Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd.

(2015-16)

EMPLOYMENT RELATIONS ISSUES IN THE

INDUSTRIAL DISPUTE BETWEEN MARITIME
UNION OF AUSTRALIA AND PATRICK
STEVEDORES PTY LTD. (2015 – 16)
REPORT TO THE PRESIDENT OF THE FAIR WORK COMMISSION

NAME: AMAR SINGH

DEPARTMENT: HUMAN RESOURCE(EMPLOYMENT RELATION)

DATE: 12TH MAY, 2016

STUDENT ID: S0275762

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

Table of Contents
SUMMARY.................................................................................................................................................................. 3
The dispute between Patrick Stevedores Holdings Pty Ltd and the Maritime Union of
Australia..................................................................................................................................................................... 4
Central Issues...................................................................................................................................................... 4
Direct Stakeholders........................................................................................................................................... 5
ENTERPRISE BARGAINING................................................................................................................................ 6
THE ROLE OF THE GOVERNMENT............................................................................................................. 6
THE ROLE OF THE FAIR WORK COMMISSION...................................................................................... 7
PATRICK STEVEDORES’ STRATEGY........................................................................................................... 8
ACTIONS OF THE MARITIME UNION OF AUSTRALIA........................................................................8
CONCLUSIONS.......................................................................................................................................................... 9
References............................................................................................................................................................... 10

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

SUMMARY

The historical “Patrick Stevedores Holding Pty. Ltd. and the Maritime Union of Australia”
dispute have again reared its head. The MUA is fighting a long and protracted battle to get
job security for their members who are PSHPL employees. The simmering issue of wage
hike, lesser working hours leading to requirement of more manpower are at the forefront
of the dispute. The employer claims the wage hikes to be economically unjustified while the
union claims to be protecting the interest of the workers’ jobs likely to be compromised
due to automation.

While the government is yet to intervene significantly, the Fair Work commission also is
playing a sedate role in trying to aggressively resolve this matter of national concern.
Instability at the ports, delays in containers not only harms the international trade image of
Australia but hit the balance sheets of many businesses including small and medium ones
that are trying to compete globally with countries like China.

While the two main stakeholders have been negotiating for long with the employer PSHPL
finally throwing an ultimatum to enter into an agreement and face lockout, the union’s
stand seems adamant and inconsiderate. The larger concern is the laidback approach of the
government and the Fair Work Commission in the whole affair.

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

The dispute between Patrick Stevedores Holdings Pty Ltd and the
Maritime Union of Australia

On 20th January 2016, the Maritime Union of Australia (MUA) threatened to go on

prolonged strike at the terminals of Patrick Stevedores Holding Pty Ltd. (PSHPL). The
company is stated to be managing about half the container cargo of the country and every
day $ 40 million impact will be felt by the Australian economy. Dispute is not an alien
concept for Patrick who had earlier been embroiled in a significant contention with their
workforce in 1998 [ CITATION Rus16 \l 16393 ]. The union went on strike few times which
is denounced by the government (Acton, 2012). The demands seem unrealistic at times and
any action like strike that hampers productivity is not favorable for the country.

The dispute and need for job security stems from the attempt by the owners of Patrick –
Asciano to sell the business. Qube Logistics is bidding to buy Asciano and it is not
contingent upon signing a workplace agreement with the existing workers. Qube has Chris
Corrigan spearheading the bid and once they take over the company will seek to achieve
higher productivity through automation. Corrigan was at the center of the 1998 faceoff
between PSHPL and the union. The union seeks assurances of jobs in this age of automation
as the company has already reduced the jobs by close to half in a span of 24 months. PSHPL
has threatened lockout in the event of strikes [ CITATION The16 \l 16393 ].

Central Issues
The central issues of the dispute are job security and pay which are common concerns in
almost all industrial disputes in some form. The union contends that the issue is more of
job security than pay. They want stability of jobs and continuity of service instead of people
being served a one-day notice. PSHPL claims that MUA wants employees to work for 32
hours each week but get paid for 35 hours. Stevedoring companies were seeking longer
work hours (38 instead of 35 hours) in 2011 against which MUA was concerned about
workers well-being [ CITATION All13 \l 16393 ].

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

The union was demanding $ 285 increase over the existing $ 995 to be paid to stevedores
engaged in Port Botany for working an eight – hour shift on Sundays. PSHPL stated that fair
wages were already being paid and the demanded increase was extremely steep which will
not only impact the labor cost but overall company performance. The demand for increase
have been in place since 2011 and MUA have gone on strike (industrial action) after which
the employees voted to go back to work. The demand was higher pay without agreeing to
increased productivity. The increase in labor cost without growth in performance was
unjustified for PSHPL [ CITATION Pad15 \l 16393 ].

