Tugboat workers aligned to the Maritime Union of Australia took a major step toward industrial action on Monday.
Deckhands on the tugs have been campaigning for better conditions over the past two months, and a ballot of the workers has today approved that strike action can take place at a later time if deemed necessary.
The ballot result will not immediately lead to a strike, but it suggests that interruptions at one of the nation’s most economically important ports are becoming more likely unless North American shipping company Teekay can salvage a compromise with the workers.
Port Hedland is the exit point for the vast majority of Australia’s iron ore, with BHP Billiton, Fortescue Metals Group and Atlas Iron said to be the most affected if a strike occurs.
Iron ore remains Australia’s most lucrative export commodity, and Port Hedland exports about $100 million of it every day.
Teekay is contracted to run the tugs at Port Hedland by BHP Billiton, and the major miner said it was ”disappointed” by the ballot result.
”If the Port operations are suspended, Australia’s iron ore exports are significantly impacted. We estimate this will cost suppliers who ship out of Port Hedland around $100 million a day,” a spokesman for the company said..
”Significant royalty and tax revenue will be lost to the West Australian and federal governments. Mining companies like BHP Billiton are not able to make up lost volume of this nature, and governments cannot recover these lost royalties and taxes.”
The major benefactor of a strike could be Rio Tinto, which exports through its own Pilbara port – Cape Lambert – just south of Port Hedland.
The major loser could be Fortescue Metals Group, which needs to run at “sprint capacity” for the entire June quarter to meet its full year iron ore export guidance.
Under the terms of today’s ballot, the MUA and the deckhands have the option to strike for either 24 hours, 48 hours or a full week.
They can choose not to strike, but with the union still at loggerheads with Teekay, a compromise does not appear imminent.
Permission to strike only lasts for 30 days, so if strikes are to occur, they will likely happen before the first half of June.
Deckhands are one of three types of workers on the tugboats, alongside Masters and engineers.
The deckhands earn the least of the three types of workers, and the MUA is seeking improved pay and annual leave entitlements.
Currently most deckhands at Port Hedland do not earn annual leave, but work four weeks on, four weeks off.
The union wants deckhands to be better rewarded for the sharp increase in exports going through Port Hedland each month.
Earlier this month the Port Hedland Port Authority reported that exports through the port in April were 33 per cent higher than in April 2013.
Such records have been common in recent times, as iron ore miners seek to grow exports rapidly.
But most of the miners that use Port Hedland have just come though several years of cost-cutting and in come cases, wage reductions, and believe the tugboat workers should do the same.
The deckhands are unlikely to be the last tugboat workers to vote on a strike motion, with the engineers and masters also taking a ballot on the same issue.
The results of those two ballots should be known within the next month.
All three types of tugboat workers have separate unions.
BHP said a conciliation process with the union was still progressing through the Fair Work Commission, and the miner said it was hopeful that an agreement could be worked out within the constraints of the Fair Work Act.
”Given the current wages and conditions, we think it would be irresponsible for the MUA to take industrial action that would put a stop to one of Australia’s most critical national exports,” said the spokeswoman.
