The Australian waterfront dispute of 1998 was a watershed event in Australian industrial relations history, in which the Patrick Corporation undertook an illegal restructuring of their operations for the purpose of increasing the productivity of their workforce. This dispute involved Patrick Corporation locking out their workers after the restructuring had taken place, with many of these workers members of the dominant Maritime Union of Australia. The resulting dismissal and locking out of their unionised workforce was supported and backed by the then Australian Liberal/National Coalition Government.
Major events in the dispute occurred in four major ports, where the Patrick Corporation had significant operations, Melbourne, Brisbane, Fremantle and Sydney. It revolved around attempts by Patrick Corporation and the federal government to improve efficiency on Australia's wharves; primarily by reducing staffing numbers and the power of the Maritime Union of Australia.
In 1995–96 approximately 70 per cent of Australia's imports and 78 per cent of exports were transported by sea, amounting to approximately $60 billion in trade. This however does not include the revenue on car importations.
Data was collected throughout 1997 by the Productivity Commission, comparing international container stevedoring performance for the same ships and trades. The data indicated that Australia charged generally higher, productivity was lower and services were less reliable than overseas. With the exception of bulk grain loading, other areas of traditional stevedoring also performed relatively poorly. It also found that marine service and port infrastructure charges were, in total, two to three times greater than at overseas ports – noting that only some of this reflects cost-recovery pricing in Australia.
Together with other problems in the transport chain, this under-performance was not only resulting in higher direct costs to shippers, but also significant indirect costs from delays and unreliability which could have been reduced. Overall, the international benchmarking revealed significant scope for improvement in Australia's performance.
The Howard government, before being elected in 1996, had promised significant industrial relations reform. In January 1997 it substantially amended the Industrial Relations Act, and renamed it the Workplace Relations Act 1996. The stated aim of this legislation was to foster individual choice in workplace bargaining by reducing the powers of external organisations, particularly trade unions, to intervene. In addition, the legislation reduced powers of the Australian Industrial Relations Commission to arbitrate disputes. The Act also introduced individual statutory employment contracts. These were known as Australian Workplace Agreements or AWAs. The watering down of collective bargaining provisions was a source of objection from many workers and unions.
Australian waterfront productivity had been an issue of concern since the 1980s. Patrick Corporation sought to improve productivity by creating redundancies and reducing overtime entitlements for its permanent employees, as well as hiring more employees on a casual basis. The MUA (Maritime Union of Australia) was formed through the amalgamation of two unions: the Seafarers Union of Australia – the SUA, and the Waterside Workers Federation or WWF. The Maritime Union of Australia was born from this background and retained a heavy union presence on the waterside. There had been numerous allegations concerning union members and officials in relation to illegal activity, fraud, grafting and bully tactics.
At the time, it was mandatory that prospective employee had to be a card-carrying member of the MUA. The Howard Government sought to encourage a non-union workforce to compete against the MUA and made new legislative changes to bring this about.
After the legislative introduction of Australian Workplace Agreements, a number of stevedoring operators toyed with bringing individual contract workers into their workforces, but abandoned their plans in the face of strident union opposition and activism.
One Australian stevedoring company, Fynwest Pty Ltd, sought to recruit former and current Australian Defence Force members to counter the MUA. In particular, from December 1997, Fynwest began a campaign to recruit former and current members of the Special Air Service (SAS), paratroopers from 3RAR, commandos from 4RAR and other military specialists, to become stevedores Others were recruited from controversial private military and security consulting companies, such as Sandline International and the Control Risks Group. This led to use of terms like 'industrial mercenaries' in political and media circles.
Fynwest planned to send these recruits to Dubai in the United Arab Emirates, where international standard training could be provided. The newly trained stevedores would then take part in an Australian non-union dock workers training program.
The MUA was "tipped off" about the planned Fynwest operation and took the matter to the media who met the departing Fynwest employees as they boarded a flight to Dubai and questioned their "tourist" status. Intense criticism and the threat of international industrial retaliation forced the Dubai Government to cancel visas for the Fynwest company employees.
In September 1997, Patrick implemented a restructure whereby the functions of employing its unionised workforce and owning its stevedoring business were divided into different companies. The stevedoring businesses and assets previously held by the employer entities were transferred to other companies within the Patricks Group. In addition, the employer entities entered into various labour supply agreements with the owner entities to supply Patricks with labour. As a consequence, the labour supply agreements became the major asset of the employer entities.
Significantly, the labour supply agreements were terminable by the owner entities without notice in circumstances of industrial action. The details of the corporate restructure were not made known to Patrick's employees or the Maritime Union of Australia (MUA).
In late 1997 and early 1998, Patrick's employees engaged in industrial action, most notably at Melbourne's No 5 Webb Dock.
On 8 April 1998, Patrick's management dismissed all of its employees; liquidated its assets, becoming technically insolvent; and imposed a lockout at most ports in which it operated.
Minister for Workplace Relations, Peter Reith read from a prepared brief, stating that the government fully supported Patrick in their action.
By the following morning the docks were fully operational with new non-union staff in place.
The case went before the Federal Court with Justice North finding in favour of the union. He found that the company had deliberately restructured their corporate structure with the sole intent to dismiss their unionised workers. The company with the support of the government appealed this decision to the full bench of the Federal Court which upheld Justice North's earlier decision. The company appealed to the High Court of Australia with the government's support. The full bench of the High Court amended the original judgment to acknowledge the legitimate power of the (now insolvent) company's administrators.
The MUA and Patrick negotiated a new work agreement, which was adopted by the company and workers in June 1998. The agreement specified a near-halving of the permanent workforce through voluntary redundancies, the casualisation and contracting out of some jobs, smaller work crews, longer regular hours, company control over rostering, and productivity bonuses for faster loading. While the union retained the ability to represent maritime workers, the company achieved significant changes to work practices as it desired. Workplace Relations Minister Peter Reith stated at the time "There appears to be a number of reforms which will satisfy the seven benchmark objectives which is very important."
The non-union workers who had been employed to break the union were dumped by their employer at the conclusion of the dispute. Many workers from the non-union group claimed they were still owed thousands of dollars in unpaid wages, and successfully sought payment of the unpaid wages through the courts. In contrast, the Fynwest employees, who were on an annual salary of around A$120,000, were awarded bonuses and commissions worth around $50,000 each on cancellation of their contracts.The waterfront dispute was the subject of the 2007 miniseries Bastard Boys.
It was the subject of Katherine Thomson's 2004 play 'Harbour'.
It was also an influence on The Living End's song Roll On.
It was also covered in the 1st episode of the ABC TV documentary The Howard Years, broadcast Monday 17 November 2008.
It was briefly covered in episode 2 of 'Liberal Rule' which aired on 28 July 2009 on SBS.