Aurizon coal wagons. Photo: Aurizon

Aurizon secures final workforce vote

Aurizon’s two-year battle with industry unions is all but over.

Employees voted in favour of the Queensland Train Crew and Transport Operations Enterprise Agreement (EA) in a ballot running from July 20 to 27, the rail operator said on Monday.

The agreement is the third major Aurizon EA to get union approval this year. It follows the Queensland Staff EA, formalised in January, and the Queensland Construction and Maintenance EA, which unions voted in favour of earlier this month.


Related story: Aurizon’s union saga nears end


Together, the three EAs cover around 5,000 Aurizon employees in Queensland – the majority of the company’s workforce.

And with the rubber stamp from the Fair Work Commission – more or less a formality – expected to come down within days for the last two EAs, one of the longest and largest Australian railway labour disputes in recent history should come to an end.

946 employees voted in favour of the new Train Crew and Transport Operations EA, while just 310 voted against the deal, meaning the agreement passed with a vote of 75.32%.

Employees will earn a 4% pay increase each of the next three years. In return, Aurizon will remove the ‘no forced redundancies’ provision from the deal, and will no longer supply rail passes for the majority of its employees: only those with more than 25 years’ experience will be able to keep their passes, and theirs will be removed from 2018.

“The support of modern agreements by our employees is an important milestone for the future of Aurizon,” the ASX-listed company’s executive vice president for human resources John Stephens said.

“This is the catalyst for significant productivity enhancements and workplace flexibility in order to deliver for our customers and sustain and grow our business.”

Each of the new EAs has a 3-year duration.

Aurizon, Lance Hockridge - Photo Aurizon

QR safety standards “kept me up at night”: Hockridge

Aurizon boss Lance Hockridge has recalled his struggles with the bureaucracy, lack of customer focus and “appalling” approach to safety he witnessed upon joining the business in 2007, when it was part of state-owned Queensland Rail.

Hockridge spoke last week at a Leadership Series lunch at Bond University, on the Gold Coast.

He has been the chief executive of what is now the ASX-listed rail operator Aurizon since 2007, when he moved from his role as president of Bluescope Steel’s North American operations in Dallas, Texas.

“Multi-national, publicly listed companies had been my comfort zone for 30 years,” Hockridge recalled, “and I found myself the CEO of a state railway owned by the Queensland Government.”

Two years after his arrival, the state government announced it would separate QR’s commercial activities from passenger rail, by floating ‘QR National’ on the ASX, where it later became Aurizon.

And from what Hockridge said last week, that move couldn’t have come soon enough.

“While QR was a respected rail operator with extraordinary potential, on occasions it felt like I had gone back in time,” he said.

“We were buried in bureaucracy, customers took a backseat and safety was appalling. The matter of safety,” he added, “was truly the one thing that kept me up at night.”

Hockridge recalled in his early years with the company, he often found himself “caught in the crossfire” between the social considerations of the government, and the commercial needs of the customers.

“I managed to dodge a few bullets but also took my fair share of ‘robust’ phone calls from George Street,” he said, referring to the major Brisbane street housing State Parliament, the Treasury Building and several other key sites.

“In November 2010, we floated in what would be the largest float on the ASX in over a decade – worth $4.6 billion. While the privatisation backlash for government was huge, it was a true catalyst of change for the company, our leaders and the broader employee base.”

The transition was not an easy one to make, with a company owned for more than 140 years by the government, becoming a top 50 ASX listing in a five-year stretch.

“It sounds simple but, of course, the journey has been complex, nuanced and colourful,” Hockridge said. “It’s been a hard slog at times. Transformational change is not easy. We’ve hit many speed bumps but momentum has been sustained.”

Hockridge is particularly proud of the transition Aurizon has undergone in terms of safety.

“The safety performance when I first began at the company, measured by the standard metric of Lost Time Injury Frequency Rate, was simply unacceptable,” he said.

“From trackside to senior management, I was told that accidents were inevitable, unavoidable, because we worked in the rail industry. Lots of heavy machines and moving parts ‘apparently’.

“I could not accept this. I’d worked for decades in the steel industry; my experience was very different. It had to change.”

