Future Industrial Relations Strategic Objectives for Australian Unions

Australian industrial relations has gone through massive change since the introduction of enterprise bargaining in 1990, and not much of it for the good of unions and workers.


The most urgent need of the Australian union movement at the moment – mid-2020, for the post pandemic, is for a five to ten year set of strategic objectives for all unions to work together to achieve. Based on the agreed strategic objectives, they should aim to set the agenda, win public support, and not rely on reacting to the industrial relations strategies of Business, Liberal Party, nor the Labor Party, although it will be necessary to influence the Labor Party.

This piece is not an economic strategy, but an integral part of such a strategy. The ACTU has announced a five point economic development plan which is a good basis for generating public support and building allies among investors, industry super funds, and some business leaders. The Tony Evan’s piece – “Jobs and Equality” is a valuable contribution to their economic agenda, as is Ross Garnaut’s book, “Super Power”. The ACTU, armed with their economic plans, should sit down with the Industry Superannuation Fund’s investment arm IFM, and any other investor interested in renewable investment, e.g. Cannon-Brooks, to discuss the practicalities of bringing those good proposals into being. Then add a progressive industrial relations agenda which the unions will agree to as an important element of those investment decisions.

The IR component should be a set principles for worker rights, worker voice, minimum standards for income, training, including paid training leave, etc., will assist such investments become reality. Discussions with investors should include the AEU and NTEU, because international experience shows that, especially in manufacturing, having a tertiary institute at the heart of investment decisions, enhances the success rate. An example being Deakin University in Geelong, which provides research and education to a number of advanced manufacturing companies in that region.

Research suggests that high skilled apprentice type trained workers, generate nearly four new jobs across their working life, which is the highest of any trade or profession, by comparison academics generate about one job, hence a good reason to focus on advanced manufacturing.

The world of work has changed massively in the 21st Century, but our IR framework and laws have not. The so called gig economy, with the growth of short term contracts, casual, part time, and many needing to have a portfolio of jobs, in order to maintain living standards, is a huge challenge, and has not been so widespread since the late eighteenth and early nineteenth centuries, of sub-contracted factory work . We should not forget that in normal times about 60% of employees still work a full time, 38 hour week.

The ACTU objectives to change the rules, break the wage rise drought, and regain the right to bargain across industries, are most important as a start, aims which were dealt a serious blow at the last federal election. That experience highlighted the weaknesses of a union strategy reliant mainly on the parliamentary system. Therefore it will be necessary to examine other strategies and tactics, that go further than changing the rules, not just rely on which government is in power, but also preparedness to break laws when necessary and possible.

Industrial relations legislation is the most changed legislation of any since it was first promulgated in 1904, when the Conciliation and Arbitration Commission was established. Allied to the Basic Wage decision in 1907, and despite many changes, the system worked reasonably well for unions, as a means to set the price of labour and working conditions, and along with the ‘welfare state’, helped secure reasonable living standards, especially after the second world war.

The Left were always wary of the C&AC because it took collective bargaining out of the hands of workplace activists and union officials, which made many unions lazy. The left/militant unions usually made the running on wage increases, shorter hours, extra holidays etc., through over-wars campaigns, then the other less active unions would go along to the C&AC, and have those gains consolidated in their award, having done very little to win those gains.

The Left became adept at using the system to advance the interests of their members, by developing the over award campaigning, which made gains at the workplace level, which were then consolidated in the various awards.

That was a period of more benign capitalism when the main players – Government, Employer organisations, and Unions, roughly played by the rules, which importantly provided considerably more scope for unions and workers to exercise their bargaining power than under current IR laws. Appointments to the Conciliation and Arbitration Commission were usually shared between unions, Dept. of Labour, employers, and some academics. The conciliation system for solving disputes was efficient, simple, and usually free of legal representation. For example during a dispute, unions usually objected to employers having legal representation, and the conciliation commissioner would generally ask them to withdraw, as an agreement was usually achieved quicker without them. The Left unions in particular would ensure that the members in dispute were present in the gallery, so that the negotiations, chaired by the Commissioner, took place in full view, and members could be quickly consulted.

