Arbitration In Contempt
The Nature of Trade Union Power
Hugh M Morgan
In their letter to those who were asked to come to
this seminar the gentlemen responsible for this occasion
cited two primary reasons for their invitation. First,
to commemorate the memory of Henry Richard Nicholls,
the editor of the Hobart 'Mercury', who at the age
of 82 was acquitted by Griffith CJ., Barton and O'Connor
JJ., of a charge of contempt of the High Court, and
who was subsequently acclaimed by the citizens of Hobart
at a public meeting in the Hobart Town Hall on 27th
June 1911. Second, to stimulate debate in Australia
on the role and purposes of trade unions and the various
arbitral tribunals which are embedded in our industrial
I welcome their initiative. Australia's export industries
now find themselves battling on an economic Kokoda
trail. They now face survival problems of, I think,
unprecedented magnitude. But unlike the Australian
soldiers who fought the Kokoda trail battles of 1942
and who knew that the rest of Australia was watching
and praying for them, the farmers and miners today
feel that the rest of the country regards their present
struggle with unconcern.
For the rest of Australia, it seems to be business,
and borrowing, as usual.
It seems beyond dispute that the public advocacy of
many trade union leaders; the philosophical underpinnings
of the arbitral bureaucracy which stands on the shoulders
of the trade union movement; together with the insulation
of an ever growing proportion of our workforce from
the discipline and vagaries of the market place, are
responsible for this lack of community concern for
our front line troops in the world market place.
It Is, I think, noteworthy, that it is not yet three
short years since the ACTU and the newly elected Labor
Government, elected on a great wave of enthusiasm,
and riding very high in public esteem, joined with
representatives of the business sector at the economic
summit held in the House of Representatives, and laid
the basis of consensus politics---the acceptable, even
the superficially attractive, face of corporatism.
Three years later, in 1986, it is clear from the papers
to be given at this seminar, from the impact of Mudginberri
and Dollar Sweets, that there is a feeling that at
long last the dark forces, to use Star Wars terminology,
might be on the defensive.
Much has happened since 1983 to produce this change
of opinion, and whilst I do not wish to attempt a detailed
history of the period, there are two events, however,
which I think merit citation. The first was the appearance,
in the September 1983 issue of 'Quadrant,' of Gerard
Henderson's seminal essay on the Industrial Relations
Club. I understand that Paddy McGuinness claims proprietorship
of the term and he may be correct in his claim. None-the-lese,
we can date the transition from approbation to scorn
from Dr. Henderson's essay.
The second event which I wish to note took place in
August 1984. That event was the Edward Shann Oration,
given by John Stone on the eve of his resignation from
the Treasury, in which he laid the blame for our scandalous
unemployment situation, particularly amongst our young
people, on the shoulders of our arbitral tribunals
and the unions behind them.
There have, of course, been many other people who
have made important contributions to our changed situation.
President Regain and Prime Minister Margaret Thatcher
are two people whose actions and policies have influenced
opinion and events here in Australia. Our Queensland
Premier must be included in such a list of political
It seems to me that the fundamental question which
ought to be at the forefront of our deliberations,
is the origin, the nature, the purpose, of trade union
Why is it that every time the Amalgamated Metal Workers
Union is cited in the Melbourne 'Age' it is preceded
by the adjective 'powerful'?
Why is it that the Hancock report contained these
'Trade unions are, to varying degrees, centres
of power: they replace the powerlessness of individual
workers with collective strength'.
'It is a mistaken view of the pluralist society
to assume that every 'subject' is equally dominated
by the might of the State and its arms of enforcement.'
Those two sentences are, I think, pregnant with significance.
The first sentence is an attack on the dignity and
worth of the individual with the throw-away description
The second sentence would, in Elizabethan times, have
put its authors at risk for imprisonment or worse,
for treasonable utterance. It is an open attack on
the sovereignty of the state.
How could the Hancock Committee have signed their
names to such extraordinary sentiments?