Direct Stakeholders
PSHPL, MUA and employees of PSHPL, the Government of Australia along with Fair Work
Commission are the direct entities affected by the dispute. The other businesses and
general public were the indirect affected parties to the fall – out of a protracted
“waterfront” dispute.

While PSHPL is the employer, the employees are affiliated to MUA. PSHPL has taken a
tough stand on the enterprise agreement step by seeking a direct vote from their
employees, thus sending across a message of not yielding to demands of the union which is
unjustified. Close to a year’s time has been spent on negotiations with MUA without any
specific outcome.

Fair Work Commission is the facilitator for enterprise bargaining between the two main
entities thus becoming the focal point of the dispute. They have the right to rule over
proposed strikes and sustain the negotiations to reach a fruitful end.

Government of Australia is a party to the dispute because PSHPL is one of the largest
terminal owners in the country and manage the logistics of containers. PSHPL was reported
to have suggested probably Federal Government intervention to protect the public from
the fall-out of the strikes. Disruptions in operation affect many businesses that are
depending on goods being delivered in the containers. This directly hits the economy and
the credit rating of the country. Finally the impact is felt on investments and economic
forecast [ CITATION Bab16 \l 16393 ]. The government might initially choose to watch
from the sidelines but it will have to take a position at some point.

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

ENTERPRISE BARGAINING
The labor forces and dynamics between employers and employees are changing all over
the world. Reacting to these changes, advanced countries are taking proactive measures in
creating a structural framework safeguards the interest of both employees and employers.
The system’s intention is to create a fair basis for adhering to basic norms and requisites
for a decent human life and sustenance by monitoring the compliance by employers while
ensuring that employees and unions don’t arm twist. Union voice is also can be said as
communication between two groups (Holland & Cooper 2012). The Australian Fair Work
Act 2009 was drawn up to forge strong relations between employees and employers to
press forward Australian economic growth.

Fair work Australia has established unambiguous standards for compliance work week,
holiday entitlement and sick leave etc. The rules and process for creating an enterprise
bargaining agreement are clear as per the Fair Work Act 2009 [ CITATION Ste16 \l 16393 ].

THE ROLE OF THE GOVERNMENT

In a democracy, the role of a government is more of a facilitator making policy decisions. It
is the state institutions like parliament, judiciary, public service etc., who set the rules. The
government has a ministry for work, employment and workplace relations who are
responsible for the labor market, work and family matters, and income support. The
ministry is also responsible for protecting and upholding the rights of the concerned
parties. In the interest of the nation, the government is also expected to act as an arbitrator
and conciliator in case of disputes that have far reaching effect on the general population.

The government is responsible for managing the modalities of employee relations when
the right of any interested party is affected – the employees, employers, unions. If the
consequence of an industrial dispute affects the public, then it is incumbent upon the
government to act and diffuse the situation.

By not intervening into this matter, the government is matter to reach a flash point where
positions will be hardened and one of the stakeholders will buckle. However, there seems
to be no serious concern about the long term effect on the Australian terminal business in

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

the globalized economy [ CITATION Ewi15 \l 16393 ]. The spate of disruptions is unhealthy
and display instability. The issues have been simmering since 2011 and pay hikes have
been continuously pressed for. It is time the government gets into the act and decides if the
wage hike demand is truly justified or Patrick is trying to elongate it for business gains. Is
the government really concerned about the true losers in case of strikes that throw the
delivery schedules haywire and eat away into the shelf life of perishable food items?

THE ROLE OF THE FAIR WORK COMMISSION

The commission’s vice-president G. Watson had suspended legal industrial action by the
union for 35 days to enable both sides to negotiate and reach an agreement. His decision
was later overturned which signals instability in the operation of the commission. The
commission is trying to balance its role by allowing the negotiations to proceed without
hurting work at the terminals [ CITATION Joe161 \l 16393 ].

What is the role of the commission? Is it not authorized to verify if the demands are valid
and just or the union is trying to be high-handed and taking the PSHPL’s operation into
ransom?

How is the commission protecting the rights of the employees? The commission can guide
the employees in evaluating the pros and cons of the enterprise agreement terms to help
them make an informed decision which is in favor of the employee and his/ her sustenance.
Unions everywhere will and do have their own agenda. They believe in getting the highest
wages as an impressive achievement even though that compromises the economic
sustainability of the business. Leading industrial action and strikes, the loss of wages are
only of the employees.

