Magazine of Socialist Action in Australia

Behind the 2011 Desal dispute

Reading Time: 26 minutes

The following is an in depth report of the major dispute that took place on the construction site of the Victorian Desalination Plant at Wonthaggi in mid 2011. It was written by Socialist Party member and Electrician Simon Millar. He was working at the site at the time when Thiess, the principle contractor, attempted to sack 160 electrical workers – all members of the Electrical Trades Union (ETU).

This article was written during the dispute but we voluntarily withheld it from publication as parts of the piece could have been used against the union in legal proceedings. In the heat of the dispute the article was passed around hand to hand throughout the site and was read by hundreds of construction workers.

This piece covers most of the essential elements of the dispute which resulted in an outright victory for the ETU. We believe it was an important struggle that can serve as a guide for other similar disputes in the future. A final chapter of the article covering the aftermath of battle will be published soon.

Mass sackings of electricians at desalination plant a temporary reprieve
Or Thiess’s descent into madness
Or the return of the King… Wal King

Just before I begin the epic tale of boardroom deals, back stabbing and a collapsing cable tray, I want to make a qualification. Having not been present at the countless boardroom meetings and not being a part of the class of multi-millionaires that run the world economy some of my interpretations may be off the mark. I am also not a disinterested player in this dispute being one of the electricians under the gun. So I am writing from a partisan position. But unlike the rich man’s press I will not lie to advance my position, as I have always believed that the truth is the working classes biggest ally.

The story of this industrial dispute – the ongoing attempt by Thiess to sack 160 electricians at the Victorian Desalination Plant (VDP) – has two major threads. The thread that defines this story begins with a recent phone call to Electrical Trades Union (ETU) organiser Troy Gray from John Barraclough the VDP project manager.

But the thread that explains the at times unfathomable behaviour of Thiess management begins back in June 2010 at a party held by Wal King, the then CEO of Leighton’s (Thiess’s parent company). It is the interweaving of these two threads that reflects the struggle between classes and brings hidden truths into the light.

The party was at the Grissini, Hong Kong’s premier Italian restaurant that boasts stunning views of Victoria Harbour. On this night in early June last year, one hundred or so guests from Leighton Holdings sipped champagne and took in the sights while a metre high cake, topped with a toy Caterpillar bulldozer, was cut in an atmosphere reported as pure relief. An hour before, Leighton chief executive, Wal King, had addressed his board and top-100 managers from around the world after earlier that day seeing off a coup from the company’s major shareholder Hochtief. He’d also proudly introduced his anointed heir apparent, Leighton’s Asia managing director, Hamish Tyrwhitt.

At the time no one could have predicted the next twelve months – the most tumultuous year in the engineering and construction giant’s history. Friendships have been ruined, long-serving executives have jumped – or been pushed out the door – and the share price has been trashed. To understand the commercial calamity that is still unfolding and which threatens the jobs of 160 VDP electricians, it is necessary to understand Leighton’s history and the individuals involved.

Wal King was appointed CEO of Leighton Holdings Limited (LHL) in 1987 after almost 20 years with the Leighton’s Group. He has a Bachelor of Engineering and Master of Engineering Science from the University of New South Wales, and joined Leighton Contractors as a civil engineer in 1968. King began his career working on major construction projects all over Australia before quickly moving into management. He was appointed as one of the Director’s of LHL in 1975, Managing Director of Leighton Contractors in 1977 and Deputy Managing Director of LHL in 1983. King finally reached the top of the tree in 1987 when he was appointed CEO of LHL.

In 2004 he was paid $8.2 million ($1.49 million in cash), which rose to $9 million in 2006 ($5 million in cash). The appointment of David Mortimer as chairman in 2007 allowed the floodgates to really open. King’s pay in 2008 rocketed to $16 million ($10 million in cash). In 2009, King collected another $16.4 million, more than half in cash. He was easily Australia’s highest paid CEO and he would justify this by pointing to the fact that during his 42 years at Leighton’s the company’s assets grew from $70 million to over $9.2 billion.

The company now employs 55,000 people with contracts spanning the globe from Mongolia to Iraq. Not discounting the subjective role of King, it has of course been the sweat and toil of these workers that has, and continues to be, the primary source of this enormous wealth. The workers’ side of the story that includes thousands of injuries, deaths and countless struggles for better wages and conditions is, of course, largely untold.

Leighton’s is now the twelfth largest building contractor in the world and the largest in Australia by a long shot; its closest rival, Bovis Lend Lease, is well under half the size. Stan Leighton who amassed most of his capital by landing the role as chief war contractor for Britain during WWII established Leighton’s in Australia in 1949.

