Unions give in on North West Shelf contracts

Issue 

By Jennifer Thompson

The ACTU and Australian Workers Union-Federation of Industrial Manufacturing Engineering Employees (AWU-FIMEE) on November 3 agreed with Woodside Petroleum on the introduction of non-union "enterprise flexibility agreements" on the North West Shelf project. The deal, which will in effect de-unionise three workplaces, was struck after the company offered several concessions to overcome the union leaders' previous opposition.

The agreement will place employees on salaries that replace award wages, shift penalties and overtime payments. Base salaries, which will initially offer 10-15% pay increases, will be negotiated with workers on an individual basis. Future rises will depend on performance reviews, as will changes to employment conditions.

The last-minute concessions will allow workers to go to the IRC over changes in their working conditions if disputes cannot be settled directly with management. The awards covering the sites will be maintained as a safety net, and the AWU-FIMEE has formally applied to become a party to the agreement. Acquiescence by the ACTU and AWU-FIMEE allowed IRC commissioner Greg Harrison to approve the agreement immediately.

The pay rises offered by the company appealed to the traditionally highly unionised workers, who voted overwhelmingly in secret ballots to adopt the agreement.

The possibility of the spread of this type of arrangement, which is now being introduced at CRA's Weipa and Bell Bay sites, has perhaps spurred a number of unions to serve notice of pay claims around the 14-15% mark.

The Automotive, Food, Metals and Engineering Union (AFMEU) put in a 14.5% claim, and the National Union of Workers is seeking a 14% increase over two years. On October 24, the Transport Workers Union (TWU) launched a campaign aimed at securing pay rises of 15% over the 1995-96 bargaining period.

On October 26 the Textile, Clothing and Footwear Union (TCFU) announced that it had secured deals with two major companies. Capital Carpet Industries will pay workers a 15% increase staggered over two years, and Bradmill Textiles will pay rises of a minimum of $50 per week over two years (equivalent to 12-16%). The TCFU said it would seek to flow wage settlements of that level throughout the textile industry.

The claims were cautiously supported by the federal Labor government. Industrial relations minister Laurie Brereton on November 1 reassured business that the claims would not injure the economic recovery: "No-one should be frightened of large claims provided they are linked to productivity".

Prime Minister Paul Keating added that union claims were "eminently affordable in national economic terms". The government expected workers to push for wage increases, he said, because most had not maintained real wage levels in recent years.

Keating also attacked the NSW government from the right for the wage rises it was offering to state public servants. "I can assure you that the Commonwealth public sector, that is, my government employees, we will not be making those sorts of settlements", he said.

The claims sparked a flurry of discussion in the business press about the possibilities of a dreaded "wages break-out". The November 4 Financial Review was much closer to the mark when it referred to the "great wage catch-up": around 10% of the projected wage increases would bring workers up to the level of the minority who were able to secure real wage increases over 1992-94, and the remaining 5% will cover estimated increases in the cost of living over the next two years. And all of it is conditional on past or future improvements in productivity.

The Financial Reviews could also confidently reassure its readers of the commitment of union leaderships to hold to "wage outcomes which are consistent with Australia maintaining an inflation rate comparable with those of our major trading partners", as promised in the Accord mark VII.

This pledge to restrain wages was reaffirmed by ACTU senior vice president George Campbell, who said, "We have met that commitment over the past three years and we will continue to meet that commitment".

A Bankers Trust economist, Jenny Cratchley, estimates that it is possible to have wage increases of up to 4% over the next year without seriously challenging the business/government aim of keeping underlying inflation at 2-3%.

And as federal treasurer Ralph Willis pointed out in an interview in the National Australia Bank's magazine, Decisions, increases even in real wages still allow profits to rise, thanks to increased productivity: "Nominal unit labour costs have actually fallen in the past 12 months, and they increased by a very small amount prior to that. This is because we've been getting strong productivity growth, so wages have been increasing in real terms, but productivity has been increasing faster."