Coal wagons Aurizon. Photo: Aurizon

Aurizon cancels EAs, may give back to investors

While headlines point to a potential bigger dividend from Aurizon in coming months, the rail operator has cancelled enterprise agreements with roughly 3500 workers.

The Queensland-based operator is in the middle of a prolonged bargaining saga with a number of unions. 12 expired agreements are still in dispute.

Under the Fair Work Act, expired enterprise agreements remain in place until they are replaced with new agreements.

But in what Aurizon boss Lance Hockridge at the time called “a landmark decision,” the Fair Work Commission in mid-April ruled that Aurizon could terminate the 12 agreements.

Hockridge had agreed to wait until an appeal by the unions had been heard by the Federal Court, but with that hearing taking place last week, the operator announced the termination of expired EAs on May 21.

Workers who were under the cancelled deals will now be covered only by the Rail Industry Award (2010), the National Employment Standards and individual contracts, which the operator describes as “less favourable” to workers.

“The termination of these old agreements means a range of legacy conditions that are a hangover from government ownership and restrict Aurizon from making changes in a competitive market, will disappear,” Hockridge said.

Aurizon says it has offered employees a 4% per year wage increase over three years, in return for the introduction of a range of work practices and productivity measures “already widely accepted in Australian industry”.

The sides can’t come together, but Hockridge says they are getting closer.

“We are pleased with progress in our negotiations with unions since the [Fair Work] Commission’s decision in April,” he said.

“That decision has certainly been a catalyst for renewed focus around the bargaining table on the outstanding issues.”

Meanwhile Aurizon is also reportedly considering a boosted dividend in its upcoming 2014/15 results, in an effort to address investor concerns over weak growth prospects.

“Aurizon’s strong balance sheet continues to offer capital management opportunities,” a company spokesperson was quoted as saying by the Australian Financial Review this week.

“Any further capital management opportunities will be considered by the board as part of the 2014/15 financial results.”

Confidence in the operator has also dipped after it acquired a share of a major iron ore project just months before the commodity’s price took a significant hit.

Aurizon now holds an exclusive contract to develop a railway for the West Pilbara Iron Ore Project, after it joined forces with Chinese steelmaker Baosteel to acquire Aquila Resources in a $1.1 billion bid in 2014.

But after averaging US$100.56 a tonne in May 2014, the iron ore price has dropped to roughly US$60 a tonne so far in May 2015.

On May 11, the operator announced a formal push-back of the Pilbara plans, but key shareholder Perpetual has expressed its desire to see the project permanently shelved by Aurizon.

Freight rail track - stock - credit Shutterstock (8)

ARA begins search for new CEO

Executive recruitment firm Jo Fisher has begun its search for the next chief executive of the Australasian Railway Association, with the role advertised late last week.

Former chief executive Bryan Nye formally left his post at the end of April. As a result, the industry body is currently being run by interim chief operating officer Phil Allan, and interim chairman Bob Herbert.

But the association is well on its way to finding its next chief executive, with job ads popping up in a number of different mediums last week.

Recruitment agency Jo Fisher posted one such ad to popular job site SEEK on Thursday, May 21.

“The Australasian Railway Association (ARA), the peak membership based body representing the rail industry – passengers, freight and track operators, contractors and suppliers – is seeking to appoint a leader to take the organisation through an exciting phase of change for the long term delivery of value adding services to its national membership,” the agency wrote.

“The role reports to a Board, representative of the industry and committed to policies and their advocacy to enhance the prosperity and standing of all facets of rail in the Australian and New Zealand economies.”

According to Jo Fisher, ARA’s next boss “will be experienced in leading change, with an ability to focus on the strategic direction for rail”.

“The ideal candidate will demonstrate political acumen with excellent stakeholder management, advocacy and media skills,” the ad continues.

“The role also entails a commercial orientation, the management of budgets, and the leadership of its Canberra-based professionals.”

See the ad here.

Level crossing Victoria - Photo: Creative Commons

Friday is Walk Safe to School Day

The TrackSAFE Foundation is encouraging primary school children to take extra care when heading to school on Friday for national ‘Walk Safely to School Day’.

General Manager of the TrackSAFE Foundation, Naomi Frauenfelder, said that WSTSD provided an opportunity for parents and carers of primary school-aged children to promote safe pedestrian behaviour, not only when crossing roads but also when near railway lines and pedestrian crossings.

“An estimated 250,000 Australian school students use the rail network to commute to school, largely unsupervised, each day,” Frauenfelder said.