Formulating such questions is one thing. Answering
them is another. To at least set out to try to discover
an answer, we must, naturally, look at the origins
and early history of trade unions. Just as Weber, for
example, studied in great detail, the life of the early
Calvinist communities in Holland and New England, in
order to trace out the connecting links between religious
belief and economic success, so should we, I think,
go back to the latter part of the last century and
look again, very carefully, at the origins and growth
of trade union ideology, in order to understand the
connections between trade unionism and economic decline.
Now I cannot pretend to be an expert on the history
of trade unionism, but I was, not so long ago, moved
by the repeated use of the word 'charisma,' (with respect
to our Prime Minister) to read Max Weber's seminal
essay on charismatic leadership. I could not help but
be forcibly struck when reading this essay, that Weber
knew all about, for example, Norm Gallagher.
Let me quote some striking sentences from this great
'The domination exercised even by a gifted pirate may be charismatic, and charismatic political heroes seek booty, above all in the form of money. But the important point is that charisma rejects as dishonourable all rational planning in the acquisition of material goods, as in the case of the charismatic war hero'.
'The charismatic hero does not derive his authority from ordinances and statutes, rather he acquires it and retains it only by proving his powers in real life. He must perform miracles if he wants to be a prophet, acts of heroism if he wants to be a leader in war. Above all, however, its divine mission must 'prove' itself in that those who entrust themselves to him must prosper'. .
However, if charismatic leaders succeed in establishing
institutions which live after them, those institutions
must make an accommodation with economic constraints,
or collapse through bankruptcy or through loss of credibility.
Weber described this process with these words:
'All charisma, however, in every hour of its existence
finds itself on this road, from a passionate life in
which there is no place for economic matters, to slow
suffocation under the weight of material interests,
and with every hour of its existence it moves further
along it. '
I think there is little doubt that trade unions were
founded by charismatic leaders in the latter half of
the nineteenth century. This was a time when unprecedented
prosperity promoted literacy as well as newspapers
and pamphlets of all kinds; publications which were
read by the rapidly growing populations of Western
Europe, North America, and Australasia.
Trade unions were a product of the nineteenth century
growth and prosperity which provided extraordinary
opportunities for charismatic leaders to establish
Trade unions in their early days were not only involved,
as Weber put it, 'in a passionate life in which
there is no place for economic matters'. They were
deeply involved in what we would call insurance or
friendly society activities---sickness benefits, funeral
benefits for example, but, as William Lane exemplified
when he set off with a loyal band of disciples to build
the New Jerusalem, or as he called it, New Australia,
in Paraguay, the charismatic element was predominant.
Now it seems to me the charismatic origins of trade
unionism are of fundamental importance to our understanding
of the situation. Established institutions, such as
church and state, have to face the recurring problem
of how to handle outbreaks of charismatic activity.
The standard response of the Roman Catholic Church,
for example, has been to establish the charismatic
leader as head of a new missionary order and send him
to far off countries to spread the gospel. The further
off the better.
In Britain, contrariwise, the extraordinary response
of the Parliament to trade union organisation and agitation,
was to grant the new charismatic movement immunity
from the law. In I906 the Campbell Bannerman Government
passed the Trade Disputes Act which gave the Trade
Unions immunity from tort.
F. E. Smith, later Lord Birkenhead, during the debate
on this Bill, said, in what was his second speech in
the House of Commons:
'We are asked to permit a hundred men to go round
to the house of a man who wishes to exercise the common
law right of this country to sell his labour where
he chooses, and to 'advise' him or 'peacefully persuade'
him not to work. If peaceful persuasion is the real
object, why are a hundred men required to do it ...
Every honest man knows why trade unions insist
on the right to a strong numerical picket, It is because
they rely for their objects neither on peacefulness
nor persuasion. Those whom they picket cannot be
peacefully persuaded. They understand with great
precision their own objects, and their own interests,
and they are not in the least likely to be persuaded
by the representatives of trade unions, with different
objects and different interests. But, though arguments
may never persuade them, numbers may easily intimidate
them. And it is just because argument has failed,
and intimidation has succeeded, that the Labour Party
insists upon its right to a picket unlimited in respect
It is important to note that the Tories, who had a
majority in the House of Lords, could have killed the
Bill. But the Tory leadership was as unwilling to antagonise
the emerging power of labour as the Liberals were anxious
to placate it. The Tories of 1906 were not Thatcherites.