Aurizon started a sustained program, he said, with an investment of three to five years at a minimum. “It could be no less,” he said, “and unsurprisingly, it continues today.”

By focusing on behavioural change, and a mandate that safety must prevail over production, Aurizon has been able to reduce its Lost Time Injury Frequency Rate by 97% since 2010, meaning the number of employees seriously injured since 2010 is over 100 less than it might have been at rates prior to the change.

“We’ve turned the dial, in terms of results and in our belief,” the chief executive said. “Most employees now believe all injuries are preventable.

“The cultural shift is well underway; it’s now about continuous improvement and there’s still a way to go. The safety journey is analogous of broader transformation, and increasingly, of a values-based approach by employees.

“This is as much about how we go about our work, not only focusing on what we achieve.”

New ARTC chair appointed

Finance minister Mathias Cormann has announced who will succeed John Caldon as chair of the Australian Rail Track Corporation.

Cormann announced the appointment of Dr Helen Nugent as the ARTC’s new chair, appointing her for a period of three years.

Cormann was joined by deputy prime minister and minister for infrastructure and regional development Warren Truss to make the announcement on July 16. The pair praised Nugent’s significant executive management and board experience, which they said made her well suited to serve as chair.

“She brings extensive expertise in finance, governance, infrastructure investment, and risk management to the Board,” the pair said in a joint statement.

Nugent’s previous appointments include as Partner at global management consultancy, McKinsey & Company and as Director of Strategy at Westpac. Over the past 20 years, she has served on multiple boards, both private and not-for-profit, including at Swiss Re Australia, the State Bank of New South Wales and Opera Australia, as well as at infrastructure investment entities including United Energy, Macquarie Airports and Macquarie Group.

Nugent was a Menzies Scholar to Harvard University, where she gained her MBA. In 2004, she was made an Officer in the Order of Australia (AO) for services to business, the arts and the community.

She will replace acting ARTC chair Lucio Di Bartolomeo, himself standing in for former full-time chair John Caldon, who held the position of Chair of the ARTC for five years from 2010.

Truss and Cormann thanked Caldon for his service to ARTC over this period.

“Mr Caldon has overseen significant investments aimed at improving the competitiveness of the interstate rail network during his term,” they said. “Mr Caldon has made an invaluable contribution to ARTC and leaves the company well-placed to meet future challenges in the freight rail and broader transportation market. During his leadership, ARTC more than doubled in size since 2010.”

Aurizon coal train. Photo: Aurizon

Aurizon’s union saga nears end

A new enterprise agreement covering roughly 1500 Aurizon employees has been approved by union vote, moving the Queensland-based operator a step closer toward ending its two-year battle with unions.

82.7% of employees who voted on the new agreement were in favour, in a ballot that ran from June 6 to 15, Aurizon said. 886 votes were in favour of the agreement, while 185 were against.

The Construction and Maintenance Enterprise Agreement is one of the three major EAs Aurizon and unions – primarily the RTBU – have been trying to come to equal terms on for the last two years.

Under the union-approved deal, which replaces and unifies nine separate deals, employees will earn a 4% pay increase each of the next three years. In return, Aurizon will remove the ‘no forced redundancies’ provision from the deal, and will no longer supply rail passes for the majority of its employees: only those with more than 25 years’ experience will be able to keep their passes, and theirs will be removed from 2018.

With the positive vote from union members, the agreement has been put to the Fair Work Commission, and will be in force seven days after approval from the Commission.

It will join the Staff Enterprise Agreement – covering roughly 1300 employees – which was implemented in January. The third major agreement, the Train Crew and Transport Operators agreement – covering around 1700 workers – has come to an in-principle deal, and will be voted on by union members between July 20 and 27.

For both Aurizon and the unions, the developments signal the end of a long, drawn out negotiation period. As is often the case, both sides insisted they were bargaining in good faith, and both have felt – at times – that the other side was being unreasonable.

While the Staff agreement was done and dusted earlier this year – replacing two old deals with one new one – talks dragged on over the final two deals, which together were set to replace a set of 12 old agreements. Aurizon stood on one side; unions – including AFULE, QSU, CEPU, AMWU, RTBU, APESMA and Together Queensland – on the other.

