Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Stevedoring Industry Legislation Amendment Bill 1990



Download PDFDownload PDF

House: House of Representatives

Portfolio: Industrial Relations

Purpose

To expand the membership and functions of the Stevedoring Industry Finance Committee and to remove the cross subsidy currently applying to smaller ports' award obligations. The latter will apply from a date fixed by notification in the Gazette. The measures are part of the waterfront reform package.

Background

The stevedoring industry comprises the firms, employees and authorities engaged in the loading and unloading of ships and the packing and unpacking of containers at depots on the waterfront. On 30 March 1990, a total of 8 418 people were waterfront employees (this figure includes ancillary groups such as watchmen). The stevedoring industry has been subject to much criticism on the grounds of inefficiency, delays and the work practices of some employees. The industry does not have a strong record of competition, largely due to pooling arrangements, monopolies, barriers to entry and links between stevedoring companies and shipowners.

The industry has been subject to many reviews from 1947 to the 1980's. The Webber Task force was established in 1984 and identified many problems, such as low productivity and delays. Following the report of the Task Force, the government requested the Inter-State Commission to examine the waterfront. Its report, which comprises seven volumes, was released in March 1989 and concentrates on a strategy to improve the industry rather than examining the deficiencies in depth. The basis of the proposed strategy is the Waterfront Industry Plan which aims `to eliminate waterfront-related transport impediments to Australia's trade and to achieve reliable, cost-effective transport for exporters and importers.' 1 To achieve this aim the Inter-State Commission listed seven main elements:

1. effective management and a well motivated workforce;

2. strengthening the influence of exporters and importers;

3. increasing accountability;

4. improved industrial relations and dispute settlement;

5. ensuring market oriented provision of infrastructure and services;

6. removing anti-competitive practices; and

7. establishing a body to implement the changes.

Essential to the plan was co-operation between employers, employees and governments.

The governments response to the Report was announced in the House on 1 June 1989 following consultations with the groups mentioned above. The government accepted the majority of the Inter-State Commissions recommendations and placed emphasis on three main recommendations: a change in employment from a pooled arrangement to enterprised based employment; measures to improve the efficiency of port authorities; and measures to create a more competitive environment.

Employment in the waterfront has been based on a registration scheme since World war II. Each port keeps a register of those working in the industry or available to be employed. To be registered a person must be a member of the Waterside Workers federation (WWF) and will be added to a ports register when they enter the industry or are transferred permanently into that port. People are reinstated to the register after a period of dismissal or suspension. For each port there is a quota which determines the number of waterside workers needed for the efficient conduct of operations at the port which is determined by the Port or, ultimately, Federal Co-ordinating Board which involves industry and WWF representatives. The arrangements are based on the 1977 General Agreement between major employers and the WWF which was ratified by the Conciliation and Arbitration Commission. The actual conditions applicable to a waterside worker depends on the nature of the port in which they are employed, with the main types of classification being permanent and non-permanent ports. Permanent ports are those where the WWF workforce is permanently employed by a stevedoring company, or a holding company, on a weekly basis. In the major ports (Sydney, Brisbane, Melbourne, Adelaide and Fremantle) there is no pool of spare labour and shortages are covered by the company experiencing the shortage hiring labour from another firm on a daily basis or through transfers from another port. At other permanent ports (there is a total of 19 permanent ports), where the workload wasn't as consistent as the major ports, labour pools operate, and shortages are made up from the pool. For all waterside employees at permanent ports a number of idle time payments operated (e.g. for periods when there was a seasonal drop in work or a disruption not due to waterside workers).

In non-permanent ports employees can also be engaged on a casual basis with a number of allowances. Attendance money is payable when no work is available but the person attends the labour centre or takes certain other action. There is also a guaranteed minimum wage scheme based on the average hours worked per week. A retainer applied where the average was less than eight hours per week. These arrangements are financed through a special and general levy. The special levy was introduced by the Stevedoring Industry Levy Act 1977 to finance two loans which had been used to finance redundancy payments, while the general levy is imposed to finance award obligations relating to non-permanent ports and to finance employers contributions to pension funds. The funds collected are administered by the Stevedoring Industry Finance Committee. The levy paid by the permanent ports was used to a significant extent to finance the non-permanent ports obligations. During the period 1977-78 to 1986-87, the difference between receipts and outlays for permanent ports was $8.7 million, while the deficit for non-permanent ports was $6.4 million. 2 The arrangements led to many work practices that were inconsistent with the general practices in other industries and resulted in general inefficiencies and increased costs. The impact of these effects was largely not borne by the companies and employees involved who, because of their monopoly powers and the general lack of potential competitors (see below) were able to pass their costs on to those using the ports and, ultimately, the consumers of imports and exports.