“It is therefore important that days like ‘Walk Safely to School Day’ serve as a reminder to children and their parents of the risks involved when crossing or standing near rail lines.”

Frauenfelder said students regularly take risks near platform edges, and at pedestrian crossings.

“This is why TrackSAFE has developed an Australian first, national education initiative called ‘Be on the Safe Side’, for primary school students to learn about train and track safety,” she explained.

Be on the Safe Side provides teachers with learning resources to conduct engaging student- centred lessons within various Australian Curriculum learning areas with a train and track safety theme.

TrackSAFE says the program provides consistency in rail safety education throughout Australia, and empowers students to improve their own and others’ safety when they are near trains and train tracks.

“I encourage all children heading to school today to look, think and be on the safe side,” Frauenfelder continued.

“Stand behind the yellow line; hop off your skateboard or bike when crossing tracks; wait when the lights are flashing and gates are closed; and remove your headphones at crossing and on station platforms.”

For more visit www.tracksafeeducation.com.au

Aurizon, Lance Hockridge - Photo Aurizon

How Aurizon will hit its ambitious workforce goal

Aurizon boss Lance Hockridge has delivered an impassioned address at the AHRI Diversity & Inclusion Conference, detailing the steps the operator has taken to reduce gender inequity in its workforce.

“Women make up just under 15% of our entire workforce,” Hockridge told the conference on May 18. “In our operational area, this is far lower.”

Aurizon has around 6% female traincrew, 5% female tradespeople and 10% female engineers, he detailed.

“As CEO you occasionally hear murmurs in the lifts and corridors of your workplace. It’s often difficult to appreciate, with clarity and insight, some of the people issues that might be at play at any given time.”

Looking to act on the chatter he had heard, Hockridge brought together a group of female executives, he said, for a frank discussion about issues they face as women at Aurizon.

“Quite honestly,” he said, “I was dumbfounded by what I heard.

“The tactics of exclusion, the undermining behaviour and the unconscious – and perhaps not so unconscious – bias that prevented these and other women from rising to the top.”

A parent with two school-aged children of both sexes, Hockridge said he would never accept the notion that they wouldn’t have the same opportunities in education, in the workforce and in life.

“Similarly I would in no way by prepared to turn a blind eye to gender inequity playing out in an organisation I led.

“I have never considered diversity to be about ideology or political correctness. This is so much more than just ‘the right thing to do’,” he argued.

“Increasing the talent pool makes good commercial sense to our organisation.”

Hockridge compared gender inequity issue to workforce safety.

“When I first joined Aurizon people told me we would always have workplace accidents because that was the nature of working in the railway,” he recalled.

“I did not – and will not – ever accept this. And needless to say after significant cultural change and much focus, our safety performance has gone from substandard to now approaching world-class.”

Building off his experience shifting Aurizon’s safety culture, Hockridge said he knew that to improve gender inequity in the company’s workforce he would need to “initiate a process that would be uncomfortable and confronting for some parts of our workforce”.

Midway through last year, he set a five-year aspirational target to increase female representation at Aurizon to 30%.

“In a heavy industry like ours, with such low female participation, this target is bold, and it will be difficult to achieve,” he conceded.

“I’ve received all sorts of feedback about its implementation. It’s fair to say it has caused the organisation, or at least big parts of it, to take a very deep breath.”

A number of early initiatives toward Aurizon’s ambitious target have included open discussions with both male and female members of its workforce, as well as a CEO Rotation Program, which allows high potential women to work with Hockridge four months at a time.

“We also have a transition to operations program for women in corporate roles wanting to take a leap of faith and transition into the operational world through an 18 month program through our supply chain,” Hockridge added.

An employee referral program has also been introduce, to reward employees for successfully referring women to operational roles, and indigenous people to any role in Aurizon, the chief executive said.

Collectively, Hockridge said Aurizon’s initiatives so far have already driven tangible results.

For the first time, Aurizon’s female voluntary turnover rate is the same as for men – reducing from 15.5% in 2012 to 5.4% at the end of 2013/14.

There has also been an increase in female representation in the company’s management leadership team, from 21% to 26%m, and females now make up 34% of Aurizon’s middle management roles.

“Almost 27% of all trainees, apprentices and graduates are female,” Hockridge outlined. “And, of the positions filled by females last year, 33% were appointed to non-office based roles representing an increase of 19%.

“Clearly we are not there yet, but it’s encouraging to get some hard earned runs on the board,” Hockridge continued.

“This is an issue of national and global importance. I encourage you to spread that message far and wide, to challenge and disrupt the status quo in your organisations.

