Australian strikes on the rise as unions make up for ‘lost time’

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January is usually one of the busiest times of the year for Australian fruit exporters, as they ship thousands of tonnes of nectarines, plums and grapes to China for lunar new year festivities.

But thanks to a months-long battle over wages between the country’s maritime union and Dubai-based port operator DP World, much of this year’s cargo is only now being shipped and might not make it in time for the weekend’s celebrations.

DP World — which handles about 40 per cent of Australia’s trade — and the maritime union last week struck a deal to deliver a near-25 per cent increase in pay to the company’s stevedores over the next four years. It could take up to six weeks for the backlog of 54,000 containers of fruit, meat, wool and aluminium to be cleared.

The stand-off, and its successful outcome for the dock workers, is the latest sign of rising union power in Australia, where labour shortages and the election in 2022 of the first Labor government in almost a decade have strengthened the hand of organised labour, a development that potentially threatens investment.

“There has been a sense of making up for lost time with the union movement,” said Innes Willox, head of employers’ association Australian Industry Group, referring to the preceding nine-year period of Conservative rule. Unions had pushed back at Conservative reform efforts they said favoured employers.

“The world already judges Australia to be a high-cost location and a heavily regulated economy. It is not the easiest place to operate. They’ll hesitate about investing here,” he said.

Data from the Australian Bureau of Statistics shows that the number of industrial disputes has steadily risen since 2020 to the highest level in eight years. Overall there were 211 strikes in the year to September, 16 per cent more than in the same period a year earlier.

Industrial activity has ranged from work stoppages in August at offshore gas developers Woodside and Chevron — which drove the European natural gas price up 40 per cent on supply fears — to a strike by BHP’s railway drivers in November. A government spokesperson, pointing to a brief quarterly spike in industrial action in mid-2022, said the number of hours lost to strikes had fallen “dramatically” since the election.

While union membership has been in decline, the spate of disputes has also spread to less unionised sectors. Renewable energy projects and food delivery services have all been hit by industrial action.

Tim Harcourt, a former union researcher and economist with the University of Technology Sydney, said pressure for higher pay in public sector services, mining, transport and construction could trigger more industrial action. Despite wage growth hitting a 14-year high in the third quarter of last year, he said: “The cost of living is hitting everyone.”

Paul Farrow, a veteran trade unionist representing the Offshore Alliance that took on Woodside and Chevron, said: “With a new Labor Government in power Australian workers feel empowered to ask for a reasonable portion of the spoils of our country’s abundant mineral and energy resources.”

Australia adopted a collective bargaining approach to industrial relations in the 1990s, whereby employers and employees, often represented by unions, forge legally binding enterprise agreements. The government is able to intervene to stop a strike if it is disruptive to the economy.

DP World has called for Canberra to do so, arguing that the trade disruption has cost the Australian economy about A$84mn (US$55mn) a week — or A$1.3bn in total — since action began in October. But the government did not intervene.

“Australians are sick to death of having highly profitable companies say everything is the fault of them having to pay their workforce the same as their competitors,” said Tony Burke, the workplace relations minister, last month, referring to the strike.

The Labor party’s historically close ties with the union — the party was set up by trade unions and many affiliate directly with the party — has left it with little room to manoeuvre, some claim. Joseph Saina, chair of the Australian Horticultural Exporters’ & Importers’ Association, said: “The government [was] paralysed in its ability to act in the wharf dispute because of the relationship with the unions and it is affecting industry.”

The Labor government is also partway through a wider revamp of industrial relations laws to extend benefits to vulnerable workers and to close “loopholes” that companies allegedly use to lower wage bills. BHP has criticised the reforms, which it said would add A$1.3bn to the miner’s annual costs.

With unemployment at its lowest level in almost 50 years, the Australian Industry Group’s Willox said workers now had momentum. Employers are bracing for further pain in terms of wage demands and industrial disputes, he said. “These are big significant changes in terms of how the economy operates.”