Towards Collective Bargaining, Wage Solidarity, & Minimum IR Laws 

The lesson is that we need a system which is less reliant on legislation, but based on free and independent collective bargaining, which will take two or three electoral terms to achieve, but will only happen if unions have clear, long term strategic objectives to make it happen. 

Having recently read a considerable amount of material from the Future of Work, articles in Labour and Industry, from other sources, and drawing on my long experience, I would like to contribute to this every important discussion. I am suggesting that the unions not immediately adopt what I am proposing, but providing a thesis for an active research project to examine all the potential strategies, and select the one which the studies shows will best enable the union movement to again become a major force economically, politically, and socially in Australian life. 

Winning the next Federal Election is clearly key to the future of unions and collective bargaining, as another Coalition term, will see our unions with few exceptions, becoming too small to be affective, or some disappearing altogether, probably leading to more merges for those really struggling.. 

 While agreeing with almost everything I have read, the critical importance of industry wide bargaining stands out. Some unions have maintained some form of such bargaining, and have been innovative such as seeking collective bargaining across the supply change, which is a good idea, and represents a good basis to start from. I want to suggest some longer term strategic objectives, which not only places the emphasis on collective bargaining, requiring by definition a winning back of union rights, but downplay or change the role of the FWA as a third arm, and also minimise and change the character and culture of industrial relations legislation. Such objectives, including improving relations between employers, unions, and government, will take a long time, and will be difficult. 

It is important that over time a system/culture is developed which can withstand the return of a conservative government. 

It is already obvious why unions cannot have too much faith in industrial relations legislation, when every recent appointment to FWA by the Coalition Government has been from the employers, or right wing ideologues. From nineteen hundred and four, under whatever title it operated, the IR Commission was based on government, employers, and union participation involving a certain amount of trust, and by and large it worked.  

There were times such as the introduction of the Penal Powers in the sixties when the unions had a huge fight with government and employers, but those powers were made redundant following the national strike in response to the imprisonment of Clarrie O’Shea in ’69. This massive response could never have happened without the decade of over award campaigns – discussed below, involving a massive shop stewards movement, and rank and file militancy, preparing the ground for the nationwide strike which freed O’Shea. 

The unions became skilled at using the Commission, and had many victories, reinforced by union training initiatives, providing a significant number of people who were/are competent in the Commission. However everything has changed with the emergence of Neo-Liberalism, where there is little chance of employer/union/Coalition government consensus on almost anything, which is largely driven by the ideologues and lawyers. However there is still some consensus on issues like climate change, training, industry development, among the better employers, when freed from the ideologues. 

Also the current system involves far more legal arguments, than the past, taking the issue right out of the hands of shop stewards, rank and file unionists, and even organisers have to rely far more on lawyers. In the past, during a CAC conciliation conference, compulsory or otherwise, the unions often objected to employers being represented by lawyers even QCs, and the Commissioner would usually ask lawyers to withdraw. 

We have learnt the harsh lessons of relying on government, as when the ideologues got into power they immediately stopped the funding of TUTA, and introduced Work Choices, which while it has been modified, the current IR legislation is still based on anti-union and anti-collective bargaining. 

The lesson is that we need a system which is less reliant on legislation, but based on free and independent collective bargaining, which will take two or three electoral terms to achieve, but will only happen if unions have clear, long term strategic objectives to make it happen. 

Some history. When a young Laurie Carmichael was elected as full time secretary of the Melbourne District Committee of the Amalgamated Engineering Union, (AEU) in 1958, he promoted a discussion about how the union might move beyond the shackles of the Federal Conciliation and Arbitration Commission, (CAC), to drive wages higher, and involve shop stewards and members as integral to the process. This discussion was ably assisted by Jack Hutson, who was then a shop steward, but already becoming an expert on industrial relations legislation and the CAC, eventually working in the AMWU National Research Office, and wrote two very important books on wage setting, the penal powers, and the CAC. 

Out of these discussions the “Over Award Campaign” was developed, which began in 1959. Noting that an award represents the minimum and not the maximum, there was no barrier to unions demanding higher wages and better conditions. The normal way for this to happen was for a log of claims to be lodged with the CAC, which would decide that an official dispute now existed between the unions and employers in that particular industry. 

The Metal Trades Federation (MTF) was an organisation which united about 9 or 10 metal industry unions, with the AEU at their heart, they were the driving force of the campaign. Shop steward’s meetings were convened all around Australia for them to discuss and endorse the log of claims, and they then went back to work and lodged those claims with their local employer. Later on, this was assisted by shop steward training, where they were trained in how to bargain, and lead workplace campaigns. 

The shop stewards, usually with the assistance of their local organiser began bargaining the claims with their employer, often leading to industrial action, until in many cases individual workshops achieved significant breakthroughs with many of the claims. 

