IN written submissions to the Fair Work Commission, several parties involved detailed the devastating impact the lockout would have on Australian shipping, port operations and the Australian economy.

Svitzer Australia submitted a report by HoustonKemp detailing the possible economic consequences of a lockout. The authors estimate the total value of lost containerised goods associated with a one-day lockout would be from $49 million to $98 million. Also, the total value of lost exports during a one-day lockout for bulk freight at the Port of Newcastle would be $137 million.

The report author points out these estimates do not account for the total economic consequences of the lockout since they do not take into account its diffuse, operational effects.

Stevedores weigh in

Patrick said it believes the commission should terminate the protected industrial action.

It said the commission must determine whether protected industrial action would threaten to cause significant damage to the Australian economy.

“Svitzer is the sole supplier of essential towage services to most of Australia’s major ports. If Svitzer does not operate, the maritime supply chain grinds to a halt, and with it virtually the entirety of Australia’s import/export commerce,” it said.

“On any view the inability to move ships in and out of Australia will cause enormous economic loss. Even a short disruption would be damaging; an indefinite lockout would be much more so.”

Patrick said the Fair Work Commission must consider the risk of a situation similar to the Qantas lockout case.

Qantas grounded all domestic and international flights on 29 October 2011 and announced an employee lockout to begin on 31 October. Fair Work Australia terminated all industrial action by Qantas and the involved unions before the lockout took effect.

“The commission would infer that if action is only suspended, it is unlikely that this will enable the parties to conclude an enterprise agreement given the posture of the parties and the extent to which industrial action has escalated,” Patrick said.

“The likeliest outcome of a suspension order is a period of inactivity followed by further damaging action, and the need for further proceedings of this kind before the commission.”

Patrick said terminating Svitzer’s lockout was the only step that would protect the economy from any future lockout or other damaging industrial action by the parties.

In its submission, DP World Australia called for Svitzer’s lockout order to be terminated, saying the proposed industrial action would “create significant flow-on effects to the shipping industry and the broader transport and logistics industry.

“Shipping lines only have limited alternative options to ensure that the containers on vessels are delivered to the intended port. Those alternative options (such as waiting for industrial action to cease, adjusting the shipping schedule or delivering to an alternative port and then arranging alternative transport back to the intended port, assuming that is possible) are much more costly and cause significant delays compared to delivering the containers to the intended port,” DP World wrote.

“If the planned schedule is interrupted or vessels are subject to delays, there are significant additional costs and flow on effects that the shipping line incurs as a result. It is not possible for the shipping lines simply to “catch up” the lost time as a result of a disruption.”

Qube director ports Michael Sousa said Qube is scheduled to provide stevedoring services to 36 vessels over the weekend. Of these vessels, 34 are importing product and require cargo unloading services during that time.

Mr Sousa said 13 of these vessels are importing automobiles and/or machinery (importing a total of 15,621 units, worth an estimated $624.8 million), 10 are importing a total of 69,000 tonnes of steel and/or construction materials (worth an estimated $74.3 million), five are importing a total of 38,036 tonnes of fertiliser, two are importing a total of 73,700 tonnes of cement, two are offloading passengers and luggage, one is importing pulp for the manufacture of paper and one is importing scrap metal.

“If the lockout goes ahead, those of the 34 vessels that have not arrived in port before the lockout will be turned away from port,” Mr Sousa said.

“The impact of the lockout will also have effect prior to the lockout commencing because those vessels that have docked prior to the lockout will likely be removed from berth by the relevant port authority for reasons relating to safety.”

Mr Sousa also said that if the lockout goes ahead, Qube expects to have to stand down its employees that would have been involved in loading and unloading vessels.

“This potentially affects approximately 750 employees,” he said.

“Given the period of the Lockout is currently unknown, the period of any stand down direction issued to Qube’s employees is also unknown. In my experience, the impact on employees further along the supply chain, such as transportation companies involved in delivering unloaded cargo, is likely to be similar with the possibility depots close during the lockout period.”

Mr Sousa said the prospect of ongoing industrial action creates uncertainty and cost for vessel operators and the sequencing of vessels into port.

“In my experience, this can result in vessel operators rescheduling or cancelling shipments and re-directing vessels to ports outside of Australia,” he said.

“Considering consumers are already being affected by increased supply chain costs and disruptions, including those caused by severe weather events which have resulted in rail and road outages across the east coast, ongoing on and off protected industrial action will likely exacerbate the challenges already being experienced across the sector and further increase costs to consumers.”

NSW Ports general counsel and general manager property Julian Peter Sefton in his submission to the commission said representatives of the top five shipping lines by volume told NSW Ports that should the lockout go ahead, goods imports into Australia would essentially stop, apart from some operations continuing at Port Botany.

“Vessels will likely still call Port Botany [as Engage Towage also operates at the port], with the option for discharging non-Sydney cargo being explored for later transhipment or transport by road/rail to Victoria/Queensland destinations,” Mr Sefton wrote.

