Around 90 strikers picket outside the East Preston tram depot in north Melbourne over a new company agreement (EA) on wages and conditions. The picket at the site of the Downer Group, which is refurbishing 450 Melbourne trams, has been underway for two weeks.
The previous four-year agreement covering workers expired last March. Downer’s first offer was only 2.5% per year for each of the next three years. On Monday last week, the company increased its offer to 4%, 3% and 3%. This still represents a substantial drop in real wages. Australia’s official inflation rate is expected to hit nearly 8% later this year, although the real cost of living affecting the working class is significantly higher than that.
Last Friday, Downer promised a $1,000 signing bonus, in a bid to push through his regressive offer. At the same time, however, the company is trying to recover other rights. This includes eliminating a pass that allows workers to use public transit, which is worth about $2,500 a year for a worker.
Work on the site is divided equally between four trades: painters, electricians, boilermakers and mechanical fitters. The strikers are represented by three unions, the Rail, Tram and Bus Union (RTBU), the Electrical Trades Union (ETU) and the Australian Manufacturing Workers Union (AMWU). The unions’ demand is for a 5% wage increase, still a reduction in real wages. In other words, the difference between the company and the unions on the question of basic wages does not exceed the extent of the reduction in the real wage.
The unions have also demanded a 36-hour week (instead of 38 hours) and a nine-day fortnight (instead of 10 days), and an increase in overtime rates, from 150% to 200%.
The East Preston depot is the site of a seven-year, $230 million project to overhaul and refurbish 450 of Melbourne’s older trams (Z, A, B and D classes). The state Labor government awarded the fleet refurbishment contract to Downer in 2018. After the expiration of the initial four-year “greenfield” agreement, a final agreement is required for the completion of the project .
Downer Group is a diversified transportation, engineering and mining services company with over $12 billion in revenue, over 50,000 employees and operations in Australia and New Zealand. He owns 49% of Keolis Downer, which has a government contract for Yarra Trams to operate Melbourne’s tram network, the largest in the world.
The streetcar renovation project reached its halfway mark in November 2021. At that time, Downer CEO Grant Fenn (annual salary over $3 million) said the completed work was “a testament to our qualified team of over 130 in East Preston”.
With the supply chain crisis, Australia is experiencing a spike in material costs which is affecting the manufacturing and construction industries. A total of 16 home building companies have collapsed since 2021, due to fixed price contracts. Downer and other manufacturing companies will face similar pressures, with worker wages now targeted to maintain profit margins.
World Socialist Website reporters spoke to several workers on the picket line. One told the WSWS that inflation was rising: “Interest rates are going up half a percent every month and that’s going to drive up rents, higher bills and more pressure on households “, he explained. “We are all below the rate of inflation. Under inflation we get a pay cut.
Another worker, who has been on the project since its inception, said: ‘We just want the equivalent of what the Yarra trams are getting on the road, since we are doing the same job. We want a 36-hour week and a nine-day fortnight. Downer said no to both of those things. They offer below average.
He noted, “Any dollar they pay less to labor goes to profits.”
When asked why the unions were demanding a nominal wage increase below inflation, he replied, “We should get increases in the cost of living, but we’d be happy with 5%. Obviously having more would be nice, but at the same time we don’t want to be greedy. We just want what’s right. We also want respect. We got two shitty offers and we just want what’s right.
The worker explained that Downer had other industry agreements that were due to expire and that management was looking to set a precedent “I know that’s why they [the company] try to be tough on us,” the worker explained, “because once our deal is decided, then Newport [rail workshop] and Pakenham [rail depot] are next.
Even though the struggle in East Preston directly affects the fate of the company’s other workers, the unions are blocking any unified action.
Unions have allowed breaches of contracts and contracts for the past 40 years, so each site now has a separate agreement, even within the same company. Unions supported the passage of the Fair Work Act under the Rudd Labor government in 2010, which severely restricted the right to strike and other industrial action and instituted stiff penalties for breaching its provisions. This has allowed companies to negotiate each EA one factory, depot or warehouse at a time while small groups of workers have to fight for their interests in isolation.
The role of unions as an industrial police force was openly expressed when a union official tried to block WSWS reporters from talking to workers. The RBTU official said, “You come here to play politics. We don’t need that. We are a united workforce here. We don’t need you to put wedges between us.
In reality, it is the unions that are dividing different sections of the working class facing similar attacks on their wages and conditions as those faced by the strikers in East Preston. As for “doing politics”, the unions are intimately linked to the Labor Party, currently in government at state and federal levels, and champion its politics and anti-labour policies.
In May’s federal election, unions ran a massive campaign blaming the previous coalition government for wage stagnation and promoting the illusion that a Labor government would improve conditions. Just a week after taking office, however, Anthony Albanese’s new government suddenly ‘discovered’ a budget crisis and insisted workers ‘must make sacrifices’. The meaning of “sacrifice” is that corporate profits must be protected by real wage cuts and austerity budget cuts.
The role of unions in East Preston and elsewhere shows that workers must take matters into their own hands. The Socialist Equality Party calls on the tram workers to form their own rank-and-file committees independent of the trade unions which can unite in a common struggle with other sections of workers nationally and internationally on the basis of a perspective socialist.