September 23, 2022

Australia seeks labor law changes to address port inefficiencies

Port of Melbourne (file photo)

Posted on September 9, 2022 at 5:51 PM by

The Maritime Executive

The Productivity Commission of Australia has released a report which, among other things, focuses on increasing productivity in the country’s major seaports. The report claims that persistent inefficiencies at Australian ports are costing the economy around A$605 million (about US$415 million) a year.


The report is part of an inquiry commissioned by the Coalition Party during the tenure of Scott Morrison, leader of the Australian Liberal Party and the country’s Prime Minister from 2018 to May this year. Last December, the former director of the Australian Treasury, Josh Frydenberg, appointed the Productivity Commission to examine the efficiency of Australian ports.


At the time, they cited the impetus for the report based on a long-running dispute between the Maritime Union of Australia (MUA) and some port terminal operators. In August, ten ports across Australia were again disrupted after workers boycotted labor to negotiate a better enterprise (EA) agreement. The survey has also been extended to look at labor issues and industrial relations in Australia’s maritime sector.


Part of the inquest’s verdict concerns an overhaul of Australian port labor laws, wresting power from the Maritime Union of Australia, which the authors say is needed to save the shipping industry maritime.


The report argues that companies should be given the opportunity to counter strike threats in an effort to limit the unchecked dominance of the MUA. These include making it easier for port workers to stop industrial action by the Fair Work Commission (FWC) and creating an environment in which importers and exporters can easily intervene.


“Systemic industrial relations issues across the containerized freight supply chain have played a central role in inhibiting productivity and efficiency gains at Australian ports. For some time, restrictive labor practices and industrial action have intensified in recent years,” reports the Australian Competition and Consumer Commission (ACCC).


The report says that the operating conditions of container terminals have given employees significant and unbalanced bargaining power. The dominance of the MUA and its high membership density within the ports workforce further strengthened this position.


“The risk of conflict also has a historical dimension, with old conflictual relations between employers and employees,” notes the report.


Consequently, the average duration of EA negotiations has increased in recent years, with a substantial impact on container terminal operations.


In response, the Productivity Commission recommends a range of measures, including amending Australia’s Fair Work Act to allow the Fair Work Commission to suspend or terminate protected industrial action where it causes or threatens cause significant economic harm to a party. under EA rather than both (as is currently the case).


Other amendments include a mandatory requirement for CC intervention when certain trading activity thresholds are reached, for example, time limits or thresholds related to the number or magnitude of protected industrial actions. Employers should also be given ample time to prepare for industrial action by extending the mandatory three-day notice period for protected industrial action to seven days.


Earlier this year, during an election campaign, Labor Party leader Anthony Albanese and current Australian Prime Minister, promised to create a strategic “national maritime fleet” to protect Australia from supply chain disruptions.


The report warns, however, that Australian-flagged vessels are not a prerequisite at this time, as international capacity they say appears to be working well. However, it is worth focusing on the problem of the lack of competition between terminal operators, which leaves shippers without choice and exposes them to exorbitant charges.