Unions and collective bargaining in Australia in 2016

Introduction

In 2016, unions continued to attract attention in Australian politics. Following the report of the Royal Commission into Trade Union Governance and Corruption in late 2015, the federal government sought to re-introduce two pieces of legislation that had failed to pass both houses of parliament during the Abbott government – the Australian Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] and the Fair Work (Registered Organisations) Amendment Bill 2014 [No. 2] (Anderson, 2016). Again, neither bill passed, which was used by the government to trigger a double dissolution election. Voters returned the Conservative Turnbull government and a fractured and fractious Senate crossbench, but by year’s end the Coalition passed both bills in amended form.

Unions mounted a considerable campaign around the federal election, spending around $35 million in attempting to unseat the Turnbull Coalition government (Bramston, 2016). The Australian Council of Trade Unions (ACTU) claimed responsibility for the closer than expected outcome, arguing its campaign had a ‘massive impact’ (Gribbin and Dziedzic, 2016). Despite the election trigger being industrial legislation, the Australian Building and Construction Commission (ABCC) was not a central campaign issue. Unions, however, campaigned in defence of penalty rates which they claimed were threatened by a re-elected coalition government. In Victoria, protracted negotiations between the United Firefighters’ Union and the Country Fire Authority, centred on the division of labour between career and volunteer firefighters, spilt over into the federal election. Prime Minister Turnbull campaigned aggressively on the dispute, promising legislative amendments to support the volunteers which passed in October (Kozoil and Gordon, 2016).

These events epitomised the challenging environment faced by Australian unions in 2016: overall it was a tough year for unions and collective bargaining. Shrinking membership and bargaining coverage, sluggish wages growth, a robust industrial environment, allegations of union corruption and criminal activity, and instances of union agreements leaving workers worse off were key themes in public debates around the role of unions.

Unions and bargaining

Industrial disputation

For the 12-month period ending September 2016, there were 285 disputes recorded – up from 222 disputes over the same period in 2015 (ABS, 2016a). This increase in the number of disputes is reflected in the total number of working days lost (WDL). To September 2016, there were 106,500 WDL recorded, compared with 81,200 over the 12 months prior. As with 2015, the majority of days lost were concentrated in Queensland (49.7%), Victoria (28.5%) and New South Wales (NSW) (11.5%). In Queensland, a series of industrial disputes in the construction sector account for a large proportion of these WDL. Overall, WDL per 1000 employees rose from 7.7 to 10.0 over this period.

In the year to September, just over half of all WDL were concentrated in the building and construction sector (51.1%). Other sectors were relatively quiet, with the remaining industrial disputation concentrated in metal manufacturing (4.5%), coal mining (4.1%), transport, postal and warehousing (3.4%) and other manufacturing (1.9%). As with prior ABS releases, education and training, and healthcare and social assistance are reported together, and account for 6.6% of WDL – a similar proportion to that reported in the previous year.

ABS data also report the cause of disputes and how they were resolved, although the latest releases provide a delayed snapshot – reporting data for the year to June 2016 only. The ABS distinguishes between causes related to enterprise bargaining and other matters. For the first time since 2009, the proportion of all disputes that resulted from enterprise bargaining fell to less than half (46.1%). Of these, around three-quarters relate to disputes around working conditions and just over 20% concern remuneration. The other half of all disputes were accounted for by a range of causes not associated with enterprise bargaining. Notably, workplace health and safety matters caused half (50%) of all non-bargaining disputes in the year to June 2016, up from 43.6% for the previous 12 months.

Termination of expired agreements

In their 2015 review, Pekarek and Gahan (2016) noted that a number of employers succeeded in having expired agreement terminated by the FWC. By default, formally expired agreements continue to operate unless they are terminated or replaced by a new agreement. In this context, an application by one of the parties covered to have an expired agreement terminated under Section 225 indicates a willingness – or willingness to threaten – to withdraw from enterprise agreement making and, in its absence, revert to either minimum conditions set out in awards or more individualised arrangements. Figure 3 presents data on s225 applications made to the FWC. It shows a significant increase in the number of s225 applications over the last 5 years – and the increase in the rate of growth with which they have been made, which in part explains the decline in coverage of EAs we reported earlier. OPEN IN VIEWER

The mining and energy sectors witnessed a number of prominent examples of employers seeking to terminate expired agreements. In March, Peabody Energy succeeded in terminating an expired agreement covering 18 workers at two coal mines in the Bowen Basin (Workplace Express, 2016a). In July, a FWC full bench dismissed an appeal by the Australian Manufacturing Workers Union (AMWU) over the termination of an agreement covering maintenance workers at the Griffin Coal Mining Company in Western Australia (WA) (Carmody, 2016). Griffin indicated that it would pay above the award for a 6-month period while negotiations continued, but cited its poor financial performance to insist the termination was necessary. In July, AGL Energy lodged an application to terminate an agreement, arguing it needed to remove restrictive work practices and excessive labour costs in the face of a deteriorating market and the intractable nature of bargaining at its Loy Yang power plant and associated coalmine in Victoria (Workplace Express, 2016b). In January 2017, the FWC terminated the expired agreement, with the Construction, Forestry, Mining and Energy Union (CFMEU) vowing to appeal the decision.