The Inter-State Commission found that the stevedoring industry has become increasingly concentrated, with four companies performing almost all stevedoring work. 3 The possibility of increased competition was reduced by a number of barriers to entry to the industry due to costs and the present arrangements. The main cost barriers were seen as the establishment costs for new terminals, the high labour costs relative to other industries and the levies. Existing arrangements that created barriers to entry included the current labour practices (i.e. the refusal to let any new players into the `club'), terminal agreements and arrangements, and the strong links between stevedoring companies and shippers. The Inter-State Commission suggested that freeing up the industry and introducing only the minimum necessary regulations would encourage competition and allow the firms to specialise and develop market niches.

The governments response centred on the move to enterprise based employment. Central to this was the plan to introduce a special retirement and redundancy plan to encourage 3 000 existing employees, particularly elder workers, to leave the industry. Under the plan 1 000 new employees are to be recruited. The plan is to be financed by a $154 million contribution from employers and a matching contribution from the government. The changes will be implemented by the Waterfront Industry Reform Authority (WIRA). WIRA's first task was to negotiate an agreement with the parties involved in accordance with the guidelines outlined by the Minister in the response to the Inter-State Commission's report. Negotiations were completed in September 1989 and the agreement was endorsed by the government in October 1989. The other parties signed the agreement in November 1989. WIRA then began the task of overseeing the implementation of the agreement and monitoring progress, which is achieved by six monthly reports to the Minister and parties involved. The first of these reports was released in April 1990. The change to enterprise based employment is to be achieved by negotiation in accordance with guidelines laid down by WIRA. The guidelines stress the need to increase productivity and the fact that the parties have accepted the need for fundamental structural reform and attitudinal change. The agreement will run for three years.

Although the reform process has only recently commenced, some change is already evident. The total number of waterfront employees has fallen from 8789 on 30 September 1989 to 8418 as at 30 March 1990. Delays to shipping waiting for berths have also fallen. For the five main ports, the average delay in the third quarter of 1989 was 18 hours, which fell to 11 hours in the fourth quarter and to 8 hours in the first quarter of 1990. 4 However, there has been little change in the average hours worked and the percentage of time when people are idle.

Main Provisions

Clauses 4 and 5 will alter the constitution and functions of the Stevedoring Industry Finance Committee (the Committee), which authorises payments made in respect of employers meeting award obligations (see above), to provide for a representative of WIRA and the Department to be on the Committee and to allow the Committee to make recommendations about when the levy should cease to apply to an employer.

Clause 7 will amend section 8 of the Stevedoring Industry Finance Committee Act 1977 (the Principal Act) to provide that payments to employers at a port for meeting award obligations in respect of Division B waterside workers, (this is defined in the Stevedoring Industry Levy Collection Act 1977 to be a waterside worker who is not engaged on a weekly hiring basis) are to cease after the `finishing date' for that port. The `finishing date' will be notified in the Gazette under the Stevedoring Industry Levy Amendment Bill 1990. The result of the amendment will be the end of the subsidy of non-permanent ports by the permanent ports.

Clause 9 will substitute a new section 12 into the Principal Act. The proposed section will allow the Committee to make payments in respect of the redundancy package included in the agreement on reform.

References

1. Inter-State Commission, Waterfront Inveatigation, Volume 1, p. 141.

2. Ibid., Volume 3, p. 112.

3. Ibid., p. 133.

4. Waterfront Industry Reform Authority, First Six Month Report, April 1990.

Bills Digest Service

Parliamentary Research Service

For further information, if required, contact the Economics and Commerce Group on 06 2772460.

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1990

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1990.