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The year of the union

By Ken Wolff

For the Chinese, 2016 is the ‘Year of the Monkey’ but I think in Australia it may well be the year of the union – although not in a positive way. As it is an election year, and in the light of the Trade Union Royal Commission (TURC) report in December, we can expect the Coalition government to have a lot to say about unions during the year. Turnbull, in releasing the TURC report, has already indicated that he will make union ‘corruption’ an election issue if his legislation to implement the TURC recommendations, including the reintroduction of the Australian Building and Construction Commission (ABCC), does not pass parliament.

Unions of course will not take this lying down. The ACTU responded to the release of the TURC report by stating:

The ACTU rejects any accusation of widespread corrupt, unlawful behaviour in the union movement. We take a zero-tolerance approach to unlawful conduct, whether in the union movement or elsewhere. Isolated instances of unlawful conduct must always be referred to the police. Unions stand united to ensure any individuals convicted should feel the full force of the law. There is no place for crooks in our movement.

The ACTU welcomes sensible discussions about best practice governance. Prime Minister Malcolm Turnbull must allow space and time for these discussions to occur. This report should not be used to rush legislation that removes employee rights.

It also saw that the TURC report and a Productivity Commission review, which recommended a reduction in penalty rates, were related:

It is clear from the timing of the Royal Commission’s report that these two reports were always designed to attack the rights and pay of working people and undermine unions who defend their rights and pay.

We do not often see issues discussed in terms of workers’ rights in Australian media but the International Trade Union Confederation (ITUC, representing 180 million workers world-wide and currently led by former ACTU president Sharon Burrows) has rated Australia as having ‘regular violation of rights’. This appears in the ITUC Global Rights Index which tracks legislation that limits workers’ rights and actual incidents of violations: these are tallied together and each country then given a score between 1 and 5, where 1 represents rights being generally guaranteed and 5 being no guarantee of rights.

Australia’s score of 3 means:

Governments and/or companies are regularly interfering in collective labour rights or are failing to fully guarantee important aspects of those rights. There are deficiencies in laws and/or certain practices which make frequent violations possible.

By comparison, the USA scores 4 (systematic violations of rights) and Brazil 2 (slightly weaker collective labour rights than those with a rating of 1 but certain rights have come under repeated attack).

Interestingly, however, the USA, since a 1977 Supreme Court decision, has had a rule that public sector workers who benefit from union representation – such as higher wages and improved conditions – can be made to pay their fair share to the union and a number of states did introduce laws to enforce this. In other words, in the land of ‘free enterprise’ the union basically can claim a ‘fee for service’. (That is currently being challenged in another court case, with a ruling expected in June 2016).

In Australia, governments across the country have introduced ‘fee for service’ models into all sorts of public services but refuse to recognise it in respect to union activities and are doing as much as they can to undermine unions and workers’ collective rights. In fact, ‘fee for bargaining services’ is explicitly made illegal in Australia, other than union membership dues – but because a person cannot be made to join a union, it is possible in Australia to have ‘free riders’ who benefit from union bargaining without making any contribution. (The ‘free rider’ effect was what led to the original US Supreme Court decision.) In that regard, the ILO (International Labour Organisation) has found that in Australia, although less than 20% of employees are union members, 60% of employees work under collectively bargained conditions.

The ITUC provides quite a long list of the problems in Australia – note that these relate to a period up to early 2014: the link is here but also click on ‘In Practice’ to see the rest of the list. It includes:

  • employers have a discretionary right to refuse to bargain with representative trade unions
  • prior authorisation or approval by authorities is required to hold a lawful strike
  • restrictions with respect to the objective of a strike (eg economic and social issues, political, sympathy and solidarity reasons are not allowed)
  • authorities’ or employers’ have power to unilaterally prohibit, limit, suspend or cease a strike action
  • employers are using delaying tactics to avoid collective bargaining
  • individual agreements are undermining collective bargaining
  • many employers (particularly in the mining sector) do their best to frustrate trade union activity

Some employers try to avoid bargaining with a union and the ITUC assessment provides one extreme example:

The employer went to great lengths to avoid bargaining with the union by closing the mine for three months (to avoid certain transfer provisions in the Fair Work Act), hiring a small number of employees (21 from a required total of over 400) who were thought to be non-members, and negotiating an agreement directly with the employees and excluding the union. The employer essentially forced the employees to relinquish their rights to be represented by the union by having them appoint themselves as their own representatives for the bargaining.

