Globalisation and Employment Relations

This essay explores the issues around globalisation particularly as they relate to the industrial dispute on the Australian waterfront during 1998; the dispute that became known as the battle that changed the nation (Trinca and Davies, 2000).

Globalisation can be thought of us the evolution of large firms becoming world-wide in their scope of operations. These firms are typically driven by the quest for growth and increased profits in the wider markets. Globalisation has also been defined as a combination of freer trade in goods and services and freer movement of capital (Waddington, 1999). Held (1999) defines globalisation as: “a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions – assessed in terms of their extensity, intensity, velocity and impact – generating transcontinental or interregional flows and networks of activity, interaction and the exercise of power.” Further, three approaches to globalisation are proposed: hyperglobalisation, the sceptical and transformational.

Hyperglobalists view globalisation as the end of the traditional nation states with a borderless economy taking their place (Held, 1999). The driving forces behind globalisation are capitalism and new technologies which enable faster, more seamless communication. The hyperglobalist approach views the power of national governments as either eroding or at least declining replaced by more powerful forms of governance (Held, 1999)

Sceptics suggest that globalisation is a myth. This view of globalisation is built on the assumption the globalisation is achieved by a perfectly integrated global market. Given that evidence supports increased activity between national economies, sceptics argue that globalisation is exaggerated. Further evidence suggests that the world economy is evolving into three major trading and financial blocs: Europe, Asia-Pacific and America. Sceptics view this regionalisation as contrary to globalisation. (Held, 1999)

The transformational view is that rapid social, political and economic change are reshaping nations to the point that the power, authority and functions of governments are being challenged. Unlike the sceptical and hyperglobalist views, transformationalists do not proffer a view as to where globalisation is headed nor do they necessarily subscribe to a global marketplace or civilisation. Instead transformationalists suggest that globalisation is a long term historical process (Held, 1999).

The increasing focus on globalisation has led to calls for Australia to become more internationally competitive. The nation is over governed and the workplace is hampered by interventions from third parties such as trade unions. The economy contains many unproductive sectors (ACCIRT, 1999). Australian ports play a crucial role in the national economy and were viewed as one such sector. According to Productivity Commission (1998) Australia exports 370 million tonnes of cargo by sea, and imports 50 million tonnes. In 1995-96 70% of all imports and 78% of all exports moved through Australian ports. The total value of which was A$120 billion.

However, many government and industry reports have identified the container ports, particularly those in capital cities, as being below world standards in regard to the number of containers lifted and moved (O’Neill, 1998 ). The Government’s Seven Benchmark Objectives for the waterfront (Reith, 1998) states that Australian port cranes lift an average of 18 containers per hour whereas some lesser industrialised countries are achieving 25 lifts per hour or better.

Historically, debates about economic reform on the waterfront focused on the role of the Maritime Union of Australia (MUA). By virtue of its monopoly position and outdated and inefficient work practices the MUA was seen as impeding competition on the waterfront.

The coalition was elected to government in March 1996 having made commitments to restructure industrial relations to improve the efficiency of the labour market (O’Neill, 1998). The Government also made commitments to reform the Australian waterfront. The reform of the waterfront had been on the agenda since the mid-1980’s.

Shortly after assuming government in 1996, the Prime Minister, the Hon. John Howard MP, reconfirmed his Government’s commitment to reform the waterfront and reiterated the Government’s goal to increase productivity on the docks to ensure international competitiveness. (O’Neill, 1998) The Prime Minister’s words were supported by actions that included commissioning several consultancies on waterfront reform that, according to ones newspaper article, amounted to in excess of $900,000 (Sydney Morning Herald, 1998).

The Australian waterfront, particularly container movement, is controlled by two operators: P&O Ports and Patrick Stevedoring (Patricks). Like many other heavy industries, substantial capital investment resulted in significant technological change and decreases in labour requirements.

Although there are other unions on the waterfront , the MUA is the dominant union. The industrial militancy of the MUA was founded on its monopoly bargaining power and absence of strong competition (Petzall, 2000).

Negotiations for a new industrial agreement between the MUA and Patricks had been occurring for some time during 1997 however, its employees generally resisted attempts to improve productivity. A major sticking point being Patricks’ attempts to introduce annualised salaries at the expense of work arrangements that generated large amounts of overtime (O’Neill, 1998).

As an alternative to pursuing industrial reform on the docks there had been various attempts to permit a new entrant to start operations on the docks: the OOCL/COSCO bid to enter the port of Melbourne in 1996; International Purveyors in Cairns in 1997 (O’Neill, 1998). In December 1997 a company called Fynwest began training (former or on leave) Australian Defence Force (ADF) personnel in Dubai. The plan being to train personnel in container port operations and bring them back to work on Australian ports or to train others. Australian Workplace Agreements, a form of employment contract created by the Workplace Relations Act 1996, were entered into by the individuals. The plan to train ADF personnel apparently had the support of the Government. The plan, however was aborted after the MUA made it public after being tipped off about the operation (Petzall, 2000).

Patrick continued to try and de-unionise its workforce. A new plan was developed that would see the National Farmers Federation (NFF), who had also developed a keen interest in waterfront reform, form a new stevedoring company called Producers and Consumers Ltd (PC) and lease part of Patricks’ operations at Webb Dock in Melbourne (Petzall, 2000).