In the meantime the CAC convened to hear the employers and unions put their cases for and against, hear witnesses, experts, and then normally would adjourn to make their decision. However in 1959 the ACTU CAC Advocate, was the recently appointed Bob Hawke. Working closely with the MTF, especially Laurie Carmichael, he would present not only the case for the wage increase etc., but the evidence from those workplaces where the employer had already agreed to the claims, which would run to hundreds of workshops. As well, the MTF would organise for workplaces in different suburbs to stop work for half a day to sit in the CAC gallery, and Hawke would be briefed to present those agreements from the workplaces who just happened to be in the gallery. There would be regular cheering, as Hawke proceeded, which sometimes brought forth a reproach from the Bench, which would in turn bring forth jeering from the gallery, and Hawke relished it. 

This approach was important because it mobilised the rank and file as intended, and eventually built a huge shop stewards movement, but it also consolidated the gains across the industry into the award, and did not allow the CAC to operate in a vacuum. It was a form of wage solidarity of the strong assisting the weak, as not all workshops had the same strength to battle. Carmichael used to talk about the “active 10% of hot shops”, providing the lead for the industry wide campaign. 

This over award campaigning continued successfully until the shorter hours victory in ’82. In the later years far more bargaining took place at the industry level as part of the campaign, as the CAC convened compulsory conferences to try and head off the campaign, but as the shorter hours campaign showed, they did not succeed. 

However towards the end of this period the commitment to consolidate the gains in the award waned, as stronger workshops had their own campaigns, sometimes achieving a couple of wage increases in a year, which were never consolidated in the award. Hence we began to see increasing discrepancies between the strong 10% of workplaces, and those not so strong, which has continued under enterprise bargaining. The reason for outlining that history, is to suggest there are seeds of what we might strategically aim for in that experience. Once the Accord began in 1983, the over award campaigning ceased, although as mentioned above it was losing steam any way. 

The best industrial relations system is one where unions and employers bargain collectively at national, industry, and enterprise levels, unencumbered by restrictive IR legislation, or third party interference e.g. FWA. This is what our union movement should aim for strategically over time, despite that we are in a far weakened position, and it will be very difficult. It maybe that new IR legislation could see the FWA playing a different role, in facilitating collective bargaining at all levels. 

Looking around the world, possibly the Norwegian system where the unions and employers usually bargain bi-annually nationally, over what is known as their Basic Agreement, which is the equivalent of our award, setting out standards for every worker, is a signed contract with the force of law, with no industrial action allowed during the term of the agreement. There are four Norwegian union peak councils, the largest being the LO, but they unite for the purposes of bargaining the Basic Agreement. 

Wage increases and other guidelines – working hours, conditions, holidays etc., are then bargained in more detail by the unions and employers at the industry level, who set the guidelines for detailed bargaining at the enterprise level. This holistic approach provides for co-ordination at a national level where the parties may agree on national policies, including seeking government support or legislation for some issues, deals with issues that can only be dealt with at the industry level e.g. industry wide training programs, industry co-ordination around some issues/problems, and the whole framework then assists the detailed bargaining at the enterprise. There is no involvement of a third party, e.g. government, or any other body. 

While Norwegian unions have 50% union density, the Basic agreement covers about 70% of workers, however while it is not compulsory, most of the other 30% abide by the Basic Agreement. While our system is different in this regard, our comparatively high Minimum Wage, set by FWA, following the excellent work of the ACTU every year, is binding on all employers, so this approach maybe more affective. 

It is worth noting that in the Nordic countries, Wage Solidarity was always central to the unions’ bargaining strategy, i.e. the stronger, higher paid workers would take less, so the lower paid weaker workers would get more. However this strategy has been waning, and there is less of the original solidarity. The other interesting component of the Norwegian industry wide bargaining, and most of the Nordic countries, is that they start the bargaining in trade exposed industries, in order to maintain competitiveness, which might not happen if they had to accept the wage levels paid in those industries not facing such pressures. A form of wage solidarity.  

Having said that, Norway remains one of the highest wage countries in the world, so elements of the strategy must be working. By contrast, largely because of enterprise bargaining with little ability for industry wide bargaining, has seen our system significantly break up, with huge discrepancies now between a minority of very highly paid workers, mainly in strong unions, and the majority in low paid, often casuals in the gig economy, with little industrial power, often relying on the minimum wage and award. 

Can this be changed? Possibly, but it will be very difficult given the weakened state of our unions, the unprecedented attacks on unions by government and the very restrictive IR laws, the worst in the OECD, employers, and the media.  

To succeed, one thing is certain, it will require a set of strategic objectives looking several years ahead, probably including 2 or 3 terms of ALP government, and achieving step by step reforms, which are contributing to an end result, where collective bargaining, capable of involving the members, is taking place at national, industry, and enterprise levels. 

We should be looking at IR laws which facilitate collective bargaining, rather the prescriptive laws which prevail now. These laws would start by outlining the legal rights of both unions and employers, but without being prescriptive. An example being the law in Sweden which provides the union with the right to access the information an employer is using to deny a wage rise. The law says that if the union requests that information, the employer has to provide it. In other words it is up to the union to take the initiative, which of course will happen in nearly every case. 

There is no reason why the FWA cannot be the vehicle for facilitating collective bargaining, which is hampered, because either side can refuse to participate. It requires a provision that if one party wants to bargain, the other party cannot refuse. This would also include a Commissioner convening a compulsory conference. These have been an important element of the CAC system, and required skilled, knowledgeable, and experienced commissioners, which in the main they were, compared to the present day ideologues and lawyers, most with no understanding of the complexities of industrial relations.  

