News

Today Aurizon will be making an application to the Fair Work Commission to terminate the 14 existing Queensland-based Enterprise Agreements (EAs).

Aurizon has been bargaining with union representatives extensively for more than a year (since April 2013) and has completed more than 70 days of bargaining. Despite these efforts, and the benefit of significant assistance from the Fair Work Commission (FWC), meaningful progress towards the agreement of new EAs has not been achieved.

Throughout the process, Aurizon has reinforced the need for fair, competitive and commercially sustainable EAs that are reflective of contemporary Australian work practices.

While the negotiations have produced in principle agreement on some clauses, no agreement has been reached on significant changes on legacy conditions and practices, such as hours of work, rostering, the removal of the no forced redundancy clauses or free rail travel. This is despite Aurizon proposing a 4% wage increase per year for three years.

On multiple occasions the Company’s position has been rejected by union bargaining representatives and delegates without a counter proposal being put forward.

On 4 March 2014 Deputy President Asbury of the FWC wrote:

“The discussion on hours of work is typical of the way in which the negotiations have proceeded, and indicates the likelihood of reaching agreement is virtually nil.”

In April 2014, in an attempt to reach an agreement, the Company requested the unions consent to the Commission arbitrating the outstanding matters. The unions did not agree to this.

The current 14 Queensland EAs nominally expired at the end of December 2013. They were agreed almost four years ago, prior to privatisation in 2010, to give effect to an agreement between the then Queensland Government and the unions that employees’ terms and conditions would be “protected” for three years.

In effect, this means there have been no significant productivity or efficiency changes in the Queensland EA’s in six years, since the previous agreements were negotiated in 2008, while employees have received wage increases of at least 4% per year over the life of those agreements.

The current EAs inhibit Aurizon’s competitiveness in the current challenging economic climate and contain clauses that are no longer sustainable for a listed company, including:

• No forced redundancies and no forced relocations
• Over 900 pay classification points, which Aurizon aims to significantly reduce
• Complex allowances and ancillary payments, above base wages

These agreements are placing significant and unreasonable restrictions on the Company that impact on efficiency, productivity and customer service, as well as imposing additional costs on the business. Aurizon is therefore pursuing an option available to it under the Fair Work Act to have the EAs terminated.

Aurizon is disappointed that it has become necessary to pursue this course of action, however the Company, our employees and our customers need certainty and deserve fair, modern workplace agreements. The extremely slow progress with bargaining has resulted in Aurizon having to explore all options available to it.

FWC will set a timetable for hearing the Application to be heard on the termination of the 14 existing Queensland EAs. In the meantime Queensland employees will remain covered by the relevant existing EAs.

If the EAs are terminated, the terms and conditions of employment will be regulated by:

• The Rail Industry Award 2010 (a modern award made under the Fair Work Act);
• The National Employment Standards;
• and Employees’ individual contracts of employment.

As part of the Application Aurizon will undertake to maintain a number of the current terms and conditions, such as base wages, certain allowances, superannuation, leave accruals and redundancy pay.

Aurizon remains firmly committed to trying in good faith to reach agreement on the terms of new EAs that are fair and commercially sustainable for employees and the Company. We are not seeking provisions more advantageous than previously agreed by the same unions with other competing companies in the rail sector.

Aurizon, as a publicly listed company operating in a highly competitive environment, is not prepared to remain in a union-driven “holding pattern” because unions want to preserve outdated, legacy working conditions.

New South Wales

In New South Wales, the Company has welcomed a positive vote by employees late last month on the proposed Aurizon NSW Coal Operations Enterprise Agreement 2014. In accordance with the Fair Work Act 2009, Aurizon has now formally lodged the agreement for approval with the Fair Work Commission.

“The result of the NSW bargaining process represents a fair agreement, with appropriate rostering and workplace flexibility, to contribute to the continued success of our NSW Coal business,” said Managing Director & CEO Lance Hockridge.

It is a four year agreement, running from 1 April 2014, providing for a 12% increase over three years and a reduction in hours in the fourth year. It will come into effect seven days from approval by the Fair Work Commission.