In a long-running bargaining dispute with the Australian Workers' Union (AWU) and other energy unions at its Bass Strait oil and gas operations, Esso applied in August to have two expired agreements covering more than 700 workers terminated. When in December the unions moved to take protected strike action, the Victorian government applied to terminate strike action under s424, paving the way for an arbitrated outcome (Hatch, 2016).

Employers in other sectors also sought to leverage s225 in bargaining disputes: in December Murdoch University applied to have its expired agreement terminated, claiming its move was designed to overcome the impasse reached after 7 months of bargaining (Hare and Ross, 2016); whilst Parmalat applied to terminate its agreement with unions in November, after only 2 months of negotiations (Hatch, 2016).

In these disputes, unions were concerned about employers using s225 to reduce wages and conditions to award minima and improve their bargaining position. In some parts of the economy, however, workers are still covered by expired WorkChoices-era agreements, which provide for below-award conditions. In these cases, workers (and, if represented, their unions) have a stronger motivation to seek a termination than the employer. For example, in December the FWC dismissed a bid by a (former) Bakers Delight employee to have an expired agreement from 2006 terminated after the company objected on the grounds that she had already resigned when she lodged the application (Toscano and Danckert, 2017).

Significant industry campaigns and agreement-making

In the construction industry there was extensive bargaining as unions faced the spectre of a revived ABCC. In Victoria, the CFMEU rolled out a new 3-year construction industry agreement containing annual increases of 5% and retaining the existing 36-hour week and 26 annual rostered days off, after members endorsed the deal in May. The Master Builders Association expressed concern about the ‘unsustainable costs’ of these terms and, deeming the agreement non-compliant with the 2014 Building Code, advised employers against signing (Workplace Express, 2016c). The amended ABCC legislation allows 2 years from the passage of the legislation for EAs to conform to the code. By December, however, around 1500 firms had signed the deal (Hannan, 2016a). While there was no major strike action in Victorian construction, Queensland experienced high levels of bargaining-related industrial activity, the CFMEU in particular clashing with major contractors such as Hutchinson, Watpac and Lendlease on different projects.

The CFMEU and selected officials faced regulatory scrutiny and proceedings related to past and more recent activities. In July, the Australian Competition and Consumer Commission (ACCC) raided the union’s Canberra office as part of an investigation into alleged cartel conduct arising from the Royal Commission (Workplace Express, 2016d). In August, the FWC announced it would take no further action following an inquiry into the use of trusts by former officials of the CFMEU’s NSW branch based on referrals from the Royal Commission (Workplace Express, 2016e). In October, the ACCC brought its case against the CFMEU over its alleged secondary boycott of the building and construction materials company Boral, with the Federal Court reserving its judgment (Workplace Express, 2016f). Victorian CFMEU leaders John Setka and Shaun Reardon were unsuccessful in challenging blackmail charges arising from the Boral dispute, with a committal hearing expected early next year (Workplace Express, 2016g). Over the year Fair Work Building and Construction (FWBC) secured significant penalties against the CFMEU in proceedings primarily focused on contraventions around right of entry, coercion, unlawful industrial action and freedom of association. Meanwhile, the Electrical Trades Union took federal court action in November challenging the power of FWBC to assess agreements for their compliance with the 2013 building code, after the watchdog objected to the inclusion of some content in a proposed deal. Proceedings were ongoing at the time of writing (Workplace Express, 2016h).

