The DP World Dispute – An Assessment
The DP World docks dispute is over. Negotiations started in March 2023, industrial action commenced in October 2023 and a settlement was reached in February 2024.
The industrial action involved bans and strikes. The protracted nature of the dispute was costly for DP World and damaged the Australian economy. A backlog of 53,000 containers built up and the economic cost of the dispute was estimated to be at least $84 million a week. The dispute is reminiscent of decades past; an aggressive and prolonged contest with a great divide between the parties’ positions.
It is instructive to look behind the headlines to assess the parties’ positions, the settlement and what the dispute might suggest about the future conduct of workplace relations in Australia.
The protagonists were DP World and the Maritime Union of Australia, a division of the notorious CFMMEU. DP World operates four container ports at Sydney, Melbourne, Brisbane and Fremantle. About 1,800 employees were covered by the claims.
Background:
The log of claims was extensive, over 40 items. The headline claims sought annual pay increases of 8 per cent, a two-year term for the new agreement, a 3 per cent increase in the employer’s superannuation contribution and improved personal leave conditions.
DP World proposed changes to work rostering to better align operations to a 24/7 port facility. The company opposed a two-year term for the agreement.
Separate enterprise agreements apply to the four DP ports. Many of their terms are identical.
The claim for wage increases of 8 per cent is a high figure when across the economy wage increases are averaging 3 to 4 per cent and inflation sits at 4.1 per cent.
The published terms of the settlement consolidate the workers standing amongst the best paid and well looked after in Australia.
Salary rates increase by 23.5 per cent over four years. The employees receive a whopping 8 percent in the first year plus a $2,000 sign on inducement. A salary increase of 7 per cent is given in the second year.
DP World has achieved a four-year agreement and changes to rosters.
In Senate Committee evidence in January 2024, the company stated that its employees are paid within the top 10 per cent of income earners in Australia, with an average salary of $130,000 to $140,000. Average salaries following the settlement will approach $170,000.
In comparison, stevedores in Canada are paid around A$80,000 per year while German stevedores are paid A$92,000 per year.
The DP World employees are obviously well paid. Conditions of employment are also generous.
Employees work a 35-hour week, the employer superannuation contribution has been 12 per cent since 2015, 5 weeks annual leave, 13 days personal/carers leave apply and the company pays income protection insurance for all employees.
The DP World personal/carers leave entitlements are exceptional. This leave, formerly identified as sick leave, accrues if not used.
Australian employers across the public and private sectors have steadfastly resisted acceding to the cashing out of accrued personal/carers leave on retirement, resignation or termination.
The DP World enterprise agreements allow an employee to apply for cashing out if their accrual exceeds 28 days. Further, the accrued personal/carers leave balance is paid out when the employee retires, dies, is made redundant, or resigns after 5 years employment.
Future Implications:
The dispute signals worrying trends that may characterise Australian workplace relations following the Albanese Government’s reforms.
The reforms seem designed to prop up union leaders who have overseen their unions’ membership fall to only 8 percent of the private sector workforce.
The Government’s response to the dispute has been timid. The Government was told by the union not to get involved. All the Minister seems to have done is give DP World a condescending lecture about how to run its business.
The Minister declined to even contemplate using a power to terminate the dispute that was causing significant damage to the Australian economy.
A return to the days of industrial muscle winning out is likely. This week the CFMMEU in Western Australia won a 25 per cent pay increase over four years. Industrial action by workers across a range of industries has occurred over recent months. Some of the disputes, like the VLine train dispute, are protracted.
The 2024 version of the workplace relations system is designed to expand union officials’ interference in the running of businesses. It is a return to the early 1980s style workplace relations. Employers will need to be resolute and build a sound partnership with their staff to resist excessive union claims and interference. The ability to reward employees displaying initiative and enterprise will be constrained. Productivity improvement will be a challenge.
The system is now loaded against employers, especially small employers. The regulation of employment has become so atrociously complex that even top companies and government agencies are unable to pay staff their lawful entitlements.
Many of the Government’s reforms will hinder dynamic change and growth. Most will eventually be removed.
