Fortescue Metals Group has threatened to stand down workers if a threatened tugboat strike at Port Hedland goes ahead, as tensions and rhetoric mount over industrial action that could cost hundreds of millions of dollars.
Following BHP Billiton flagging this week that it may use national interest laws to ask the government to prevent the strike, FMG said it would also use the Fair Work Act to intervene.
Tugboat deckhand members of the Maritime Workers Union (MUA) voted to take industrial action last week after failing to reach an agreement with Teekay Shipping.
MUA WA Assistant Branch Secretary Will Tracey says the deckhands are not paid enough, getting only 62 per cent of the $220,000 that a skipper receives compared to 70 per cent at other Australian ports.
Fortescue chief executive Nev Power said the industrial action would threaten the livelihoods of thousands of Australians and cost millions of dollars in lost government royalties and tax revenues that will put pressure on health, education and emergency services.
"Fortescue employs more than 8000 people, including 1000 Aboriginal people at its operations," he said.
"In the event of a strike, Fortescue will be forced to consider standing down its operations and the associated workforces for indefinite periods of time.
Mr Power said there was something wrong with industrial relations laws.
"There is something wrong with our industrial relations laws when a small group of 45 people wanted to only work 22 weeks a year and be paid a base rate about three times the base wage of a first year nurse in the Victorian health system can hold to ransom an industry that generates more export earnings than any other and is relied upon for significant revenues to state and federal governments," he said.
A strike would mean lost sales for BHP, Fortescue and Atlas Iron that are already under pressure with iron ore prices slumping to 20-month lows and below $US100 a tonne.
Mr Tracey said the MUA was happy to meet the employer halfway, so deckhands in Port Hedland were paid 67 per cent of the wage of a skipper.
"We are also asking that deckhands be compensated for receiving no annual leave," he said.
"Currently, deckhands work six swings of 28 days, working 12 hours a day. This equates to almost 54 weeks for an ordinary office worker at BHP, working a standard five day and 37.5 hour week. The difference at the moment is that the office worker gets four weeks paid annual leave, and the tugboat deckhands do not."
Yesterday, BHP iron ore boss Jimmy Wilson warned the strike would stop all shipments out of the port and cost exporters like it, Fortescue Metals Group and Atlas Iron about $100 million a day.
"In addition, the State and Federal Government stand to lose tens of millions of dollars a day in royalties and corporate tax revenue," he said.
The WA Chamber of Commerce and Industry also weighed into the dispute today, warning a strike could affect thousands of jobs, the local community and the State's budget.
CCI WA chief executive Deidre Willmott said it was "ludicrous that irresponsible unions and a small group of self-interested employees can hold the whole State's iron ore industry to ransom".
"The most frustrating part of this situation is that action will be legal under the Fair Work Act," she said.
"We need urgent legislative reform to ensure that this ongoing behaviour does not seriously damage WA's reputation as a place to invest."
Meanwhile Federal Employment Minister Eric Abetz has called on Opposition Leader Bill Shorten to intervene in the dispute.
However Mr Abetz would not say at what point the government would intervene in the matter to protect the national interest, but said the government did not want the iron ore industry to be harmed during difficult economic times.