By contrast since Work Choices the system is dominated by lawyers in courts, before magistrates and judges who have little idea of work systems, which makes the settlement of disputes, and campaigns ever more remote from union members and activists.

Usually when governments changed there is nearly always industrial relations legislative changes, good and bad, but the essence of the system remained in place. One serious weakness of the system was that it completely excluded any rights for unions to pursue action around anything impinging on management prerogative. This was until, despite the employers challenging it to the High Court, in the mid-eighties unions achieved the right to consultation when new technology was introduced. This was the only time that unions had the right to bargaining about management prerogative. This was one of the first rights deleted by Work Choices .

Over the last forty years, we have experienced the growth of neo-liberalism, where all bets are off, and employers and conservative governments have broken all the rules and customs. They recently appointed six new Commissioners to the Fair Work Commission, all from employer ranks, unheard of previously. They are determined to crush unions, drive wages and conditions back to the most basic level, and in a completely market driven system, ensuring management prerogatives are unchallenged.

This has exposed the weakness of a system which the union movement has relied on, as nowadays when a conservative government comes to power, it does not just tinker with industrial relations legislation, it completely overturns custom and practice. It has even eliminated terminology such as industrial relations, unions, in favour of employees/workplace, and there is no Dept. of Labour.

The most obvious example of unions relying too much on government, was when the Howard Government in it’s very first act, ordered the Dept. of Labour to stop funding the Trade Union Training Authority. It did not have to change the legislation, but simply defund. Most unions, except those with their own union training, were suddenly left without a facility to train their activists and fulltime officials. This was until the ACTU established the Trade Union Education Foundation, based on donations from some state governments, and private businesses, and which has a representative of business on it’s board.

The only issue which the Fair Work Commission delivers any advantage to unions is the National Minimum Wage case, and we rarely get a fair deal from that. In these circumstances the union movement needs to consider how to begin sidelining the FWC, and step by step attempt head to head bargaining at all levels, national, industry, and enterprise.

An important way to measure the success of a union strategy, is the extent to which it sustains gains when a conservative government comes to power. An important lesson of the Nordic experience, is that they seem to sustain more of their gains, and maintain more of their union membership, while experiencing neo-liberal governments, than has been the case with most Anglo-Celtic countries, such as ours.

One reason is that their industrial relations systems rely far less on government legislation. For example their extensive union training is completely funded by the unions, it is the biggest single cost of their union budget, with no reliance on government, so no third party can interfere.

Every agreement from national, industry, to enterprise level, is directly bargained, with no reliance on an outside body such as the Fair Work Commission to establish minimum standards, and certify agreements. The Norwegians for example have what is called – The Basic Agreement. This is nationally bargained every two years between the unions and employers, and establishes minimum rates and conditions for all workplaces, and is signed as a binding contract. Like our awards, but emanating from direct bargaining, without a third party: https://www.lo.no/language/english/basic-agreement-lo---nho/

They then have an agreement at the industry level, informed by the Basic Agreement: https://www.fellesforbundet.no/globalassets/lonn-og-tariffsaker/overenskomster-2018-2020/industry-agreement-2018-2020.pdf

The national contract provides guidelines for further bargaining at the industry and enterprise levels, indicating what might be the main focus for that bargaining, e.g. appropriate wage rates, skills training, working hours, greater worker power in management decision making, etc.. Because of the great diversity of industry and enterprises, there is considerable flexibility within the system, as the guidelines set our principles, not precise details.

They have an independent body funded by the government, for dispute resolution. There is also legislation setting out legal rights of both unions and employers, which is not so much prescriptive, but more facilitating the bargaining process. The government is usually consulted by the parties prior to national bargaining, to understand their major priorities, so these are kept in mind by the parties, but then it is resolved through the bargaining process, with no third party.

While no system is perfect, their system demonstrates, that while governments will always have influence, for good or bad, it makes it a little more difficult for neo-conservative governments to do the kind of damage to workers and their unions, as has occurred in Australia.

A centralised wage setting system is important. For example during the first few years of the ACTU/ALP Accord in the eighties, we had centralised wage decisions. The lower paid always do better in a centralised system, and during that period, women’s wages rose to their highest parity ever with the male rate. However since enterprise bargaining that parity has been eroded.

