Shipping Australia Limited
ABN 61 096 012 574
Level 1, 101 Sussex Street, Sydney NSW 2000
PO Box Q388, Sydney NSW 1230
Tel: (02) 9266 9900
Fax: (02) 9279 1471
Shipping Australia's Submission on the Fair Work Act Review
Shipping Australia is pleased to have the opportunity to provide comments relating to this review and the comments are generally in accordance with the Terms of Reference for the review. Shipping Australia is a peak shipowner body representing 38 shipowners and shipping agents who would be involved with over 80% of Australia’s container and motor vehicle trade as well as over 60% of our bulk and break bulk shipping trade (membership list attached).
Our interest in industrial relations relates primarily to services provided within our seaports being stevedores, linesmen, crew on board tugs, pilot cutters, staff of various Port Corporations, whether they be privatised or government owned. We also have an interest in terms of the broader logistics chains involving the trucking and railway industries as far as they impact on delivery of cargo to seaports and the delivery of cargo from seaports.
An issue that is not in the terms of reference but has been a major concern to the shipping industry over the last few years since the Act was introduced, has been the application of PART B of the modernised Australian seagoing award to foreign flag vessels carrying Australian domestic cargo under permits issued by the Australian Government. These rates and conditions are much higher than those applying to the International Transport Federation agreements whereas technically one container of domestic cargo carried along with 3,000 international containers still requires the vessel to pay these higher wages and conditions. We appreciate that this issue is not part of the review but we wanted to simply make the point that this has been the cause of a considerable increase in the costs of carrying Australian domestic cargo and in a number of cases withdrawal of previous shipping services available.
The review panel has sought specific data and statistics supporting comments and submissions. The Department would have available detailed statistics on the increase in waterfront disputation since the Act was introduced at least as far back as 1998. For almost 11 years there was relative peace on the Australian waterfront but over the last two years, in particular, we have witnessed a considerable increase in stoppages or work bans and other work limitations in both the container and general stevedoring areas. Whilst this protected industrial action has been taken during re-negotiation of Enterprise Based Agreements, this was not the case for the previous 11 years when EBA’s were re-negotiated.
Patrick container stevedoring business, has, for example, been subject to threats of work bans and limitations as well as actual stoppages over a twelve month period last year as they endeavoured to reach an agreement with the Maritime Union of Australia. Similarly, DP World had a similar experience as they followed Patricks in trying to reach agreement.
A general stevedore has been in negotiations for over 13 months and the issues have still not been resolved. This has involved many joint meetings and site visits. This (and the container stevedoring disruptions) have caused serious cost impacts on the operations of our members, the lower cost impact being around the $30,000 per day cost for the vessel and SAL has received many complaints from our members and importantly their customers, the importers and exporters of Australia regarding these delays.
During these protracted negotiations there was a noticeable lowering of productivity generally which exacerbated an emerging serious congestion issue especially in Sydney and in Fremantle. Shipping lines had to pay substantial increases in fuel costs to try and recover some schedule integrity and some ports both in Australia and overseas had to be bypassed. Whilst this port congestion arose from other causes as well as industrial issues, the impact of the stoppages and work bans put serious road blocks in the path of efforts to recover some reasonable level of efficiency.
Shipping Australia believes that there should be criteria in the Act or in supporting regulations that set out the criteria for “bargaining in good faith”. In our view, the test should be whether the negotiating process has been exhausted and whether protected industrial action has been taken prematurely. We have been advised by one company that if they had accepted the claims by the union which had caused the strikes, then the company would have gone out of business. It is difficult to believe this is bargaining in good faith.
SAL would recommend that the criteria also include whether both parties to the negotiation have complied fully with the terms of the current EBA which is the focus of the negotiation. This comment has specific reference to issue 29 under bargaining and agreement-making on page 19 of the background paper which was issued last January.
SAL believes it is particularly difficult to understand how authorised protected industrial action can be undertaken before the good faith bargaining process has actually commenced. If this is correct, we would urge the Government to remedy what must be an anomaly in the Act.
Individual Employment Contracts
Shipping Australia believes that EBA’s should contain the Fair Work Act’s model flexibility term that is currently included in all modern awards but there should be a requirement that the mandatory flexibility terms in enterprise agreements genuinely meet the flexibility needs of both the employer and employee.
Under such individual flexibility arrangements, the parties should be able to agree that no protected industrial action will occur during the life of that arrangement and neither party should be able to unilaterally terminate the arrangement within its term except by mutual agreement.