Fair Work Commission should act if the layoffs by PSHPL are illegal. If the company is
removing workforce as per norms, there should not be any dispute. It is the right of the
employer [ CITATION Mik152 \l 16393 ].

In the whole PSHPL and MUA dispute in the last 2 years, Fair Work Commission does not
appear prominently in playing not only the role of an arbitrator but also negotiator and
guide for both employees and employers(Gahan & Pekare, 2012).. The entire bargaining

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

process seems to be managed by the PSHPL and MUA with hardly any nudge in the positive
direction from the government or the commission.

Is the enterprise bargaining process really working in this case?

PATRICK STEVEDORES’ STRATEGY

PSHPL sought an order from Fair Work Commission to suspend any industrial action by the
union under section 418 of the Fair Work Act 2009. The company has chosen to take a
different route – seek direct secret ballot. The move to take the vote directly to the
employees by bypassing the union shows that PSHPL is ready to take the agreement to a
logical end [ CITATION Luc16 \l 16393 ].

There are two options – either the employees see reason in the company’s enterprise
bargaining offer and go ahead or reject the offer. In case of the latter, the company might go
to the point of lockout to send across the message of their seriousness. And the ballot has
been rejected. The union considers the rejection as a sign that PSHPL needs to negotiate
with them for an enterprise agreement [ CITATION Han161 \l 16393 ].
The company seems to be playing their cards well though at a constant loss of business and
revenues due to strike and stoppage of work (Kramar, R 2012). Though an eventuality of
the lockout will have serious repercussions for PSHPL but a decision has been taken on the
extent of negotiations and the company is sending clear signals of intent to MUA,
employees, the commission and the government.

Though the company’s operations are getting disrupted, it is Australian economy and
public that is truly suffering and paying the price.

ACTIONS OF THE MARITIME UNION OF AUSTRALIA

MUA seems to be playing a very militant role in the whole negotiation and acting contrary
to employee welfare. In an economy, where cost competitiveness is critical and companies
exist for economic viability and not just social sustainability; seeking a balanced enterprise
agreement will always be in favor of the employees. Automation is inevitable and cannot be

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

warded off with strength and threats of strike. Unless the economy thrives, companies will
not have the financial wherewithal to fund the growing demands of unions.

Based on the bids placed on Asciano, it is just a matter of time when the company is bought
over. The new management will bring its new practices and systems which might be
detrimental to the existing fragile employer – employee relations and the position of MUA.
MUA appears to be under the impression that Asciano will be forced to enter into an
agreement to become a lucrative deal for the bids which does not seem to be the case. On
the contrary, delaying an agreement might work in favor of Asciano. The new management
will be in a stronger position to bargain considering that economic survival and growth will
be their prime focus to recover the costs. If the takeover is completed by June 2016, MUA
will find themselves again on the negotiation table with another owner [ CITATION
Jen151 \l 16393 ].

What is the strategy with MUA to counter loss of income or jobs in the eventuality of a
lockout by PSHPL? How will the union provide for their members?

MUA’s deadlock is based on demands that are not economically favorable. The union wants
all employees to have a full-time permanent position. This move is probably to ensure that
no one loses their job in case of Asciano’s Stevedoring business being bought over by
another entity.

CONCLUSIONS

The past instances of strike and pay hike disputes combined with layoffs in the last two
years show the employee relations in very poor light. The bid by Qube Logistics under
Chris Corrigan to buy PSHPL appears to have created further instability among the
employees. Chris has a legacy of replacing union workers with non-union ones. Today,
Qube is pushing forward automation at the terminals and ports for higher productivity,
cheaper rates and much lesser employee relation issues to contend with.

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Maritime Union of Australia and Patrick Stevedores Holdings Pty Ltd. (2015-16)

Does the lack of a simplified minimum wages and labor laws directive from the government
complicate the whole enterprise bargaining process? Is it causing the negotiations to
become costly and resource hungry while hampering trade and material movement at
ports? Is it time to review the framework of the Fair Work Act 2009 and introspect if there
is a better way to protect the interest of the employers and employees without making the
process contentious?

The case of PSHPL and MUA enterprise bargaining negotiations seem to point out the
weaknesses in the enterprise agreements. Who is gaining in the end? Are the employee
concerns being truly addresses or the employer and the union trying to have their own way
making the employees the scapegoat of the tussle?

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