest 12 hours and work 12 hours. It ranged over some other options. From an old union perspective, it flies in the face of the eight-hour day movement, with eight hours work, eight hours rest and eight hours recreation. I guess it is brought about by the necessity that the unions would have had to negotiate with the companies, who were obviously pushing that. Is that something that your membership would have—

Mr Thompson : There are different scenarios. In the workplaces where we have organisation, in most instances those sorts of shift patterns do not exist. In areas where we do not have organisation, those shift patterns do exist. You are right: it does fly in the face of the issue of working 12 hours, having 12 hours off and then coming back on again for a three-week cycle. From our point of view—and primarily from our Western Australian branch's point of view, as it occurs a lot in the west—there is the impact that it is having on the worker directly but more importantly the impact that such long shift patterns are having on the family. There is an example in our submission about the disconnect in respect of an incident that I think was up in Karratha, in the Pluto project, which has those long shift patterns. There was a worker who had actually passed away in his accommodation, and the disconnect between the community and the people on those shift patterns meant that he was not found for over a week. So there are obviously issues there.

Mr GIBBONS: Very tragic.

Mr TEHAN: I want to turn to your recommendations. At 3.2 you say:

Contract workers must have the same conditions and protections in the mine, and at camp sites, as provided to directly engaged workers.

What do you mean by 'protections'?

Mr Thompson : With the specific question that you are asking—

Mr TEHAN: You say, 'Contract workers must have the same conditions and protections in the mine, and at camp sites.' What do you mean by 'protections'?

Mr Thompson : What we are referring to is, where we have directly employed people on those mine sites on certain conditions, that those conditions should apply to contractors that come in as well.

Mr TEHAN: But what are the 'protections' that you refer to?

Mr Thompson : There would be an agreement in place. There are two scenarios that we have direct engagement in—for example, the Bowen Basin. There we have negotiated a greenfields agreement with the principal contractor that the terms and conditions of that agreement are afforded to any contractor engaged as part of that project. Those are the protections we are referring to.

Mr MITCHELL: You are talking about protections in safety, not having them work extra-long hours, health and safety and the like.

Mr Thompson : That is exactly what we are talking about, yes.

Mr TEHAN: Issues around OHS, length of shifts and those types of things.

Mr Thompson : Absolutely.

Mr TEHAN: You also say at 3.7:

The negotiation by government/s, employers and unions of a resource industry industrial agreement and the amendment of the Fair Work Act 2009 to enable industry agreements.

What you are suggesting is to push once again to a broad resource sector industry agreement?

Mr Thompson : Yes, there have been some discussions—I was not involved in these so I cannot give you the detail, but I know the broad detail—with industry in the offshore oil and gas sector recently which dealt with a number of key issues for that operation. This is about, as was said at the back of our submission, identifying key issues so minimum standards are set and every single person that operates in the space knows that this is what the accommodation arrangements are et cetera. They are non-negotiable. It is an industry agreement to address those basics.

Mr TEHAN: Have you made submissions to the government on that, or is that currently at the stage of being a union recommendation?

Mr Thompson : To my knowledge, this is a recommendation for which we are seeking government consideration.

Mr TEHAN: At 3.8 you say:

The AMWU recommends that the industry through the resource sector taskforce develop enforceable minimum accommodation standards, which have to be accounted for in mining licence applications …

What do you have in mind when talking about 'enforceable minimum accommodation standards'?

Mr Thompson : I make the point that I cannot offer you any specifics, but this is about addressing minimum accommodation requirements in relation to workers working on a specific project. As you would no doubt be aware, accommodation is a significant issue in the north-west. This is about us having minimum standard requirements for accommodation that are agreed at an industry level and then there is no issue in respect to those matters.

Ms LIVERMORE: When you talk about 'minimum accommodation standards', do you mean specifically relating to temporary accommodation or would those standards extend to building family houses?

Mr Thompson : No, this is in relation to temporary accommodation arrangements.

Mr TEHAN: Some of the criticism we have heard of fly-in fly-out is regarding the 12-hour rosters. Do you think that one thing that might help is greater employment flexibility, so workers would be able to negotiate a variation in terms to accommodate family commitments? That might not work for some, but it might work for others. Do you think more flexibility is required?

Mr Thompson : I think it is important that there are agreements in place that provide for rosters that are normal. I think it is impractical on these jobs, for the work that is done, to have such an arrangement in place. From personal experience, a family member did two rounds on a job in Western Australia and the shift patterns were enough. That particular job had a turnover in excess of 100 per cent of the workforce, from start to finish, for this simple reason: unrealistic working conditions in harsh conditions.

CHAIR: Can you clarify what you mean by you 'two rounds'?

Mr Thompson : Month on, week off, month on, week off.

Mr TEHAN: Anecdotally we heard that some of the conditions which have been set for the greenfield sites, especially when it comes to wages being offered, are beginning to make some of these projects internationally unviable. One instance we heard of—and we have not had testimony of this; it is anecdotal—was where some chefs were being paid around $200,000 to $250,000 and their assistants were being paid similarly, which is starting to make the cost of some of these projects difficult, compared to where investors might put their money otherwise. Are you concerned that we are starting to see these types of wages being demanded?

Mr Thompson : I would take you back to the points we have made in our written submission and in my oral submission to this committee. It is supply and demand. A cluster of projects all happen to be coming on at once. The projects need skills. As an organisation, we see the issue of skills and training; hence, we have made this submission around the engineering skills training awards to take a long-term view in respect of this sector. This boom and this infrastructure build is likely to go for a decade plus. We do not believe that there has been ample focus on, and mutual obligation for, addressing these skills for the future. So, while there is a lack of skills to put in on these projects, it is like anything: if there is a demand for something, there is a price to be paid.

Long term, I think there is a real opportunity here for Australia. We have concerns, obviously, in relation to the west and the issue around the infrastructure build and what skills that is going to need. It is going to compound because there are not the workshops to put on apprentices. That is where we are at. I do not see there is any way around addressing that matter.

CHAIR: Thank you very much for your submission and thank you for coming today. Your evidence will be in the Hansard, and if there are any issues with that please let us know. If you would like to follow up on your answers to any of the questions, please do so.

Mr Thompson : Thank you very much.