ITF: Svitzer’s termination bid could deepen Australia’s supply chain woes

A decision by Mærsk’s towage subsidiary, Svitzer, to terminate a collective agreement with its entire Australian workforce could further deepen the country’s supply chain woes, according to the International Transport Workers’ Federation (ITF).

Svitzer’s decision

On 19 January, Svitzer — Australia’s largest tug operator — lodged an application with the Fair Work Commission to terminate its enterprise agreement with maritime unions — the Maritime Union of Australia (MUA), the Australian Institute of Marine and Power Engineers (AIMPE) and the Australian Maritime Officers (AMOU).

As informed by Svitzer, the move followed two years of negotiations with the three maritime unions, involving more than 50 meetings and two conciliation sessions facilitated by the Fair Work Commission.

The current enterprise agreement, which lapsed in 2019, has enabled restrictive work practices and interference in managerial and operational decision-making, leading to inefficiencies and limitations on workplace productivity, Svitzer explained.

“The 2016 EA contains a plethora of restrictive work practices and interference in managerial and operational decision-making which are aimed at reducing productivity and utilization and increase the company’s fixed costs. Svitzer is not prepared to agree to a new EA that replicates legacy terms which had been agreed more than 22 years ago, in a completely different market. We are looking to secure an EA which reflects the current market and meets our customers’ demands and expectations,” Nicolaj Noes, Managing Director of Svitzer Australia, commented.

Should the Fair Work Commission terminate the 2016 Enterprise Agreement, the existing enterprise agreement would cease to cover or apply to Svitzer and its approximately 540 employees will be covered by the Marine Towage Award 2020. During this time, Svitzer said it is committed to continuing to bargain to reach a fit-for-purpose EA.

ITF: Svitzer needs to recognize tug workers’ rights to freedom of association, collective bargaining

“Throughout the pandemic, unions have been working alongside governments and transport bodies on measures to avoid supply chain collapse,” ITF General Secretary Stephen Cotton said.

“In the last two years, companies and unions across every transport sector have been working together to get the world through the many faces of the pandemic. Companies, including Maersk, have been active alongside the ITF and many of our maritime affiliates in trying to resolve the seafarer crew change crisis.”

“Our message is that mature, respectful industrial relations are possible. In fact, constructive dialogue with everyone at the table is the only way that we will meet the shared challenges before the industry – whether it’s securing supply chains, or transitioning shipping towards sustainability.”

Cotton said that it was important that all parts of the Maersk Group upheld workers’ rights to freedom of association and collective bargaining, provisions for which are clearly set out in the International Labour Organization’s conventions C87 and C98.

“It is the right of all working people to freely associate, to form and join independent trade unions, and to bargain through those unions with their employers, should the workers choose to do so. Svitzer recognising tug workers’ rights to freedom of association and collective bargaining has got to be the cornerstone of any constructive dialogue to resolve this.”

“Svitzer need not engage in a short-sighted race to the bottom that will leave tug workers worse off and our supply chains far less secure. We know that Svitzer is capable of changing the direction of its conduct in Australia, and starting instead to actually reflect the best of Maersk’s values – some of which we have seen in action during this pandemic.”

“We encourage Svitzer to sit down with our affiliates and resolve this together, so that we can return our collective focus to ensuring Australian households and businesses have maritime supply chains they can rely on, for the food, fuel, medicines, and consumer goods they need,” Cotton continued.

“The tug sector is critical to the security of our supply chains. These workers are the air-traffic control operators of ocean cargo: without them, nothing moves. Without their focus and skill: containers can pile high, ships back up, vessels collide, or worse happens.”

Maersk Group’s responsibility

ITF Inland Navigation Section chair Yury Sukhorukov said Mærsk had an ethical responsibility to lead all the industries within which it operates towards better standards for pay and conditions, and health and safety.

A successful termination bid by Svitzer would push hundreds of Australian tug and towage workers onto the bare legal minimums for pay and conditions. This would result in the loss of union-won restrictions on excessive hours critical to prevent fatigue.

“While this behaviour is unacceptable from any employer, it is particularly disappointing because maritime workers and our unions have worked so hard to build robust, respectful industrial relationships with Maersk and its subsidiaries,” Sukhorukov said.

“The Maersk Group has benefited from these constructive global relationships to make enormous revenues through the pandemic – but now the company has chosen to switch its approach by endorsing Svitzer’s … antagonism towards workers in our important, but often undervalued, tug sector,” Sukhorukov added.

The chair said that when the ITF began to analyse major areas of risk to global supply chains, towage services in ports and harbours was identified as a significant risk by the federation’s researchers.

“The ‘race to the bottom’ we see in many tug markets, with operators undercutting each other, inevitably leads to lower labour and safety standards,” Sukhorukov continued.

“A safe tug sector is in Maersk’s long-term interest. I am sure that when Maersk Group takes the time to stand back and see the bigger picture, they will come to understand that everyone benefits from a safe, secure and stable tug sector. We look forward to Maersk therefore reasserting its support for the rights of tug workers to collectively bargain for fair wages, secure jobs, and safe hours of work and rest – of course, as part of a new collective agreement with our fraternal unions in Australia,” Sukhorukov concluded.