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Waterfront reform: speech to the AIC Conference, 13 March 1997

Ladies and Gentlemen

Thank you very much for providing me with the opportunity to talk to you today. I know that yesterday you were joined by my colleague, the Hon John Sharp MP, Minister for Transport and Regional Development, and that he canvassed some important issues with you, going to Government transport policy in relation to the waterfront and maritime industries.

Today I want to make some remarks about how the Government's new Workplace Relations Act provides real opportunities for people particularly in the waterfront sector to pursue reform. I want to leave you with a simple message: don't sit back grasp those opportunities. Use the spirit and intent of the law to their best advantage.

I see from the conference brochure that this is the eighth annual waterfront reform conference. That says a couple of things to me. First, it says something about the importance of the topic. Second, it illustrates that people have been talking about waterfront reform for a long time. I doubt that there would be another industry that has been subject to so much scrutiny, so much debate, so many efforts at performance measurement, so many inquiries.


Because Australia's waterfront has an entrenched, and sadly well- deserved reputation for unreliability and poor productivity. It tarnishes out capacity to participate in international trade on an equal footing with other nations. It costs Australians jobs and sends a ripple of inefficiency through the transport chain, and the economy as a whole. It adds to the cost of products for ordinary Australians.

Because of this, and despite past efforts of varying kinds, waterfront reform is not finished The rest of the world is not standing still, so nor can we. And because the waterfront occupies such an important position in the economy, the Government is vitally interested, from a public interest standpoint, in seeing waterfront performance improve.

So we say to the stevedoring employers, we respect your commercial interests, but urge you to redouble your efforts to achieve lasting, significant performance improvement. We encourage you to pursue enterprise agreements, but don't settle for agreements that do little to achieve better performance.

Unfortunately, improvements in waterfront performance stalled during the last years of the previous Government. The WIRA process, now completed five years ago at massive cost, exhausted Labor's capacity to bring the MUA and ACTU forward, and little has happened since.

The current Government was elected on a platform that promised a waterfront that achieved internationally competitive standards, building in particular on industrial relations reforms.

Those legislative reforms are now in place, indeed the last element of the Workplace Relations Act to come into force - the capacity to reach Australian Workplace Agreements (AWAs) - got underway yesterday.

Before turning to what the Act has to offer, I would like to make a few remarks about the Meantime Union of Aust . Allow me to dispel one myth This Government is not setting out to attack the MUA.

Our legislation provides a place for the MUA, just as it provides a place for other unions. But what wc don't accept is that the MUA should have the unalienable right to sign up every waterfront employee, even those who might prefer not to belong to it

The MUA's rules contain a list of objects. One of the union's objects is "to control the supply of labour'. We say that is inconsistent with the concept of freedom of association, and the concept of company employment, which theoretically was achieved on the waterfront in the early 1990s.

What we also won't accept is behaviour by any union that holds the Country to ransom, over issues that are of no direct relevance to the terms and conditions of its members. We do not accept that any union, at the ACTU's behest, has some special role to play, at the nation's expense.

If the MUA, like any responsible union, operates within the law, if it can adapt its behaviour to conform with the law of our democratically elected Government; if it can provide relevant services to its members and if it can make a constructive contribution to working circumstances where it has members, then it has a place in the industrial relations framework, like any other union.

In some ways, you have to hand it to the MUA Pan of the union's folklore is that it fought, over many years, to overcome what were hard, dangerous and unreasonable working conditions on the nation's wharves. For that, it deserves credit But I wonder whether any of that folklore is relevant today?

Late last year, after a meeting with MUA and ACTU officials, I undertook to visit some stevedoring facilities around the country. I wanted to talk to local managers and grass root wharfies. I went to Patrick's container terminal in Melbourne, PO Ports' container and general cargo facilities in Sydney, and SeaLand in Adelaide. I saw high- tech equipment with air-conditioned cabins, in which the companies had invested a lot of money, but I did not see anything which resembled the back-breaking work of yesteryear.

I saw the potential hazards of any heavy industrial site, but the facilities seemed well- - ordered, the employees wore appropriate safety gear and so forth Some men were no doubt working double-headers, but they were being well remunerated for their efforts. They work to detailed allocation and rostering procedures, the very opposite to the "bull" system of the past and, by virtue of handsome penalty rates, earn very good money.

So it seemed to me that in many ways the folkloric battles of the union have long been won, and in the main that's a good thing.

But it made me wonder: why are our ports still internationally uncompetitive when it comes to crane rates, ship-turnaround times and reliability?. In return for good pay and conditions and secure employment, in return for the legal right to represent stevedoring employees, what are the MUA and its members giving back to the community?

And then I hear of employees "nicking off" because they have arbitrarily decided that work for the shift is over. I'm told of union officials on site at stevedoring facilities almost every day to oversee the rostering process. I come across thirty workers in a canteen on a one-hour break while a ship is sitting idly by the wharf; if employees' breaks could be staggered, the ship could continue to have been worked. I hear of the down- drivers from cranes or heavy machinery spending large parts of their shift relaxing in recreational rooms. I hear of small delays here and there as employees take an extra five minutes or ten minutes before or after meal breaks, further eating into the productive time available during what is already a short shift. Of course, none of these things approach a stoppage or major interruption of operations, and indeed some restrictive work practices are enshrined in awards and agreements; nor am I saying these sorts of things are equally prevalent at every facility, but they point to a malaise in the employer/employee relationship.