“Collectively we can make the changes that, while they may feel uncomfortable today, are critical to achieving fairness, equity and productivity in our society.”

AHRI is the Australian Human Resources Institute. Its Inclusion and Diversity Conference took place in Sydney, on Monday, May 18.

Train carrying iron ore through the Pilbara in Western Australia, run by Rio Tintos Pilbara Iron. Photo: Rio Tinto

Budget a mixed bag for resources

Brendan Pearson

COMMENT: The 2015/16 Budget is a cautious document that seeks to address Australia’s near-term growth challenge but falls short of preparing the ground for long-term reform.

In an economy experiencing below-trend growth, the minerals industry recognises the risks surrounding a sharp fiscal contraction.

It is important, however, that the Abbott Government not lower its sights when it comes to longer term fiscal repair and structural economic reform on tax and workplace relations.

The strong emphasis on supporting families and small business needs to be matched in the future with a coherent reform agenda that lifts Australia’s growth potential and makes the economy as a whole more internationally competitive.

The introduction of a two-tiered company tax structure undermines the Government’s stated objective of a ‘lower, simpler, fairer’ tax system.

The Budget recognises the contribution of strong mining exports in coming years as production increases following the largest mining investment boom in Australia’s history. It notes that the volume of iron ore exports has doubled over past 5 years and is expected to increase by a further 8 per cent by the end of 2016-17 with export values exceeding $90 billion.

The decision to deny FIFO workers the zonal tax rebate will impose an additional burden on employees commuting to remote locations. Given its inclusion in the tax discussion paper, this issue should have been considered as part of the Government’s Tax Reform White Paper process.

The Australian mining industry is an acknowledged leader on tax transparency will participate actively in consultations on a new voluntary code.

 

Brendan Pearson is the chief executive officer of the Minerals Council of Australia. This release was originally published on the Minerals Council of Australia website, which can be viewed here.

Aurizon train on Queensland Rain Network. Photo: Aurizon

Aurizon delays EA terminations ahead of Federal appeal

Aurizon has agreed to wait until a Federal Court appeal, before it terminates expired enterprise agreements covering the majority of its Queensland rail workforce.

The rail operator is in the middle of a prolonged bargaining saga with a number of unions, including AFULE, QSU, CEPU, AMWU, RTBU, APESMA and Together Queensland. 12 expired agreements, covering the bulk of Aurizon’s workforce, are still in dispute.

Under the Fair Work Act, expired enterprise agreements remain in place until they are replaced with new agreements.

But in what Aurizon managing director and chief executive Lance Hockridge called “a landmark decision,” the Fair Work Commission in mid-April ruled that Aurizon could terminate the 12 agreements on May 18.

If Aurizon terminates the expired deals, workers’ employment will be governed instead by the Rail Industry Award 2010, the National Employment Standards and individual contracts of employment; all of which were described by Aurizon as “less favourable” to workers.

Ahead of the May 18 termination date, however, the unions have appealed the Fair Work Commission’s decision to the Federal Court.

And Aurizon said on May 5 that it had agreed to hold off on terminating the enterprise agreements, until the Federal Court hears the case.

Hockridge said that while Aurizon does not accept that there is any error in the Fair Work Commission decision, the operator is prepared to suspend acting on the termination until the hearing begins on May 21.

“We want to minimise the disruption to our employees and customers,” Hockridge said on Tuesday.

“After negotiations extending two years we can wait a few more days to let the legal process play out,” he reasoned.

Aurizon said that following any enterprise agreement terminations, it would undertake to maintain a number of conditions such as base wages, for the next six months. But, the operator warned, a range of other terms and conditions currently “enjoyed” by employees would be impacted.

“At the end of the day we want a fair deal for our employees that is competitive and allows our company to grow,” Hockridge explained.

“That is why while the legal process is underway we will still continue to negotiate in good faith with the unions on the substantive and unresolved issues associated with the new agreements.

“Therefore we urge the unions to engage in meaningful and productive dialogue on the proposed new agreements.”

V/Line train. Photo: Victorian Government

11 rail commitments in Victorian Budget

Victorian transport minister Jacinta Allan has described the state’s 2015/16 Budget as “the biggest investment in public transport in Victoria’s history,” with as much as $6.32 billion committed to rail projects.

Allan said the Budget, which was handed down on Tuesday, lays the foundations for a public transport system able to move millions more people as Victoria grows into Australia’s most populous state.

“The Andrews Labor Government is investing in the transport projects that Victoria needs, so people can get to work and get back home to their families safer and sooner,” Allan said.

