Unions threatening strike action on Snowy 2.0

Unions are threatening strike action on Australia’s biggest renewable energy project, the trouble plagued Snowy 2.0, as they push for pay rises totalling more than 30 per cent over four years.

The Snowy 2.0 site in Kosciuszko National Park in NSW. Picture: Martin Ollman

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

Unions are threatening strike action on Australia’s biggest renewable energy project, the trouble plagued Snowy 2.0, as they push for pay rises totalling more than 30 per cent over four years, in what is shaping as the first major industrial dispute since the re-election of the Albanese government.

Unions representing fly-in fly out employees earning more than $200,000 annually on the government-owned $12bn hydro project declared on Wednesday that industrial action in support of dozens of claims, including significant upfront and annual pay rises, 15 per cent superannuation, better food, flights exclusively from Canberra Airport, triple time on public holidays; higher overtime and an increased “productivity” allowance, was “inevitable”.

Having rejected a 23 per cent pay rise offer over four years, the Australian Workers Union is pushing for an upfront payment to bring workers into line with tunnel wage rates in Melbourne where an entry-level tunneller can be paid $230,000 annually and more experienced tunnellers earn more than $300,000 a year, followed by 6 per cent annual pay rises.

Unions are also seeking a raft of better entitlements including two “mental health” days off each year; more cleaning staff; a $140-a-day camp allowance, $30-a-week mobile phone allowance; accrued sick leave paid out at the end of employment; updated parental leave; a same job same pay clause; allowances for union delegates and double time for working in the rain.

Unions won Fair Work Commission approval for a protected action ballot, with about 1300 workers to vote in coming weeks on proposed industrial action ranging from short stoppages to 24-hour strikes and unlimited stoppages.

In a significant win for the AWU in its decades old demarcation battle with the CFMEU’s construction division over industry coverage, the CFMEU agreed it would not seek to represent five occupations to be covered by the new agreement.

AWU NSW secretary Tony Callinan likened the working environment for the fly-in fly-out workers on the remote project to a “prison”, telling The Australian that he expected workers to walk off the job.

“I think industrial action is inevitable, unfortunately,” he said.

Malcolm Turnbull at Snowy Hydro in Cooma in 2017. Picture: Alex Ellinghausen

Unions reduced their demands from more than 130 claims to 80 during negotiations with contractor Webuild on Wednesday, and a conciliation conference has been scheduled before the commission for Friday.

The Snowy 2.0 project was initially projected by the former Coalition government to cost about $2bn and be completed in 2021, before the cost was revised to almost $6bn, and then $12bn.

Mr Callinan said the project “started off very badly on the wrong foot and we have spent a long time trying to fix it”.

“Since the Labor government was elected last time, the relevant ministers and the government have worked with the unions to try and improve safety and other ongoing concerns,” he said.

“But there’s been cost blowout after cost blowout on this job.

“This is obviously going to cost more money and the government needs to continue to work with the client, with the construction company, with the unions to find a way to get the project finished, make sure safety is at an appropriate standard, and workers get paid what we would say is industry standard wages and conditions, so any assistance we can get from the government we will be calling on them to help at the relevant time.”

A spokesman for Climate Change and Energy Minister Chris Bowen, who has oversight for the project, said on Wednesday the “government expects all parties to come to the table and negotiate constructively”.

Mr Callinan said the tunnel work should have been completed before the current enterprise agreement expired, but delays on the project meant a new agreement had to be negotiated, increasing costs including higher wages and better conditions.

Documents seen by The Australian setting out the union claims and the contractor’s responses show the workers have been offered an upfront 5 per cent raise plus 2.25 per cent pay rises every six months over the life of the proposed agreement.

But the unions have rejected the position, seeking a larger upfront increase to bring workers’ pay into line with “industry standards” applying on the Melbourne tunnel projects, followed by 3 per cent increases every six months for four years.

The trouble-plagued Florence tunnel boring machine.

According to the documents, Webuild has rejected many of the union claims but agreed to increases in overtime rates and night shift penalties; greater flexibility for banking of rostered days off; cashing out of annual leave; higher workers compensation and top-up insurance, sickness and accident cover; more airport options; a labour hire clause; and increases in allowances albeit smaller than those sought by unions.

Workers are currently paid a $6-an-hour productivity allowance and unions want to increase the rate to $11 an hour, increasing by a further $1 an hour for each year of the agreement. Webuild is proposing a $6.40 rate at the start of the new agreement, followed by four 10c increases.

Likening conditions on the project to a “prison”, Mr Callinan said “compared to other work environments, the camp is extremely remote”. “You are flown in there on a company-arranged flight, you are transported into the camp on a company bus, there’s no avenue to leave site, to go anywhere for any respite,” he said.

“It’s down the tunnel and then back to your room and you wait for 14 days later and you get taken out on a bus and you get on a plane and go home again.

“When compared to working on a traditional construction or tunnel project in any one of our capital cities, it is extremely remote. There’s no shops, there’s no restaurants, there’s nowhere to go.

“You are working for 14 days. You are either working or stuck in the camp.”

Webuild, in a one line-statement late on Wednesday, said the Future Generation Joint Venture “continues to negotiate in good faith for a replacement agreement with relevant bargaining representatives”.

The project has been dogged by issues, including underground work being halted in February after an industrial-sized ventilation fan malfunctioned, sending dangerous metal shrapnel flying through the air. In 2023, the AWU released videos showing what appear to be maggots and bugs in meals served to workers.