Hiring on the wharves is a prime example of a labour supply monopoly
by Steven Amendola, Partner, Kingston Reid
The stevedoring company Patrick Terminals currently needs the union’s permission to recruit labor, while its competitor Hutchison Ports agrees that the majority of its new hires will be family and friends of its current workforce or the names on a list the union provides.
No, we’re not talking about the bad old days (or good old days, depending on your point of view). We’re talking about the here and now. These constitute parts of agreements that are or are proposed to be in place with the Maritime division of the Construction, Forestry, Maritime, Mining and Energy Union soon.
Discussions today around workforces usually revolve around diversity, inclusivity, and flexibility of work arrangements. By sharp contrast, what’s happening on the wharves is a prime example of a labor supply monopoly (of which more later).
As was said by an industry insider when the Hutchison Ports agreement became public knowledge – the union preference clause for recruitment was very powerful in an industry where the average pay was $170,000 a year. “If you can control who gets hired, who gets fired, you can control the employment chain,” the source said.
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What’s happening on our wharves in 2021 got me thinking about past labor practices that have long gone the way of the dodo bird. For more than 50 years, the powerful Barrier Industrial Council, the union body the effectively ran the mining town Broken Hill, excluded married women from paid employment.
The only exception were professional women and that was on the proviso there were no qualified single women available. This blatantly discriminatory policy only ended when a dental assistant took her case to the NSW Equal Opportunities Board and successfully won reinstatement in the early 1980s.
In the coal mining industry, for decades key tenets of employment included union-controlled job lists and an emphasis on seniority over merit, which only started becoming historical relics after the Coal Industry Tribunal was folded into the Industrial Relations Commission in the mid-1990s, bringing the industry back into the industrial relations mainstream for the first time since 1946.
At the time of that reform, Dr David Klingner, chairman of Coal & Allied Industries (a then CRA subsidiary), said: "Current industry recruitment practices and seniority rules offend people outside the industry as much as they offend Coal & Allied, because they are at variance with the thrust of our laws and social values.
At a time when the pace of change in equal opportunity and discrimination law and practice is stepping up, the way these matters are regulated in coal has stepped back." More than quarter of a century later, the comments seem particularly germane to the wharves today.
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In both those instances, such arrangements were successfully challenged because they were either directly, or indirectly, discriminatory. Yet in the wharf examples today neither arrangement falls foul of the Fair Work Act, although it’s a moot point whether it’s consistent with the goal of providing workplace relations laws that are fair to all working Australians - part of the objects of the Fair Work Act 2009.
Moreover, while such arrangements reflect all the hallmarks of a labor supply monopoly, the competition legislation excludes labor agreements from the reach of its laws. The exception is in the following terms. In deciding whether a person has contravened the restrictive trade practices part of the laws, disregard:
- The making of a contract, arrangement or the entering into an understanding; or
- Any provision of a contract, arrangement or understanding to the extent that the contract, arrangement or understanding, or provision relates to the remuneration, conditions of employment, hours of work or working conditions of employees.
Although there is a policy reason for this exception which is to permit employees to form unions or groups to negotiate wages and other conditions of employment, it is nevertheless expressed in exceedingly broad terms. Is it time for the breadth of this exception to be revisited? If it were a supplier or acquirer of goods or services exercising that type of monopoly power, it would quickly be caught by the competition laws.
Why should the fact that it relates to the exercise of labor supply monopoly power be different? Is it appropriate for a union to determine who you can employ or when you can employ? Does that not move beyond negotiating general terms and conditions of employment? I would think it does.
