By Melanie Sjoberg
The ACTU has gained a small win in its legal challenge to BHP's offer of individual contracts (Australian Workplace Agreements — AWAs) to iron ore workers in the Pilbara. On January 31, the Federal Court granted the ACTU an injunction to prevent BHP offering further AWAs while the two sides negotiate. On February 4, a meeting of 700 Pilbara workers voted to take further industrial action if BHP does not negotiate.
The judgment indicates that BHP may have a case to answer in relation to the ACTU's claim that the company breached the Workplace Relations Act by discriminating against trade unionists. The president of BHP's iron ore division, Graeme Hunt, told ABC TV's January 31 7.30 Report that the company is not overly concerned because it was only a provisional hearing and an interim injunction.
The injunction provides an opportunity for the ACTU to have further discussions with BHP about the possibility of achieving a collective agreement.
The ACTU proclaimed the injunction a victory. To the extent that the bosses have had to delay further AWAs and talk, it is a gain. The impact of several hundred workers striking for four days, rallies in Perth and Geelong, along with messages of support from around the country should not be underestimated. ACTU secretary-elect Greg Combet is touring the Pilbara because the sentiment amongst workers for action is high.
Both BHP and the ACTU are presenting a tough line, but the outcome for the workers seems far from assured as long as the ACTU holds to its position that the unions will act "responsibly".
BHP is sticking to its position that it needs AWAs to achieve "good business outcomes". Hunt told the 7.30 Report that BHP wants AWAs because it does "not have confidence that a collective agreement will deliver what is necessary to be competitive ... The union movement doesn't really understand how radical the change would need to be to deliver the outcomes."
Hunt strongly affirmed that BHP would only accept conditions in a collective agreement that are in the AWAs being offered to Pilbara workers. These include individual performance reviews and non-standardised wages.
He conceded that such items are not traditionally in union agreements but said they are necessary to allow the development of the "behaviours" BHP needed in the workplace. This means pitting workers against each other to work harder, faster and longer, and to put pressure on workers perceived as "less efficient".
Hunt said he thought this would have an impact on the relevance of unionism, although he denied that BHP was pressuring employees to leave the union.
Combet signalled that the ACTU is prepared to "negotiate flexibilities" that take into account BHP's competitive position. He pointed to the "responsible role" of the unions, noting that the no-strike clause BHP inserted into the AWAs had existed in the collective agreement since 1995. He also said that the unions had helped BHP achieve a 17% improvement in productivity by reducing costs as part of a collective agreement. This included a 20% reduction in the work force.
How much more flexibility does BHP need? According to BHP financial statements, the company made an operating profit of $1081 million in the half-year ending November, an increase of $645 million (or 147%) on the previous half-year. The statements cite the closure of loss-making businesses and abnormal tax benefits as the reason for the profit surge.
A BHP media release on January 24 announced that the refinancing of rolling stock operated by the Mt Newman joint venture in the Pilbara will deliver a "book profit" of $31 million after tax.
The February 8 Bulletin revealed that BHP is creaming off more profits from job cuts in the form of un-retrieved surpluses from workers' superannuation funds. When a worker resigns or is sacked, they lose any claim to the surplus accumulated in the company-run superannuation fund. BHP has been able to invest these funds.
According to material distributed to employees in September, BHP obtained a 12.4% return on the invested funds. The Bulletin reported that the surplus accumulated in the fund is similar to the total wages paid to employees over the past five years.
If the rights of the Pilbara workers are to be seriously defended, the campaign needs to extend beyond the demand for a collective agreement. A collective agreement that contains the same provisions as the AWAs will make no worker better off.
The campaign needs to make BHP's practice of putting its profits before the interests and rights of the workers and their community the main issue. BHP should be forced to open its books and allow the workers to democratically decide what is in their own best interests.