As Weber has so clearly described, charismatic movements
whether led by St. Francis of Assisi, or Karl Marx,
or Lenin, are profoundly hostile to the institution
that is, sui generis, anti-charismatic, that
is the family.
An incident from the British coal miners' strike of
1984 illustrates this fundamental hostility. A father
and son worked together in a mine that was the life
blood of, what was always referred to in the British
intellectual press as, a close knit village community.
The father decided, after nine or more months of fruitless
unemployment, that he'd had enough and was going to
accept the British Coal Board's offer of a return to
work on generous terms.
His son called him a scab, and refused to let him
see his grandchildren or give them birthday presents.
The bonds that reach across the generations were thus
broken in a particularly humiliating way.
This poignant incident illustrates the power of charismatic
leadership and its ability to disrupt and defy the
most fundamental human relationships, those between
father and son, between grandparents and grandchildren.
The family is not the only institution to which trade
unions are hostile.
From the early part of the nineteenth century governments
have been suspicious of trade unions, regarding them
as rivals challenging the sovereignty of the state.
Lloyd George, as Prime Minister in 1921, and faced
with the prospect of a general strike triggered by
the miners' union, demanded that union's leaders if
they were prepared to assume responsibility for the
State, since what they were doing constituted an open
challenge to the authority of the government. In 1921,
because of the totally erratic behaviour of the miners'
leaders, the threatened general strike did not eventuate,
and in 1926, when it did, Lloyd George had long since
been replaced by Stanley Baldwin.
In Australia there have been some notable instances
of direct confrontation between the unions and the
State. It was the Chifley Government that put troops
into the coal mines in 1949; as fundamental a use of
the power of the State as could be envisaged.
The 1984 British miners' strike was an open and direct
assault on the legitimacy of the Thatcher government,
and the clashes between pickets and police took on
the aspect of open insurrection, if not civil war.
In Victoria the continuing saga of the Builders' Labourers'
Federation is noteworthy in that both union and government
see the contest as a struggle between protagonists
of comparable weight. The government, elected by all
the citizens, its legitimacy beyond question, feels
it necessary to go to the most extra-ordinary lengths
to compel employers to collaborate with it in its campaign
to bring this union within the aegis of the law.
The continuing resolve of the Victorian government
to uphold the sovereignty of the State of Victoria
contrasts with the crucial recommendation of the Hancock
The power of Australian trade unions is so great,
so that committee argued, that the new Labour Court
proposed in their recommendations will have exclusive
jurisdiction in industrial matters, but will have no
power to impose sanctions, except on employers.
A government that passed legislation setting up a
court in line with the Hancock recommendations would
be a government that was compromising its sovereignty
to an extraordinary degree. I do not think the electorate
will countenance such a diminution in the prestige
and authority of the State, and I do not think the
Hawke Government will seek to go down that path. If
it does seek to do so there is going to be a fearful
There have been many instances of trade unions seeking
to take over the execution, if not the responsibility,
of the most important prerogative of the State, the
conduct of relations with foreign powers.
On relations with South Africa, on the export of uranium,
on the maintenance and provisioning of the naval vessels
of allied powers, they have sought and in some cases
successfully sought, to impose a particular policy
on the government; not through argument, or public
advocacy, but through strikes or threats of strikes.
The use of 'industrial action' in order to impose
a particular foreign policy on the government is a
very dear example of contested sovereignty. The arguments
used to justify this conduct are, consequently, of
very great interest.
The most authoritative exposition of the legitimacy
of the exercise of trade union power, and in this case,
it was argued in relation to issues of 'economic management'
rather than foreign policy, was given by Simon Crean
in his address to the MTIA seminar 'Wrong Way Go Back'
on 21st October last. The President of the ACTU was,
in this context, discussing and defending 'the Accord.'
