David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to draw the chamber's attention to a recent decision of the Federal Court, sitting in Western Australia, wherein the Maritime Union of Australia and the labour hire firm Offshore Marine Services were successfully prosecuted by the Fair Work Ombudsman for breaches of the Workplace Relations Act and the Fair Work Act. Each of these respondents was fined and ordered to pay compensation to a married couple, Bruce and Lynne Love, whom the court assessed as a 'salt of the earth' couple, who were in 2009 seeking employment in the maritime domain of the Western Australian oil and gas industry as ship stewards. The union and the hire firm were ordered to pay some $800,000, inclusive of some $80,000 in penalties, with the balance being compensation paid directly to the Loves. The fines and compensation were imposed by the court for the breaches of the Workplace Relations Act and the Fair Work Act as a result of the union imposed 'closed shop' in employment within the maritime domain in the oil and gas industry in Western Australia—in other words, a 'no ticket, no start' as well as a 'closed shop, jobs for the boys' regime run by the MUA in Western Australia.

This case underlines and reaffirms the importance of a strong legislative framework giving clear powers to those agencies charged with the duty of protecting against, prosecuting and preventing such illegal industrial practices. Indeed, that is precisely the sort of legislation this Senate passed on Monday of this week to protect our building and construction industry from such union thuggery. The union was fined $79,200, with the labour hire firm given a much lesser penalty of only $7,500.

The facts of the case were that the Loves had applied for work as ship stewards through Offshore Marine, the hire company, which was keen to hire them but told them they would first have to join the MUA. Accordingly, they applied to the union for membership and were refused. His Honour, Mr Justice Gilmour, found that the couple would have been 'above average employees' and free of an 'entitlement mindset'. The Loves had travelled to Perth from Melbourne and had specifically undertaken several courses to obtain the necessary qualifications to secure their jobs, all at their own expense.

The Loves were the victims of an illegal closed shop orchestrated by the Maritime Union of Australia. This unlawful practice was accommodated by Offshore Marine, which did not contest the prosecution and to some extent was also a victim of the bullying and illegitimate standover tactics of the MUA. Having been told by an employee of Offshore Marine that they would need to join the MUA, the Loves attended the union offices on several occasions, only to be refused membership. They had completed an elementary first aid certificate course, a fire prevention and firefighting course and a personal safety course, and received training in social responsibility and personal survival techniques. They had also obtained maritime passports, all at their own expense, all whilst they themselves were under considerable financial pressure.

Their experience with the union, as set out in His Honour's reasons, indicates very clearly that there was no employment in the maritime domain in Western Australia unless such employment was accompanied by union membership. Membership of the MUA is at the whim of its officials and is not a qualification or membership freely available or obtained. His Honour's reasons set out a pattern of abusive and coercive conduct on the part of the state secretary and other union officials. The judge took into account abusive phone calls to the hire firm by such union officials, clearly indicating that, if you do not employ unionists, you will have industrial strife. His Honour found that a series of memos between the hire firm and the union in the context of the abusive phone calls recorded a 'closed shop arrangement', patently in breach of both the aforementioned pieces of legislation. It is important to note in reviewing what has happened in the court that the union called no witnesses and adduced no evidence in its own defence, and the time for the lodgement of an appeal has now passed.

The MUA and its bullying and standover type tactics have been a significant blot on the industrial landscape in Western Australia for many years. This situation has rendered WA ports as amongst the most inefficient in Australia, and in cost terms they compare very unfavourably to similar port operations around the world. This is completely unacceptable for an export oriented state like Western Australia. David Byers, Chief Executive Officer of the Australian Petroleum Production and Exploration Association, has said:

… the MUA controls access to the supply chain in every facet of offshore oil and gas—exploration, feasibility, construction, operations and maintenance.

Companies like Woodside, Chevron and Shell have their schedules and overall productivity completely at the mercy of the MUA. Unionised construction site costs are clearly among the highest in the world, well above comparable project costs in the North Sea and in Houston in the United States. The result is that Shell are now building an offshore floating LNG facility, not in Australia. Woodside are going the same way and have shelved James Price Point, at a cost of some 8,000 Australian jobs. James Price Point was in fact a $40 billion development. Following the shelving of this project, Woodside immediately looked to acquire an interest in a Canadian LNG project. The blow-out in Chevron's costs at its Gorgon development has caused a reassessment of the go-ahead for the $10 billion fourth gas train on Barrow Island.

In WA, we have potential for almost $200 billion of oil and gas projects, with billions of dollars of future exports and royalties at stake. There is a further $100 billion worth of projects currently under consideration and evaluation. All of this would be under direct threat if there were a continuation of conduct as seen in this case by the MUA. The Business Council of Australia has maintained that Australian oil and gas projects require 30 to 35 per cent more labour than comparable projects off Houston in the US, because Australian productivity is dramatically lower.

The bullying and intimidatory coercive conduct of unions, particularly in the offshore and construction industries in Western Australia, discloses the entrenchment of union thuggery in my home state of WA. Deliberate intimidation and the enforcement of a closed shop by the MUA is an example of what is at the heart of this nationally damaging blight. His Honour, in imposing some of the highest monetary penalties yet seen in the workplace-relations arena, explained that one of the contributing factors for this was the unions' 'significant number of prior contraventions of similar legislation'. This case sends a strong message that the imposition and enforcement of a closed shop will not be tolerated in today's—and future—workplace environments.

I wish to record, here in the Senate of the Australian parliament, my appreciation to His Honour for the very thorough way he has adjudicated this case over more than four years and I congratulate Fair Work Australia on this very successful prosecution.