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Grow the cake: another Waterfront dispute not the way forward, says Corrigan

Industrial relations in Australia in the early 1980s, conservative commentator Gerard Henderson wrote, was a clubby place filled with the “truly reasonable and moderate” as union and business bosses negotiated deals over fine wines and song.

“They alone understand industrial realities; they alone know how the system works, and it is they who can do deals and fix agreements,” Henderson opined. “Within the Club there is no time for confrontation.”

If such a reality ever existed it was shattered in April 1998, when security guards with big dogs marched across the wharves of stevedoring company Patrick under the cover of darkness to shunt its 1400 unionised workers from the waterfront.

Locked-out unionists haranguing non-union workers as they enter the Patrick terminal at Port Botany.

Locked-out unionists haranguing non-union workers as they enter the Patrick terminal at Port Botany.Credit:Jonathan Marsden

New workers, many ex-military, were flown in by chopper to avoid the picket line, where the furious wharfies stood outside company gates and pelted the new recruits, some wearing balaclavas to shield their identities, with verbal abuse, rocks and sometimes cups of scalding coffee.

Moderate it was not. But significant it was. The dispute dominated politics at the time, with images of heavyset security guards in black balaclavas permeating the Australian consciousness and was made into an ABC TV series in 2007 called Bastard Boys. It is still talked about today as a defining industrial dispute and a marker of the changing balance between unions and business in Australia.

Patrick managing director Chris Corrigan, fed up with what he saw as the sclerotic operation of Australia’s wharves that made everything imported more expensive, was one architect of the fight. Australian ports were moving containers too slowly, below world standards, and Corrigan argued the company had too little control over its own workforce. He was backed by the Howard government and the National Farmers Federation.

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Opposite him was the Maritime Union of Australia, the Australian Council of Trade Unions and Labor. In a departure from the old industrial battles the union had won on the back of crippling strikes, its hopes rested largely on its legal appeals through the court. Josh Bornstein, then a young partner at labour law firm Maurice Blackburn, was one of the legal minds charged with running it.

A worker, transported in by helicopter, taunts unionists and media at the gate.

A worker, transported in by helicopter, taunts unionists and media at the gate.Credit:Dean Sewell

The union won temporary victories in the courts and then negotiated a deal that minimised job losses. But hundreds of wharfies were still made redundant and those that remained gave up many of the work rules that gave them big overtime payments and incentives to move containers slowly.

Two decades later, the Morrison government is once again looking to industrial reform to help restart economic growth and get Australians back to work once the coronavirus pandemic is over. Bornstein and Corrigan are both despairing of the state of Australia’s industrial policies. Their reasons, though, are no closer than in 1998.

Chris Corrigan spoke to The Sydney Morning Herald and The Age from the United Kingdom, where he was travelling from his home in Switzerland. This interview has been edited and condensed for clarity.

Chris Corrigan faces the press.

Chris Corrigan faces the press.Credit:Dean Sewell

“If there was ever a time for a new way of thinking about the common goal of getting the economy restarted this would be the time to do it and I guess you can always hope that some sense prevails but there is a long history of class warfare rhetoric in Australia.”

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“The more flexibility that you can build into the system and the less rules and regulations the more chance it suits both the employer and employee.”

After the battle was over, Corrigan says, Patrick workers “realised it was much more fun if you have more control of your destiny and perform and are rewarded than to be stuck in a rules-based system where you’re told not to work too fast because that’s not in accordance with class warfare.”

(The Maritime Union, now part of the CFMMEU, disputes this, pointing to the emotional and financial toll the waterfront battle took on its members and arguing productivity gains were a product of greater investment on the wharves.)

“I think real industrial reform is focused on how do you grow the cake, if you can grow the cake it’s much easier then to have a discussion about the relative shares of that cake.”

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“At the moment the cake is shrinking quite rapidly and if you get into bitter negotiations over how to divide a shrinking cake that’s likely to be quite counterproductive and lead to further shrinkage.”

Asked about the Morrison government’s reform process, where unions and businesses are in talks on five areas and the government has emphasised a collaborative approach, Corrigan is doubtful. “I would be shocked if there were proactive discussions along the lines that I’m talking about. Having some idea of the background and mindset of the people, I think it would be broadly the same discussions we’ve been having for decades.