In America, and to some extent in Australia, this is done under the banner of the ‘right to work’. That is a neo-liberal banner that claims each individual should be free to choose the manner and conditions of their work and not be ruled by external influences – like collective bargaining and union involvement. It was an idea that was originally abandoned in Australia in the Harvester decision in 1907 when Mr Justice Higgins determined that:

The provision of fair and reasonable remuneration is obviously designed for the benefit of the employees in the industry; and it must be meant to secure to them something which they cannot get by the ordinary system of individual bargaining. [emphasis added]

Since the 1970s, however, individual bargaining has eased its way back towards centre stage.

The attempts to reduce workers’ rights and working conditions, and remove unions from the equation, has been reflected in agreement negotiations in the Australian Public Service. Some public servants have not had a pay rise since 2014 as, at the direction of the government, public service departments delayed negotiations or included proposals that staff could not agree to. One interesting approach was to offer to maintain conditions but to remove them from agreements and make them ‘policy’. In December 2015, the CPSU (Community and Public Sector Union) warned staff in the agriculture department that:

If your rights are taken out of your agreement and put into policy, they can be removed or changed at any time. In some agencies that have voted yes this is already happening!

Just weeks after a small majority of workers said yes in DSS, management moved to change their consultative arrangements in a way that meant union delegates were no longer being consulted.

Effectively taking unions out of the industrial relations loop is part of the ‘right to work’ approach and has been pursued by the Howard, Abbott and now Turnbull governments. Turnbull may cloak it in fine words but the intention of his proposed legislation in response to the TURC report is to further erode the influence of unions.

All this may not mean much to many in the electorate but there are 1.6 million union members in Australia: that is the ABS figure for 2014, whereas the ACTU claimed late in 2015 that the membership in its records suggested a figure of 1.8 million. Either way, that is certainly the lowest level of union membership in the workforce since detailed records have been kept: it has come down from about 40% of the workforce in 1992.

While the official ABS figures suggest union membership is down to 14% of those in employment, that is slightly misleading because the ABS counts owner-managers of both incorporated and unincorporated enterprises and many, if not most, of those would not be likely to join a union in any case. Union membership only for those who are employees is somewhat higher at 17%, or 19% if we use the ACTU figure.

As at 30 September 2015, there were 15,259,399 enrolled voters in Australia. Union membership, therefore, represents between 10.5% (using the ABS figure) and 11.7% (the ACTU figure) of voters – which gives unionists about half the electoral power of those aged 65 and over, who represent 21.8% of the electorate (which also gives a clear indication why the ‘grey vote’ is so important). Even so, about 12% of the electorate is a figure that cannot really be ignored and especially so if one considers that there may be influences to non-union members in a person’s family or circle of friends.

The problem is that union members are not evenly distributed across electorates. Although I do not have actual figures, I suspect they are disproportionately represented in what are strong or safe Labor seats which is why the government believes it can launch its union attacks. It knows the attacks may cost votes in Labor seats but that will make no difference to an election outcome. It is hoping that by bashing the unions, it can gain enough votes in ‘swinging’ seats to hold on to government.

The government, however, should note that, as reported in The Guardian, Essential Research found in 2015 that 62% of Australians believed unions were important (that figure had increased since 2012) and 45% believed workers would be better off if unions were stronger (compared to 26% who thought workers would be worse off). Given those figures, government attacks on unions can backfire if that 62% begin to believe that the government is going too far – as they did when Howard introduced WorkChoices.

Before people start believing the government’s rhetoric regarding unions they should consider some of the facts, even as revealed by the ABS which by no means can be considered a propagandist for unions. The median weekly income for employed persons in a union in 2013‒14 was $1,200 compared to $960 for non-union employees (and the mean was $1,295 compared to $1,162). Overall 24% of those in employment did not have paid leave entitlements: while this includes the owner-managers, it would also include some casual and part-time workers. Of union members, however, 91% had paid leave entitlements.

In America, workers have no nationally mandated paid leave: it is entirely a matter for employers and employees and to some extent state and local regulations. It was found in 2006 that workers who were union members in the USA received on average 13 days paid leave and 8 paid public holidays while non-union workers received 9 days paid leave and 6 paid public holidays. Given our experience in Australia, it is difficult to comprehend that the amount of leave a worker is entitled to can be dependent on whether or not one is a union member.

Even with all the changes that have taken place in Australia, the Fair Work provisions include ten nationally mandated minimum standards including:

  • a standard 38-hour week
  • four weeks paid annual leave
  • ten days paid personal/carer’s leave each year and two days paid compassionate leave for each eligible bereavement
  • long service leave
  • a right to request flexible working arrangements

While these conditions may now be legally mandated, they did not arise out of the blue nor out of the goodness of heart of employers or government. Those conditions, now accepted as the norm, were fought for over many years by unions. If the role of unions is further diminished in coming years, where will improvements in workers’ conditions come from in the future?