The company expanded dramatically in 1983 when Germany’s number one building contractor Hochtief became the majority shareholder bringing Thiess in tow. In 2003 Leighton’s acquired John Holland, which previously incorporated the road (toll) builders, Transfield. Leighton’s also has a property arm and under Wal King expanded into both Asia and the Middle East.

Robert Gottliebsen, prominent business writer, described Wal King’s corporate strategy as CEO in the Business Spectator (25 August 2011). “In essence, Wal ran the Leighton construction operation in three tribes. There was the Thiess tribe, which did co-operative deals with the unions; there was the John Holland tribe, which took a tough line with the unions; and there was Leighton Contractors, which did a bit of both.”

It was the ‘three tribe’ strategy that saw John Holland’s cheaper bid for the VDP contract lose out to Thiess but ultimately secure the project for Leighton’s. The ALP had rejected the lower bid from John Holland accepting the AquaSure consortium’s bid. The Victorian Desalination Project (VDP) – then valued at A$3.5 billion –is one of the largest Public Private Partnerships (PPP) in the world and if completed will be Australia’s biggest desalination plant.

Consortium AquaSure – comprised of Thiess, Degrémont, Suez Environment and Macquarie Capital Group – took on the responsibility to finance, design, construct, operate and maintain the reverse osmosis desalination plant, and its associated transfer pipeline.

The Labor Government’s acceptance of the AquaSure bid began the process of courting the unions in the lead up to the 2010 State election in an effort to stop further electoral haemorrhaging to the Greens. By engaging Thiess as the builders the government hoped to woo the unions and avoid any repeats of the bitter industrial battle that had just occurred between Holland and the construction unions on the West Gate Bridge strengthening project and which resulted in the Construction, Forestry, Mining and Energy Union (CFMEU) being fined $1.3 million dollars by the ACCC (Australian Competition and Consumer Commission).

The political process that has resulted in a private consortium seeking to profit from Melbourne’s water crises began in 1992 with the disbanding of the Melbourne and Metropolitan Board of Works. Control over the planning process regarding major water and sewerage construction projects was then transferred from a state managed non-profit organisation to private developers.

This process came under increased criticism during initial feasibility studies and assessments of Melbourne’s water supply and the desalination plant. By June 2007, the Victorian Government released the next stage of its water management strategy, marketed as Our Water Our Future. As part of the plan, the government announced its intention to develop a seawater reverse osmosis desalination plant to “augment Melbourne’s water supply, as well as other regional supply systems.”

The total average inflow into Melbourne dams from 1913 to 1996 was 615GL per year. Between 1997-2009, during the most severe drought ever recorded in Victoria, it was 376GL per year. Rapid population growth has also put pressure on reserves. Reserves in the state’s water storage dams had been decreasing since 1998, to around a third of maximum capacity. Consequently, water restrictions have been in place for several years. With global warming intensifying Leighton’s, like many others, predicted the value of water would rapidly escalate now that it had become a fully-fledged commodity.

In 2008 to 2009 Thiess was in excellent financial shape. Leighton’s profit margins had been soaring from year to year on the back of the mining boom. By 2010 Leighton’s annual report boasted an $843 million profit before tax, total revenue of $18.6 billion with work in hand worth $41.5 billion. The market looked rosy and it was on this basis that Thiess and the unions signed an historic Greenfield’s agreement in December 2009. The deal looked like a match made in heaven; Thiess had a profit forecast of $288 million and the unions had secured an enterprise bargaining agreement (EBA) that set new benchmarks.

This is what capitalists like to call a ‘win win’ situation, but unfortunately capitalism is also notoriously unstable and full of unwelcome surprises. (It is important to note here that while the Liberals and Employer Organisations lambast the wages and conditions in the VDP mixed metals EBA very similar EBAs had already been won on a string of previous projects including the Mortlake gas fired power plant and the Westgate Bridge)

At the time only a handful of sceptics questioned whether Thiess could build one of the world’s biggest desalination plants in two years despite the fact that plants in both Queensland and Perth, which are a third of the size, took four years. The Kurnell desalination plant in Sydney, which is 60% of the size of Victoria’s and kept union free by John Holland and John Barraclough, also took four years to build.

The VDP contract is hidden behind the veil of business confidentiality but many key elements have since become public knowledge largely through Hansard. It allows no extensions due to design alterations or weather. Fierce debates between State Liberals and Labor have revealed that Thiess face daily penalties of $1.8 million if they fail to meet the completion date. But ETU state secretary, Dean Mighell, explained to me that standard contract provisions always allow for extensions if the company has been subject to industrial action. This particular provision is going to play a key role.