“This investment is a part of the Labor Government’s plan for a high-capacity, high-frequency train system where you don’t need a timetable – you just turn up and go.”

11 separate commitments directly relevant to rail are included in the 2015/16 Budget:

  1. $2.4 billion is committed to kick-start the Andrews Government’s planned removal of 50 of Victoria’s most dangerous and congested level crossings.The commitment will see the removal of at least 20 level crossings in the Government’s first term. If the Andrews Government lasts beyond that, and all 50 crossings are removed, the scheme will cost a total of between $5 and $6 billion.
  2. $2 billion  will be spent on 83 new trams and trains across the state’s metro and regional rail passenger networks. As announced on Monday, the funding will finance the delivery of:
    • 37 new high capacity metro trains ($1.3 billion)
    • 20 new E-Class trams ($274 million)
    • 21 new VLocity carriages ($257 million)
    • 5 new X’Trapolis trains ($90 million)
    • Maintenance and refurbishment to extend the life of the current Comeng train fleet ($75 million)
    • Extending the life of the B-Class Tram fleet ($21 million)
  3. $1.5 billion will go towards the first works to construct the Melbourne Metro Rail project. Premier Daniel Andrews made headlines in April by announcing the planned spending, which will go towards anticipated planning, design and significant early works for the project, which is expected to commence construction in 2018. The Melbourne Metro is expected to cost $9 to $11 billion to complete.
  4. Up to $220 million could go to the Murray Basin Rail project, once the business case for that project is finalised in coming months. $30 million has already been fast-tracked to this project, Allan said.
  5. $55.6 million is provided for Stage 1 of Victoria’s first trial of High-Capacity Signalling, set to be rolled out on the Sandringham line.
  6. $50.5 million is set aside to upgrade 52 level crossings
  7. $50 million has been committed to trial the Homesafe scheme – a plan for all night public transport on weekends, to begin on January 1, 2016. The Government says the plan is designed to get shift workers and late night travellers home safely.
  8. $18.8 million in funding is assigned to a road and rail minor works fund, intended to be used to pay for critical maintenance and improvements around the transport network.
  9. $13.1 million is committed to upgrade the Frankston Station precinct. $50 million is set to be made available for this project in future budgets, Allan said.
  10. $9 million is for the planning and preparation of the business case for the Mernda Rail Link, with remaining funds for the project to be assigned in future budgets.
  11. $2 million has been committed to the Bendigo Metro Rail Project.

All in all, the 2015/16 Budget commits to just over $6.3 billion in spending for rail or rail-related projects, but almost all of that spending sets the scene for even more state spending down the track. Projects like Melbourne Metro, the Rolling Stock plan, and the level crossing removal scheme will likely all see more money spent in coming years.

The Australasian Railway Association yesterday congratulated the Victorian Government for delivering “a strong, smart transport infrastructure plan that will not only future-proof the efficiency and productivity of the state’s heavy and light rail networks; but also provide greater certainty to local rolling stock manufacturers and suppliers”.

ARA’s new interim chairman, Bob Herbert, said the Budget was a clear sign that the state was listening to the rail industry.

“This announcement supports the ARA’s priority policies that were outlined to all the political parties prior to the Victorian election late last year, which included greater orders of rolling stock for metro and regional train services; acceleration of the renewal of Melbourne’s tram fleet with E-class light rail vehicles to meet growing demand; and a mandated 50 per cent local content in all rolling stock orders – all of which are outlined in this Budget,” Herbert said.

“Support from Government for our local rail manufacturing industry is imperative to its future, having watched the decimation of Australian rail manufacturing and the loss of jobs that goes with that over the past decade.

“This injection of funding in to the local rail manufacturing industry will ease ongoing pressures and enable industry to invest in new innovation and technologies as well as broaden the skill set of workers.”

(Left to Right) R U OK? chairman Mike Connaghan, ARA chief executive Bryan Nye, Sydney Trains chief executive Howard Collins, TrackSAFE chairman Bob Herbert, Minister for Health Sussan Ley, R U OK? ambassador Phil Waugh, NSW Trains chief executive Rob Mason. Photo: Oliver Probert

Rail’s R U OK? day “a great blueprint for other sectors”

Suicide prevention charity R U OK? has hailed rail’s first R U OK?Day in April as a success, with general manager Brendan Maher saying rail is setting a standard for other sectors to follow.

Rail R U OK?Day was launched on April 16, at a ceremony at Sydney’s Central Station. Across the country, more than 20 industry stakeholders took part in events in over 60 locations.

Reviewing the inaugural event, the R U OK? organisation said, “as an industry affected too often by suicide and other trauma, Rail R U OK?Day was a great campaign to help remind workers about the importance of looking out for one another”.

