The 1990 Victorian tram dispute represents a significant episode in Australian labour history.¹ The tenuous position of small unions during the period of the Hawke Labor government’s Accords was encapsulated in Victoria’s tram dispute. Although there is a growing body of literature on the Accords’ effects on union membership, amalgamations and mergers, the eventual disappearance of the Victorian tramways’ union was the direct result of a government lock-out.² Nevertheless, Michael Rafferty’s argument that union amalgamations locked the labour movement into support of both the state, and the profitability of capital has proven accurate.³ In alliance with the federal agenda to reduce the number of Australian unions, Victoria’s Cain Labor government embarked on a programme of reform by targeting one of the state’s smallest unions, that which represented the ‘trammies’.

A fiscal crisis confronted the Cain government by the end of the 1980s. Elected in 1982, Cain’s neo-Keynesian economic policies had substantially increased the state’s budget deficit. The Cain government was placed under increasing pressure following the collapse of two key financial institutions during the last years of that decade. The Victorian Economic Development Corporation (VEDC) had been established to encourage economic growth in Victoria, but was declared insolvent in 1988.⁴ Many of the VEDC’s loans had been granted to fraudulent or high-risk companies that were unable to service the debt.5 The collapse of the VEDC represented an estimated $112 million loss for the Victorian government.6 Tricontinental, the merchant subsidiary of the Victorian State bank, was deemed insolvent in May 1989.7 Tricontinental had approved large loans that were often unsecured, or secured through high-risk investments.8 Tricontinental’s insolvency added a further $1.7 billion to the Victorian government’s debt. After five years of Cain’s leadership, an enormous public sector debt had accumulated. The government’s worker’s compensation initiative, Workcare had unfunded liabilities of at least $5 billion, and the State superannuation bill had reached $4 billion.9

Following its 1982 election victory, the Cain government had resolved to reform the Victorian public service. The 1980 Public Bodies Review Committee concluded that there existed a largely inefficient public service where innumerable departments remained virtually unaccountable to public scrutiny.10 The government’s efforts to reform the public service were largely focused upon the State’s
transport system.

Through the 1983 Transport Act, the Cain government repealed more than 100 Acts of parliament and replaced the previous ten transport authorities, including the Melbourne and Metropolitan Tramways Board, with four new organisations: the Metropolitan Transit Authority (MET), State Transport Authority (STA), the Road Construction Authority (RCA), and the Road Traffic Authority (RTA).11

In enacting these changes, the government emphasised the need for efficiency in the operations of the public transport system, and focused on cost reduction.12 To this end, these four new organisations were each given a corporate structure, a set budget, and were made accountable to the Minister for Transport through the Victorian Transport Directorate.13 Ironically, the ‘reform’ measures adopted by the government increased managerial numbers within the public transport sector while decreasing the workforce required for the State transport system to function. The number of blue-collar workers had declined from 27,000 in 1985 to 20,000 by 1991.14

Moreover, the executives and board members recruited to the managerial ranks of the MET were employed for their experience in private enterprise, rather than knowledge of the public transport system.15

The Cain government’s paradoxical public transport policies during the 1980s contributed substantially to the State’s fiscal crisis. While ostensibly attempting to reduce costs within the public transport sector, the government began recruiting greater numbers of employees at the managerial level, and devoted $3 million in its first term to the repainting of Victoria’s trams.16 Within Premier Cain’s initial years in office, Melbourne’s older W-Class trams were refitted and upgraded, but by 1989, only 30 per cent of these trams were still in operation.17 Although public transport had traditionally been an unprofitable Victorian government service, under the Cain government’s management, the public transport deficit achieved a record high of $1 billion.18

In 1983, a voluntary redundancy scheme was initiated to decrease the size of Victoria’s public transport workforce. While intended to reduce the government’s wages bill, the redundancy programme created further financial problems for the State. Public transport workers over the age of 50 were offered generous retirement provisions.19 The scheme led to the loss of senior train drivers and specialised operating staff, which then needed to be replaced.20 Within four months, new employees were recruited to fill these vacancies, and a large number of those workers who had accepted redundancy packages returned in temporary, permanent, and even consultancy capacities.21 The voluntary redundancy programme had cost the government $71.3 million, and resulted in the transport ministry exceeding its budget by $19 million in 1984.22