Turnbull may think he is on a winner bashing the unions but the effectiveness of his campaign will depend on two crucial external factors:

  • the effectiveness of any union campaign against the changes he proposes (they did, after all, mount an effective campaign against WorkChoices), and
  • whether the 62% of Australians who support unions perceive that he is going too far (the unions will certainly do their best to foster that view)

So his task will not be easy and can unravel and backfire on him and on the Coalition’s electoral chances. Despite the risks, I believe Turnbull and the Coalition will persist with it because it is consistent with their neo-liberal economic agenda and has the support of their big supporter – big business.

What do you think?

Why did Turnbull promise to make union ‘corruption’ an election issue? Is it no more than his pursuit of an ideological agenda in support of big business?

Please let us know what you think are the pros and cons of Turnbull’s approach both for the Coalition and Labor.

Ken Wolff is a retired federal public servant who worked for 30 years in Aboriginal and Torres Strait Islander affairs, mainly in policy areas. That background gives him an understanding of socio-economic issues as well as the processes of government. An Honours degree in social anthropology also influences his thinking on our society. His political beliefs were moulded in the western suburbs of Sydney where he grew up (and where Jack Lang was a local hero) and at Sydney University during the Vietnam years.

This article was originally published on The Political Sword

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  1. Michael Taylor

    Thanks Ken. Great post.

  2. Kizhmet

    A timely reminder of the positive outcomes achieved by unions over the decades. Thank you Ken!

  3. John Kelly

    Targeting unions in an election campaign is part of the Coalition’s DNA. It wouldn’t be an election without it. The voters are immune to it.

  4. Wally

    “where will improvements in workers’ conditions come from in the future?”

    Forget about improvements who will maintain existing working conditions and penalty rates?

    If ever there was a time when being a union member was imperative it is now, we need unions to stand up to employers groups so our rights are protected. If you think that a union does nothing for you think again, in a union or non union workplace the wages and conditions you receive are due to the work of unions, given half a chance Twiggy Forrest and Gina would be paying half a bowl of rice a day.

    Unions need to change the way they operate so they cover more of the workforce, particularly in industries with relatively high union membership. Pursuing EBA’s for construction employees, mining sites and other industries with high numbers of employees is fine but abandoning old school awards has left millions of people at the mercy of greedy employers.

    To cite an example the Fair Work Commission consolidated modern award for an electrical tradesman is less than 50% of the EBA for the same grade worker. The divide between the salaries of the top 5% and the rest of us is bad enough but the gap between the lowest paid workers and workers on EBA’s is also growing rapidly. Unions must look after their members first but being proactive fighting injustice and working beyond the traditional scope will help the union movement improve their image and increase membership.

  5. margcal

    John Kelly, I disagree that people are immune to LNP union fearmongering as elections approach. Or I mix in the wrong circles. More often than I can believe I’ve heard people worrying about unions, strikes, disruptions and all the rest. People whose wages and conditions have improved due to union action, I might add. These people have blind spots just like pensioners, public school and hospital users, et al voting for the LNP like turkeys voting for Christmas.

  6. John Kelly

    Margcal, they must be drip fed biased information. When was the last time a strike affected anyone? Such people must still be living in the seventies.

  7. jimhaz

    Are there any unions that have different service packages for employees?

    What I am concerned about is whether a fat cat mentality has developed within unions. Regulatory capture would be a problem even for unions. Then there is the political career path issue, which is fine – unless it is taken for granted and covert.

    The problem seems to be that they cannot do much for you – a) they seem to have been legislated somewhat out of the picture, and b) globalisation is forcing an averaging down of our work conditions due to much wider competition and unchecked greed factors.

    I just wish they had a low rate for the very basics. Ie a basic like Take all actions to maintain salary per hour at inflation levels, including leave loading. Maintain rec, sick, flex leave. No personal support. Half current rate or less. Get the numbers back in, to have more power to be effective against the opposition. Get the message out to more, perhaps making them less accepting of a lowering of base conditions.

  8. margcal

    No, John, not living in the 70s. Just susceptible to that particular Lib lie that has no relationship to reality. As others are susceptible to various Lib lies. There are quite a few to choose from!

  9. Kaye Lee

    The only institutions capable of protecting us against corporate greed are government and unions. Since our current government is the political arm of corporate greed, the unions are the only group left who can save us from attacks on hard won entitlements and who can represent us in future negotiations.

    The government conveniently forgets that workers traded past pay rises away for a compulsory superannuation scheme that was supposed to be increasing.

