Workplace reform battle continues to rage

workplaceINDUSTRY heavyweights are calling for urgent changes to workplace relations laws amid fears Australia could miss the next wave of international oil and gas investment.
The Australian Petroleum Production and Exploration Association (APPEA) led the charge at its annual conference and exhibition in Perth last month, accusing current workplace laws of encouraging high labour costs and low productivity.

APPEA’s recommended changes included a new form of enterprise bargaining agreement for major projects, aimed at limiting negotiating times and renegotiations; toughening right of entry provisions for unions; bigger fines for unlawful industrial action; and re-introducing the Australian Building and Construction Commission – a move already flagged by government. APPEA chief executive David Byers said the government had to do everything possible to ensure the $200 billion in projects under construction started production on time and on budget, and that Australia seized future oil and gas investment opportunities.

“APPEA is calling for labour relations reform to be placed at the centre of the national productivity agenda,” he said. “Reform is urgently needed or we risk losing the next wave of LNG investment that could create 150,000 Australian jobs.” Speaking at the conference, Woodside chairman Michael Chaney said Australia’s workplace relations legislation had “serious shortcomings” and called the Rudd Government’s workplace reforms, including increased rights of entry and the abolition of individual workplace agreements, a “hugely retrograde step”.

“Our high wage structure is not matched by sufficiently high productivity, something I firmly believe is hindered by the so-called Fair Work Act,” Mr Chaney said. “Amendments to the Act contained in the new government’s recently tabled House of Representatives bill address certain right of entry issues but, in
our view, do not go far enough.

“One hopes that the proposed review of the Fair Work Act by the Productivity Commission will highlight the detrimental effect the current legislation has had on Australia’s competitiveness.”
Mr Chaney welcomed the government’s plan to reinstate the Australian Building and Construction Commission, which he said had proven to be the only effective body in the “battle against union lawlessness” on construction worksites. Chevron Australia managing director Roy Krzywosinski said massive wage growth in the offshore construction and maritime sectors was crippling Australian industry.

“Rising labour costs are hampering competitiveness, and combined with low productivity, will ultimately cost jobs,” he said. “It’s not much good having the best paying jobs in the world if there’s fewer of them because the pipeline isn’t replenished.”

Mr Krzywosinski also hit out at right of entry provisions, calling for urgent changes to the Fair Work Act. He said the Chevron-operated Gorgon Project had been subject to almost 1000 right of entry claims from unions since 2009.
“That same imbalance in the employer-employee relationship also explains how unions have leveraged significant and unsustainable wages and conditions hikes over recent years,” he said. Industry minister Ian Macfarlane also threw his support behind the move towards more competitive workplace conditions, but fell short of offering new commitments.

“While no one is advocating lower wagesfor workers, our higher wages must come with greater productivity gains,” he said. “It is in the best interests of workers and unions to engage constructively with companies. There is no room in the increasingly competitive sector for outrageous demands.

“If Australian projects price themselves out of [the international] market then it’s not only workers, but also the national economy that stands to lose out.”
The Maritime Union of Australia (MUA) and the International Transport Workers’ Federation (ITF) returned fire during the APPEA Conference, launching a campaign against Chevron’s approach to the Gorgon project.

MUA WA branch secretary Chris Cain said Chevron was using maritime workers as scapegoats. “Research undertaken by BIS Shrapnel found that the wages of maritime workers make up less than 1 per cent of the US$54 billion cost of building Gorgon,” he said.

“Despite the negligible impact of maritime wages on the total construction cost of Gorgon, the MUA and our members are portrayed by the industry and their henchmen as being responsible for all of the problems facing the Gorgon project and the LNG sector as a whole.”

ITF president Paddy Crumlin said the MUA and ITF had had a functional and long-term commitment to productivity within the reach of labour relations since the initial financial investment decision was reached on Gorgon. “Each approach has been firmly rebuffed by the company,” he said.

“It’s imperative that Chevron develops a good industrial relationship with those working on the [Gorgon] project. “The company needs to get a grip, cop their
stuff-ups on the chin and return to a mature and balanced industrial relations model more suited to Australian values underpinning economic and commercial success.”

As part of the campaign, the MUA erected a 5m high statue of a Chevron manager with his head buried in sand outside the APPEA Conference.