With the Victorian State’s debt increasing during Cain’s reign, the government adopted a neo-liberal policy, ‘rationalising’ State assets during the late 1980s. Schools, hospitals, land and other public assets were sold during 1989 and 1990. In 1989, trams were sold to Japanese, German and Dutch companies, and then leased back by the State’s Metropolitan Transit Authority (MET). The leasing of the now foreign-owned trams cost the Victorian State government an estimated $1.3 billion.23

As the Cain government approached the end of its second term, the State’s mounting debt crisis appeared irreversible and the government’s popularity waned. During December 1989, Premier Cain’s approval rating dropped by 13 per cent.24 The government needed to reduce the deficit and, at the same time, regain the confidence of the Victorian population. Decreasing the funding for health and education would have been an unpopular move, so a more benign target was selected within the public transport sector. In motorcar-dependent Victoria, the service provided by the tramways system was primarily limited to inner-city Melbourne. With a small patronage and large deficit, the tramways service was potentially the most vulnerable component of the State’s public transport system.

The Cain government’s neo-liberal plan for the public transport system was revealed in August 1989. A scratch ticketing system was to be introduced on Victoria’s trams, buses and trains at the expense of 500 tram conductors’ jobs. Conductors on the Z Class trams were to be eliminated, with 300 conductors retained on W Class trams, and a further 300 to be re-deployed as roving conductors.25 Trams would be converted to ‘driver-only’ mode by the installation of doors, isolating the driver from passengers. Security cameras and the ticketing system would replace conductors in order for the government to save an anticipated $24 million per year.26 In selling the scratch tickets through chemists, news-agencies, Seven Eleven stores, and milkbars as well as Metropolitan Transit Authority shops, the government could avoid the additional costs that would have been incurred through selling tickets to commuters solely through State-owned outlets.27

The $24 million revenue from this ‘rationalisation’ would be insufficient to contribute to a significant reduction in the Victorian State’s debt. Nevertheless, the reforms were valuable politically as an election loomed and the Cain government needed to create the perception that it was in control of the State’s economy. The changes to the public transport system were to come into effect from 1 January 1990.

Conductors were an easy target for government expenditure cuts: they were members of a small union, with little political clout, and a high natural attrition rate. The workers could be replaced by scratch tickets, which ‘required little capital and organisation’.28 Many of the unskilled labourers employed as conductors were also recent immigrants. Eighty-five per cent of Victoria’s conductors were from non-English speaking backgrounds, and could not easily find employment elsewhere.29

The tramways union, the Australian Motor Omnibus and Tramway Employee Association (ATMOEA), had not been informed of the cuts to conductors’ jobs prior to the announcement of the reforms during the government’s unveiling of the budget in August 1989.30 As New Year’s Day 1990 approached, the ATMOEA attempted to prevent the impending changes being enforced through sporadic industrial action. One hundred tram drivers, conductors and maintenance workers who had disrupted the implementation of the new ticketing system by the MET were sacked on 2 November 1989.31
Twelve days later, the union responded to the dismissal of these workers by refusing to collect fares.32 Trams were abandoned in Melbourne’s CBD, causing traffic congestion, but the workers were not reinstated, nor was the government willing to revise its policy.33

The transition to the ticket system began from December 1989, despite opposition from disability organisations, women’s groups and the Public Transport Users Association, who questioned the safety and convenience of the new scheme. The attempts by the ATMOEA to block the introduction of the ticket system were supported by other Victorian unions, who banned the printing and transport of scratch tickets. Members of the ATMOEA and Australian Railways Union (ARU) also picketed the South Clayton warehouse that distributed the scratch tickets during December. The scratch tickets then had to be printed in South Australia and, due to the warehouse picket, the tickets were often distributed from executives’ car boots.34 Despite the actions of the public transport employees, the distribution of the Cain government’s scratch tickets continued. Unions placed bans on the conversion of trams for ‘driver-only’ operation, and private contractors had to be hired to do the work.35