Work commenced on the VDP on October 6th 2009. Throughout the summer it went to schedule but then it began to rain. To the VDP management’s horror the rain did not stop. Rain in 2010 broke past records by over 30%, and filled dams to over 60% capacity. This is in harmony with the worldwide phenomena of extreme weather events. Such events have been predicted and documented by climate scientists for decades now. As storm clouds burst over the VDP, political storm clouds were now gathering over Leighton’s CEO Wal King.

Hochtief with 54% of Leighton’s shares is the majority shareholder. They have been hit hard by the global financial crisis and Leighton has become their biggest source of revenue. When the German company bought into Leighton in 1981, it was 10 times the size of the Australian company. But now the tables have turned and Leighton is double the size of its parent and delivers almost 80 per cent of its earnings. As a result Hochtief wanted to secure their hold over Leighton’s as well as gain control over the company’s direction by merging with Leighton’s. Wal King vigorously resisted this move.

King knew his days were numbered so, in order to preserve the organisational and political culture he had built, he fought to guarantee that his protégé Hamish Tyrwhitt would take his place. This brings us back to the party at Grissini where King, having fended off a leadership challenge, had seemed to win himself time to organise an orderly transition. Hochtief not only wanted to merge but was also hostile to King’s three tribe approach and the autonomy it allowed the various branches. Their operational style was similar to John Holland’s aggressively anti-union approach and they wanted to see the organization centralised around a single operational philosophy.

Between June and September 2010 serious problems began to emerge on three projects initiated on King’s watch. One is of course the VDP, another was the Brisbane Airport rail link and the third was the joint venture in Dubai with Al Habtoor. This gave King’s opponents the opening they needed. King had also been making waves by selling off thousands of his own shares and collaborating with Hochtief’s major Spanish shareholder ACS who were in the process of carrying out a hostile takeover.

The move to oust Wal King was lead by former TNT CEO David Mortimer and backed by Hochtief. It was a three way battle between long term Leighton’s executive David Stewart from the John Holland’s tribe, David Saxelby, head of Thiess and Peter Gregg, a recent arrival from Qantas. Peter Gregg, who resigned from Qantas after failing to succeed outgoing CEO Geoff Dixon, had recently knifed King’s numbers man Scott Charlton to become Leighton’s Chief Financial Officer. With the backing of Mortimer and the four Hochtief executives on the board, David Stewart won. Leighton’s top level management is divided by personal rivalries and the company is also set to take a new political course that would lead to major clashes with the unions.

At the VDP changes were also afoot. Greg Miller and other senior Thiess executives had lost their scalps over the spy scandal. Bruce Townsend who was famous for organising the scabs at the MUA dispute had been hired by Thiess to plant operatives on the job to spy on the workforce and have plans ready for another scab workforce if Thiess encountered serious industrial problems.

‘Operation Pluto’ as it was called was leaked by Rupert Murdoch’s paper, The Australian, on 18 November 2010 just two weeks before the state election. Inside sources at the time said the media had sat on that story for months. It sparked a two-day walkout by the CFMEU and a one-day walkout by the ETU. Ted Ballieu made the most of this dispute and the mounting cost blowouts at the VDP. Many believe this turn of events played no small part in John Brumby’s defeat.

A few months later Project Manager, Don Johnson, was removed and after much internal bloodletting the VDP saw John Barraclough at the helm. Barraclough oversaw the construction of the Sydney Desalination Plant for John Holland.

Effectively the Thiess tribe had been routed and the VDP was now in the grip of the Holland tribe. These changes filtered down to the shop floor as Glen Rice replaced Graham Dumphey as the head of electrical supervision. Trouble was heading the workers way. There was now an overtly hostile upper management and a state Liberal government led by Ted Ballieu. Thiess’s previous upper management were no angels. Although they lied, spied, broke countless health and safety rules, managed incompetently, created mountains of waste, tried to provoke and sack shop stewards they stopped short of open warfare.

At Leighton’s, after removing King, Hochtief immediately began applying pressure on David Stewart to commence merger procedures but Stewart faced continued resistance from independent shareholders and King’s allies. Then a game changer occurred, ACS El Grupo, Spain’s leading Construction Company, finally succeeded in becoming the majority shareholder of Hochtief in a hostile takeover.

Insiders knew that Stewart had been handed a poison chalice and on April 11th 2011 he shocked investors by announcing a $1.2 billion dollar write down. In the space of months new owners ACS saw Leighton’s share-price drop by 40%. They were not happy and pushed to have King reinstated, but this was exasperating the rifts within both Hochtief and Leighton’s so they backed off.

Leighton’s went on a drive to raise $757 million in capital and to appease shareholders Stewart authorised a dividend only six months into the financial year. Business insiders calculated that $757 million would still be insufficient to cover Leighton’s losses. At this point Stewart lied to investors assuring them that both the Brisbane rail link and the VDP were on track to meet their deadlines.

