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Wharfies fired up over alleged threat to income protection benefits

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Longshoremen working for DP World Australia (DPWA) are fired up over an alleged threat to their income protection insurance. That benefit was granted to them by the company three years ago in the last round of negotiations for a collective employment contract known as an “enterprise agreement”.

The Maritime Union of Australia claims the company wants to take the benefit away. The company denies that claim.

“Wharfies [longshoremen] working at container terminals in Sydney, Melbourne, Brisbane and Fremantle are outraged after management at DP World Australia — the largest stevedore in the country — moved to strip them of income protection insurance unless they accepted the company’s demands… when management tells workers they must to do things their way or have their family’s social protection through income protection insurance terminated, it’s no longer a negotiation, it’s blackmail,” the Maritime Union of Australia said in a statement on February 13.

“The brutal and immoral DPW decision to remove income protection… from the workforce is an incredible act of disrespect and uncaring corporate muscle-flexing designed to pressure workers to accept an [enterprise agreement] that doesn’t deal with our concerns… [DPWA] have chosen to use a social clause, a protection for our families, bargained for and agreed with the company last [enterprise agreement] against us now as industrial leverage.

“They are using our families’ health and well-being as an industrial bargaining chip. Imagine the uproar if the union made a threat to the boss’s family. That would be outrageous and completely unacceptable behaviour. It would and should be condemned. DPW are doing this to every workers’ family! It too should be condemned,” the union said in an earlier statement on February 09.

However, the company categorically denies the union’s claims.

In a statement provided to FreightWaves on February 15, the company said: “[income protection] was agreed in 2015 as part of the current EA which expires on 28 February 2019. The EA specifically includes a discontinuation date for [income protection] of 28 February 2019. In the absence of a new agreement DPWA is obliged to redirect the salary component which was being used to pay [income protection] back to employees.

“This is what DPWA is doing and employees will receive a two percent increase to … their salary… from 1 March 2019. This arrangement is nothing new – until the 2015 EA employees who wanted [income protection] organised it themselves. We anticipate they will do so again. There is no saving or other benefit for DPWA… DPWA values both our employees and certainty, which is why we made a generous offer to rollover the existing agreement, including [income protection].”

The company also accused the union of threatening “spurious industrial action”.

DPWA has also offered a pay rise at or in excess of two percent (accounts differ as to the exact value). However, it is an above-inflation pay offer as the consumer price index in Australia for the last year is about 1.8 percent.

Each of the four main DPWA work sites has a separate enterprise agreement but a superficial scan of the content suggests they are the same, or are very similar. Each DPWA enterprise agreement normally has a “Part A” which deals with enterprise-wide issues and a “Part B” which deals with site-specific issues.

There is an “income protection” clause in each of the four enterprise agreements. FreightWaves examined one enterprise agreement at random, the DPWA Fremantle enterprise agreement.

In clause 18.11.1 of the current enterprise agreement (i.e. the one that runs out at the end of February), the stevedore company agrees to give its longshoremen workers an income protection insurance policy that will provide all employees with a capped replacement wage if an employee is unable to work owing to a personal injury or illness. It is worth noting that Australian workers are entitled, by law, to 10 days of paid “personal leave” (sick leave). Personal leave accumulates progressively throughout the year and it rolls over from year-to-year.

What’s interesting is the next clause in the enterprise agreement, which deals with the interaction of the company-paid-for income protection insurance policy and the legislated entitlement to paid personal leave.

Clause 18.11.14 of the enterprise agreement says that personal leave “shall not” be deducted from the worker’s account if that employee is in receipt of the income protection insurance. The subsequent clause says that “benefits provided by this insurance will cease… upon reaching the maximum limit of the insurance benefits provided by the fund.”

That could, potentially, be quite a lot of leave if the worker has been employed a long time, hasn’t used much of the statutory sick leave and can also access the payments from the insurance policy.

The union also has a variety of other issues that it is upset about. It is unhappy that the company wants to roll over the contents of the existing enterprise agreements to the next round of enterprise agreements.

If the union were to agree to that, then, under Australian law, it wouldn’t be able to take industrial action on a wide range of issues until the next round of enterprise agreement bargaining due to take place around February 2022.

And the union knows that.

It has several issues that it wants to tackle in this round of enterprise bargaining. In a public statement, it has listed leave accrual, overtime payments, company demands for drug- and alcohol-related urine testing, payment for eight hours instead of seven for personal leave, and matters relating to rostering and contracts of employment as issues it wants to tackle. None of which it will be able to affect if it agrees to roll over the content of the existing enterprise agreements.

Readers familiar with the Australian waterfront will know that the ports at Brisbane, Sydney, Melbourne and Fremantle account for the majority of container throughput in Australia. The other port with large volumes of box traffic, Adelaide, is unaffected simply because DPWA does not have a presence there.

Australia had about 5.1 million container lifts (equivalent to about 8.0 million twenty foot equivalent units) in the 2017-2018 financial year. DPW Australia is the biggest longshoreman company by volume and it accounts for about 44.4 percent of those container lifts, according to the federal competition watchdog. The other major stevedore, Patrick Terminals has a market share of 44.1 percent. Patrick Terminals is not currently negotiating for an enterprise agreement as its current enterprise agreement doesn’t expire until June 2020.

Negotiations continue between the company and the union to decide on conditions for a new national enterprise agreement to cover 1,800 employees at the company’s four Australian container terminals.