In addition, employers and employees should have the option of agreeing to individual contractual arrangements that have statutory effect. These individual arrangements would require a guarantee of minimum entitlements. The failure to provide for statutory individual contracts should not be part of our industrial relations system nor does it promote innovative and progressive workplace arrangements underpinned by the guarantee of minimum entitlements.
The Application of a Public Interest Test
In SAL’s view, protected industrial action should be prohibited where unions are pursuing claims that don’t satisfy a public interest test. The current ability to take such action over claims that are clearly contrary to the public interest should be removed and this is particularly the case with many disputes that disrupt Australia’s international trading relations and facilitation.
In our view, such action should only be available as a last resort after a demonstrated attempt has been made to exhaust all bargaining options including mediation.
In item 56, under the Heading of Industrial Action on page 21 of the background paper, the question is raised, should compulsory conciliation play a more prominent role in settling disputes over the application of enterprise agreements or more especially in the machinery which governs the settlement of intractable disputes. As noted above, we believe at the right time, assuming both parties to the negotiation agree, compulsory conciliation could have an important part to play in resolving those issues which are preventing agreement. Again, failure to agree to conciliation in those circumstances by one party would make it difficult to understand that they are negotiating in good faith.
Perhaps a reasonable term (say three or six months) should be set to conclude negotiations failing which there should be the ability for a party or both parties to refer the matter to FWA for compulsory conciliation. A reference by one party would oblige the other party to accept such conciliation.
Public interest issues should include consideration of the size of the wage claim and other proposed improvements to conditions compared to general industry standards, the rate of inflation, productivity issues, whether bargaining has been exhausted and the employer’s capacity to meet the wage and conditions claims.
Restrictions on subject matters in Enterprise Agreements
SAL believes that the objects of the Fair Work Act to facilitate greater productivity in enterprise bargaining are not being met under the current framework.
It appears to SAL that Unions are currently using the Act to include a wide array of matters and agreements that could be seen as increasingly related to promoting union rights and privileges as opposed to the wages and conditions for employees or boosting productivity at the enterprise level. Similarly, the Fair Work Act purports to prohibit the taking of protected industrial action where pattern bargaining is occurring which pays no regard to the needs of the enterprise. However, pattern bargaining continues to be the modus operandi for many unions who then encourage employees to take protected industrial action to secure a pattern agreement. In our view, the ability for unions to take such action where they are seen to be engaged in pattern bargaining should be removed.
We hope these brief comments have been useful to the panel in its review of the Fair Work Act and we certainly commend for the panel’s consideration much better guidance and criteria to be employed in the legislation relating to what bargaining in good faith means and urging Fair Work Australia to avoid granting the right to take protected industrial action where that criteria is not being met.
If the Department or members of the review panel wish to raise any question in relation to these comments, we would be most pleased to try and address them and would be grateful if you could contact me on 02 9266 9903 or email me at .
Llew Russell, AM
Chief Executive Officer
Full Members
ANL Container Line Pty LtdAPL Lines (Australia)
Asiaworld Shipping Services Pty Ltd
Austral Asia Line Pte Ltd
CMA CGM
Evergreen Marine Australia Pty Ltd
Five Star Shipping & Agency Co Pty Ltd
Goodman Fielder
Gulf Agency Company (Australia) Pty Ltd
Hamburg Sud Australia Pty Ltd
Hapag-Lloyd Australia Pty Ltd
Hetherington Kingsbury Shipping Agency
Hyundai Merchant Marine
Inchcape Shipping Services
“K” Line (Australia) Pty Ltd
LBH Australia Pty Ltd
Maersk Australia Pty Ltd
Mediterranean Shipping Co (Aust) Pty Ltd
MISC Agencies (Australia) Pty Ltd
Mitsui OSK Lines (Australia) Pty Ltd
Monson Agencies Australia Pty Ltd
NYK Line (Australia) Pty Ltd
OOCL (Australia) Pty Ltd
Pacific Asia Express Pty Ltd
PB Towage
Quay Shipping Australia Pty Ltd
RCL (Australia) Pty Ltd
Royal Caribbean International
Seaway Agencies Pty Ltd
Ship Agency Services Pty Ltd
Svitzer Australia Pty Ltd
The China Navigation Company Pte Ltd
Wallenius Wilhelmsen Logistics
Wilhelmsen Ships Service
Contributing Members
China Shipping Container Lines Co LtdHanjin Shipping
Neptune Shipping Line Pty Ltd
Pacific Forum Line (NZ) Ltd