Meanwhile the problems plaguing the VDP went from bad to worse. The weather, the lack of planning, systemic problems arising from the cobbled together management team and a completely unrealistic timetable were compounding. Capitalism is riddled with inefficiencies, and onsite workers are confronted with irrational working procedures. My former leading hand wishes we had documented all the crazy nonsense that we dealt with nearly everyday.

For example, before anyone can use Elevated Work Platforms or cars or hoists they must be VOC’ed, which stands for verification of competency. Fair enough, but as the numbers of workers escalated supervisors found they could not get them into VOC courses thus workers, despite having tickets, couldn’t use vital equipment. One of the most absurd examples was an electrical trades assistant who had just been trained to use the hoist by Thiess onsite (the hoist is vital for getting cable drums and other equipment up on to gantries) could not operate the hoist because he had no VOC.

We have permit systems for temporary power that are generally considered crazy and involve enough paperwork to sink a battleship all while genuine health and safety concerns are resisted. Similar stories abound in the mechanical and civil sides of the project. Yet despite all these obstacles the workforce has completed an amazing amount of high quality work. This has made it all the more galling when Thiess’s new management began putting out statements that blamed the delays on the unionised workforce. Unfortunately for John Barraclough and his cronies the truth is on the workers and the unions side. In fact it is present in the very fabric of the construction process itself. This does not necessarily mean the workers will win but it certainly helps.

With the Holland’s tribe effectively in the driver’s seat at the VDP, the already deteriorating culture inside Thiess had taken a sharp turn for the worse. At the shop floor level demoralisation among our supervisors was clear as they tried to carry out orders while fearing they might be the next in line to get the chop. Thiess had secretly gone to the government asking that they be allowed to shut the site down over winter but were knocked back by Peter Walsh, Minister for Water and deputy leader of the Nationals.

One can sense Ted Ballieu and his Coalition Government beginning to use Thiess as a foil in a renewed attack on the construction unions. Article after article lambast the latest industry wide EBA deal with the CFMEU as being too high and a result of the new benchmarks reached through the EBA negotiated at the VDP. It is only the socialist and trade union press that celebrates workers achieving wage rises that may stay ahead of the increasing cost of living.

Not only do these wages and conditions benefit construction workers and their families they also put upward pressure on wages as a whole while helping to sustain other industries as construction workers have greater spending power. If wage restraint is the key driver of capitalist economic performance why are both Victoria and Western Australia well ahead of New South Wales?

Thiess was well aware that the project is at least 8 months behind and is facing over $430 million dollars in contract breaches so turned to plan B and announced the retrenchment of 190 CFMEU members. While it is true that parts of the civil works were nearing completion Thiess provoked the union by targeting members who, for instance, had refused to operate cranes in high winds. They also targeted four health and safety representatives and retrenched workers while continuing to hire CFMEU members with the same job classification. Crane drivers were being sacked while new recruits were being hired to operate the very same crane. The EBA disputes procedure was ignored and the CFMEU membership responded just as Thiess had hoped they would. They voted to go out the gate.

The CFMEU is in a much weaker position than the ETU structurally because much of their work does not require either a ticket or a license and they are carved up into a myriad of subcontractors. The CFMEU were also conned into following Thiess’s health and safety structures, which meant that their Health and Safety Representatives (HSRs) were not officially registered with WorkSafe.

The CFMEU shop steward and HSR Frank Brennan was one of the best on site and normally would have been protected from summary dismissal under the Victorian Occupational Health and Safety Act 2004 but Thiess was able to legally lie at the industrial tribunal and say he was not an HSR. After a five day dispute, in which it rained most of the time, Thiess came to a compromise agreement in which they once again promised to abide by the consultation procedures and cease hiring workers of the same classification. They also agreed to abide by any successful unfair dismissal rulings – how magnanimous of them.

At the end of the day the 190 workers were still sacked, including Frank Brennan, though they retreated from sacking the other three HSRs. As a reward for this attack on the CFMEU Ted Ballieu extended the deadline from December 2011 to June 30th 2012. The tactic had worked. The level of bastardy and intransigence demonstrated by Thiess shocked Noel Washington, CFMEU organiser for the site. Interestingly as an ALP supporter he made special mention of Prime Minister Gillard and the ALP’s industrial laws and the key role they have played in tying the hands of the union and aiding Thiess.

All that has unfolded was no surprise to leading CFMEU militants who testified for the CFMEU rank and file at the Fair Work Australia tribunal hearings. As he put it, the CFMEU has bent over backwards to help Thiess on this job and in suing for peace they have created a war.