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“[Real reform] is very difficult. The only way were able to do it was to bring about a conflict [between Patrick and the Maritime Union] that allowed a different way of thinking, I wouldn’t recommend that at the moment. It’s extremely difficult.”

“Unions are still running a class warfare mentality and companies [are] not [engaging in] class warfare but they don’t have a very broad view for the most part about how to refocus the conflict.”

“If you looked at Germany you’d get a totally different picture all about how they can grow the cake.”

In Germany, unions get seats on company boards. Corrigan, with his plain dislike for attitudes in Australia’s unions, says that is not what he’s talking about. “It’s whether or not they’ve got a mindset that is about expanding the company or the country’s broad economic welfare.”

For now, the government, unions and business are staying mum on the process of the negotiations, which is a good sign for their progress. Is Corrigan involved at all? “[The government] would be crazy to take a call from someone living in Switzerland.”

Josh Bornstein, who made his name in the Waterfront Dispute and has gone on to enjoy a successful career as head of Maurice Blackburn’s employment and industrial law practice, agrees with almost nothing Corrigan says.

Josh Bornstein (right) and actor Justin Smith (left) who plays him in Bastard Boys in 2007.

Josh Bornstein (right) and actor Justin Smith (left) who plays him in Bastard Boys in 2007.

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(Both were unhappy with parts of Bastard Boys — a fictionalised drama of the dispute — though. Bornstein has said he found a depiction of him reading legal texts in the nude and coming up with a genius legal scheme after vomiting into the gutter confronting while Corrigan suggested the whole show was biased. [The series] “does not explore any inconvenient truths such as the impact of the waterfront rorts on ordinary Australians” Corrigan said in 2007).

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“Companies hire more people when they need more people to do work, they don’t examine the fine print of labour market regulation in each country and then make a decision about whether they are going to hire another five people or not. It’s a complete furphy” Bornstein says of Corrigan’s contention more flexibility will lead to successful companies, higher wages and more employment.

He is equally scathing of the prospects of a “middle ground” compromise between the unions and businesses.

“The notion of a middle ground is a deeply misleading term, it’s a loaded term. Employees are at their weakest in terms of bargaining power than they have been for decades, employers on the other hand enjoy immense bargaining power in the labour market.”

Bornstein traces the problems back past the waterfront dispute to the 1980s, when Australia started to move from setting wages across sectors to a company by company approach.

Police move protesters off the picket line at Patrick.

Police move protesters off the picket line at Patrick.Credit:Dean Swell

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“The consistent theme for the last 40 years has been weakening employee bargaining power, reducing security of employment, de-unionising large parts of the labour market and during that period we’ve seen collective bargaining collapse, particularly in the private sector.

“Enterprise bargaining requires each enterprise to engage with its workers if it’s going to work … that’s been subverted by changes to the way business operates through labour hire, sham contracting, various other mechanisms which have fragmented workers into insecure environments.

“Let’s take 7-Eleven — it’s a franchise operation where the employer may own one 7-Eleven shop. They might employ two or three staff who are visa workers. How are they going to collectively bargain for a wage rise?

Some non-union workers were choppered into Patrick to avoid angry wharfies.

Some non-union workers were choppered into Patrick to avoid angry wharfies.Credit:Dean Sewell

“I think it’s very difficult to conceive of a middle ground when metaphorically speaking there is a very big strong guy with his boot on a very frail individual lying on the ground.

“The enterprise bargaining system is out of reach of most employees in the private sector and should have been disbanded years ago.”

The number of private sectors workers covered by enterprise agreements has grown in recent years to about 1.4 million, after a low in 2018 but is still well down on the about 2 million workers covered in 2014.

Bornstein goes on: “the share of economic growth that goes to business has risen to its highest on record, the share to employees has fallen to its lowest on record.”

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A Reserve Bank paper released last year notes the share of Australia’s gross domestic product that goes to workers had dropped about 10 percentage points from its peak in the 1970s to just over 50 per cent, while income earned on capital has gone up. That is due primarily to more money going to housing and greater profits in the financial sector, the RBA paper says.

Sector wide bargaining is the approach Bornstein would prefer. Without that kind of overhaul, he says, “I’m deeply sceptical about the direction of yet another push for ‘IR reform’ and almost certain that it won’t have any material impact on employment levels.”

The new IR club is not as congenial as its predecessor.

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