The tram workers were initially supported in their industrial action by public bus and train employees. The public transport unions held a mass stop work meeting in the City Square from 10am to 2pm on 4 December 1989. Following the meeting, 1,000 public train, tram and bus employees marched to the office of Jim Kennan, the Victorian Minister for Transport, where security guards prevented the workers entering the building.36 A picket by 500 ARU and Amalgamated Metal Union members at the Jolimont railway yard prevented a number of train lines from operating on 6 December 1989.37 Public bus employees maintained support for the tram workers with a 24-hour public bus and tram strike occurring on 13 December 1989, and another bus and tram strike disrupting services the following evening.38 The Municipal Officers Association also challenged the Cain government’s scheme during December by refusing to check scratch tickets or process the paperwork required for the dismissal of conductors.39

Although these other Victorian unions resisted the ticketing system intermittently, industrial action was primarily limited to the tram services in the final month of 1989. The ATMOEA organised stop work meetings at depots on 11, 12 and 13 December, suspending services throughout Melbourne and leaving trams stationary.40 The ATMOEA undertook a programme of civil disobedience, as conductors refused to check scratch tickets during December and urged commuters to purchase tickets from conductors and boycott the new system.41 Conductors no longer accepted Victorian parliamentarians’ gold passes, which had entitled the politicians to free travel on public transport.42

To avoid alienating commuters, tram workers endeavoured to maintain most peak weekday services in December 1989. ATMOEA members resolved to ban tram services into the centre of Melbourne from 10am to 4pm on weekdays, while continuing services at the peak times during the morning and afternoon.43 Fare free days won the tram workers support from commuters, the majority of whom apparently wanted to retain conductors on tram services.44 However, the Victorian Employees Association, the Retail Employers Association and the Victorian Chamber of Commerce condemned the tram workers, denouncing the disruption to transport services during the retail industry’s key trading period prior to Christmas. Stores such as Myer, David Jones, Katies and Prouds claimed that they had experienced considerable losses and a reduction in pre-Christmas sales because of the tram workers’ industrial action.45 The Cain government refused the demand from the Retail Employers Federation for compensation, and was unmoved by the ATMOEA’s ongoing defiance of the ticketing system.

The government continued to exert pressure on tram workers, demanding that employees sign contracts before they could be issued with their uniforms. Without their uniforms, conductors were not permitted to work and would not be paid.46 The ATMOEA asserted that it was discriminatory for conductors, who were overwhelmingly from non-English speaking backgrounds, to be required to sign contracts they may have difficulty reading.47

The tram drivers and conductors refused to sign the contracts, and instead implemented a short-lived form of workers’ control. The ATMOEA members drew up their own timetable and, intensifying their resistance, operated the trams for free on New Year’s Day 1990.48 The trams were driven without State approval, and the Cain government declared that the union had ‘stolen’ the trams.49 In late December 1989, an ATMOEA representative had warned that the union would run the trams themselves during the following month.50 After the fare free day on 1 January 1990, the government sought legal advice with regard to disconnecting the power to the tramlines.51

Anticipating the government’s actions, drivers drove 250 trams into the centre of Melbourne early on the morning of 2 January 1990, and the government disabled the tramlines’ electricity supply later that day.52 The trams were parked two abreast between Elizabeth and Flinders Street Stations, while dozens more were parked along the central city tram routes.53 Picket lines were established beside trams to prevent the government towing them away.54 Public buses were carefully positioned to ensure that the trams could not be moved. Tramways workers also occupied the depots to ensure that the government could not execute the lock-outs that had been threatened.55 The workers manned the depots and the trams 24-hours per day for the duration of the strike. Makeshift kitchens were established in depots, where workers and their families shared meals.56 Public support for the tram drivers and conductors was demonstrated through donations of food and money to the workers.57

The unity of the Australian Motor Omnibus and Tramway Employee Association lasted a mere four days. Both public bus and tram employees were represented by the ATMOEA, but the Cain government’s reforms to public transport primarily affected tram workers alone. By the 4 January 1990, the ATMOEA was already divided, with bus drivers from the Doncaster and Elwood depots voting in favour of ending the strike.58 Six hundred bus drivers and 400 tram maintenance workers had abandoned the strike and returned to work by 5 January 1990.59 Tram drivers and conductors were left to continue their industrial action.60

A split became evident between some rank-and-file members and the executive of the ATMOEA. The Doncaster bus depot’s union delegate declared that their buses would operate, but would avoid the city to ensure the bus drivers’ safety from the wrath of picketers.61 With many public bus employees determined to return to work, the ATMOEA executive was forced to revoke its earlier directive and endorse the restoration of government bus services. To salvage the impression of solidarity among the union members, it was claimed that bus drivers were returning to work to support the tram workers financially.62 However, public bus workers appeared resolute on returning to work with or without union approval.63

