The successful prosecution of the Australasian Meat Industry Employees Union (AMIEU) under section 45D of the Trade Practices Act (Secondary boycott provisions) was seen by the National Farmers Federation and the developing New Right in and outside the Liberal Party of Australia as a breakthrough in a campaign to break the power of the unions and introduce contract employment.
Most of those employed in the Mudginberri abattoir were itinerant workers who came through each year to make good money during the dry season, whereas the larger Katherine meatworks consisted of mainly permanent residents.
"[6] In 1983, the Australasian Meat Industry Employees Union (AMIEU) served a log of claims on Mudginberri and on all other abattoirs in the Northern Territory, seeking a unit tally system to be set up (a log of claims was served on employers when a union wished to create a new award for the industry) on award conditions similar to that operating at the Katherine abattoir.
In July 1984, the AMIEU increased pressure on the dispute by setting up picket lines at two Northern Territory abattoirs – Point Stuart and Mudginberri.
Almost unanimously (there were a couple of exceptions that joined the picket line[8]), workers at Mudginberri defied the union instructions and continued to work.
On 12 August the employers faxed their terms of settlement for the dispute to the Prime Minister which included removal of all picket lines, a 2-year ban on strikes, and pay $2.5million damages to Pendarvis as well as all accumulated legal costs.
[12] AMIEU organiser Jack O'Toole reflected in 1995: "At that stage we knew that we weren't dealing with people who were looking for a settlement so much as an overwhelming victory".
[13] The AMEIU by this stage were interested in finding a compromise to the dispute and on 27 August lodged with the Arbitration Commission an application to vary the McKenzie award to allow union involvement in contract negotiations and strengthening the preference for unionists clause.
The dispute had come at the expense of a four-month picket line and a total of $144,000 in fines against the union and a pending lawsuit for damages under Section 45D of the Trade Practices Act.
[14] In subsequent interviews Pendarvis claimed he was not anti-union but that he believed the union was misusing its power by trying to impose an unworkable award on his business.
[15] In 1986 it was revealed in Business Review Weekly that the Country Liberal Party Government of the Northern Territory facilitated loans to Pendarvis with the proviso that he sue the union for damages.
[18] Ian McLachlan, who was president of the National Farmers Federation (NFF) during the dispute and later a minister in the Howard Government, wrote that Mudginberri "turned the tide" against union power and "changed the nature of industrial relations in Australia".