Labour turmoil sweeps Australia as inflation stirs ‘spirit of anger’

By Byron Kaye and Sonali Paul

SYDNEY/MELBOURNE (Reuters) – After a decade of making up to A$200,000 a year (about US$135,000) on oil and gas rigs as a fitter and subsea equipment specialist in Western Australia, Adam Naylor had had enough.

He had watched his pay go backward and conditions worsen during the pandemic, he said, as companies enforced isolation periods for fly-in-fly-out workers and cut pay rates for the days when they were not working.

“The work had become too patchy and also the rates have just totally decayed,” said Naylor, who returned to Melbourne last year and got a job at a steel plant 30 minutes from his home. “I don’t feel you get compensated in any way for the inconvenience of living offshore.”

Now his peers in the offshore industry are pushing for a better deal, part of industrial action at oil and gas facilities that has hit global majors and reflects broader tumult in Australia’s economy.

The country clocked its most days lost to disputes since 2004 in the June quarter, official data show, as a tight labour market and cost-of-living pressures fueled demands for improved wages and conditions.

The malaise began when teachers, nurses and paramedics exhausted from the pandemic repudiated long-standing policies limiting public-sector pay rises. But it is spreading across finance, energy, retail and aviation, threatening to push up labour costs in industries facing supply-chain bottlenecks and worker shortages.

“When you get a pretty volatile brew of capped wages, increasing demands for service and squeeze on the workforce, something’s got to give,” said John Buchanan, head of the University of Sydney’s Health and Work Research Network, who was on his seventh day of a strike over a pay dispute at the university.

A wage fight at Shell (LON:) cost the energy giant an estimated $1 billion in liquefied exports between June and August, just as prices hit records.

Employees of National Australia Bank (OTC:) Ltd said this month they will strike for the first time since 2001 if the lender cannot improve on an offer of a 5% raise. Annual inflation stood at 7.3% in the September quarter.

Domestic cabin crew of Qantas Airways voted this month on options including a 24-hour strike after the company proposed wage freezes and longer shifts. At iPhone maker Apple Inc (NASDAQ:)., customer-facing staff began stoppages last month oct to demand fixed two-day weekends.

The turmoil is especially pronounced because union power was curtailed in Australia under laws in place since the 1990s. Union membership is about 14%.

In addition to inflationary pressures, unions cite windfall profits at mining and energy companies, fueled by high coal and gas prices, to support their case for raises.

“What workers want is a fair share,” said Zach Duncalfe, coordinator of the Offshore Alliance, a combination of the Australian Workers Union and Maritime Union of Australia, which won increases in base pay at Japanese giant Inpex Corp’s Ichthys gas operations after a strike in February.

Concerned about the impact of industrial action on the Australian economy, the Fair Work Commission, the labour umpire, this month on Nov. 18 blocked strikes at the country’s biggest tugboat operator, Svitzer, for six months.

CANBERRA BACKS UNION PUSH

The angst comes as Australia’s first Labor government in nine years is poised to pass legislation giving unions the power to negotiate wage deals that cover several employers, allow industry-wide strikes, and grant workers more scope to request flexible arrangements.

Business leaders say the measures, which are likely to gain Senate approval this week, will hurt the economy.

“We now face the prospect of more strikes and fewer jobs,” said Innes Willox, chief executive of the Australian Industry Group.Global miner BHP Group (NYSE:) says multi-employer bargaining in the mining industry, where it says workers are highly paid, is unnecessary and risks cutting flexibility in wage deals and fueling industrial action.

“It’s just so essential that Australia remains competitive,” Chief Executive Mike Henry told reporters recently.

The number of workers involved in Australian strikes in the first half of 2022, about 85,000, was more than that of the United States, despite the latter’s far larger labour force, according to data published by Cornell University’s School of Industrial and Labor Relations.

Jim Stanford, director of the Centre for Future Work at the Australia Institute, a think tank, said a “spirit of anger” was evident as Australians were “seeing their living standards slipping through their fingers”.

In the year to June, the average Australian wage rose 2.6%, compared with inflation of 6.1%, according to official data. Despite seven interest-rate hikes since May, inflation is set to climb further before subsiding in 2023, the government says.

‘A LONG RIDE’

The resources sector is a focus of the strife amid a global energy crunch. As well as raises, workers want a reversal of the increased casualisation that has made jobs less secure for some.

Workers held a short strike at four coal mines run by BHP Group on Nov. 4, a mine run by Peabody Energy in July, and a mine run by South32 (OTC:) in August. BHP workers are in talks with management after threatening further action.

“It’s all about job security,” said a BHP coal truck driver, a casual employee, who was told by supervisors to keep working when permanent staff downed tools on Nov. 4. The person, who spoke on the condition of anonymity out of concern for their employment, said one sticking point was that casual workers did not get additional pay for working public holidays.

BHP says it has been pushing to beef up its permanent workforce, creating nearly 4,000 permanent jobs in operational services since 2018.

In the offshore oil and gas industry, workers at a site run by Santos Ltd, Varanus Island, have been disrupting operations for more than 100 days, while those at gas facilities run by Chevron Corp (NYSE:) and Woodside (OTC:) Energy Group are pushing for union-led wage deals at sites where unions previously have not been active.

Oil and condensate output fell 20% in the September quarter from the same period a year earlier, and LNG exports were down 7%, partly because of industrial action.

Australia’s Federal Court this month ((Nov. 23)) cleared the way for the industrial umpire to consider ordering Woodside to negotiate a new collective agreement.

The same day, Woodside told staff it had raised base pay rates, including a 10% increase for offshore workers, after its merger with BHP’s oil and gas division. The Offshore Alliance said on its Facebook (NASDAQ:) page that this would improve the starting point for negotiations for an enterprise agreement.

Bargaining in this way “would represent a departure from how we have worked for many decades, which is direct engagement with our people”, a Woodside spokesperson said.

But in the current climate in Australia, workers are in no mood to back down.

The union is “locked in for a long ride,” said Duncalfe, the alliance official.

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