BlueScope workers overwhelmingly supported a plan that will deliver $65.7 million in annual labour cost savings.
BlueScope workers overwhelmingly supported a plan that will deliver $65.7 million in annual labour cost savings.
Union’s response to steelwork company’s proposals shows members chose pragmatism over ideology.
In late 2013, Toyota issued a stark warning to unions.
The carmaker said the future of its Australian manufacturing operations was in doubt unless the union agreed to a deal to cut costs and restructure work arrangements.
The unions voted no and Toyota's Melbourne plant will shut down next year, with the loss of 2500 direct jobs and many thousands more in the automotive parts sector.
Fast forward two years to Port Kembla, the steel town south of Sydney, when BlueScope Steel announced last week that it will cut 500 jobs to secure its future.
Collette Dinnigan has teamed up with discount supermarket Aldi. Photo / Neville Marriner
Not only did the workers endorse the job losses, they also voted for a wage freeze and restructuring of the workforces. These measures will deliver A$60 million ($65.7 million) in labour cost savings a year.
Compared with New Zealand, industrial relations in Australia has long been a pitch battle between unions and employers or, for the Marxists out there, between labour and capital.
While things have calmed down in the last decade or so, industrial relations reform is still a key wish-list item for business.
The business lobby argues restrictive work practices hold back productivity and hence jobs and the economy.
Which is why the BlueScope deal is so significant. It suggests there might be a new way of approaching industrial relations, where pragmatism and not ideology is the key consideration.
BlueScope had warned a couple of months ago that unless it could shed 500 workers it would have to shut down the Port Kembla Steelworks, at a cost of 5000 direct and indirect jobs. Instead of calling the company's bluff, the unions took management at its word and worked to negotiate a deal with the company.
By the time BlueScope workers met last Thursday, after eight weeks of negotiation, the level of support was overwhelming, with an estimated 95 per cent voting in favour of the deal.
Bonuses will be surrendered, overtime payments reduced, and working arrangements rewritten, meaning there will be significant changes in the way employees work.
It would not always have been thus. In the past, when decisions were made in Australia - however necessary and logical they were - unions huffed and puffed, fighting furiously against any cost reductions, as the unions at Toyota did.
Maybe the Australian car industry was on the way out anyway - all four manufacturers have or will soon shut their operations - but the unions didn't do their workers any favours. They could have thrown Toyota a lifeline until a fall in the Aussie dollar restored the global competitiveness of its local factory.
BlueScope, which demerged from mining giant BHP Billiton in 2002, has struggled in recent years. The high Australian dollar and cheap labour in Asia made it globally uncompetitive.
After hitting a high of around A$50 in the lead up to the global financial crisis, shares in the company dropped below A$2 a couple of years ago. But they came back from those lows recently and on Friday jumped 5 per cent to A$4.01.
One of the main industrial relations bugbears of business is penalty rates, especially in sectors such as retail and hospitality. Prime Minister Malcolm Turnbull has signalled he's prepared to move on this area, saying we live in a "seven-day economy".
How the union movement responds will be a litmus test of pragmatism versus ideology.
Cheap fashionCollette Dinnigan is Australian fashion royalty.
Her clothes have shown at Paris Fashion Week for many years and are sold around the world. New Zealand brides-to-be have been known to fly across the Tasman to buy her wedding dresses. The last place you'd expect her to show up is at discount supermarket Aldi.
It's akin to finding a Karen Walker range of frocks at The Warehouse.
On Wednesday, Aldi will start retailing a limited edition line of girls' clothing designed by Dinnigan, with prices starting at A$11.99 and rising to A$29.99 for a special-occasion dress.
Teaming up with Dinnigan - who in the past has collaborated with Dom Perignon, Audi and Qantas - is the latest in a series of clever promotions by Aldi aimed at luring new shoppers to the store.
The German-owned company is making huge strides in breaking the cosy supermarket duopoly of Woolworths and Wesfarmers-owned Coles, but it faces one big hurdle: many shoppers who haven't visited the store believe it's full of cheap rubbish.
When customers are lured into Aldi to buy the limited edition dresses - or cheap nappies, or tents, or chest freezers, or whatever - they look around, experience the shop and throw in a few cans of tomatoes, some toothpaste or some fresh fruit and vege.
The Dinnigan experience won't necessarily convert people into Aldi shoppers, but it means the next time they want to go to a supermarket, Aldi will at least to come to mind. That's a big step.
