Traffic controllers in WA are in line for a 38 per cent pay rise and contractors expect similar increases will apply across the board because of new tendering rules set by Main Roads.
Traffic controllers in Western Australia are in line for a 38 per cent pay rise and contractors expect similar increases will apply across-the-board because of new tendering rules set by Main Roads WA.
The increased pay rates for traffic controllers were unilaterally announced by Main Roads in October, causing alarm for businesses in that sector.
A potentially much more significant change was revealed in recent industry briefings for the Tonkin Highway Extension project.
Main Roads said it was committed to implementing “best practice industrial relations” on its projects.
It told an industry briefing that minimum rates of pay would be introduced for all workers on site, to attract and retain more experienced civil construction workers.
The new rates will be based on those paid by head contractor ACCIONA on the Armadale rail line upgrade.
This has been described by one industry source as a government-sanctioned pattern agreement, with the highest rates of pay becoming the new normal.
“What’s different is that the client will be mandating it, imposing that enterprise agreement on everyone,” they said.
Contractors have pointed to the new rules for traffic controllers – introduced by Main Roads as part of a new company registration scheme – as a guide to what can be expected across the sector.
Main Roads has mandated a minimum rate of pay of $37.24 per hour (including an industry allowance) for traffic controllers with the most basic accreditation.
This equates to more than $78,000 per annum after adding in the travel allowance of $21.19 per day.
Workers doing night shift and weekend work will earn substantially more.
Civil Contractors Federation WA chief executive Andy Graham said the changes would lead to significantly higher construction costs on all government and non-government construction works.
“The new rate is so far out of step with industry norms that it will inevitably result in wages increases across the board, as more skilled and experienced workers seek parity with entry-level traffic controllers,” he said.
The new base rate for traffic controllers appears to be based on the current enterprise agreement for Metronet projects, but with a 4 per cent add-on.
Mr Graham said pay rates on Metronet projects were always higher than normal and, as such, the new rate was far higher than industry standards.
“It is highly concerning that the government regards this rate as appropriate for all traffic management works, including local government and private sector,” he said.
The Traffic Management Association of Australia said the new rate was 38 per cent higher than the hourly rate under the relevant industry award.
“There is no doubt that some companies will struggle with cash flow issues resulting from the sudden large increase in payroll,” the association said.
The Roadmarking Industry Association of Australia echoed these concerns, saying traffic controllers will receive a higher entry level full-time wage than graduate engineers and nurses.
“Many companies involved in road marking, road maintenance, and other activities that involve traffic management have contacted the RIAA to express major concerns with this sudden change,” RIAA general manager Paul Robinson said.
“Our members and industry participants are locked into contracts and levels of payment, only to see a significant part of their costs increased unilaterally by Main Roads WA.”
"It is likely that some companies will relinquish their Main Roads registration and avoid state road work altogether," Mr Robinson said.
Mr Graham said the new Main Roads rate would put entry-level traffic controllers on a higher base rate than the rates being paid to experienced workers doing more skilled and more physically demanding work.
For instance, drainers, asphalt workers and brick pavers typically earn about $33 per hour, which is at least 20 per cent above the relevant award.
Mr Graham said asphalt workers often worked closely with traffic controllers on road resurfacing works.
“When skilled and experienced asphalt workers learn that newly hired traffic controllers are being paid significantly more [than they are] they will, of course, seek a pay rise,” he said.
A Main Roads spokesperson said it expected the new pay rates to deliver productivity benefits.
This was based on its experience over the past two years, during which project-specific enterprise agreements have applied on most Metronet projects.
“This has resulted in greater retention and productivity of the workforce, many of whom have chosen to stay and work on these projects rather than pursue opportunities in the resources sector,” they said.
“Contractors tendering for the Tonkin Highway Extension project are also being asked to price their bids based on project-specific enterprise agreement rates in recognition of the retention, productivity and safety outcomes achieved on the Metronet projects over the past number of years.”
The changes come shortly after the collapse of Perth firm Advanced Traffic Management, which was one of the biggest employers of traffic controllers.
It is understood ATM shifted employees to a labour hire company (with lower rates of pay) not long before its collapse.
Main Roads did not respond to questions about ATM, however, it has mandated that traffic controllers must be directly employed, which means contractors cannot use labour hire.
It also noted that some traffic controllers on Main Roads projects have been paid as low as $22 per hour and have been supplied by short-term labour hire providers.
“Giving workers certainty about their pay and conditions is a good thing,” the Main Roads spokesperson told Business News.
Main Roads has agreed to industry calls for the implementation date for new traffic controller pay rates to be deferred (to February 1) in recognition of payroll system changes required.
Main Roads has also agreed to work with industry to explore a graduated pay scale linked to training, qualifications and experience.
“The highest rate of pay will only apply to the most experienced, qualified and trained,” the spokesperson said.
Looking beyond the latest changes, local contractors are worried they are just a first step.
They fear that union influence will result in WA following the lead of Queensland and Victoria, where state governments have effectively mandated big across-the-board pay increases.
Under Queensland’s best practice industry conditions, for instance, traffic controllers can earn up to $116,000 a year.
This includes a base pay rate of $46.95 per day plus site allowances of up to $8 per hour and travel allowances of $50 per day.
