Case study

An extraordinary turnaround in industrial relations has been achieved at Sydney Water. As touched on in last year’s annual report, the relationship between the company and the union could have been described as hostile, with up to a dozen different disputes before the Fair Work Commission. Now, not a single dispute has been notified to the Commission in almost two and a half years.

It is morning at a water treatment plant in Sydney, where staff are in a meeting to discuss the challenges facing the business and ways to overcome them. In a scene that would have been unimaginable three years ago, Sydney Water Chief Executive Kevin Young and Australian Services Union Branch Secretary Sally McManus are standing side by side answering questions.

“It’s a remarkable thing considering the past, because I don’t think that ever occurred before. But it’s something we’re doing more and more,” Mr Young said. Ms McManus agreed, saying “There’s no way whatsoever that would have happened three years ago—no way. It would have been me addressing the members and they would have been passing resolutions probably condemning the Managing Director and probably in another few hours be out on strike.”

A new working relationship

The relationship has changed from one of distrust to openness. “The way it works now, it’s very different,” Ms McManus said. “Management will come to us with changes that they want to make and they’ll be open and honest about why they want to do it, what’s driving it, what they’re trying to achieve. And we’ll be open and honest about what our interests are and what we would like to see out of that.”

Kevin Young describes the new relationship as consultative and honest. “It’s very transparent,” Mr Young said. “If we’ve got major issues with any part of the business we sit down and we talk and we understand why we need to make some reform. We put some proposals together and we talk to people early and then we nut out the best way forward.”

Water under the bridge

The turnaround occurred after both parties sought the assistance of the Fair Work Commission to develop a new working relationship. Deputy President Booth instituted a year-long process that helped the parties ‘let go’ of their long-held hostilities and find common ground.

Ms McManus said, “It involved a lot of work by the Commission for us to put aside, not ignore but put aside, our previous grievances which in some circumstances would go back 50 years on both sides, to work from a position of ‘Okay, what do we agree on?’ rather than what are we against.”

Deputy President Booth convened a two-day workshop involving management and the union that proved to be a turning point in the relationship.

“It was one of the most honest two days that I’ve ever had,” Mr Young said.

Improvements to the business

The new relationship has allowed new conversations to occur about how to improve the business and become more efficient.

“So in our civil area we went depot by depot for the first time,” Mr Young said, “and we said look, we’ve done benchmarking of how we’re going against what the typical costs are in the market and there’s a gap. We’re not sure what the answers are but we want to work with you and we want to close this gap and I think a fair time would be three years.”

There are now regular meetings between management, staff and the union where progress is discussed.

“We measure customer service and safety and environmental issues and our productivity,” Mr Young said, “and you can see the charts where we are two-thirds of the way into the timeframe—two years in—and we’ve got two-thirds of the savings we need. And you can just see the change in the workforce. They’re actually very proud of the work that they’re doing and you can see morale improve.”

Ms McManus said, “People don’t actually like going to work and fighting all the time—they don’t. They wanted to go to work and feel happy and proud about their job. They wanted to trust their managers and they do want to work on the common good for the people of Sydney rather than every single day having to battle managers over sometimes minor things.”

The Commission s future role

Sydney Water has had no industrial disputes before the Commission for almost two and half years. But the Commission is still playing an important role.

Mr Young said, “From time to time we get into really difficult circumstances—there was one recently in IT that we had to deal with—and on occasions, it’s rare, we say to Deputy President Booth ‘can you come in and just help facilitate a discussion between us?’. I think we will always want the Commission’s involvement at times of new EBAs, every three or four years, but I’m hoping that will be a light touch. I’m hoping that what we’re doing working with the Commission is that we’re learning more and more how to work these problems out ourselves.”

“We basically now use the Commission as, if I can call it, like a guardian of the relationship,” Ms McManus said. “So we will touch base with the Commissioner now and again—you know, sometimes we’ll seek her opinion about how to go forward on issues. So for example, this [EBA] agreement is something that we’ll be discussing with her.”

Both the business and the union credit the work of Deputy President Booth as instrumental to the changes that have occurred. But they also recognise the hard work done by the employees of both organisations.

“Sally and I kicked off a bit of a dream of the future,” Mr Young said. “But it wouldn’t have been anything without both sides knuckling in and saying ‘look, we’ll make it a reality’. And in the beginning, people as I said, said ‘This will never work’. But it has worked and it’s been highly successful—it’s been one of the greatest things I think we’ve done as a business”.