In my interview with ETU State Secretary Dean Mighell he revealed that Thiess was seeking $40 million in damages against the CFMEU. A total like this would come close to bankrupting the ETU. He also said that he thought the political and economic pressure on Thiess had turned them into a mad snake that was lashing out at any target it could find and may even bite itself.

A prescient metaphor, that was soon to come true. Having attacked the CFMEU Thiess then turned their attention to the most well organised union on site, the ETU. Forewarning of the attack filtered through the supervisors who, to their amazement, were instructed by John Barraclough to seek any opportunity to transform any Health and Safety disputes into an Industrial Relations dispute.

On Wednesday August 17th 2011 Troy Gray, ETU organiser, was summoned to a meeting with Thiess’s VDP project manager John Barraclough at 3pm. Barraclough said words to the effect, “We have made a decision to terminate the 4/4 roster (four days on fours days off). We will be reverting back to the 56 hours per week roster. We shall be entering a demobilisation phase which will result in 160 redundancies. There is no point in us sitting here chewing the cud, the decision has been made.”

Troy responded by asking when are they going to consult with the Union. Barraclough answered, “We will consult with you this week, but be clear, the decision has been made.” Troy asked, “Why?” Barraclough responded briefly that there were concerns about productivity and not getting value for money. Barraclough offered no evidence for this view and ended the meeting.

But Barraclough had no plan B and never foresaw how difficult it was going to be to justify sacking 160 electricians when the electrical work was only 30% complete and there is a June 30th 2012 completion date. Combined with a 56-hour week this would cause the loss of 4480 man-hours a week. Barraclough comes from a culture where the unions are weak or non-existent; management decisions in this world are simply carried out and not questioned let alone challenged.

Of course finishing the job by June 30th was never the aim of this shock and awe tactic. The aim was to provoke the ETU into taking industrial action and this would then lead to the invocation of standard contract clauses that would allow another extension of the completion date. With the ETU out the gate taking illegal industrial action perhaps the dream was to provide Baillieu with the chance of fulfilling his lifelong ambition of breaking the power of Victoria’s construction unions which was the very goal he said motivated him to join the Liberal Party in 1981. In this fantasy land Ted Baillieu having become a corporate hero would reward Thiess with another generous extension of the completion date.

Unfortunately for Dave Stewart, Ted Ballieu and John Barraclough were not only dealing with one of this country’s strongest and most successful unions but also one of its smartest unions led by Dean Mighell. The Victorian ETU is no stranger to trouble and has been under siege on multiple fronts. In 2010 Mighell asked ETU members if they wanted to maintain their affiliation to the ALP and continue to be used as an ATM every election?

The Victorian ETU has been close to a lone voice in pointing out that the emperor has no clothes. Dean has repeatedly and publicly pointed out that the ALP’s ‘Fair Work Act’ has kept the main pillars of John Howard’s ‘Work Choices’ and retained the ABCC (Australian Building and Construction Commission). Eighty-six percent of the membership voted to disaffiliate.

Thiess and Barraclough had lobbed a grenade into the ETU camp. The grenade was tossed back in the shape of letters, phone calls and business articles prompted by the union but coming from Thiess’s/Leighton’s allies, in particular Robert Gottliebsen. It landed in the lap of Dave Stewart and Leighton’s boardroom. Stewart has lost his job and the carnage is not over. Dean Mighell’s letter to the Leighton Board had a powerful effect because it contained some vital truths that Dave Stewart had kept from his corporate masters and the independent shareholders. Landing in the middle of a management team riddled with an explosive mix of divisions it signalled Wal King’s chance for revenge.

August 17th may have been the date Thiess’s hidden agenda was revealed but for those of us on site it had been obvious for sometime that something had to give. Nine weeks ago a section of cable tray collapsed in the Reverse Osmosis (RO) stream one switch-room. This led to a full investigation of the tray work and it was found that most sections of the tray were structurally unsound.

The inadequacy of the tray supports had been raised many times by the electricians constructing it but in the rush to get the job completed their concerns were ignored. With the tray having to be made safe by putting in extra supports all cable pulling came to a halt. For electricians this is the equivalent of the cranes stopping and drastically limits the work available. You would think Thiess would then start working round the clock to get the trays fixed. The union approached Thiess in an effort to find a way to jointly redress the problem and were rudely rebuffed. Instead two things happened that at the time didn’t make sense.

Firstly, Thiess delayed getting the trays fixed citing problems with getting engineers to sign them off as structurally sound once rectified. Plans finally emerged, scaffolds went up but the pace was torturously slow until, two months later, we are still unable to pull a single cable on a single tray.

