THE recent workforce troubles of Qantas and Asciano have been plain for all to see, but a growing number of ASX-listed companies outside the overheated resources sector are quietly facing labour issues and increased wage pressure as agreements expire this quarter.
As businesses recover from the effects of the global financial crisis, the number of workplaces conducting votes on industrial action has surged almost three times over the past financial year.
But there has been no noticeable increase in days lost to strikes, which could indicate the threats of strike action could be increasingly translating to increased wages, observers say.
For now, there is no evidence of wage blowouts outside the mining and oil gas sectors, but there are definite signs the pressure is increasing.
According to research from CLSA, there are 16 listed companies, including Wesfarmers, Transfield, QR National and Lend Lease, with industrial relations issues this quarter.
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“Wage agreement expiry peaks in the second quarter of 2011 and the fourth quarter should see a pick up in (industrial relations) activity,” CLSA analyst Scott Ryall said in a recent report studying listed companies facing industrial action.
“We expect this to result in a significant noise around renegotiation and disruption potential from the threat of protected strike action.”
The increased expiries are partly due to a rush to reach and lodge agreements before the Fair Work Act started on July 1, 2009, he said. Qantas engineers this month voted to take industrial action in Australian Electoral Commission ballots, threatening flights after the Easter weekend.
Meanwhile, Patrick stevedores, owned by Asciano, has temporarily averted the threat of rolling strikes at container terminals at Melbourne, Sydney, Fremantle and Brisbane.
But as of last week Asciano, which did not return calls, had been unable to reach agreement with the Maritime Union of Australia.
Along with the publicised plight of Asciano and Qantas workers, there has been action brewing at many other listed
companies.
Employees have voted for the right to strike at Adelaide Brighton, BHP Billiton’s Mt Arthur Coal operation, Boom Logistics, Coca-Cola Amatil, Downer EDI’s rail unit, GWA Bathrooms and Kitchens, Transfield and UGL, according to CLSA and Fair Work Australia data.
On top of this, workers at Monadelphous, QR National and Salmat have been given the right to vote on strike action, while Lend Lease, Mirvac, UGL and Wesfarmers’ Coles unit are attempting to stop industrial action taking place through court orders.
“Outside of actual strikes, pressure appears to be in the form of wage-increase demands, ancillary cost increases (superannuation, minimising casual labour) and increased management time,” Mr Ryall said, citing union feedback.
The struggles of the resources sector have been well documented. A shortage of skilled and unskilled workers in remote regions has resulted in project cost blowouts, particularly in the gas and iron ore-rich northwest of the country, as salaries surge to astronomical levels.
Analysis by the Australian Mines and Metals Association last month found the most recent wage agreement registered for offshore construction workers contained maximum annual pay packages for a four-week-on, two-week-off rostered employee of $423,000 for a laundry hand; $445,000 for a cook; $450,000 for a tradesman; and $498,000 for a barge welder.
Despite signs other industries are are under pressure from increased wage demands, they have not been hit hard so far.
In the Reserve Bank’s minutes from its latest meeting, there was little evidence of contagion from the resources boom.
“Liaison with firms suggested that wage growth was increasing in mining-related industries and some skilled occupations, though pressures in the labour market had not become widespread,” the RBA said.
The Australian Industry Group says that while pressures are rising, to date, wages have been largely contained.
“There’s certainly rising wage pressures due to skills shortages and various other matters, but the outcomes have been around the 3.5 to 4 per cent (wage increase) level, which is consistent with what the outcomes have been for quite a few years,” AI Group national workplace relations director Stephen Smith said.
“But the unions’ claims are in many cases increasing, and companies are feeling the effects of skills shortages — there is upwards pressure there.”
He described the increase in the number of workplace ballots, even though they often did not result in strikes, as “worrying”.
CLSA highlights Asciano and Qantas as being at risk of increased labour costs. CLSA forecasts Asciano, whose staff costs make up 29 per cent of revenue and 16 per cent of earnings margins, will see labour costs increase by 5 to 6 per cent.