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Should There Be a Freedom To Strike?

Graham Smith

Today we are debating whether there ought to be a right to strike in Australia. For reasons which I will state later, I prefer to couch the debate in terms of a freedom to strike rather than a right to strike. This is because I regard the freedom to strike as a fundamental freedom which has a place in a free and democratic society alongside other fundamental freedoms such as freedom of speech, the freedom to vote, the freedom to hold property and so on. The term 'right' as distinct from 'freedom', implies a privilege which others do not share and which is at their expense. As I shall argue, this is not the way in which we should view the freedom to strike.

It is important in a debate such as this to clearly articulate our fundamental assumptions. Why we believe the freedom to strike is important. For a start the freedom to strike is not an inherently socialist principle. We have seen that socialist societies have equally been capable of repressing the freedom to strike for the so called common good, as have other societies. The freedom to strike is a fundamental human right because it is an essential ingredient of a free and democratic society and of freedom itself. Recent events in the Soviet Union only go to underlay this. Isn't it ironic that in the week during which I have been preparing for this debate that a headline should appear in the 'Herald-Sun': 'Ban Strikes-Gorbachev'. In addition to assuming that we all desire a free and democratic society, I also make an assumption that we have a common goal of creating a fair and just society.

A freedom to strike, like all other fundamental freedoms, cannot be an absolute right. Just as the law of defamation proscribes the freedom of speech in our society, there must be restrictions on the freedom to strike. We cannot have a situation in which the full flowering of one freedom effectively eliminates other freedoms. So, as I will state later, the freedom to strike must be proscribed in essential services and probably in situations of genuine secondary boycotts. It may also be that in the context of a truly arbitral system of industrial relations the freedom to strike should, too, be rather restricted.

We should also be absolutely clear about another fact. That is, that there is in Australia at the present time no right to strike or no freedom to strike as a matter of law. The industrial torts in combination with ss 45D, 45E of the Trade Practices Act make every form of concerted industrial action lawful.1 If there is any freedom to strike in a defacto sense then it only exists because employers do not, in all cases, exercise their legal rights. So what we are talking about here today is not whether an existing right or freedom should be enshrined in legislation, but whether something which does not presently exist in law should in some circumstances be permitted. It is a nonsense to say, as did Peter Costello in a recent letter to the Age newspaper (5/04/91) that 'the individual has the freedom to strike 'because' employees in Australia are free to withdraw their labour (strike) on proper notice without any liability'. This is because the very essence of a strike is the concerted withdrawal of labour usually, but not necessarily, involving concert with a trade union.

As Professor Sykes said in his seminal work Strike Law in Australia:

    There may be difficulties as to whether the word 'strike' is properly applied to particular situations, but there is little difficulty about the general notion conveyed. The general notion is simply that of a concerted refusal to work, a 'downing of tools', with the object of thereby gaining some concession or wresting some advantage from some other person who in normal circumstances would be an employer. The notion of 'concert' is essential. The right of the individual to terminate his employment has always been regarded as his inalienable right under a free democracy. Nor would any government feel obliged to apply any sanction against the action of a number of employees who, without concert, happened to quit the employment at roughly the same time. These situations contemplate, however, individual action only. The term 'strike', in contradistinction, is usually applied to the situation where the withholding of labour services is done pursuant to a combination or agreement designed to secure some form of industrial benefit.2