    Another way rights are being eroded is by hiring staff on contract. Even government departments are doing this. The contracted employees have no paid leave entitlements or security of tenure.

    It is disturbing that unions are no longer able to strike about social issues. For the majority of us, our labour is our only bargaining chip when fighting against the vast wealth of those who would burn the planet for a quick buck.

    Bill Shorten did well when he said “Labor is against corruption. The Coalition is against unions.” But he needs then to be more specific about how corruption will be dealt with. His refusal to back a federal ICAC is disappointing. We need more governance of political donations and politicians’ expense claims if you ask me.

  10. Ken Wolff

    I thank everyone for their comments. Forgive me if I don’t respond individually. I agree with Margcal that there are still many voters susceptible to the Liberals approach and who believe (despite legislation to the contrary) that unions cause disruption by striking on all sorts of issues, including non-industrial issues.

    The demise of much of our manufacturing industry has played a major role in the decrease in union membership. The highest proportion of union membership now occurs in the education and government sectors. If you are as cynical as I am, you could almost see the Liberals refusal to provide government support for some manufacturers as a deliberate ploy to undermine unions and the strength of labour generally.

    Wally, I agree that unions could be doing more but they are restricted by the Fair Work provisions. As ITURC pointed out, employers do not have to negotiate with unions and will sometimes go to extreme lengths to avoid unions. It is logical that in a small workplace negotiations could take place without union involvement but once a workplace is getting around 50 or so, there needs to be some form of coordinated negotiation, not just individual bargaining, and that is where unions should be involved. It only takes one union member on a worksite to say they wish to be represented by the union that triggers the Fair Work provisions regarding union negotiations.

    Kaye Lee, I agree that the legislative provisions that we cannot strike for social and solidarity reasons undermines our capacity to create change in society. Many countries have undergone social change through strikes and demonstrations led by unions but that is now denied to us in Australia – who benefits from that!!!

  11. Kyran

    Seems to me the system of ‘workplace rights’ is broken beyond repair. The destruction has occurred over decades. The demise of the manufacturing industry has been a serious blow to union membership, without a doubt. The casualization of the workforce is another major factor. Other factors, in no particular order (and definitely not complete), include the following.

    The rampant abuse of ‘ABN’s’ to frustrate the definition of ’employee’ as opposed to ‘subcontractor’ is another major consideration. If what I have seen in the private security industry is anything to go by, workers are systemically treated as subcontractors (regardless of the ‘sole source’ provisions) which serves to deprive them of workplace rights such as leave entitlements, superannuation, workers compensation, even minimum wages in many instances.
    “Overall 24% of those in employment did not have paid leave entitlements.” I suspect that is a conservative estimate.
    I can’t find any reliable information on the likely loss of revenue to the ATO. My guess would be that it is substantial.

    Another consideration is unpaid overtime, estimated at over $100 BILLION per annum, for those ‘fortunate’ enough to have full time salaried employment.

    Another consideration is protection of workers entitlements on the demise of a corporate entity. The Dick Smith saga is merely the latest in a long corporate history of companies going broke and their employee’s left waiting for what is owed to them, whilst the beneficiaries take the money and run.

    Another consideration is the rampant abuse of 457 visa’s, which serve to not only rip off the ‘imported’ worker, but lower the basic minimum conditions for any ‘domestic’ competitor for the same job.

    This is before any reference to the education and training of the up and coming workforce, our youth, which we have privatised to the point of ensuring the profits of the training provider before ensuring the standards to which they should comply.

    These are merely some of the reasons I regard the system is broken beyond repair. The unions ability to effect change was largely due to the one significant power they had, the right to withhold their labour, their right to strike. My suspicion is that the loss of this right has led to a perception of impotence by many of their members. At the very time the members and the wider public, need them most.
    Thank you, Mr Wolff. I think I’m going to have an Eeyore day! Oh dear. Take care

  12. Ricardo29

    Globalisation gets a mention but I wonder how many people realise the extent to which this process, aided and abetted by (sadly) both major parties is contributing to the increasing powerlessness of unions. Sales of companies to foreign ownership, free trade agreements and the iniquitous TPP are other ways employee conditions are debased. We don’t need the Building industry watchdog, we need something that targets employers like 7/11 and those on last night’s 7.30 dudding seasonal migrant pickers. I agree with Margcal on those who should be voting Labor or Greens but blindly suck up LNP lies.

  13. Ken Wolff

    Kyran, I agree with your expanded list of factors affecting union membership but if I went into many of those issues the article would have been twice as long. Perhaps there is scope for a follow-up article or two.