The ATMOEA and the ARU organised a strike on 15 January 1990 that shut down Melbourne’s public transport for the day.64 Despite the ATMOEA’s ability to attract support from the ARU, the tram workers’ industrial action was increasingly untenable. Further divisions had emerged within the ATMOEA by the end of January, with militant members establishing unauthorised pickets at the head office of the MET, and the North Fitzroy bus depot.65 Tram workers from the Brunswick depot were also involved in a picket at the Jolimont rail yard on 31 January 1990 that had not received the approval of the ATMOEA executive.66 The frustration of the tram employees had intensified as the dispute persisted, with workers receiving no wages during the strike.

The Victorian government maintained its refusal to reconsider its reforms to the public transport system. Premier Cain instead threatened to remove all conductors and replace them with scratch ticket vending machines. He warned that the government would employ non-unionised labour on the State’s tramways, and that employment on the trams would be on a casual basis, eliminating the benefits received by permanent employees.67 While the Premier’s threats were not fulfilled, an agreement was reached between the State, the Industrial Relations Commission (IRC), and the tram union on 2 February 1990.

The ATMOEA capitulated, accepting the scratch ticketing system and ‘driver-only’ trams.68 The IRC determined that no conductors would be sacked, as their numbers would decline through natural attrition. Four hundred conductors would be retained on W Class trams, and 300 would be redeployed and promoted.69 Tram drivers were to be paid at the same level as public bus drivers, receiving a
9.7 per cent pay increase that was equivalent to an extra $35 per week.70 ‘Driver-only’ trams would begin operating immediately from the Camberwell, Essendon and Kew depots, and would be introduced after two weeks at all of Victoria’s tram depots.71

The response to the resolution from the members of the ATMOEA at the union’s mass meeting on
2 February 1990 was disparate. The meeting was described as violent and emotional.72 Many members were relieved that the dispute had ceased, believing that such an agreement was inevitable. Some workers responded to the decision by throwing food and water at the union’s senior officials.73 Thirty workers from the militant Brunswick depot advanced on the ATMOEA’s executives, shouting that they had been sold out, before the executives were ushered from the meeting.74 One worker recalled that union officials had speculated during the meeting about being fined and embroiled in legal action, and that the agreement with the government had been ‘sold’ to the union membership through fear.75

From the announcement of its public transport reforms to the eventual agreement with the ATMOEA, the Victorian government did not waver in its determination to enforce changes to the operations of the State’s tramways. The government demonstrated a reluctance to compromise its key transport reforms for a small union that would soon be forced to amalgamate with another union or face deregistration under the Accord. Indeed, Premier Cain remained on holiday for the majority of the tram dispute, ignoring the Liberal Opposition’s demands that he return to resolve the dispute.76

Although the Essential Services Act had been invoked by Victoria’s Liberal government to break the 1972 rail strike, the Cain government avoided using these powers during the tram dispute.77 Premier Cain was instead willing to shut down the tram system for the duration of the dispute. The small number of passengers and the limited area encompassed by the trams meant that the service could be suspended with relatively little effect upon the Victorian population. However, it was the timing of the tram workers’ industrial action that permitted the government to turn off the power to the tramlines without significant repercussions. Politically, January was the safest time for the tram system to be immobilised, as the impact on corporate Melbourne, whose staff and productivity levels decrease during in this period, was minimised. Ironically, the suspension of tram services potentially benefited the Cain government during its fiscal crisis, as the government did not have to cover the costs of operating the trams for an entire month, nor was it required to pay wages to striking government employees.

In the aftermath of the dispute, the small ATMOEA disappeared in an amalgamation negotiated in December 1992.78 Conductors finally vanished from trams in 1998, replaced with automated ticket machines. The reduction in numbers and eventual elimination of conductors saw a rise in assaults, robberies, graffiti and vandalism on trams staffed only by drivers.79 One hundred roving conductors were employed on Victorian trams in 2000 in an effort to combat these problems. In 1989, the Cain government believed that replacing conductors with scratch tickets would save $24 million annually. With automated ticket machines installed on trams, operators estimate that $50 million is lost each year through fare evasion.80