The conflict came to a head in April, when the Fair Work Commission ruled Aurizon was allowed to cancel the old agreements, leaving employees covered only by the Rail Industry Award (2010), the National Employment Standards, and individual contracts, conditions Aurizon described as “less favourable” to workers.

Speaking at the time, Aurizon boss Lance Hockridge praised the Fair Work decision.

“This is a landmark decision, not only for Aurizon but in the broader context for Australian industrial relations,” he said. “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.”

Unions appealed the Fair Work decision, but following a hearing in May, Aurizon formally scrapped the old deals.

This week, announcing the successful vote on one of the major new agreements, and the dates for voting on the other deal, Aurizon’s executive vice president for Human Resources, John Stephens, praised employees for approving the deal.

“After two years of bargaining in good faith with unions, the positive vote on this Enterprise Agreement is a very welcome result,” he said.

“It will be the catalyst for significant productivity enhancements and improved workplace flexibility. This is good for employees, customers, business efficiency and the broader economy.”

Sydney Train

TfNSW gets new deputy secretary

Transport for NSW secretary Tim Reardon on Wednesday announced who will take up the newly-established role of deputy secretary for freight, strategy and planning at the department.

Clare Gardiner-Barnes has been named to the new role, and will move from her current role as chief executive at the Northern Territory Department of Transport.

Gardiner-Barnes has over 20 years’ experience in the public sector with leadership roles across a number of areas of government, Reardon said.

The new position of deputy secretary of freight, strategy and planning is tasked with bringing together all of Transport for NSW’s policy, planning and regulation into the one area, streamlining decision making and accountability.

“Transport for NSW is undergoing organisational reform to ensure that it can effectively deliver the government’s significant investment in new infrastructure and service improvements,” Reardon said.

“Ms Gardiner-Barnes will play a critical role in the development of strategy and policy for public transport and roads networks and work closely with industry to ensure the safe and efficient movement of freight in the State.

“I am pleased to have someone of Ms Gardiner-Barnes’ calibre join Transport for NSW at this important time,” Mr Reardon said.

Gardiner-Barnes will take up her position in August.

Melbourne Tram

Tram drivers want 18% pay rise over 3 years

Melbourne could be headed for public transport chaos as tram drivers joined train drivers on Friday last week, lodging a bit at the Fair Work Commission to ballot its members over potential strike action.

An EBA covering tram and train drivers in Melbourne expired on June 30, but will remain in place while employers Melbourne Metro and Yarra Trams negotiate with the Rail Tram and Bus Union, which represents many of its workers.

Unhappy with negotiations and growing impatient, the union went to the Fair Work Commission to request a ballot of train drivers, seeking permission to conduct a number of industrial actions, including station skipping, giving passengers free travel, and work stoppages.

The trains ballot was approved by the Fair Work Commission on Thursday, July 9, and the relevant members will be polled over the next fortnight.

Tram drivers could also soon be polled, with the union reportedly logging another ballot request for industrial action in its dispute with Yarra Trams late last week.

The RTBU reportedly wants permission from its tram driving members, to stage bans on infringement and on-the-stop penalties, bans on announcements and bans on overtime, as well as work stoppages and other measures.

Interviewed on 3AW Drive on Friday afternoon, RTBU Victoria’s bus and trams secretary Phil Altieri said the employer and the union are far from coming to a deal.

“We’ve been negotiating for a number of months now with very little progress [and] very little agreement,” Altieri told the program.

Yarra Trams are refusing to take important matters on board, he claimed.

“On top of that, the wage offer they’ve put to workers is insulting, if nothing else … We’re miles apart.”

Altieri confirmed the union is asking Yarra Trams for an 18% pay rise over the next 3 years, in stages of 6% per annum. When host Nick McCallum questioned the demand – stating it was more than twice inflation – the union official said: “It’s a bargain, and we’re in-good-faith bargaining”.

“The thing that’s got under the skin of [tram drivers] is that we know that Yarra Trams has substantially increased revenue over the last year … all the while, our members are getting their current terms and conditions.”

Yarra Trams has reportedly offered workers a base increase of 1.33% per annum, but will increase that if certain conditions and productivity gains are met.