And then one can reflect on history.

I recall how in 1995 the union held the country to ransom because an independently-minded business person tried to set up a non-union stevedoring operation in Fremantle.

Or one can flick through Margo Beasley's fascinating book "Wharfies". It paints an unashamedly positive view of the Waterside Workers Federation. But it contains some telling remarks about how the union has always seen its role as being above that of the employer in the day to day operations of the waterfront, as though the union and the workforce, at some point in the past, have come to the view that the waterfront is there primarily for their benefit.

For instance, Beasley quotes a federal union official's remark at a Federal Council meeting in 1985 that, and I quote

"We have tried to tell the members that at some time the practice of telling the employers how many containers they will handle, what time they will knock off, etc, will work against them but we cannot convince them of this"

Of course, the MUA is skilled at defending its position on the waterfront. It points proudly to the contribution it made during the WIRA period towards improvements in productivity, but it seldom acknowledges the costs of that process, or the dreadfully low base upon which it built; and it fails to acknowledge that, since then, productivity improvement has virtually stalled while the rest of the world moves on. Improvements in crane rates in 1996 are welcome, but still leave us well below comparable overseas ports.

Six months ago, the MUA was holding up the PEP scheme at the CTAL facility in Port Botany as a major initiative, an illustration of its willingness to embrace reform. One of its brochures made the magnanimous offer "to negotiate similar productivity arrangements with other major stevedoring companies". What a joke PEP turned out to be an expensive, unproductive failure.

Another well-run line of MUA argument goes to the effect that the MUA can't be held responsible for the shortcomings of management, equipment, technology and the like. I'd be the first to agree that stevedoring employers have to improve their management performance, though I note in passing that the major stevedores would appear to have spent a fortune on equipment, technology and waterfront infrastructure. But I can understand their frustration when the MUA takes a pig-headed or manipulative attitude to proposals for change, or when it breaches agreements.

So when I reflect on all of these things, it seems to me inescapable that work practices and productivity can be substantially improved, that the degree of union influence or, indeed, control in the waterfront workplace far exceeds that which is generally acceptable, and that the MUA and its members, together with the employers, have got to face up to the responsibilities that go with occupying an important place in the economy.

The good news is that the Workplace Relations Act offers opportunities for something positive to be done about this state of affairs, while effectively protecting the legitimate interests of employees and employers. It also, I think, provides some important challenges to the MUA which I hope the union takes up in a constructive fashion.

One of the central elements of the Government's approach to industrial relations is the concept of freedom of association under the Act, this policy is given effect. The Act' s provisions axe designed to ensure that employers, employees and independent contactors are free to join or not to join industrial associations and are not discriminated against or victimised because they are, or are not, members of such associations.

Among other things, the Act has made void preference clauses in awards or agreements.

The illegality of preference arrangements could present employers and the MUA with some interesting challenges. To the best of my knowledge, for the time being all employees who are covered by the MUA are members of the union. I wonder how the union will react if and when some numbers of employees choose to resign, or when one of the employers chooses to employ people strictly on the basis of merit - and picks up some non-union members on the way.

Of course MUA publicity material has it that compulsory unionism on the waterfront is a myth. They argue - and I'm quoting from a 1996 MUA document titled 'The Facts Behind Waterfront and Maritime Reform" - that

"Compulsory unionism is illegal. The waterfront is 100% unionised because the MUA is a good, stung, democratic, effective organisation and people want to be members."

So to the MUA I say this: you're dead right that compulsory unionism is illegal. You have coverage of waterfront work and you are free, within the limits of the law, to encourage employees to join your organisation.

But if someone chooses to exercise their legal and democratic right not to join you, then let them. And if an employer chooses to hire non-union members, let them. Or if a group of employees choose to depart your ranks and form an enterprise union under another of the provisions of the act designed to ensure freedom of association in the workplace, then let them. Ask yourselves how you might better have served your departing members? but let's not have a repeat of the response to the new entrant in Western Australia.

Another area of the new Act concerns the seemingly prosaic question of union access to the workplace, or right of entry. The presence of union officials in the workplace can be appropriate on occasions, and the Act recognises this. But there is a difference between protecting the vulnerable - which our legislation seeks to guarantee - and interfering in the company's business. The Act provides for 24 hours notice before properly accredited union officials enter the workplace, and stipulates the basis upon which entry can occur. I hope the MUA and the employers take a responsible approach to the adoption of the intent of the Act to their particular circumstances.

I also look forward to the MUA, with the employers. adopting a responsible attitude to the new avenues available for bargaining under the Act. I acknowledge that many stevedoring facilities are already covered by enterprise agreements. But the Government is looking to the employers and employees to strive for agreements that actually achieve significantly more productive work practices, and greater flexibility, in ways that are tailored not to some historical industry-wide model, but rather to the needs of the enterprise and the workplace.