    Ricardo 29: Unfortunately, we will never get an employer ‘watchdog’ while the Coalition is in power. Even Labor would be reluctant because there would be a strike by capital. And that raises another issue. While there are provisions (I think – someone correct me if I’m wrong) in the Fair Work Act regarding employer ‘lock outs’, there is no legislation controlling strikes by capital and that can be a more powerful threat against workers and government than almost anything else. Your comment about gloablisation, the TPP, etc also provide more fodder for a follow-up article.

  14. Kyran

    It seems to me that the discussion of ‘unionism’ is emblematic of the broader conversation on notions of ‘society’.
    The preferential treatment of ‘capital’ over ‘labour’ predates Thacher/Reagan by centuries. All those two did was globally enshrine in legislation the protection of ‘capital’ over ‘labour’. In the ensuing decades, the ‘capital’ end of the equation has obtained power beyond its worth.
    Just as in broader society, the wealthy now have entitlements, ironically ensured by the contributions of those worse off.
    Both conversations are desperately overdue, but must reflect notions of equity and fairness. In my opinion, that conversation is not likely to occur in the current global environment of ‘profit first, people second’. Been a while since I looked at the International Labour Organisation web site, but it’s interesting to note
    “The ILO was founded in 1919, in the wake of a destructive war, to pursue a vision based on the premise that universal, lasting peace can be established only if it is based on social justice. The ILO became the first specialized agency of the UN in 1946.”
    Nearly 100 years later, we have gone backwards. At the risk of sounding like a grumpy old socialist, the withdrawal of labour will hurt capital far more than the withdrawal of capital will hurt labour. If only our politicians (and unions) would give that a try!
    Thank you Ricardo, for the reminder the issues are global. Sorry for going ‘off track’, Mr Wolff. Take care

  15. Ken Wolff

    Kyran: not ‘off track’ at all. There are, as you say, much wider implications.

    While I agree in theory about withdrawing labour (also being an unreconstructed Leftie or grumpy old socialist), history tends to show that it doesn’t work. In Australia and in England when strikes have dragged on for months, it has usually been the workers who have been forced back to work, either accepting depleted conditions or only very marginal improvements. That makes sense, because the bosses/owners/capitalists are only a few individuals who can survive on their capital for long periods: the workers, however, living almost day to day, or at least wage packet to wage packet, cannot long survive. Even when unions have supported longer strikes, there came a point where the union resources were also stretched to the verge of bankruptcy.

    The Fair Work Act would not allow such strikes to happen now. Although if someone/some union challenged the arrangements and people were gaoled for striking, that could have an impact on the public view. I think it fair to say that most Australians would still baulk at a person being gaoled for striking.

    You might be interested in a couple of articles I did a year or so ago on TPS: ‘Bankers 3 Democracy 0’
    and ‘Whose responsibility?’

  16. Kyran

    In the current environment, the Fair Work Act is little more than an oxymoron.
    Any scrutiny of ‘work place death’s’ usually shows construction is top of the list, with agriculture being next. Yet we need to investigate the union, not the employer. Unfortunately for farmers, they don’t have a union, and their collective bargaining is being whittled down by Wesfarmers and Woolworth’s.
    I was in Dublin when ‘Wapping’ and the ‘Coal Miners’ strike’s were happening. Having read through your links (which I will re-read, due to their complexity), I suspect we are in furious agreement.
    The notion that social responsibility is economically unviable doesn’t make sense. The most recent ‘economic forecast’s’ on the NDIS are merely a recent example.
    Due to our current legislation, having referenced Wapping and the Coal miners, there can be no national strike. Imagine if the next ‘tradie’s RDO’ coincided with a truck load of people ringing their bosses and saying “My bad, I’m crook.”
    “an unreconstructed Leftie or grumpy old socialist”
    I’m good with holistic approaches to problem’s. It ain’t going to happen in the current environment. Take care

  17. Wally


    “Fair Work Act is little more than an oxymoron”

    You are correct, with unions placing more emphasis on EBA’s the old award system referred to in the fair work act is so far behind the times ii is barely worth the disc space it occupies. In industry we have workers with the same skills/qualifications who are paid totally different hourly rates because one worker does some work on union sites (covered by an EBA) and the other doesn’t (Fair Work Act Award).

  18. Kyran

    Good post, cornlegend. Reminder of a bygone era. Hawke, from memory, espoused ‘accord’, as opposed to little john’s ‘discordl. Wally, the correlation between abuse of the ABN system and EBA’s are, in my opinion, inarguable. The system has been robbed of a minimum standard.
    Take care, both of you.

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