02 November 2016
by Matthew Stevens

Union ordered to rewrite record after misleading members and media

The Maritime Union has been slapped with a rare trio of good faith bargaining orders.

The Maritime Union has been slapped with a rare trio of good faith bargaining orders after the Fair Work Commission found the union misled members in a continuing four-year stand-off with offshore oil and gas vessel operators.

Commissioner Danny Cloghan has ordered the union to formally correct the public record on a series of "misrepresentations" made to MUA members and the media about the progress of the negotiations and the behaviour of the employers and their bargaining agent, the Australian Mines and Metals Association.

Before reminding unions generally of their responsibility to disseminate facts to members, Cloghan found the MUA had "strayed from reality" in describing the progress of negotiations with four key employers to both its members and the media.

The commissioner ordered the union to avoid any further misrepresentation of the "status or progress" of future bargaining and also moved to stymie a union effort to isolate Chevron operations from any of the general agreements under discussion.

From early 2014, the union has tried to ring-fence Chevron's Gorgon project from the general industry agreements.

The MUA's antipathy to Chevron has been made plain through the Barrow Island project's progress from the US giant's future Western Australian flagship to massively over-budget LNG white elephant.

After copping blame for a good deal of the $US17 billion cost blowouts that have lifted the project's cost to a staggering $US54 billion, the union went to war with Chevron.

The attempt to ring-fence Chevron's local projects from the AMMA-led negotiations for four offshore vessel operators was viewed by the employers as an attempt to extract further leverage and enact vengeance.

Outside of being opposed to the general principle of third-party engagement, it seems plain enough here that the employers were fearful that installing Chevron as a "decision maker" risked a high-water mark settlement that might cascade through into the general industry agreements.

In the end, Cloghan found the customers of contractors like Mermaid Marine, Swire Pacific and Offshore Marine do not belong in negotiations over replacement enterprise agreements.

The commission observed that the MUA "understood" it had earned a commitment in 2014 to introduce Chevron to a discussion group that included the chief executives of the four operators then involved in negotiations.

"It is not in dispute that Chevron has an interest in these negotiations," Cloghan observed.

But reinforcing demands that Chevron be invited to discreet discussion with threats that there would be no progress on the general agreements until that happened was deemed unacceptable.

"Such conduct is inimical to Part 2-4 of the FW (Fair Work) Act," the commissioner observed.

So the MUA was ordered to "refrain from making it a condition that the bargaining group, or bargaining for a replacement enterprise agreement, include a third party".

It is telling of the changing industry dynamics that have shaped these deadlocked negotiations that four companies entered the discussions but only three will come out.

Negotiations between AMMA and the MUA opened in July 2013, a full year before the expiration of offshore employments agreements. Between then and now, Tidewater Marine has withdrawn, financially injured from the Australian offshore tender market, while the oil price recession has taken a brutal toll on the returns of the global oil and gas services sector.

This unhappy fact assessed in combination with the most telling of the union misrepresentations cited by the commission informs the quality of the union's missteps. The negotiation has left its workers without pay rises for more than four years and facing an employment environment so changed that new employment agreements in the sector are being lodged without concessions to back payment of agreed wages adjustments.

The most enduring of the union misrepresentations Cloghan identified for rectification was that the employers withdrew a 16.5 per cent wages offer. That union assertion was made on February 20, 2014, and embedded in the public record on March 10. In fact, the MUA rejected that offer on January 16, 2014, in preference for its standing 24 per cent ambit.

More generally it is telling, for mine, that Cloghan introduced and concluded his judgment with subtle but pointed observations about the fractious and enduring nature of the negotiations he has been called on to shape and mediate.

His judgment opens with an effective precis of the story so far. It offers but "a fraction of what has occurred leading up to and subsequent to the GFBO applications", Cloghan suggested.

"Bargaining has been marked by negotiations in the Commission and the MUA with AMMA, or with individual vessel operators. There have been a significant number of proceedings in the Commission and Courts. All of the proceedings have been accompanied by acrimonious public comment."

Later, in closing his judgment, Cloghan returns to this theme.

In rejecting AMMA's invitation to find that the union had not been genuine in its negotiations, Cloghan appeared to find that the fault, instead, lay with the Fair Work Act.

"The FW Act provides that parties are not required to make concessions and reach agreement on terms to be included in an agreement. This concept of 'hard bargaining' invites bargaining representatives to go through the motions and talk each other into paralysis without any progress on an enterprise agreement; what some have described as the 'wheel of death'. In my view, this is what happened."

Later Cloghan observed: "It is now nearly four years since bargaining commenced. One employer has ceased operations in Australia and the remaining employers have either not reached agreement or, in one case, the replacement enterprise agreement has not completed the approval process with the Commission. It is reasonable to assume that such a pace was never intended by the legislators."