As I pointed out earlier the truth of this dispute is present at the coalface. We have been reinforcing 300mm tray meant to hold light weight cables with Galpro struts making the ladder support so strong even King Kong could climb up it. We have been reinforcing trays in the transformer bays to make them ‘earthquake proof’. All of this work and more I have not mentioned is of course outside the original specifications and on paper it looks like we are doing nothing.

Secondly, despite the massive contraction in the amount of work available Thiess continued to hire over 120 electricians in last couple of months. It didn’t make sense and all of us on site knew something was afoot. Among the many acts of bastardry that litter this story this one takes the cake. In Thiess’s mind accident had become opportunity and the management stuff up over failing to build the cable tray to the architectural specifications could now be combined with over-hiring to produce figures that showed that production was a fraction of what it should be.

Not only did they hope to provoke a dispute but once it came under scrutiny in the courts, the press and the boardroom, they could play the aggrieved partner whose job, to paraphrase John Barraclough, was being strangled by a lazy, overpaid union workforce hell bent on milking the job for every last cent.

When the news broke that 160 electricians were to go those most recently hired couldn’t believe it. They knew they would be in the gun as unions fight for the principle of first on last off. They also sensed that they were likely to be sacked as they would be the cheapest, having accrued the least annual leave. The union office was full of electricians fraught with worry. As the news spread that I was going to document this dispute, a steady stream of fellow electricians approached me wanting to tell me their story.

The most common story was from electricians who had been lured away from full time jobs with promises from Thiess’s Human Resources department that work was ramping up and they could expect to be working well past Christmas. Another layer had knocked back work as they waited for the promised call up. Unfortunately for Thiess this is all part of the written record. The vast majority hired have to live away from home and were verbally encouraged to sign six-month leases both on the phone and during the day-long site induction.

Taking advantage of the demand for housing, rents in the area have sky rocketed. The average outlay, which includes the bond plus a month’s rent is $5600. This meant it would take most electricians several weeks’ work just to break even. Many have moved their whole families and paid for removalists to transfer their belongings. In one case a recently hired single mother has just gone to great lengths to organise and pay for childcare. She based her arrangements around the four on and four off roster, even getting her mother to change her shift to cover the weekends she would be working.

This act alone has undermined Barraclough’s ability to manage the site. The entire highly skilled electrical workforce is understandably furious at being used as pawns in a money game. A petition signed by every electrician on site expressed a unanimous vote of no confidence in John Barraclough.

I personally did not find out about the proposed sacking until August 18th when I arrived at work and was handed a Theiss memo outlining the ‘demobilisation’ and return to a 56 hour week. The previous shift had been given the memo by their supervisors. There was then a toolbox meeting held at 4.20 pm by John Crane, Thiess Degremont’s Human Resources manager. Here I will quote the ETU’s account of events.

“After Crane stopped speaking, the electrical employees were naturally upset and disappointed and questioned the motives of TD (Theiss Degremont) in terminating the 4/4 roster and making people redundant. The employees made statements to the effect of:

-The productivity issues have nothing to do with the 4/4 roster, but rather the lack of materials, poor management of resources and the wrong electrical cable tray brackets sourced by TD which prevented cable pulling.

-We have only been engaged in the last month and left good jobs to come work on this Project because of TD’s promise that we would have work to at least Christmas.”
“We have just signed a 6 month lease to live near the Project, what are we supposed to do with that now?

-Why are you reducing numbers when you have just ramped up the numbers and there is a heap of work to do?

-Why are you reducing working days, numbers and man hours when you are behind time and facing large penalties for being late?

John Crane provided no answers and called the meeting to an end.”

Troy Gray had let it be known later that day that he planned to address ETU membership of B shift at 6am. TD representative Anna Morris told him that his request had been refused. Troy Gray responded by making it clear that he would meet with his members in the car park if necessary. That morning in an act of incompetence typical of Thiess upper management Morris failed to inform security.

The security guard gave Troy Gray a swipe card and he entered the site. We all marched over to the sheds at the Screen and Feed area. As Troy was recounting yesterday’s meeting with John Barraclough, a red-faced Michael O’Sullivan from Thiess HR department burst into the room colliding with Troy Knight, one of our stewards, and began shouting, “This is an unauthorised meeting” over and over. The membership, none to happy, conveyed their desire for him to leave, which he promptly did.

Troy continued to elegantly and clearly outline the nature of the dispute. We would not be provoked. It was clear to me that the battlefield was the shop floor and if Thiess wanted us out the gate they would have to lock us out.

Scotty Riches our leading shop steward and one of the most talented ETU representatives I have met called for questions. From this a motion was passed (which unfortunately short-circuited any discussion) to march to John Barraclough’s office and demand that he announce the sackings to the members’ faces rather than hiding behind his underlings and sheets of paper.

