Shell boss calls for workplace relations overhaul

by Janie Smith27 Jun 2014
The head of global energy giant Shell in Australia has called for workplace practice reform and changes to enterprise bargain agreements.
Andrew Smith gave a speech to the Committee for Economic Development forum, in which he called for the overhaul to ensure living standards could be maintained and to prevent Australia’s global competitiveness from being undermined, the Sydney Morning Herald reported.
Smith also said that enterprise bargain agreements in sectors like construction needed to be reshaped to allow them to cover the length of time it takes to complete a project.
He gave an example of a project involving five skilled workers doing maintenance, which would take 500 hours, but which rose to 600 hours with scheduled breaks and travel.
"But because of restrictive workplace practices, such as demarcation, it led to an actual labour spend of 700 hours. The result was we had 500 hours of work, but we paid for 700... Not only did it cost more to complete the task, but the equipment being maintained was unavailable for longer than expected and longer than necessary.”
He said “unproductive clauses” in enterprise agreements needed to be eliminated so that labour could be allocated effectively.

Joydeep Hor, managing principal at People+Culture Strategies, told HC there was “a strong perception among numerous business leaders”, particularly those who had operations outside of Australia, that the workplace relations infrastructure in Australia was not conducive to multinationals wanting to invest in doing business here.
"Politically, it was only two elections ago that reforms to the industrial relations system were seen as the most dominant election issue and many would say that Work Choices led to the demise of the Howard Government. What that confirms is that radical IR reform is something that is unlikely to happen at anytime soon," said Hor.
"What we have seen with the impact on manufacturing in Australia is very much a consequence of the legacy framework that has been in Australia for over a century and in circumstances where our neighbours in the region are not constrained by such a legacy, we need to understand what that might mean for foreign investment."
What do you think of Australia’s workplace practices?


  • by MM 27/06/2014 12:08:33 PM

    The IR rules don't need to change, they work - Shell needs to ask why did it cost so much for 500 hours of work? It cost that much because that is what they negotiated. Shell needs to up its game and not blame employees for being better at negotiation than the company. They wanted an EBA for the convenience of the company instead of staying with the Award. So any shortcomings or extra costs to the business in following the EBA is the company's own fault.

  • by Paul 27/06/2014 4:59:49 PM

    Great comment MM. May I also add that many employer membership organizations (you know who you are) and other parties i.e. lawyers etc recommend that Companies use such agreements purely for reasons of their own gains.
    An in-experienced HR person won’t know the difference between available contracts and usually go with what other external or internal party’s recommend or, what other uninformed Companies are using - Industry norms. Shell you used the wrong agreements and worse – you were poor at negotiating them.

  • by Sarah 30/06/2014 2:52:37 PM

    Well said MM. If an employer wants to use an EA instead of an Award they should make sure they know how to negotiate well with unions and carry out appropriate planning.

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