While on the topic of bargaining, I know there has been debate in broader union circles about the wisdom of unions fulfilling the role of bargaining agent in the negotiation of Australian Workplace agreements (AWAs) between employers and employees. Some prominent union officials have adopted the common sense view that, regardless of their ideological hankering for collective bargaining, they have a responsibility to their members to represent them in AWA negotiations if their members want them to.

The award simplification process is also generating some interest among people whose industries are beset with antiquated, complex awards. The process is not a contrivance to attack decent pay and conditions. I trust that the MUA and employers will take a responsible attitude to the simplifying and modernising of the stevedoring and, I might add, maritime awards in the interests of overhauling provisions that hinder efficiency.

For instance, the award provisions of the Act call on the Commission, in making an award, to ensure that, where appropriate, it "contains provisions enabling the employment of regular part- time employees". To foster genuine flexibility, the Commission's award powers do not include, however, the power to set maximum or minimum hours of work for regular part- - time employees.

The stevedoring industry, reliant as it apparently is on the payment of extensive penalty rates, could perhaps do with a different mix of full-time and part-time work Currently, there are apparently frequent demands upon employees to work double headers, and the ready availability of penalty payment has allegedly been at the heart of poor productivity. The award makes no provision for part-time work, except in the limited circumstances of the two years around childbirth.

The employers and the MUA should work together to make much more flexible use of Guaranteed Wage Employees - a form of part-time employment - and supplement employees, in ways that better manage the stevedoring workload. At the moment, there are strict limits on such employees and tight controls on which employees are chosen for "double headers". The working of less double headers would cut waterfront costs and reduce the risks associated with extended shift arrangements, while providing fix time employees with more leisure time. Of course, there may be some who see double headers as a blessing rather than a burden, but the search for double headers has had unsatisfactory consequences for waterfront operations.

So, in short, a range of provisions of the Act will, over time, call for consideration in the waterfront context - preference, freedom of association, right of entry, non- union bargaining, award simplification to name some.

I highlight these things to point to some areas where the legislative framework calls on the parties to take a mature and responsible approach. I don't think enough attention has been given to these positive opportunities when people talk about the waterfront Indeed, a reader of the MUA's commentary about the legislation in recent months could be forgiven for thinking that the only thing the Government has done is restore the boycott provisions of the Trade Practices Act, with its alleged dire consequences for crews on so called "ships of shame".

That isn't to brush aside the important compliance measures contained in the new Act. Quite apart from the primary and secondary boycott provisions, the provisions of section 127 that give the Commission the power to order that actual or threatened unprotected industrial action cease or not occur, and which if breached can lead to Court injunctions, also provide effective protection for business against illegitimate industrial action. A limited right to strike - ie, during a properly notified bargaining period - is retained. But industrial action that occurs outside that context - including once an agreement is reached - can now be met with a swift and effective response In a waterfront setting, the stevedoring employers, affected employers, exporters, manufacturers, shipping lines or other affected businesses will all have the right to access these provisions; they should prepare to act to protect their legitimate commercial interests in the event that these come under threat from illegal industrial action.

Before concluding, the topic of "ships of shame' deserves some mention because of the emotive campaign of misinformation that the MUA, the Greens and others have mounted in recent months. That campaign misses the point. None of the compliance measures of the Workplace Relations Act or the Trade Practices Act prevent the MUA, or its international arm, or indeed anyone else, from drawing to the attention of appropriate authorities or courts, instances of alleged illegal treatment of foreign crews. The Government in no way condones such mistreatment. We simply say that there are adequate ways for dealing with potential issues of concern - be they underpaid wages, criminal abuse or safety matters - other than by way of industrial action that has the effect of sullying our international reputation and costing Australians jobs.

To conclude, let me deal with the question of what sort of waterfront the Government wants to see.

We want a waterfront that is efficient and reliable compared to the best similar ports around the world. We know Brisbane isn't Hong Kong and Melbourne isn't Singapore. But the best data suggests that there are ports of a similar size and cargo throughput to those in Australia that are running their waterfront operations much better than we are.

We do not want a waterfront that conjures negative images of industrial strife and poor productivity in the minds of business people who are thinking about investing here, or in the minds of those overseas who want to trade with us.

We want to see spirited competition among stevedoring companies. But we acknowledge that the economies of scale of the industry place some reasonable barrier upon the scope for there to be numerous companies involved in container stevedoring, and we therefore welcome the continued investment of the major incumbent players.

We want to see stevedoring employees who are committed to the reasonable objectives of their employers, who are prepared to take a flexible, common sense approach to the organisation of their working arrangements. Our system offers employees genuine protection, and we therefore oppose heavy handed interference by outside union officials in the day to day operations of the stevedoring industry.

The Government has put in place, through the Workplace Relations Act, a legal framework within which employers, employees and unions can work together, in a responsible way, towards achieving ongoing, positive change. The legislation also provides employers with more effective tools for dealing with illegitimate industrial behaviour, while also protecting the rights of employees and unions. The Government looks forward to working with the waterfront industry in the pursuit of improved waterfront performance.

Thank you.