First they took control of offshore oil and gas workplaces. Now they want iron ore.
Today’s strike by BHP employees at the Port of Port Hedland in Western Australia is a pivotal moment in industrial history.
The Electrical Trades Union, the Australian Manufacturing Workers’ Union and the Australian Workers’ Union haven’t convinced many members to walk out. The strike won’t last long. There’s unlikely to be violence. The cost to BHP will be relatively small.
But at stake is power over one of Australia’s few world-leading industries.
If the campaign succeeds, recent history indicates the unions will impose company-paid officials on worksites across the Pilbara, the region that produces about 93 per cent of Australian iron ore, the basis of steel.
Those representatives would function as co-managers, limiting the ability of BHP executives — and potentially those from Rio Tinto, Fortescue and Hancock Prospecting too — to efficiently run their businesses.
The unions know how to execute the strategy. Five years ago, there were few union-negotiated workplace agreements with Shell, Woodside, Inpex, or Chevron on their natural gas projects.
Changes to the Fair Work Act in 2022 by the Albanese Government made it easier for unions to break into high-paid blue-collar industries that had previously had little interest in unionisation.
Among the changes was a rule that allows unions to legally intervene in wage negotiations even if less than half the employees want them to.
A free lunch
Today, the LNG industry is a union stronghold. At Chevron’s Gorgon and Wheatstone gas projects, after a four-year union campaign, employees were allowed in 2023 to work 40 per cent of the year. They got large pay increases and protections from outsourcing of their jobs.
Having won better wages and conditions than most Australians, the union pressed for more.
Last year the AWU went to court seeking a $49.35 lunch payment for a Chevron employee earning $284,800 a year. The union told the man he was entitled to be fed after arriving home in Brisbane the day after completing a roster. The case failed, but was an example of the maximalist approach.
They are using the same negotiating tactics at Port Hedland: manufacture conflict, accuse the other side of bad behaviour and present extreme demands as reasonable.
“Our members don’t want to go on strike,” AMWU secretary Steve McCartney said last week. “Our members want justice. Our members have been talking to this company for seven months without them moving an inch.”
The seven-month reference is important. An industrial dispute that lasts nine months can be referred to the Fair Work Commission for “arbitration”, which means an industrial judge takes over and decides who gets what.
Under a change to the Fair Work Act negotiated by the Greens party, the commission cannot use arbitration to cancel entitlements in a previous agreement. This crucial rule is why employers feel under pressure to avoid the nine-month arbitration trigger — unions have little to lose when negotiations end and the commission takes over.
In the meantime, there’s little incentive for unions to make concessions. Accusing the other side of refusing to compromise provides cover to drag out talks.
Union leaders can make claims with little chance of being contradicted by company executives, who don’t want to exacerbate tensions or subject themselves to public abuse.
Once employees switch from individual contracts to a union-sponsored enterprise bargaining agreement, money flows to unions. The agreements often require employers to contribute to funds set up to provide training, income protection or insurance to workers. Unions can receive commissions from the funds, making them wealthier every time they secure a new EBA.
Fun of the fight
As anyone who has participated in a strike knows, they are a terrific unifying force. There must be great excitement among BHP employees at Port Hedland today.
They are, after all, making history. The nation is watching. So too are BHP’s shareholders and customers.
No company is perfect. But the huge demand for well-paid fly-in, fly-out jobs at BHP and other mining companies in the Pilbara suggests they are not bad employers.
They’re certainly great taxpayers. Their profits help underpin the Australian way of life.
The publicity generated by the strike will increase the pressure on BHP. The company must know it can expect little help from a Government in Canberra that shaped the law being used against it. With few allies, it faces a choice of turmoil or unionisation.
If BHP surrenders control of its workplaces, unions will celebrate their victory by going after every other mining-related site in the Pilbara. The fate of an industry hangs in the balance.
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