It was one of those historic moments that you never forget. Rather than be cowered or intimidated we marched side by side chanting, “Touch one Touch all.” Barraclough wasn’t in his office so the march moved on to Michael ‘this is an illegal meeting’ Sullivan’s office.

He invited the union reps to speak with him in his office, however Troy insisted he face the workforce and tell them about the redundancies. He refused to do so and retreated back inside his offices. Troy informed us that the next step was to take Thiess to court in order to get them to comply with the dispute procedure and we were back on the job by 7.30am. Of course as per the Fair Work Act 2009 we were docked 4 hours pay.

Later that day we had a toolbox meeting delivered by James Andrews IR rep for Thiess and son of Kevin Andrews, the Liberal Industrial Relations minister who introduced ‘Work Choices’ during the Howard government. Along side him was Rob Melville RO electrical project manager (the VDP is divided into sections the main one being the Reverse Osmosis building).

The meeting was heated as you would expect. Andrews struggled through his lines like a company drone while Rob seem at times to be embarrassed at the position he had been placed in. He claimed he would be responsible for deciding who was to go. I strongly suspect that this was not the case. When asked why 160 electricians were being sacked with 30% of the electrical work completed they both replied it was due to lack of productivity.

When asked whether this lack of productivity was caused by the inability to pull cables due to the cable tray issue Rob at least had the honesty to answer yes. So why could he not answer the obvious question of why Thiess continued to hire over 120 new electrical workers?

To admit the truth would surely have meant losing his job. Rob was asked how was he going to decide who to sack? He replied that it would be based on performance indicators. When asked how you could judge someone who had just been hired by performance indicators he admitted that this was not possible. He has since been transferred away from the RO.

The next day the union made submissions to the Federal Court. The Justice was Richard Tracey the same judge appointed by Howard to oversee the Royal Commission into the Construction and Building Industry (2001-2003). Nevertheless the union won an injunction ordering that the status quo remain until further submissions. The next case was due on Monday August 21st 2011.

The dispute hit the headlines and right on cue the Herald Sun produced the headline, ‘Victorian Premier Ted Bailliueu’s war on unions’ (August 23 2011). The article was dominated by the core absurdity of a millionaire Liberal politician wanting to cut our wages and conditions. Ted Baillieu stated we were, “partially to blame for the construction industry struggling to remain competitive.” The article continues with:
John Barraclough, project director for Thiess Degremont, said the ETU had deliberately attempted to derail the project.

“The ETU’s behaviour is designed to drag out the electrical works on the project and maximise income for electricians,” he said. “It is outrageous that we have had to chase employees out of sheds after rest breaks and supervise them constantly to ensure that they are working productively when they are being so well paid.”

These media attacks on us followed an article on the day before that cheered on the sackings and claimed that the unions had cost Thiess $278 million dollars in industrial action. In fact this figure is Thiess’s current predicted losses for the entire job of which industrial action is a tiny component.

John Barraclough’s statement is the personification of ‘capital’. It is outrageous to him (and capitalists in general) that workers should try and maximise incomes yet totally legitimate that he should work to maximise profits for super rich shareholders. This simply reflects the irreconcilable clash of interests that is at the heart of capitalism, a society based on classes of owners and workers sitting on the bedrock of exploitation of man by man. (Exploitation in the Marxist sense of workers not receiving the full value of their labour for if they did there would be no profits).

The problem for Barraclough is that while it is true that electricians, as they should, are trying to maximise their incomes in this instance, as in most others, the vast majority on site have been working diligently to get the job done. Along with Barraclough everything that has come out of Ted Ballieu’s mouth in regards to this dispute is a lie. Firstly, the construction industry has been making record profits – including Leighton’s – until this year. Secondly, the core of this highly skilled workforce has been involved in building massive infrastructure projects all around Australia that have generated these enormous profits. Alongside being unionised this is why industrial electricians and construction workers in general are able to extract higher than average wages and conditions.

I want to mention briefly the other conceit that has repeatedly surfaced in the press that it is the wages and conditions of the desalination workforce that will be responsible for escalating water prices. It is the privatisation of water and our water infrastructure that is causing escalating prices. If the desalination plant were nationalised as it should be it would be generating income for Victoria just like the power stations used to and the costs could be regulated. The private power companies have slashed labour costs and power bills have skyrocketed – the evidence is before our very eyes.

So now we now come full circle and like Tolkien’s third book we have, ‘The return of the King’ Wal King. Hochtief’s new CEO Frank Stieler had toured the VDP the week before and over the weekend all the major players of Leighton’s were in town for a board meeting. On Saturday August 20th, after only nine months in the job, Dave Stewart was sacked and replaced with Hamish Tyrwhitt who 12 months ago was King’s anointed successor.

