New port in an IR storm

Without the possibility of pay rises ahead, unions have focused on weekend penalty rates. Moreover, as the Asciano dispute reveals, the successful Qantas lockout has unleashed a new employer militancy.

There’s a common theme among many of the industrial disputes of today: it’s not about the money; it’s about managing the business. Specifically the new industrial relations battleground is around weekend penalties.

And there’s a swing back to big companies using lockouts and arbitration. They are keener now than they have ever been to force Fair Work Australia to terminate disputes and make binding rulings by taking militant action themselves.

It’s becoming more and more clear that Qantas chief executive Alan Joyce shifted the IR playing field with last year’s dramatic lockout and shutdown that resulted in Fair Work Australia terminating its dispute with three unions.

Yesterday, Asciano was the beneficiary of that shift.

Asciano’s subsidiary Patrick Stevedores has managed to persuade Workplace Relations Minister Bill Shorten to force the Maritime Union of Australia into formal conciliation without having to shut down the docks as Joyce shut down the airports. That’s because both Shorten and the MUA’s Paddy Crumlin knew Asciano chief executive John Mullen was about to do it.

Conciliation is not the same as an FWA dispute termination, where the parties have a maximum of 42 days of negotiations before arbitration takes place. But with an FWA commissioner present, everybody is more likely to be on their best behaviour.

Here’s what Asciano’s chief negotiator, Alistair Field, said yesterday when announcing that the dispute with the MUA had gone to conciliation: "This is not about the money – this is about ensuring that as a business we retain the right to manage our operations.”

It was the same with the famous Qantas dispute, it’s the same with the CFMEU versus Grocon and it was the same thing with the seven-week lockout at the Schweppes soft drink factory that ended recently.

Australian employers are becoming more militant, demanding that unions stop telling them how to run their businesses and they are using lockouts or the threat of one to get the dispute into conciliation or arbitration. Companies have always had access to lockouts but for the first time they are now prepared to use them to regain the initiative.

That’s because the Fair Work Act removed the alternative of individual contracts. Companies used to be able to threaten to go over the union’s head and negotiate directly with employees; now they can’t because the ALP gave the unions back their bargaining monopoly.

The financial crisis has made it difficult for the unions to use this new power to get big pay rises so they have been going for working conditions. Broadly that means more say over the way companies run their businesses, and specifically it means weekend penalties.

Increasingly law firms like Freehills – which advised Qantas, Schweppes and Asciano – have been moving clients towards fighting the unions on their own turf and using their own weapons: militant action and the ALP’s Fair Work Act.

It’s yet another swing of the industrial relations pendulum after it swung too far the companies’ way with WorkChoices and then swung back too far towards the unions.

It could be argued, in fact, that John Howard’s WorkChoices legislation was responsible for the ALP winning the 2007 election and giving unions control of the IR agenda again through the ALP. Australian Workplace Agreements were abolished and yesterday the hated (by the building unions) Australian Building and Construction Commission was abolished.

AWAs had been in the law since 1996 – basically from the minute the Coalition got back into power. The reason WorkChoices was an overreach is that it gave workers the ability to trade away their weekend penalties; previously the Act had said an AWA could not make someone worse off than they would be under an award.

With the Fair Work Act, weekend penalties are back. It’s a way of unions getting a better deal for their members, and thereby arresting the inexorable slide in their membership, without the sort of big percentage pay rises that used to be possible before the credit crunch.

The problem, of course, is that customers don’t pay more for weekend services. It’s setting up an almost irreconcilable conflict: everyone wants the weekend off so they can go shopping and sit in cafes, but nobody wants to pay more for their clothes and cappuccinos on Saturday and Sunday. Business owners are caught in the middle.

Small businesses have no choice but to pay up and cop the squeeze or close on the weekends. But Alan Joyce showed the way for big companies last year: he demonstrated that in the new FWA environment, the Commission is no longer necessarily a hostile place and arbitration is not to be avoided. It’s still hard to get a dispute into arbitration – you have to prove "significant economic harm” – but it’s quite easy when you shut down airports and ports.

Schweppes’ lockout only reduced soft drink production by 30 per cent (it used contractors), which doesn’t quite meet the same "serious economic harm” hurdle. The reason FWA eventually terminated that dispute is because it declared that the workers were suffering "serious economic harm” after seven weeks without pay.

The question now is: what will the Coalition do if it gets back into government? Tony Abbott has already said it won’t reintroduce AWAs, trying to ensure the stigma of WorkChoices is removed.

It’s generally believed that a new Coalition government would expand the application of what are called Individual Flexibility Agreements (IFAs). These exist within the Fair Work Act and allow companies to negotiate directly with an employee to vary an EBA as it applies to that employee.

At the moment IFAs are very restricted – mainly to things like cashing out leave for a particular reason. However they could easily be expanded to include weekend penalties, among other things that would further shift the power balance back to employers.

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