'What is wrong with the Trade Union Movement exercising
its collective responsibility, in terms of a genuine
partnership in this country? Given we directly represent
2.6 million members, together with those dependent
upon them, it is not an insignificant group in the
The important words here are 'collective', 'partnership'
and 'direct representation.'
By 'partnership' we can take it that Mr Crean means
partnership with the government. What he is arguing
for is 'co-sovereignty' or duumviracy, on the basis
of direct representation of 2.6 million people and
Let us, for the sake of argument, assume that his
claim of direct representation is valid, and that,
as President of the ACTU, Mr Crean does exercise plenipotential
authority for 2.6 million people and their dependants.
It follows, then, that those people enjoy, in effect
dual citizenship. They can, directly or indirectly,
vote for Mr Crean as their plenipotentiary, in his
role of President of the ACTU, and at the same time
vote for Mr Hawke as Prime Minister of the Commonwealth,
and assume that the two men will act, in partnership,
on their behalf.
Now duumvirates don't last. It is the essential quality
of sovereignty that it is unshared. That the trade
unions are, again, seeking to usurp the sovereignty
of the Crown and Parliament is evident in a speech
made last November by Mr Peter Duncan, Member for Makin,
in the House of Representatives. Mr Duncan argued for
repeal of Sections 45 D and E of the Trade Practices
Act,, because, and I quote:
'These sections not only prevent the trade union
movement from supporting other unions, but also prevent
it from supporting other community movements.'
'There can be no direct trade union action of
support of the Daintree campaign, there can be no
trade union action in support of consumer protection,
there can be no trade union in action tn support of
moves against anti-social developments, whilst Sections
45D and E remain in force'. (Hansard 19.11.85
It has been made clear, through other channels, that
this year there will be another attempt to repeal these
vital sections of that fundamental Act. The business
community has been told that major government interests
regard repeal of Sections 45D and E as essential.
These sections of the Trade Practices Act merely codify
ancient parts of the English Common Law under which
it became every Englishman's birthright, and by extension,
every Australian's birthright, that he should be able
to conduct his business or commercial activities without
intimidation by criminal gangs.
If the Commonwealth Government should seek again,
to give legal immunity to people engaging in activities
that would, under all other circumstances, be called
criminal conspiracy, let me make it crystal clear that
there is going to be a very big row. And, once again,
as with the Hancock proposals for a Labour Court, I
do not believe that the Australian people will tolerate
the attack on the sovereignty of the Commonwealth of
Australia, which would be implicit in repeal of Sections
45D and E of the Trade Practices Act.
If one section of the community demands, and obtains,
the legal privilege of organising coercion and intimidation
against whomsoever it chooses, then other groups in
the community, who may well believe, and with good
reason believe, that their livelihoods and property
are at stake, will feel justified in banding together
to protect themselves.
What the trade union leaders are saying to the rest
of the Australian community in their attacks on the
Court decisions relating to Mudginberri; in their demands
for repeal of Sections 45D and E; in their insistence,
as in the Accord, on obtaining immunity from tort;
is, to use Lincoln's aphorism 'You shall work, and
we shall eat '.
The rest of the Australian community, and this includes
the greater part of those who find themselves, willy
nilly, counted as members of trade unions, are becoming
uneasy at the implications of this position.
These considerations lead me to my final point. Union
power in Australia is, I am convinced, a pale shadow
of its nineteenth century charismatic origins. Australians
owe allegiance to their country, an allegiance which
is gladly and willingly accepted. They are today, as
they have always been, deeply committed to their families.
But the fundamental nature of trade unionism, its subversive
challenge to the authority of the State, its jealous
dislike and hostility of the family, is increasingly
recognised and intuitively understood by more and more
Australians, as the polls published by the Hancock
committee show so clearly.
Trade union power in Australia, and in Britain, is
based on a residue of legal privilege. It is that legal
privilege which has to be whittled away.