Hogsback and the Fair Work crisis breaking over the mining industry

IT’S not easy comparing a coal mine with an airline but the closer Hogsback looks at what’s happening at the Norwich Park mine, the more he sees a re-run of last year’s Qantas dispute, and the more he sees serious problems ahead for the Australian Government – problems entirely of its own making.

Tim Treadgold

The link between Norwich Park and Qantas is an unworkable industrial relations system managed by Fair Work Australia, a government agency which has overseen the re-empowering of militant unions and left management with only one response – shut the doors.

As if to underline the muddle it is worth a sideways glance at two other issues involving Fair Work Australia and the laws it is charged with enforcing, namely the closure of a small car parts maker in Melbourne, and the three year investigation into alleged misconduct in the Health Services Union only to produce an 1100-page document that cannot be used in any legal proceedings.

No one has yet explained why any inquiry into anything should take three years. Nor have they explained the purpose of producing a report that was doomed to be shelved the moment it was printed. Nor has anyone explained why APV Automotive had to die despite a deal being within reach.

Unfortunately, the mining industry is now travelling down the same pointless pathway that can be traced through the HSU report, HPV Automotive, and the Qantas dispute, because the Fair Work Act is a hopelessly politicised law designed to be anti-management.

Qantas was the first big Australian company to cop the full blast of an assault which unions dressed up as a way of retaining jobs, but which was nothing more than an attempt to gain a big say in how the airline was managed.

What it boiled down to, and this is the key to the point being made by Hogsback, is that Qantas was not to be run in the best interests of the people who own it (the shareholders), but in the best interests of the people who work for it (the employees).

It might be argued that under the previous industrial relations system the pendulum of power had swung too far in favour of management and shareholders.

But, to redesign an industrial relations system which encourages unions to try and take over the management of a company is as astonishing as it is nonsensical in a world which has globalised.

What Qantas management did, and the only thing it could do under the rules of Fair Work Australia, was close the doors, ground its fleet of aircraft, tell employees to go home until the dispute was settled, and tell customers to find their own way home as best they could.

BMA, the BHP Billiton Mitsubishi Alliance, has just done exactly the same thing at Norwich Park, the commercially weakest mine in its stable of assets. It has closed the doors. Told customers to buy their coal elsewhere, and told employees to go home.

What happens next is the interesting bit because BMA has just signalled it will fight hard to retain the right of management to manage.

If the unions take up the challenge and persist with hit-and-run industrial action, there is only one more step BMA can take – close all of its mines and toss the problem to the Australian government to sort out, which is what Qantas did. And it’s what a small car parts maker did in Melbourne earlier this week.

The car parts maker is pertinent to current events because it is another example of how Fair Work Australia has reduced the options of management when dealing with union demands to either cave in, or shut the doors. There does not seem to be a halfway point.

At APV Automotive, a deal was agreed by one level of the union movement, but not by shop stewards on the factory floor. The end result was the death of the business which called in receivers and, presumably, the death of 126 jobs.

BMA will not be calling in receivers, but it is a business well set up for a long industrial fight which will probably do far more harm to the workforce (and Australia’s reputation) than to either BHP Billiton or Mitsubishi.

If all BMA mines are closed for an extended period an interesting situation will develop, starting with a sharp rise in the price of metallurgical coal, and a hunt by customers for other sources of coal – some of which are co-owned by BHP Billiton.

That scenario might sound far-fetched, but it is a real possibility because management at BMA, like management at APV, and like management at Qantas, has no alternative option but to close the doors until sanity prevails and unions realise that they do not own a business, they are the hired help.