“Yarra Trams is positioned with the 1.33% wage offer, [then] they say ‘You can get more, but what are you going to give up to get more?’,” Altieri argued. “So they want us to compromise our terms and conditions in order to get half a decent wage increase.”

McCallum suggested the pay rise was so high as to hold the union up to ridicule, but Altieri disagreed.

“No, not really, I don’t think [6% per annum is too high],” the union boss answered.

“Yarra Trams have increased their revenue … on the back of our members’ hard work. The reason they’re making more money is because our members are being more productive. Fare evasion is at its lowest level ever … that makes a big impression on their bottom line, and they don’t want to recognise the workers.”

“But is six percent realistic?” McCallum asked.

“I think it is,” Altieri answered. “When you consider what the company is making, it’s reasonable.”

Level Crossing removal video. Photo: Premier Victoria

PTV, V/Line and VicTrack get new board members

Three of Victoria’s public transport organisations have new board members after an announcement from public transport minister Jacinta Allan on Monday.

Headlining the new appointments were Patricia Faulkner, who was named as the new chair of Public Transport Victoria, and Jenny Dawson, named chair of V/Line.

“Ms Faulkner has extensive experience in governance roles, including as former Secretary of the Victorian Department of Human Services, a Partner with KPMG and as a Trustee/Director of a State Government superannuation fund,” Allan said.

“Ms Dawson served 15 years as a Director of Bendigo and Adelaide Bank Ltd and is currently Chair of Sandhurst Trustees Ltd.

“She also has considerable experience in Regional Development strategy and planning from her 13 years on Regional Development policy and management committees involving Federal, State and local stakeholders.”

The appointment of Kevin Norris as a director of PTV, Allan said, also fulfils a commitment by the Andrew Labor Government to appoint a representative with expertise in the bus network to the PTV Board.

The full list of new appointments is as follows:

Public Transport Victoria

  • Patricia Faulkner as Chair of Public Transport Victoria
  • Doug Bartley as Deputy Chair of Public Transport Victoria
  • Kevin Norris as Director of Public Transport Victoria
  • Virginia Hickey as Director of Public Transport Victoria
  • Tom Sargant as Community Representative of Public Transport Victoria

V/Line

  • Jenny Dawson as Chair of V/Line
  • Craig Cook as Deputy Chair of V/Line
  • John Donovan as Director of V/Line
  • Gabrielle Bell as Director of V/Line
  • Kay Macaulay as Director of V/Line

VicTrack

  • Geraldine Gray as Director of VicTrack
  • Collette Burke as Director of VicTrack

Doug Bartley will act as Chair of Public Transport Victoria and Patricia Faulkner as Deputy Chair until Ms Faulkner is available to take up the Chair position from 1 October 2015.

Allan said the Victorian Government recognises the significant contributions of outgoing board members, and said the government looks forward to working with new appointees.

“The Victorian Government would like to acknowledge outgoing Chairs Ian Dobbs and Hector McKenzie, who have provided strong leadership during their terms,” Allan concluded.

Lack of diversity ‘significant’ to ‘ageing, male-dominated’ industry

The limited number of women and young people working in logistics is a severe issue which must be addressed going forward, the industry lobby says.

Australian Logistics Council (ALC) boss Michael Kilgariff says diversity – or lack thereof – is one of the biggest issues faced by the Australian logistics industry.

“The perception of the logistics industry, and the limited number of women and young people attracted to the logistics sector, is a significant issue for our industry and one in which ALC is determined to take a leadership role,” Kilgariff said on June 25.

ALC’s board last week announced a new strategic focus to “attract, support and develop diversity in the logistics industry”.

To start, ALC will organise a pair of events: the first ‘Women in Logistics Summit’ to take place in Melbourne on November 25, and the first ‘Young Guns in Logistics Conference’ to be organised in 2016.

The events are part of a decision by ALC to formally include the issue of ‘people’ in its policy focus.

“Expanding ALC’s focus to incorporate the policy issue of ‘people’ acknowledges ALC’s commitment to take a greater role in encouraging greater diversity into the logistics industry,” Kilgariff explained.