“It is expected that Port Botany terminals will quickly fill up if lines drop interstate cargo at Port Botany for later transhipment, creating operational issues and congestion potentially down the landside supply chain. This option is short term at best.”

Impact on emergency services

In a submission to the FWC, AMSA executive director, response division Mark Morrow said the Svitzer lockout would impact emergency towage capability around Australia.

“If Svitzer ceased to provide emergency towage services, there would be a substantial reduction in the availability of suitably equipped vessels to provide those services in the event of a maritime casualty,” he said.

“It is possible that there would be no vessels with sufficient capability available to respond to a casualty in the location where the incident occurred.”

The unions argue for a suspension

In MUA Sydney Branch deputy secretary Paul Garrett’s submission, he says the MUA opposes a termination of the lockout, rather arguing for a suspension.

“Termination of industrial action would be very detrimental to the MUA and its members’ bargaining positions,” Mr Garrett wrote.

“If industrial action is terminated, our members would have absolutely no bargaining power and there would be no real ability for our members to try and influence Svitzer to compromise on claims. We wouldn’t, in my view, be able to bargain effectively at all.

“I understand that the ultimate outcome of termination might be the Fair Work Commission making a workplace determination under section 266 of the Fair Work Act, which would take bargaining out of the hands of the parties.”

The AMOU said the hearing of evidence and submissions had come prematurely and with “undue haste” in the context of an industrial dispute that has spanned more than three years.

It said the timing had prejudiced the union’s capacity to properly respond to the case.

“Even acknowledging the imminence of the threat of damage to the Australian economy, the commission has procedural powers capable of neutralising that threat for so long as is necessary to give every affected party a fair opportunity to put its case,” AMOU said.

As such, it argues the FWC should suspend the lockout.

“Termination would deny the AMOU and its members the right to take industrial action that is presupposed by the system of bargaining established by the FW Act.

“Besides the imminent threat of the lockout causing injury to the Australian economy, there is no good reason for the proceeding to be rushed.

“Termination is not necessary to protect against the risk of damage to the Australian economy from future, as-yet unspecified, protected industrial action.

“There is no basis for the commission to find there to be any likelihood of Svitzer threatening a further lockout in the future if protected industrial action is suspended and not terminated.

“The mere possibility that Svitzer may threaten a further lockout in the future should not be a sufficient basis to terminate protected industrial action.

“… an interim order should be made preventing the lockout and the proceeding should be adjourned to give parties time to prepare their cases. In the alternative, an order should be made suspending protected industrial action until 1 January 2023.”

Greg Yates, senior national organiser for AIMPE, highlighted the risk of stopping shipping in ports where there is no alternative operator.

“That would mean that no containers, fuel, minerals, primary produce and commodities, passenger ships (that require tugs), defence vessels or other large vessels would be permitted to arrive or depart. The effect would be to stop imports and exports in and out of those ports.

“I do not know the actual extent to which the economic harm the lockout would cause, but it would be very extensive if for an indefinite period.”

AIMPE said Svitzer “willingly” threatened the economy of Australia and the safety of the Australian people in pursuit of its preference to opt out of bargaining and into arbitration.

“It has ‘done a Qantas’, except that the implications in this case are not only immense distress and inconvenience to customers but threats to the Australian economy and the safety of the Australian people.

“That Svitzer has ruthlessly pursued its own interests in slashing unit labour costs is not necessarily a cause for criticism.

“The fact that it is willing to compromise the public interest so recklessly is a cause for harsh criticism, and a matter squarely relevant to the exercise of the commission’s discretion in this case.

“It is critical that Svitzer’s approach of reckless pursuit of its industrial goals at any cost not be rewarded by delivering to Svitzer its preferred outcome of termination of bargaining.

“To do so would be inimical to the statutory objection of the provision of a balanced framework for cooperative and productive workplace relations that promotes national prosperity by providing laws that are fair to working Australians, promote productivity and economic growth, emphasise collective bargaining.

“Svitzer’s approach of using its considerable economic influence to opt out of bargaining by threatening the economy, if vindicated by the commission, would involve the statute operating in a way which was unbalanced, unfair, antithetical to national economic prosperity, productivity and economic growth, and would undermine collective bargaining.

“For that reason alone, Svitzer’s preferred outcome of termination should be rejected.”

Svitzer argues for termination

While the three unions argued that the commission should suspend, rather than terminate industrial action, Svitzer argued for a termination.

In its submission, Svitzer’s lawyers argue that the FWC should terminate because of the threat to the economy caused by the indefinite lockout is ongoing rather than temporary, and also because of the protracted nature of the negotiations, including 75 bargaining and drafting meetings over three years.

And, the lawyers wrote, a suspension has already been attempted, “and the unions continued to organise employee industrial action, leading Svitzer to eventually give notice of the lockout”.

“A suspension would be of little assistance to anyone because hostilities are likely to resume after the suspension ends, as in fact happened after the previous suspension,” the company’s lawyers wrote.

Additional reporting by Abby Williams.