John Mortimer, key enemy of Wal King, has seen the writing on the wall and resigned the day before; he is replaced as chairman with yet another Wal King ally Stephen Johns. At the upper levels the Holland tribe has been routed as ACS and Wal King assert their influence. Whether this will translate into changes at the management level at the VDP time will tell.

On Wednesday August 24th Richard Tracey of all people ruled in favour of the ETU ordering Thiess to suspend any changes and sackings until September 9th and to abide by the disputes procedure. This is a disaster for John Barraclough and Thiess. The political interpretation of these court rulings you would think Leighton’s new management would make, if Richard Tracey, a close ally of big business is ruling in favour of the ETU, is that Barraclough and Co’s tactics have failed and have made a bad situation far worse. Hamish Tyrwhitt and Stephen Johns will be asking themselves how long is this dispute procedure going to last between hostile camps as the June 30th completion date continues to sale off into the horizon.

I am sure they are asking John Barraclough the same question the union and those of us on the floor have been asking ourselves. Now that your shock and awe tactics have failed how do you plan to win the dispute and meet the deadline with a 56 hour week, no night shift and a hostile workforce? The VDP is rapidly turning into an albatross around both Thiess and Baillieu’s necks.

Even if Barraclough succeeds in sacking 160 electrical workers Thiess will inevitably want to flood the job with electricians to get it finished. Thiess will then be forced to rehire those they have sacked as the ETU controls the vast majority of labour in Victoria. Thiess themselves must be coming to this realisation as they continue to call around all the leading subcontractors to see whether they will come in with their own labour and finish the job.

As Dean Mighell said, “Thiess thought it could go around and secretly try to engage electrical contractors. They have all subsequently contacted the union.” No major subcontractor, who will be dealing with the ETU for the foreseeable future, will march into the middle of a major industrial dispute let alone supply Thiess with a scab workforce. The other major miscalculation Thiess are making is to believe that the union is simply the leadership. In Victoria unionism goes all the way to grass roots as Colin Milne at the Port Campbell gas project back in 2007 discovered (see ETUnews June 2007 edition for information about this dispute).

This dispute is far from over but the choice facing Thiess and their parent company Leighton’s is to continue a war they may or may not win but that will inevitably incur them enormous costs, or make peace. In what will not be the final twist in this tale legal firm Maurice Blackburn has just launched a class action on behalf of Leighton’s independent shareholders. They claim that Leighton’s board under Dave Stewart lied about the state of the company and the problems it faced at the VDP and the Brisbane rail link. Considering the union’s win in the Federal court this action looks likely to be a lay down misère.

Thiess has thus far been able to successfully divide the unions on site. In the beginning Thiess had a joint meeting with all the unions over IR matters. Early on they announced this wasn’t working for them and organised separate meetings. The unions rather than meeting together to maintain a united front stayed split. The reasons for this are complex but the results are simple, Thiess has successfully divided us and the workers are paying the price.

This is the political rot of ALP unionism and although it may be difficult it is vital that the unions manage to put aside their differences and focus on the real enemy. They have peeled off the CFMEU and now hold a $40 million dollar gun at their head. Even now the rifts both onsite and off mean there is no joint strategy. In the past solidarity action would be prepared on other Leighton’s jobs whether Thiess or John Holland. Action in the courts can rarely win disputes as they simply reflect what is going on between the classes on the ground.

For a socialist like myself this dispute once again demonstrates the inherent inefficiencies of capitalist production. The key to building these projects is not speed but cooperation, coordination and planning all that never reach their full potential when ownership is in private hands, profit the core motive and workers have little to no say.

Once again this dispute highlights the fact that the working class have no political voice in the corridoors of power. I believe at some stage and hopefully soon that unions, community groups and just working people in general – whether they be taxi drivers or small farmers – must come together and begin building a new workers party.

I tip my hat to the excellent onsite representation led by Scotty Riches and Paul Harman, to Troy Gray and Dean Mighell and of course my fellow electricians who have stood tall and stuck by each other and the union from day one. Despite the obstacles we must develop a strategy to win this dispute, strengthen the labour movement and go on to win a better world.

By S.A. Millar


The COVID-19 pandemic has laid bare many of the problems with capitalism. The Socialist strives to explain the systemic causes of this crisis, and reports about the issues that are important to working people. We also help to organise struggles against the powers that be.

We don’t receive a cent from big business or governments. Our work is fully funded by our supporters. Even if half the people who read our website every month donated a few dollars each we would raise thousands to help our work!

We need organisations of struggle now more than ever, so if you support what we do please consider making a donation.

One-off or regular donations can be made securely HERE.