In transport, industrial relations were also eventful. Qantas employees already covered by agreements included in the current group-wide 18-month wage freeze stood to receive cash bonuses after the company reported a record full-year net profit of $1 billion in August. This included Qantas domestic cabin crew, who accepted a new 4-year agreement in November after twice rejecting earlier offers (Workplace Express, 2016i). At Virgin Australia, international cabin crew secured a new agreement after 2.5 years of negotiations, with key provisions including pay rises of 10% over 4 years, 6% back pay to July 2014, tenure-based career progression, and arrangements for conversion to part-time work (Workplace Express, 2016j). Meanwhile, the Transport Workers Union vowed to keep fighting for better pay and safety for truck drivers after the federal government passed legislation abolishing the Road Safety Remuneration Tribunal (RSRT) in April. The RSRT was eliminated on the back of a campaign by contractor drivers who claimed to be adversely affected by the new minimum pay order (Workplace Express, 2016k). In August, the Rail Tram and Bus Union and other unions suffered a set-back when professional, technical and administrative employees of the NSW Australian Rail Track Corporation (ARTC) narrowly accepted a unilateral management offer – against union recommendations and after taking protected industrial action (Workplace Express, 2016l). However, a unilateral offer by the ARTC to Victorian employees was overwhelmingly rejected in November. In November, after a protracted 18-month dispute involving extensive stoppages, Maritime Union of Australia (MUA) members approved a new deal with Patrick Stevedores (Toscano, 2016a).

In warehousing, the National Union of Workers (NUW) secured a new agreement with Polar Fresh, a major Victorian distributor for Coles Supermarkets, after a 3-day strike in July that saw Coles and Polar Fresh obtain court injunctions (Workplace Express, 2016m). The agreement runs to 2019 and includes pay increases averaging about 4.75% a year and contains casual conversion clauses and ‘site rates’ for labour hire workers. In June, the Fair Work Ombudsman (FWO) launched proceedings against the NUW, alleging it had taken unlawful industrial action in 2014 at two Victorian Woolworths subsidiaries over the engagement of casual labour hire workers. The NUW continued to campaign for better labour standards further down the supermarket supply chain, exposing and seeking to tackle the abuse of workers, often migrants on temporary visas, in the horticulture sector (Baker et al., 2016).

In manufacturing, Ford ceased production in Victoria and Holden stopped making its Cruze model in South Australia (SA), resulting in significant redundancies. These developments are emblematic of the fundamental challenges confronting the AMWU, described in a report by former ACTU secretary Greg Combet and consultant Andrew Whittaker which predicted the union would suffer crippling membership losses by 2020 and recommended a major overhaul of its complex structure and governance arrangements (Workplace Express, 2016n). In July, the AMWU national conference resolved to press ahead with internal reforms centred on abandoning its divisional structure, and established a steering committee to guide its ‘new union’ project towards a trial phase in 2017. In October, the AMWU sought an alteration to its rules, giving it coverage of independent contractors who, if employees, would be eligible for membership (Workplace Express, 2016o). In June, maintenance workers at the Carlton & United Breweries (CUB) plant in Melbourne were informed that their labour hire contractor was being replaced by another firm. The workers were invited to reapply for their jobs, but with dramatically reduced pay and conditions. After a change in CUB’s ownership and lengthy negotiations, unions claimed victory in December, but details of the deal remain confidential (Toscano, 2016b).

In March, around 600 Fairfax journalists walked off the job for 3 days after management announced it would cut its editorial workforce by 120 positions. In August, the FWO discontinued its investigation of the wildcat strike finding that further action was not in the public interest (Workplace Express, 2016p).

In the tertiary sector, founder of the anti-bullying program SafeSchools, Roz Ward, was stood down by La Trobe University in June for a post on her personal Facebook account only to be reinstated after a campaign by the National Tertiary Education Union (NTEU) (Tomazin, 2016). At the same time, there was a highly co-ordinated start to a new round of bargaining by tertiary employers in WA, including an attempt to enjoin two NTEU officials in the Federal Court over union communications at Murdoch University (Workplace Express, 2016q). Meanwhile, the University of Melbourne has sought to split its current agreement into two – one covering academic staff and the other covering professional staff. The Independent Education Union (IEU) finalised a new agreement for teachers in Catholic schools in Queensland which broke with the convention of the Catholic system ‘following’ public schools. The IEU secured pay increases that outstripped the public agreement and ensured that experienced teachers would earn more than $100,000 a year (Workplace Express, 2016r).

Numerous retail and fast food agreements negotiated by the Shop, Distributive and Allied Employees Association (SDA) have come under scrutiny for allegedly failing the better off overall test (BOOT) – leaving workers covered by those agreements worse off compared to the relevant award. In a high-profile example, the FWC ruled in May that a 2015 EA covering employees at Coles Supermarkets left workers worse off (Schneiders and Miller, 2016a). The agreement mandated a higher hourly base rate of pay, but cut penalty rates for weekends and nights. Coles argued unsuccessfully that additional benefits in the EA compensated for decreased penalty rates. Subsequent investigations found that a number of SDA negotiated agreements – including Woolworths and McDonalds – appeared to fail the BOOT. The SDA subsequently announced that it would review almost 100 of its EAs that it believed also fail the BOOT (Marin-Guzman, 2016).

