Port Kembla coal terminal launches unprecedented lockout to counter CFMEU threat

"I've been telling my employees now for many, many months it is absolutely critical for our business to right now set up the safe, sustainable operation of PKCT so it's here in the long term," says John Gorman, operations manager at the Port Kembla Coal Terminal. Picture: Sylvia Liber
"I've been telling my employees now for many, many months it is absolutely critical for our business to right now set up the safe, sustainable operation of PKCT so it's here in the long term," says John Gorman, operations manager at the Port Kembla Coal Terminal. Picture: Sylvia Liber

The Port Kembla Coal Terminal has locked out its workers for the first time in its history as it seeks to pressure the mining union to end a three-year battle to remove restrictions on management.

The major east-coast terminal shut out 60 of its key trades and operations staff for four days from Sunday in response to the Construction, Forestry, Mining and Energy Union's latest wave of planned work stoppages set to disrupt coal exports.

The lockout is an unprecedented escalation of the dispute at the terminal, which is seeking to reduce operating costs as it faces record falls in production rates.

PKCT operations manager John Gorman told The Australian Financial Review the long-term fate of the terminal was at stake as major coal companies increasingly opted to export coal through Newcastle due to its more competitive operating costs.

The company, which at its peak was loading more than 14 million tonnes of coal a year, has seen its forecast throughput for 2018 fall by almost half to just 5.1 million tonnes.

"Our 5.1 million tonnes will be the lowest throughput ever on record and I've been telling my employees now for many, many months it is absolutely critical for our business to right now set up the safe, sustainable operation of PKCT so it's here in the long term," Mr Gorman said.

"There are some significant risks to that at the moment and we need to be doing everything we can - and having a competitive enterprise agreement is a significant element of that."

Lockout to 'keep exports moving'

Mr Gorman said the terminal had engaged a professional contingency workforce to load ships during the lockout so as not to delay coal exports.

"If we didn't do that it would have had a major disruption to three vessels and we believe this approach will deliver a much more efficient loading outcome for our customers and keep exports moving in the Illawarra."

PKCT, owned by coal mining companies South 32, Glencore, Peabody Energy, Centennial Coal and Wollongong Coal, has been negotiating a new agreement with the CFMEU since 2015.

However, since March, the CFMEU has subjected the terminal to more than 50 protected industrial action notices and hundreds of hours of work bans.

The company is seeking to reduce generous superannuation and sick leave benefits and remove historic union consultation and dispute powers as it moves from self-managed work teams to ones under management direction.

After workers overwhelmingly voted down a proposed deal in September, the company applied to terminate the existing union agreement and revert to the industry award but maintain workers' take-home pay.

'We'll never stop'

CFMEU southwest district vice president Bob Timbs said he believed the lockout was the first of its kind in the Port Kembla area and called PKCT's actions an "unprecedented attack" on workers.

"I've never seen a company go as far as they've gone to strip conditions," he said. "This is 25 years' of conditions won through bargaining."

Mr Timbs argued many of the competitive pressures facing PKCT were "self inflicted" and the result of a $280 million upgrade at the port that has seen it impose a levy per tonne of coal.

Mr Gorman acknowledged the levy was a contributor but argued customers had said the terminal was not cost competitive based on operating costs alone.

He accused the CFMEU of walking out of negotiations in December and insisted the company was still open to bargaining.

Mr Timbs called on PKCT shareholders to commit to "proper bargaining instead of lockouts" and said the parties could "quite easily get a deal".

The union is planning a "peaceful picket" at the terminal from Monday and would not rule out further stoppages.

"We've got nothing to lose at the moment," Mr Timbs said. "They've got us to a point where the only room left is industrial action. We'll never stop."