In late January 1998, events on the waterfront escalated when Patricks locked its employees out of Webb Dock and Producers and Consumers began training a workforce at Webb Dock with a view to commencing container port operations. In January and February the MUA began a series of strikes and overtime bans relying on the protective industrial action provisions of the Workpace Relations Act (WRA) (the MUA was seeking certified agreements with Patricks in various ports). Patricks responded by also relying on the WRA, which prevents an employer paying strike pay, and not paying its employees (O’Neill, 1998).

On 8 April 1998, Patricks locked out its national workforce of some 1400 employees. It was later revealed that there had been substantial restructuring of the employer companies assets in September 1997 to remove the physical assets and cause these companies to be labour supply companies only (O’Neill, 1998). If the supply of labour was not maintained the contracts between the employer companies and the parent company, Patricks, could be terminated. Patricks argued the restructuring was put into place to avoid customer confusion as to which entity owned which assets (Petzall, 2000).

A strike by the MUA presented the breach of the aforementioned contracts that facilitated their termination. As the companies were no longer able to trade they were placed into receivership. The services of the Patricks workforce were dispensed with.

On April 8 a one week interim injunction, sought by the MUA, was granted preventing the termination of the Patricks employees. At the same time Producers and Consumers, using non-MUA labour commenced stevedoring operations in a number of ports. On April 14 Patricks, the National Farmers Federation and the Federal Government challenged the jurisdiction of the Federal Court to hear the terminations application. The application was subsequently rejected by the High Court on 17 April.

April 21 saw Justice North essentially restore the pre- 7 April employment situation. Justice North found there were arguable cases in respect of unlawful conspiracy (to replace the Patricks workforce) and in respect of breaches of the freedom of association provisions of the WRA (O’Neill, 1998). Patricks unsuccessfully appealed to a Full Bench of the Federal Court and subsequently appealed to the High Court.

Meanwhile pickets were set up at ports around the country preventing the movement of traffic into and out of ports. Patricks sought and gained injunctions to remove the pickets. The injunctions later modified on appeal to apply to only officers and members of the MUA. The support of the union movement was generally in terms of financial support for the MUA. The unions careful not to incur the huge penalties of the recently changes Trade Practices Act in relation to secondary boycotts. (O’Neill, 1998)

On 4 May 1998 the High Court rejected the appeals of Patricks and others against the orders of Justice North. The non-union labour company of Producers and Consumers terminated the employment of its workforce on 16 June.

Patricks and the MUA finalised agreements following the decision of the High Court. The terms on the agreement included: Patricks retaining 645 employees at its terminals; salaries to range from $42,500 to $65,000 based on 35 standard hours and 5 hours in overtime; contracting out of same work; target crane lifts would be 25 lifts per hour; Patrick to resume operations in all ports; Patrick to pay outstanding wages and entitlements; MUA to drop all litigation; Patrick employees to all be employed by Patrick Stevedore Holdings and four labour companies to be wound up. (O’Neill, 1998:2)

Peter Reith, The Minister for Workplace Relations and Small Business, claimed that the agreement satisfied a number of the Seven Benchmark Objectives for waterfront reform (AAP, 1998). The seven objectives included: ending overmanning and restrictive work practices; improved productivity; greater reliability; improved safety; lower costs; fuller and more effective use of technology and improved training (Reith, 1998). The Government later conceded that there had been no reduction in costs to users of the waterfront (Petzall, 2000).

Patrick Stevedores emeged from the dispute relatively unscathed (Petzall, 2000). For employers generally the dispute highlights that there is no such thing as a shortcut to improving work practices and productivity.

The dispute was also a key test of the union restructuring of the 1980’s and 1990’s. The formation of approximately 20 large unions was strongly supported for the very purpose of being able to respond to a hostile employer-government alliance (O’Neill, 1998:2).

By most accounts the MUA won a defensive victory. The union was not destroyed and the possibility of effective working class solidarity was very apparent. The Secondary boycott provisions proving ineffective against power of peaceful pickets. However it could only be considered a partial victory given the number of concessions made by the union.

BIBLIOGRAPHY

ACCIRT, 1999. Australia at Work. Prentice-Hall. Sydney.

Australian Associated Press, 1998. Docks Deal Appears to Meet Criteria for Government Funding. AAP Information Services P/L.

Held, D et al.1999. Introduction, Global Transformation. Polity Press. London.

O’Neill S, 1998. Outline of the Waterfront Dispute. URL: www.aph.gov.au/library/pubs/cib/1997-1998/98cib15.htm

O’Neill S, 1998:2. The Waterfront Dispute from High Court to Settlement – Summary and Comment. URL: www.aph.gov.au/library/pubs/cib/19988-99/cib01.htm

Petzall A, Timo N, & Abbott K, 2000. Australian Industrial Relations in a South East Asian Context. Eruditions Publishing, Melbourne.

Productivity Commission, 1998. Work Arrangements in Container Stevedoring and International Benchmarking of the Australian Waterfront. Ausinfo. Canberra

Reith, P. 1998. Waterfront Reform: Seven Benchmark Objectives. Australian Parliamentary Library.

Sydney Morning Herald, 1998. Wharf Reform: We’re Paying. Fairfax Ltd. Sydney.

Trinca, H and Davies A, 2000. Waterfront: The Battle That Changed Australia, Doubleday. Sydney.

Waddington, J. 1999. “Situating Labour within the globalisation debate” in J Waddington (ed.), Globalisation and Patterns of Labour Resistance. Mansell. London.