Modern reform of the shipping industry effectively began in 1984 when a financial package came into force resulting from the recommendations of the Crawford Committee, established by the Fraser Government, with Ralph Hunt as Minister, which was comprised of shipowner and union representatives. The package provided for depreciation of 20% per annum commencing in the year prior to commissioning (previously 6.25% p.a.), provided that the ships achieved manning levels determined by a manning committee.

In 1985, the industry parties organised an overseas study mission to study manpower and training developments. Following the report of the overseas study mission, Minister Morris established the Maritime Industry Development Committee (MIDC). MIDC's subsequent report envisaged crews of 21 on next generation Australian ships and laid the foundation for integrated ratings.

In 1988, a Shipping Reform Task Force, chaired by Ivan Deveson AO, was established by the Federal Government to develop a strategy for further development of the industry. By the end of 1992, this program had achieved manning reductions in 'pre-Crawford' vessels to MIDC levels, with average crewing levels reduced from 25.9 to 21.9 in these vessels. Further negotiations negotiated reductions in average crew size to 18 by 1994.

In September 1994, a pay-as-you-earn (PAYE) tax rebate scheme for ships trading internationally was adopted by the Federal Government as part of the resolution of a dispute over the sale of the government owned Australian National Line (ANL). This was based on a scheme used in a number of other countries such as Japan, France, UK, USA, Norway, Denmark and Germany. In May 1996, the Howard Government terminated the PAYE rebate scheme, the capital grant and accelerated depreciation provisions.

The Howard Government has decided not to provide fiscal assistance to the Australian shipping industry. This is now a well accepted fact by the industry. The industry is, however, encouraged that Minister Anderson remains willing to consider maritime policy issues and in December 2001, conceded that the Australia shipping industry's contention that it is subject to an anti-competitive regulatory regime is 'not without merit'.

Discussions continue with Minister Anderson and the Department of Transport & Regional Services to clarify the anti-competitive aspects of the regulatory regime applying to Australian shipping. Those discussions commenced in 2002. A response from Government on the industry's anti-competitive contentions is yet to be received.

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Introduction of company employment

The need for all seafarers to be employed directly by companies, rather than on a collective "industry" basis had been on the reform agenda since the late 1980's. The 1997 Shipping Reform Group report commissioned by the Federal Government made the following recommendation in the context of wide-ranging suggested measures to arrest the decline in the Australian fleet:

"A system of company employment should be established and the current seafarers' engagement system terminated."

Following negotiations between shipowners in the maritime seagoing and offshore industries and the Maritime Union of Australia (MUA) on the introduction of company employment, a "Framework Agreement" was finalised on 17 April 1998. The Framework Agreement established general principles for the transition to company employment of ratings.

The termination of two institutional planks of the old system of employment provided further impetus to the parties:

(i) Removal of Australian Maritime Safety Authority (AMSA) Involvement: For employment arrangements to be normalised, the involvement of AMSA in the Seamen's Engagement System (SES) had to cease. Employers could not properly select or manage their workforce while AMSA continued its administrative and legislative involvement in the ratings engagement system. This plank for industry employment was removed on 28 February 1998 when the Federal Government withdrew AMSA from the operation of the SES.

(ii) Rescission of Schedule X of the Maritime Industry Seagoing Award: Schedule X provided the legal and administrative basis for the SES. Terminating its operation was an essential prerequisite for dismantling industry employment arrangements. Legal advice obtained by Shipowners indicated that following the withdrawal of AMSA from the operation of the SES, Schedule X became inoperable. Under the award simplification process, Schedule X was rendered unenforceable, effective from 30 June 1998. Schedule X has now been removed from the Industry Award.

Arrangements that reflected industry employment structures took full effect on 28 August 1998, and this has been taken as the practical date for the commencement of company employment.

In assessing the success of company employment, employers identified the following achievements:

(i) Employer right to hire and fire: One of the features of the SES was that employer respondents to Schedule X of the Award could only source ratings from the engagement system. Moreover there was virtually no employer discretion in terms of who they employed, and an extremely limited ability to terminate unsatisfactory employees. Under the Framework Agreement, employers now had an unfettered right to recruit suitable employees from any source. Employers now enjoy the discretion to determine selection criteria, subject to meeting minimum mandatory qualification and medical standards, established by international conventions and regulated by AMSA. The corollary to this now also applies: that is the right to dismiss, subject to the law.

(ii) No attendance money: One feature of the SES was a weekly payment to registered ratings not in employment, known as "attendance money". There is now no system in the industry for payments to be made to persons who are not in employment.

(iii) Transfers within fleets: Under the industry employment regime there was a prohibition on the transfer of ratings, other than Chief Stewards, between vessels in a company fleet. Ratings can now be allocated flexibly within a fleet by the employer, "in accordance with the normal processes of enterprise employment.".

(iv) Discipline Standards: Industry employment made it very difficult for employers to effectively impose discipline standards, as a loss of employment following termination was usually temporary. Generally, the most severe sanction was removal from the industry by a body administered by AMSA known as Marine Council. The overall effect was to prevent employers from applying and enforcing discipline or developing a proper work ethic at the enterprise level. With the demise of Marine Council and the introduction of Company employment, employers have now assumed responsibility for discipline in accordance with normal community standards.

(v) Company Based Redundancy: Under industry employment, integrated ratings did not have an entitlement to company based redundancy. Instead, surplus employees were returned to the SES and received attendance money whilst awaiting employment elsewhere in the maritime industry. Consistent with normal community standards, company employed ratings now have an entitlement to redundancy, if they are displaced from employment. Industry-based redundancy programs ceased with the elimination of the pool of surplus labour that existed under industry employment.

(vi) Enterprise Agreements: Historically, conditions of employment for ratings have been determined at the industry level. Enterprise Agreements (or 'certified agreements'), negotiated in accordance with the Workplace Relations Act, now determine conditions of employment. A range of matters, previously regulated at the industry level, and often administered centrally, are now dealt with at the enterprise level.

(vii) Company based training: Under industry employment, ratings could only be trained on an industry basis. The Framework Agreement provided for "new entrant trainees to be employed on an enterprise basis". Companies now have the responsibility for new entrant training and recruitment, subject to meeting any minimum mandatory legislative standards in relation to certification or competency.

The experience of shipowners since the introduction of company employment has been very satisfactory. The old 'roster' or SES is now a thing of the past, and all the attendant inefficiencies and costs have been eliminated. Through their enterprise agreements shipowners, their employees and their representative unions, continue to develop the necessary focus on the employer's business.

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Review of industry leave arrangement

Long Service Leave is available to seafarers under three separate federal long service leave awards. Those awards provide for mutual recognition of service with all respondent maritime Seagoing and Offshore employers.

It has been identified by the majority of the maritime unions and all shipowners that the absorption of seafarers' future long service leave entitlements into the award leave entitlement could significantly contribute to a reduction in the employment cost per berth. Discussions amongst concerned employers and the Maritime Unions continue.

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