Settlement in Australian Terminal Dispute Crippling Container Operations

DP World and the Maritime Union of Australia reached an in-principle agreement in the long-running contract dispute that had been crippling container terminal operations in Australia’s four primary ports. The settlement came after three days of facilitated negotiations overseen by the country’s Fair Work Commission and shortly after the MUA reported that it was planning to extend the rolling job actions into a fifth month.

The dispute began after the contract expired at the end of September 2023 covering the dockworkers at terminals operated by DP World in Sydney, Melbourne, Brisbane, and Fremantle. Collectively the terminals handle approximately 40 percent of the container movements in Australia servicing leading carriers such as Maersk. Other terminals, including those operated by the other leading company Patrick had remained open but periodic work stoppages at the DP World facilities along with refusals to undertake overtime and other work rules, resulted in large disruptions to operations. Maersk had reported skipping scheduled port calls, rerouting containers through transshipment between ports, and the use of extra loaders as the job actions continued.

The Maritime Union of Australia issued a statement Friday morning saying that the new four-year agreement “delivers fair pay, safety and fatigue management measures, and provides job security and a fair work-life balance for Australian wharfies.”  The proposed contract still requires approval by the workers, but the MUA immediately filed a notice withdrawing all its planned protected industrial actions.

The Sydney Morning Herald reports the terms of the in-principle agreement include a 23 percent pay increase starting with an immediate eight percent increase and back pay to October 2023 as well as a sign-on bonus. The subsequent years will see a seven percent, followed by four, and four-and-a-half percent increases. 

The two sides had been at an impasse and faced calls from business groups and the opposition political party for government intervention to settle the strike. In January 2024, Workplace Relations Minister Tony Burke met with both sides and expressed government frustration calling on them to resume negotiations and reach an agreement. He however refused to directly intervene or order the Fair Work Commission to impose a settlement, a step the minister said today had ensured the negotiations and led to a faster resolution.

“The past fortnight has shown how quickly a fair and sustainable deal can be resolved once both the workforce and the employer are fully engaged in the negotiation process,” said Adrian Evans, the Union’s Assistant National Secretary, in a prepared statement.

Trade associations however are critical of the settlement saying that it will lead to higher costs. They noted that the terms provide for wage increases significantly above the current rate of inflation, while the union argues workers were being fairly compensated for their efforts in keeping the supply chain flowing during the pandemic. DP World demanded work rules changes that it said were critical to reflect changes in port operations and its competitive position.

DP World said its focus would be on restoring the operations and the supply chain with the union promising that all workers would immediately return to their jobs. Estimates are that the strike was costing the Australian economy as much as A$50 million (US$33 million) per week and that more than 50,000 containers are backlogged. Reports are that it could take six weeks or more to clear the port congestion but it will help to alleviate feared shortages of basic materials across Australia.