I will turn now to less abstract considerations of this issue. Members of the H R Nicholls Society have in the past placed considerable reliance on the argument that employers should be free to exercise their common law or civil law rights. They place great reliance on the notion that the common law is a wonderful beast which somehow or other applies to everyone, and that unions in any event should not be above it. It is, of course, living in a dream world to reify the common law in this way. For most of this century we have passed massive amounts of legislation to overcome inherent injustices and weaknesses in the common law. Section 45D of the Trade Practices Act is just one example, but looking a little wider afield, other provisions of the Trade Practices Act itself also seek to ensure freedom of competition in the market place and to prohibit anti-competitive and monopolistic practices. The common law quite clearly failed to do these things so the legislation was necessary. Company law too has, of course, undergone massive statutory modifications because the common law has totally failed to protect the rights and freedoms of individual shareholders. But if, as members of the H R Nicholls' Society have been want to do, we look to the common law as a source of inspiration in this area, we can see massive inconsistencies in the common law itself. Two important common law doctrines have sought to provide a foundation stone for the freedom of workers in an analogous sense to the freedom to strike. In the first place the restraint of trade doctrine strikes down contracts which unreasonably interfere with the worker's freedom to trade. The doctrine has its roots in a philosophy that workers should not be slaves. As Lord Justice Bowen said in Davies v Davies [1886] 36 Ch D 359: 'The law ... allows a man to contract for his labour ... but it does not allow him to attach to his contract of service any servile incidents---any elements of servitude as distinguished from service'.3

The other doctrine is the rule against specific performance of contracts of employment. It too has its roots in a notion that people should not be forced to work where the relationship of trust and confidence between the employer and the employee has broken down.

It is ironic then, that the common law industrial torts and the kinds of injunctions which are granted under them cut directly across these common law doctrines. They in effect force workers back to work against their will.

Another myth pedalled by opponents of tort immunity for unions and workers is that the torts apply equally to all in our society. That business is equally subject to the industrial torts in particular. In abstract---removed from the practical operation of the torts---this claim is superficially valid. But it ignores the fundamental difference between business corporations and trade unions. By and large the torts make unlawful concerted or collective action or threats to cause third parties damage. For instance conspiracy to injure, three party intimidation. But a large business corporation acts as a single legal entity. Decisions made within the corporation to harm or damage workers e.g.; to make retrenchments, or to remove over award pay are made behind the corporate veil. Company directors or managers may 'conspire' to do these things but it cannot ever be proved. Such decisions are not democratically made or reported and the ultimate decision is made in the name of the corporation alone. But unions cannot hide behind such a veil of secrecy. Not only are they inherently democratic and open organisations but they are required by Industrial laws to be so. A decision to strike will generally be made by the membership in concert with the union's officials. The practical effect is to make the democratic nature of unions a liability in law. It is all too easy for lawyers to prove action in concert and by whom. So unions are not equal before the law once we move from abstract principles to the real effect of the law.

Those who claim that unions are equal before the law also ignore the historical context in which the industrial torts developed. How many of you have read the seminal cases through which the various torts developed. If you have not you should do so before you go around waxing lyrical about the common law. A good starting point would be a book I have co-authored with Ron McCallum and Marylin Pittard, titled 'Australian Labour Law'.4

An examination of the development of the torts shows that they were evolved from principles of general application and developed to restrict the statutory right to strike given to British trade unions by the Trades Disputes Act 1906. Under that Act (which was itself a legislative response to judicial decisions)union industrial action was protected from tort liability, if it was in furtherance of a trade dispute.

Such action still is immune in Britain if an appropriate secret ballot of the members favours the strike! But the British Courts---arguably without Constitutional authority to do so, have sought to emasculate these so called 'immunities' in a misguided attempt to balance out the economic power of unions and employers. Many argue---legitimately I believe---that they have tipped the balance too far to the employer side.

In Australia---where unions outside South Australia enjoy no immunity in tort---the blind acceptance of the British cases into Australian law has resulted in a situation where there is no right to strike. In my view the widespread use of the torts is going to make the enactment of some form of statutory positive right to strike inevitable. Even under a Liberal government! Members of the H R Nicholls Society may be incredulous at this suggestion but consider our obligations under international law and the strengthening of the moral force of UN Covenants following the war with Iraq. Australia is a signatory to the UN International Covenant on Economic Social and Cultural Rights. Article 8 of that Covenant provides:

The States Parties to the Covenant undertake to ensure...

    (d) The Right to strike, provided that it is exercised in conformity with the laws of the particular country.