“For the logistics industry to achieve much needed productivity improvements, we need to have the best possible talent working across all parts of the supply chain.

“Our people are our most important asset, and it is appropriate we give this issue the same strategic focus as we do the areas of infrastructure, regulation, technology and supply chain safety.”

Kilgariff said many women and young people are qualified to work in the industry, but cannot access appropriate employment within the industry. Fixing this issue, he said, would benefit companies by widening the recruitment pool, and bringing a new perspective “to what is generally an ageing and male-dominated industry”.

As well as encouraging new entrants into logistics, ALC plans to work with businesses to develop better pathways for women and young people already employed by the industry.

Kilgariff said many leading logistics companies already have pro-active programs to attract, support and develop greater diversity in the workplace.

“ALC will seek to harness the good work already underway by its members and stakeholders, as well as develop new measures to support greater diversity in the workplace,” he said.

ALC will now instigate a policy committee of members to oversee ALC’s work in this area, including planning for the ‘Women in Logistics Summit’ for November.

Vic’s next-gen trains released to market

The Andrews Government has called for expressions of interest for the design, construction and maintenance of a next generation, high-capacity train for Melbourne.

The announcement is part of a $1.3 billion investment in 37 new high-capacity trains, which will be rolled out to the city’s Cranbourne-Pakenham line, Melbourne’s busiest.

Together with the removal of every level crossing between Dandenong and the city, and upgraded signalling, Andrews says the Cranbourne-Pakenham project will add capacity for 11,000 extra passengers every morning, an increase of 42%.

The Victorian premier was joined on Monday by minister for public transport Jacinta Allan, who said the release of the EOI invitation was a significant milestone in the future of public transport in Victoria.

Allan explained the new trains will be longer than existing trains – able to carry more people with every journey – and will use the latest technology, making them safer, more reliable and more comfortable for passengers.

“These trains will be built in Victoria, for Victoria,” she said. “The EOI represents what this Government is all about: local jobs, skills and better public transport.”

The state is demanding that at least 50% of the construction of the trains is done locally, with companies required to demonstrate how they will boost local employment, training and investment through the delivery of new trains for Melbourne.

Minister for industry Lily D’Ambrosio said the focus on local content would drive growth in the local supply chain, and support high-skill, high-value manufacturing in Victoria.

“This is the first time any Victorian Government has made local jobs, skills and investment a central part of rolling stock procurement,” D’Ambrosio campaigned.

“We’re supporting local manufacturing by making sure trains that carry Victorians are built by Victorians, and support Victorian jobs.”

The 37 new trains are part of the Labor Government’s rolling stock strategy, Trains, Trams, Jobs 2015-2025, which outlines a ten year plan for 100 new trains, 100 new trams and a significant boost to the regional train fleet.

An industry briefing will be held on 6 July 2015, and the EOI period will close in August 2015.

Programmed gets Skilled

Labour hire company Skilled Group has agreed to be taken over by Programmed Maintenance Services.

Programmed will acquire Skilled by way of a scheme of arrangement which will see the former’s shareholders receive 0.55 Programmed shares plus $0.25 cash per Skilled share, resulting in Skilled shareholders owning 52.4% of the combined entity.

The offer is valued at $1.79 per share based on Programmed’s last closing price and represents a 45.5% premium to Skilled’s closing price on 22 May 2015, the trading day before the announcement of discussions between Skilled and Programmed.

Skilled’s directors are urging shareholders to vote in favour of the scheme, in the absence of a higher offer.

Skilled chairman, Ms Vickki McFadden said, “The near term financial benefits to Skilled shareholders resulting from this transaction are compelling. The combination of Skilled and Programmed creates the opportunity to unlock substantial synergies in the first year following implementation, and beyond.

“The combination will create a larger, more diverse business with the funding flexibility to support a range of organic growth and acquisition opportunities, and an enhanced equity market position.

“Our two organisations share a focus on delivering solutions that make our clients more productive and competitive. The company’s enlarged scale in staffing, maintenance and facilities management will facilitate lower costs, better customer service and enhanced organic growth opportunities.”

Chris Sutherland, Programmed CEO, will lead the combined organisation and as such, Angus McKay, Skilled CEO, will leave the company.