Making collective bargaining the centre of our IR system, means reinstating elements of what used to apply. However this time facilitating collective bargaining should include the FWA being able to bring the parties together nationally, to discuss a much wider range of issues, such as the state of the economy, trade conditions, acceptable wage outcomes across the board, undertake background research, and maybe eventually, bargaining the minimum wage before it goes to argument in front of the bench. 

One thing the unions need to do is build a strong case for the public, and ALP government, and even the employers, to show that collective bargaining has the potential, which has been shown in the past, to be a more efficient and quicker means of settling disputes, and also can benefit employers. For example a major study released by the World Bank in 2003, which examined a 100 collectively bargained agreements from several countries, demonstrated that not only had those agreements not hindered productivity, as employers claim, but probably contributed to improvement. A large US study in the mid-nineties showed that on a number of criteria, that where unions and collective bargaining were present, those businesses which were making significant changes to improve performance, were 11% more successful, than non-union businesses attempting similar change. 

Unionised workplaces introduced technology quicker, had better training and skill upgrades, better OH&S record, less turnover and absenteeism. 

Such results, should then be the subject, for dialogue with employers, starting with the better ones who for whatever reason, still have constructive relations with their unions. Another example for research would be to show that there are significant benefits for employers as well as unions, arising from industry wide bargaining. Research shows that some issues, especially training, but also others e.g. government policies, are best dealt with via industry wide bargaining, including taking wages as far as possible out of competition, so that some companies in an industry don’t get an unfair advantage by paying much lower wages. The Nordic experience of working with those companies facing trade competition, provides another reason for an industry wide dialogue. 

Led by Iain Ross FWA Pres., and people like recently retired Vice Pres. Anna Booth, there have been attempts at using the FWA as the facilitator, aided by university IR experts, to generate constructive dialogue between the unions and employers. Unfortunately it has as yet not come to a great deal, one reason being that the distrust was still too deep, and the discussions were not sufficiently under the radar to begin with. 

However, that experience, and the Morrison Government initiative to involve the unions and employers in a dialogue re handling Covid, and how to emerge from it, which as expected, did not achieve much, nevertheless attempts should continue. Given the large changes being suggested for industrial relations, and particularly the large and longer term change in IR culture, it is unlikely that progress will be achieved, or be very slow, unless there are a significant number of the better employers on board. 

For example before we get to legislative changes, some better employers might be persuaded to enter into trials of new ways, or inviting them to join in the research which will be needed. 

Finally, it will be helpful in pursuit of the strategic objectives, if the unions present as a constructive element in the future of an industry. For example, unions, in consultation with their active members, should develop some ideas about what their industry should look like in the next ten years. How it can be environmentally sustainable, high skilled, high wage, safe, decent conditions, more productive, providing good, more interesting, and secure jobs, and where appropriate, generating greater exports. This should come right down to details, and not just be in generalities. 

When the food industry unions launched their ten year plan for a high skilled, high wage, high quality, affordable, and export oriented industry in September ’94, it created a lot of interest including among some of the large food companies, and the National Farmers Federation signed on to the strategy. The unions were applauded for their initiative, and some of the large companies, e.g. Pacific Brand Foods, Nestle, George Westons, said that they had not thought of anything like that, and were interested in how the unions and they might work together to implement the strategy. 

Unfortunately just as this initiative was getting under way, the Howard government was elected, introduced their Work Choices legislation, and put enormous pressure on companies to stop working constructively with their unions, so all but one of the above dropped off. However it demonstrated the possibilities, and things would have been very different if the ALP government had remained in office, so such an initiative will be worthwhile revisiting, especially if we can be sure of a two term ALP government. Unions must be seen as a constructive force for workers and society in general, if we are to make the strategic changes suggested above. 

In the meantime unions cannot simply leave everything to the election of an ALP Government, as important as that is. Is it possible that regardless of the government, the union movement can agree on 4 key demands e.g. higher wages, shorter hours/two weeks extra leave, rights for casual/labour hire employees, time off for training and increasing skills. These are only suggestions, but the idea is that all unions in all industries have a similar small log of claims, which will unite them across the whole movement. 

Each union would then log the claims wherever they have members, and also log them with the employers industry association, making it clear that the priority is to bargain industry wide. This of course is illegal under the pattern bargaining prohibition, but it will be necessary to break the law if the unions intend to win back industry wide bargaining, and eventually national bargaining. 

These suggestions lay the basis for a united research project, and then campaigning, something like the over award campaigns outlined above. It will require something like this to mobilise union members, despite the seriously weakened union position, and be developed to the stage that the campaign coincides with efforts to get new IR laws which begin to put the emphasis on collective bargaining, and begin to change FWA from being anti-union, and making prescriptive decisions, to that of a facilitator of collective bargaining. 

This will hopefully lead to a more democratic and flexible system, one that can survive better against a hostile government, and be a means to constantly develop our industrial relation system and culture, so it meets the demands of modern work and industry systems. 


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