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July 2006 | |
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Interview: The Month Of Living Dangerously Unions: Staying Mum Economics: Precious Metals Industrial: The Cold 100 History: The Vinegar Hill Mob Legal: Free Agents Politics: Under The Influence International: How Swede It Was Review: Keating's Men Slam Dance on Howard
The Soapbox Politics The Locker Room
The Power of Ones
 Oz Hails Sun King
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Economics Precious Metals
The big business critics of Kim Beazley speak with great certainty about the adverse economic impact of any decision to abolish AWAs. Employer advocates stridently assert the productivity benefits of individual contracts. AWAs are credited with providing industries such as mining with a crucial edge; the difference between old and inefficient work practices and world class performance. Within this narrative Kim Beazley stands as a man condemned; the weak populist who would throttle the golden goose of individual contracts in order to appease the selfish interests of his union paymasters.
This reads as a good coherent argument, until one examines closely some of the underlying assumptions. In fact, the alleged shining beacon of individual contracts - the metal mining industry - can't find enough people to endure its harsh working conditions, and provides no significant evidence that individual employment relationships have an edge over collective arrangements in terms of productivity.
Let me explain.
The mining industry in Australia is comprised of a number of sub-sectors, including coal, iron ore, gold, silver, lead and zinc and so on. However, the mining industry is generally divided into two main parts, being coal mining and non-coal (or metalliferous) mining. In terms of financial size, coal mining is the colossus - export earnings of over $25 billion in 2005-06 dwarf the earnings of $14 billion from iron ore - the next largest. Indeed, Australia is the dominant global exporter of coal. It is one of very few industries in which we are the world leader.
So the first point is simple. No commentator can talk sensibly about the performance or characteristics of the mining industry without taking into account the performance and characteristics of coal mining.
In terms of productivity growth, the performance of the mining industry as a whole over the last 10 to 15 years has been good, with average annual productivity increases of 4.7% for the years 1985 to 2003. Indeed, the main employer lobby group for the non-coal sector, the Australian Mines and Metals Association, has frequently cited these figures to justify its position in support of individual contracts as the non-coal sector has had a very high take up rate of AWAs in comparison to other industries.
However, the general mining productivity figures have been good partly because they rely on coal mining. The available statistics for coal mining show that in the 10 years to 2003 productivity growth exceeded 90%.
Point two therefore, is that productivity in the mining industry has been good, and coal-mining has been a major component of that improvement. Common sense would therefore dictate that whatever the formula for success has been in coal mining, it should be preserved and even emulated.
This is where the facts become rather inconvenient for the AWA cheer squad. That is, when one examines the characteristics of coal mining in comparison with the other mining sectors there is one feature that stands out. The coal mining industry is full of members of my union and is largely regulated by collective agreements. The coal mining industry is characterised by an estimated 85% union membership density. In addition, almost every pit has a collective agreement negotiated between the union and mine operators that include Business Council notables BHP-Billiton, Rio Tinto and Xstrata.
The coal-mining sector demonstrates that collective agreements are no hindrance to productivity. On the contrary, it could be argued that the employee production bonuses that are negotiated collectively by the union and which have formed part of the firmament of industrial relations in the industry for decades, is the real spur to strong productivity performance.
The real point is that the take up of AWAs in the mining sector is not motivated by productivity, but by the desire of large mining companies to exercise control over their workers free from the troublesome interference of trade unions. The talk of productivity and gain-sharing; of "direct" relationships and empowerment is simply that.
Wages in the AWA-dominated metal mining sector are lower than in the unionised coal sector. They are considerably lower - around three quarters of what coal miners get paid. And to get that poorer pay packet metal miners have to work longer hours - often fourteen 12 hour shifts in a row, and an average working week of well over 50 hours.
What Peter Hendy and Kevin Andews will not tell you is that practically all individual contracts in the mining industry are not negotiated, but are presented to new employees on a take or leave it basis. You will also not hear about the crisis in labour turn-over in the non-coal sector as skilled and experienced workers vote with their feet against anti-social job rosters and excessive hours.
I guess this is what is meant by the term "staying on message". Unfortunately, for the "WorkChoices" cheer squad, Kim Beazley's verdict on Australian Workplace Agreements reflects the practical experience of thousands of ordinary workers. Tony Maher is National President CFMEU Mining and Energy Union
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