Sustained wage rises emanate from three elements, increased productivity, a strong union movement to ensure workers get their share of that increase, and a union movement capable of increasing the share of profits going to workers. For a long time the workers share was well above fifty percent, however now it is well below, meaning that profits are now the largest share, and this needs to be reversed. Tax policy, (the social wage) can also help that reversal. As productivity has a significant role, we should be concerned that it is very low, mainly because of Australia’s poor management/employer class, so unions must intervene in management as productivity is too important to leave to them. Workers are well aware, and often frustrated, by the incompetence and wastefulness of their management, and will welcome their union assisting them to do something about that.

Via enterprise bargaining some trades, have extracted high salaries/wages in booming industries with strong unions. However there is little suggestion of Wage Solidarity with the less well off, whose unions despite their best intentions, cannot match the gains of those in booming industries. This working class elite effectively become small business people with negatively geared properties, share portfolios, and small businesses on the side. As we witnessed in the last election, they mostly vote conservative. A colleague recently told me that he was often in the Queensland mining region, settling industrial disputes, and when at the airport to fly home, all he heard these unionists discussing were their share portfolios, and negatively geared properties. This is not the kind of unionism that I worked for.

Therefore, a most important consideration for union policy for a future industrial relations system, is for some form of wage solidarity. That is a system whereby the stronger unions who can extract higher wages, assist the lower paid to get more. This is principled unionism. Such a system can only be achieved through some form of centralisation, and agreed between the unions. The wage solidarity policy is central for the Nordic unions, and is worth examining. Despite it being very difficult to introduce into Australia, having that as a principle will inform the campaigns to achieve it. In a sense the old Conciliation and Arbitration Commission award system, allied to the National Minimum Wage Case, had an element of wage solidarity, but enterprise bargaining has no such restraints, hence the now huge gap between the highest and minimum wages. Unfortunately this is another impact of neo-liberalism.

There can be two types of centralised system. One is via an Australian like system with a third party providing part of the safety net to protect the low paid and to ensure equity across the labour market, or via centralised, national, direct bargaining between unions and employers, which sets minimum standards for all, through a binding contract. The Nordic system with it’s collective bargaining at National, Industry, and enterprise levels, seems to work better for workers, and explicitly includes wage solidarity.

Given the possibilities, our movement needs to consider which will serve our movement best, or some combination of the two, and strategically aim for that over the next 10 – 15 years, taking account of the last federal election defeat. Either way, minimising government and legal interference in the industrial relations system, must be an important objective, in order to better protect gains and to not rely on the fortunes of the political cycle. To arrive at such an outcome will require long term thinking, and a step by step process, as it cannot be achieved immediately.

The union movement must pursue strategic objectives, regardless of which party is in power, and not change every time government changes. Of course such objectives will be enhanced by having the ALP in power, but we should not forget, that we did not do very well with the new IR laws under Julia Gillard, which many dubbed as “Work Choices Light”. That experience reinforces the need to have strategic objectives regardless of government.

We still have the conundrum of attracting new members. There is membership growth in some sectors during the pandemic, but this will be offset by those losing their jobs arising from the pandemic. While recruiting is an ongoing, daily task, history shows that we recruit best when we are campaigning. Most unions e.g. nurses, teachers, public sector workers, industry, report big upturns in recruiting when involved in active campaigns, especially across an industry or craft. Obviously even active enterprise agreement campaigns are restricted for recruiting, because it is only those employed at the enterprise who are involved. Another reason for industry wide bargaining.

What is suggested here is not theoretical, but emerges from actual experience showing these strategies are possible. During the nineties the food unions set the agenda with their ten page, detailed industry plan for a high value added, high skilled, well paid industry, to be developed over the coming years. The large industry employers – Nestle’, Pacific Brand Foods, George Weston’s, Heinz, and several others, constructively engaged with the unions through the Australian Food Council, because they said the unions were a way ahead of them in suggesting such a strategy. The parties were discussing a wide range of issues, and within the next three or four years, these discussions would very likely have morphed into industry wide bargaining.