In the hospitality industry, workers represented by United Voice at Melbourne’s Crown Casino held public rallies in support of their bargaining demands, and in December approved a new 3-year agreement that includes pay increases of 3.75 per annum and satisfies the key claim for compensation of weekend and shift work through a new ‘recognition allowance’ (Toscano, 2016c). At Crown Perth, an agreement approved by the FWC in October gives hospitality workers a 7% pay increase over 3 years and retains weekend penalties (Workplace Express, 2016s).

The public sector

In the federal public sector, negotiations remained gridlocked, with around two-thirds of the public service – approximately 100,000 employees – still without new agreements after almost 3 years of bargaining. The Community and Public Sector Union (CPSU) attributed the impasse to the government’s restrictive bargaining policy, including its 2% wage cap, no back-pay, removal of some existing conditions, and a ban on inclusion of other conditions, including the refusal of agencies to include domestic violence leave clauses in draft agreements (Towell, 2016a).

While a number of Commonwealth agreements were finalised in 2016, public servants in some of the largest agencies, including Human Services, Defence, Immigration and Border Protection (DIBP) and the Australian Tax Office, have now repeatedly voted to reject government offers. Indeed, a number of draft public sector agreements were deemed to fail the BOOT by the FWC (Towell, 2016b). In an effort to progress talks, the CPSU launched strikes across agencies in March and September. In October, the FWC terminated protected industrial action by employees of the DIBP at airports, cruise ship terminals and cargo ports across the country. The parties made no progress during the mandatory 21-day negotiation period, and the DIBP put another agreement to its employees which, like the previous two offers, was overwhelmingly rejected (Belot, 2016). At the time of writing, the FWC was arbitrating the impasse, a rare occurrence under current legislation. In October, the Senate referred an inquiry into ‘the Government’s Workplace Bargaining Policy and approach to Commonwealth public sector bargaining’ to its Education and Employment References Committee, whose report characterised the government’s approach as a ‘siege of attrition’ and recommended fundamental changes to its bargaining policy (The Senate, 2016).

At the state level, Labor governments in Queensland, Victoria and South Australia conducted inquiries into the labour hire industry and insecure work. These reports generally found widespread worker exploitation including wage theft, bullying and harassment, and failure to meet safety protocols (Brown, 2016). In October, the Victorian inquiry recommended a licensing system for labour hire contractors and other provisions that the government pledged to adopt (Sullivan, 2016). Many state governments imposed or maintained wage caps in the public sector. Both SA and NSW limited increases to 2.5%, Tasmania 2% and Western Australia 1.5%. In Queensland, public sector employees secured annual pay increases of 2.5%. The Victorian government resolved a long-running dispute with paramedics, increasing pay by between 20% and 28% on 1 July (Willingham, 2016). In November, public sector nurses in Victoria voted for a 4-year deal that brings pay rates into line with NSW conditions and, through a common law deed, provides further pay increases through to March 2024 (Workplace Express, 2016t) In NSW, teachers voted to accept a 7.5% pay increase over 3 years from the state government (Workplace Express, 2016u).

In November, the Queensland government passed the Industrial Relations Bill 2016 affecting state and local government employees. The legislation strengthens good faith bargaining and adverse action provisions, mandates family violence leave and simplifies protected action processes (Workplace Express, 2016v).

New strategies and actors

Looking forward

Australian unions had a difficult in year in 2016. A concerted and resource-intensive union campaign to mobilise voters failed to unseat the Turnbull government at the federal election. Unions continued to secure wage premiums through enterprise bargaining, but the number of workers covered by EAs declined over the year, cementing a clear longer-term trend in the contraction of bargaining. Concern over ongoing membership decline saw union leaders explore and experiment with organisational reforms and initiatives as new, ‘union-like’ actors entered the field. However, analysis of longer-term membership developments across union types suggests the outlook is alarming for all but those unions focused on occupational identity. The bargaining parties continued to leverage the Act to their best advantage (Pekarek et al., 2016); however, unions grew increasingly concerned over employer attempts to terminate expired agreements. By the end of the year, the federal government had successfully negotiated the passage of its two signature IR bills, creating a new regulator to oversee registered organisations and re-establishing the ABCC. Consequently, unions confront a more stringent regulatory regime around governance, and construction unions face a new round of intense scrutiny. These developments suggest unions will need to intensify their efforts to innovate, organise and campaign to remain viable in a continuing difficult environment.