Aurizon in huge win on legacy employment terms

The company will scrap 12 enterprise agreements that it says are holding it back in a competitive market

Aurizon in huge win on legacy employment terms
Lance Hockridge is tackling higher comparitive labour costs.


Rail operator Aurizon has won the Fair Work Commission’s (FWC’s) approval to terminate 12 separate enterprise agreements.

Aurizon CEO Lance Hockridge says the ruling is a "landmark decision" for both Aurizon itself and Australian industrial relations as a whole.

"Our aim always has been to negotiate in good faith workplace agreements that are contemporary and forward-looking, and match those already agreed by unions with our direct competitors," he says.

"We anticipate today's decision will assist us in moving towards that outcome."

Hockridge says nominated agreements, some of which had been in place since it was a Queensland government-owned entity, had left it with significantly higher labour costs than key competitior Asciano and smaller rail haulage players.

Their unique provisions meant Aurizon has also been stuck with a far less flexible workforce than the market requires.

"Aurizon considers that its business is seriously impaired by many restrictions and inefficiencies that are enshrined in its enterprise agreements," the full bench of the FWC surmises.

"[These] are largely a legacy of its previous government ownership, the privatisation process, and the requirements to insert provisions in the enterprise agreements to give effect to commitments and guarantees given by the Queensland government at the time."

Among the common provisions across the 12 agreements was a "no forced redundancy" rule.

This has left some 69 Aurizon employees classified as "in transition".

Their positions have become redundant, but no redeployment opportunities existed.

The FWC heard that Aurizon has a dedicated "career transition unit" that works to find alternative employment for each of these staff members, but cannot compel any of them to leave the company or take on a different role.

"The employees in transition are required to attend at Career Transition Unit locations each day and undertake job seeking activities," the panel notes.

A number of provisions also create unreasonable demarcations in work responsibilities.

For example, train drivers are not permitted to perform "ground work" (such as shunting), even if they arrive at a depot well before the end of their rostered shift.

A consultant for Aurizon says this has meant a significant amount of double hiring, where ground crews need to be especially hired while drivers are otherwise idle.

Unions, including the Rail, Tram and Bus Union (RTBU), argue against any wholesale dismantling of the enterprise agreements.

They say the company maintains significant market power over its workforce, and is competing profitably within the current regime, noting year-on-year revenue growth over the last three financial years and a stable forward business outlook.

With no enterprise agreements in place, they fear Aurizon will seek to significantly reduce wages and a range of other standard conditions.

But the FWC notes that the unions also hold some power in the bargaining process.

"While it is likely that Aurizon will be able to introduce some changes, it is in our view also reasonable to expect that any new enterprise agreements will also contain similar wages and conditions of employment for employees," it notes.

The FWC has approved the termination of the 12 agreements, which will take effect from May 18.

Aurizon has made a series of undertakings to govern employment conditions until new agreements can be negotiated.

These include holding wages steady with those in the terminated agreements, and the continued application of the annual review performance plan.

It will, however, include provisions for forced redundancies.

Affected staff will receive three weeks’ pay for each year of continued service, up to a maximum of 104 weeks.

The RTBU has acknowledged the FWC decision but says it is consulting with lawyers over a potential appeal to a higher court. It will meet with other rail unions "later this week".

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