R U OK? general manager Brendan Maher said an industry-led initiative is a strong way to encourage regular, meaningful conversations 365 days of the year.

“R U OK? is committed to working with industry to ensure that everyone who has the capacity to ask ‘are you okay?’ will do so,” Maher said.

“This campaign was embraced enthusiastically by senior management and provides a great blueprint for other sectors to follow suit.”

Rail R U OK?Day was launched in conjunction with the TrackSafe Foundation.

R U OK? community ambassador Justin Geange helped with the launch, speaking at a number of events in the lead-up to the inaugural day.

Geange, a former Queensland Rail worker, has inspired many with his own experience of surviving a suicide attempt, and his progress through a difficult stage of his life.

Melbourne tram. Photo State Government Victoria

Vic commits $2bn for rail, sets out Rolling Stock Strategy

Victoria’s Labor Government will on Tuesday announce a $2 billion plan to deliver 83 new trams and trains across the state’s metro and regional trains and tram network.

Premier Daniel Andrews on Monday said the funding will be portioned off to kick start a long-term plan for train and tram manufacturing in Victoria.

The scheme, called Trains, Trams, Jobs 2015-25 – Victorian Rolling Stock Strategy, sets out a ten-year plan for 100 new metro trains, 100 new trams, and “a massive expansion” of Victoria’s regional tram fleet.

The 2015/16 Budget sets out to deliver the first set of these trains and trams, with funding set aside for the following:

  • 37 new high capacity metro trains ($1.3 billion)
  • 20 new E-Class trams ($274 million)
  • 21 new VLocity carriages ($257 million)
  • 5 new X’Trapolis trains ($90 million)
  • Maintenance and refurbishment to extend the life of the current Comeng train fleet ($75 million)
  • Extending the life of the B-Class Tram fleet ($21 million)

Andrews said the multi-billion dollar investment will provide greater certainty to rolling stock manufacturers and suppliers, which employ up to 10,000 people in Victoria.

“Victoria is the only state that makes trams and trains. We want to see these industries grow and employ more people, which is why we’re investing strongly,” Andrews said.

“This $2 billion investment in new trams, trains and jobs is part of our plan to transform Victoria’s public transport system and create local jobs – and we’re getting on with it.”

Beyond the initial investment, Trains, Trams, Jobs 2015-2025 aims to identify a pipeline of train and tram delivery to meet the needs of the public transport network for decades to come.

This has been done to enable companies to invest in facilities, in new technology and in workers, Andrews said, sustaining high-skill manufacturing in Victoria.

State public transport minister Jacinta Allan said the funding, and the forward-plan, were designed to address a significant need in Victoria.

“The number of people using our public transport system is growing twice as fast as our population,” Allan observed.

“Without this critical investment and a long-term plan for rolling stock, our network would grind to a halt.

“Our investment today is a key part of the Andrews Labor Government’s plan for high-frequency public transport and high-skilled manufacturing in Victoria.”

The full report is available here. Rail Express will have analysis on the plan later this week.

VLocity carriage. Photo: Creative Commons / Marcus Wong

Andrews announces $257m for new regional carriages

Bombardier will deliver 21 new VLocity carriages to Victoria’s regional network under a $257 million commitment in the state Budget.

The funding also includes money to build a new maintenance and stabling yard in Waurn Ponds.

Victorian premier Daniel Andrews was joined by state transport minister Jacinta Allan at Waurn Ponds on Friday, May 1 to make the announcement.

“The new carriages and stabling yards will create jobs and improve services for the more than 50,000 passengers who use V/Line services every weekday,” Allan said.

The stabling yard is projected to create around 100 jobs during construction and 30 once completed, and the construction of the new carriages should secure 64 jobs at Bombardier’s Dandenong facility, Allan added.

Andrews said the 21 new carriages would expand V/Line’s daily passenger capacity by around 1500.

“This investment of more than $250 million will provide better regional train services, and help create nearly 200 jobs,” the premier asserted.

“Patronage on our regional train network has increased by nearly 100% in the past decade, and this investment means we can deliver high-quality regional public transport for decades to come.”

Andrews and Allan said the new depot in Waurn Ponds will offer local education and training opportunities, with the government committing to work closely with the TAFE sector to develop programs for apprentices in the rolling stock industry, training the next generation of train and tram engineers.

Construction of the 21 carriages is expected to commence in mid-2016, and the first carriages will be in service by late 2017, the premier said. Construction of all new carriages will be complete by the end of 2018.