Unfortunately the ACTU changed tack, and stopped working through industries to focus on recruiting, which was a big mistake, a direction they reversed within a couple of years. However by then the Howard government was elected, but despite the pressure from the government on companies to disengage with their unions, several of those companies would have continued, had the union strategy continued. It proved that it was possible for unions to set the agenda, and develop industry wide bargaining over time. Similar union initiatives began in two or three other industries but were too late, as the new, destructive industrial relations environment, ensured they did not get far.

The following are some thoughts about that step by step process:

· There should be commissioned research to explore across the globe, which systems best facilitate the building of union power, wage growth, sustain union gains and help grow membership.

· The research must include an examination of which movement is handling the new work systems, gig economy etc., best.

· The research should include wide spread involvement and discussion with all unions, and their members to establish the system they believe would work for their industry/craft.

· Recommendations should be developed from the research, including the step by step process and timetable by which a new system should be aimed for.

· The process must involve active members with information to and from them, via. surveys, workplace discussions, etc.. It will also be useful to dialogue with, employers, academics, political parties, think tanks.

· Winning back the right to bargain across an industry will be an important strategic gain. Some unions have succeeded in maintaining industry wide agreements, and lessons might be learned from them. This may mean all unions in the industry, if there are more than one, agree to the same log of claims and lodging that with every company, and the employer organisation. That lays the basis for industry campaigning, and although it is illegal, it opens up the possibility to unite all workers and their unions across the industry.

· There needs to be broad agreement on a small log of claims which unions can campaign around. Obviously wages and wage theft will be paramount, particularly upgrading the lower paid, union rights, upgrading of skills, and a shorter working week/year, more paid holidays, and/or more paid study leave, on normal pay. These four issues should suffice, as too often we have long lists of demands, but very few of them get to negotiation stage. Given the post pandemic jobs crisis, many people, including non-unionists will see the logic of shorter hours as a way of sharing work around.

· Dialoguing with employers is difficult, but if the unions put forward radical new, and exciting ideas, including union strategies for improving their industry, the better employers are more likely to listen, and this is strengthened if an ALP government supports the unions.

· We should build on the dialogue beginning under the Morrison Govt.. While little will be achieved initially, it is important that it continue. The most likely issue for dialogue is to focus on skills and training, as experience suggests this issue is possible to get a useful dialogue. The tri-partite industry training councils, scrapped by the Howard Govt., should be reinstated. This would be a good starting point for the union/employer dialogue.

· Dialoguing with employers should be based on the principles of Boxing and Dancing. I.e, unions are prepared to dance with employers to solve problems, but also be prepared to box and take industrial action when necessary. The latter is critical to the success of the former.

· Such a dialogue should also include research that shows unionised workplaces are usually more productive than non-union workplaces, for which there is evidence. A good example is the Norwegian unions, Employee Driven Innovation Program, which has had an impact on improving Norwegian business. After years of union campaigning and implementing employee innovation, via industries and enterprises, even against management opposition, during the last Basic Agreement bargaining, the employers were forced to concede that the Employee Driven Innovation Program, would become an integral part of the Basic Agreement. Norwegian unions believe that management is too important to be left to managers.

· Almost certainly such a dialogue will only begin under the radar, and should initially not be under public scrutiny, and could be assisted by IR academics with networks of employers, managers, and unions.

· The scope for such a strategy to be trialled or implemented in sectors as a bottom-up approach i.e. as indicated above, to spearhead it in sectors where there is already strong unions and a reasonable relationship with the employer body, or groups of employers under a sector MOU or some other instrument.

· Central to the shift in approach is the imperative for effective worker participation in enterprises – which is critical to productivity improvement (the basis for higher wages), better quality work, and industry transformation. Here the 1986 ACTU/CAI (now part of ACCI), agreement on Employee Consultation, could be dusted off to see if it can be helpful.

The above suggestions will be difficult to implement in a movement with only 15% union density. However, the whole process should be seen as an integral part of building the membership, and increasing active involvement, within a five to ten year timeframe.

An important element of such change will mean higher union dues, while ours by international standards are low. This won’t be possible in the short term, but must be considered at some stage, and made possible because unions are delivering on the real felt needs of members.

All the above fits well with current ACTU policies, and is an attempt to find a way to action those policies.

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