The article goes on to make an exception for the armed forces, police and the public service---permitting restrictions on their rights to strike . Additionally it does not permit states party to the ILO Convention on Freedom of Association and Protection of the Right to Organise 'to take legislative measures which would prejudice, or apply the law in such a manner as would prejudice, the guarantees' provided for in that Convention. The net result, given that Australia is signatory to the ILO Convention, is that restrictions on the right to strike in Australia may only be substantial in the armed forces, police and the public service. The 'law must not be such as to impair, nor must it be so applied as to impair, the generally accepted rights of trade unions' to take industrial action.5 Otherwise a State will be in breach of the Covenant.

The obligation to ensure freedom to strike is taken seriously by many Western, and even Third World Countries. Take for instance Act No. 7783, June 1989 enacted in Brazil. Clause 1 of the Act provides that 'the right to strike shall be guaranteed. Workers have the right to determine when the right to strike shall be exercised and to define the range of interests to be defended by strike action'.

The Act goes on to impose restrictions on the right to strike, including

  • a requirement of 48 hour notice of a strike
  • a requirement that 'demonstrations and acts of persuasion by strikers shall not impede access to work, impose threats or cause harm to persons or property'
  • a provision that strikes will merely 'have the effect of suspending the contract of employment'
  • strikes in essential services require 72 hours notice.

Viewed as a package, the Act seems to an Australian, to be remarkably benevolent to workers, but in reality all it achieves is conformity with the UN Covenant. The fact is, that Australia is, in its legal approach to strikes way out of kilter with the rest of the world. Most European countries have legislated positive rights for workers or unions to strike6 and even Japan has the right to strike enshrined in its Constitution. It was put there after World War 2 as a protection from fascism. If you doubt my assertion that Australia clearly infringes its obligations under international law by failing to ensure a right to strike---consider carefully the following statement made by an Australian Federal Court Judge at a Law Asia Conference in Delhi, India in 1990:

    The existence of the vast array of legal constraints to the taking of strike action Australia, which has been described in this paper, makes it clear that no-one can speak truly of a right to strike in Australia. There is no mere circumscribing of the right to strike, the laws in conformity with which the right may be exercised, as is required by the International Covenant on Economic, Social and Cultural Rights. Not only does Australian law not contain a positive expression of the right, its effect is to make all participants in any strike (except in South Australia) subject to civil liability for damages and injunction, and to penal liability for contempt of court if the strike persists after an injunction has been granted, even if the injunction is granted without a final hearing. Further, participants in many strikes are liable to civil and criminal penalties. Unions may be crushed financially, and deprived of their legal personality and their ability to represent their members in the conciliation and arbitration systems.7

Of course, a freedom to strike must be tailored so as to be compatible with a countries industrial relations system. And it must protect the rights of employers and the community at large. It is all a question of balance.

It is often argued that a freedom to strike is incompatible with our system of compulsory arbitration. I will deal with this argument in a moment but if I may first make an aside about the relevance of the argument here today. Unless I have grossly misinterpreted the views of members of the H R Nicholls Society, it seems you would prefer not to have a system of compulsory arbitration. This presents you with a dilemma---if the major justification for greatly restricting the freedom to strike is removed---how do you justify your argument that freedom to strike legislation is unnecessary? In passing I merely note that New Zealand has included a positive right to strike in its recent Employment Contracts Act!

Anyway, if we return to the broader argument I should first like to quote once again from Professor Sykes.

    It cannot be said that the Australian arbitration system is completely compulsory at all points. But in so far as it predicates that the award or decision made by the Court has legal force, it is asserted that it must assume that a strike which has for its object or involves the disobedience of the award must be illegal. This matter is more fully discussed later, but for the moment it must be remarked that the matter is not so simple as it sounds; it depends very much on the nature of the Court award. The pattern of many awards is that of the imposition of minimum obligations on the employer and not the imposition of obligations on the part of the employee. Theoretically it may well be argued that the union should be able to struggle for the obtaining of further concessions above the prescribed minimum limit binding on the employer and use the strike weapon for that purpose. The matter of an award imposing bi-lateral obligations may well be different.

    Certainly the framers of the Federal Constitution envisaged the arbitration power as introductive of a 'new province for law and order' where legally regulated processes would replace the law of the jungle. Nowhere is this theory more strongly expressed than in the writings of the late Mr. Justice Higgins, the second President of the Commonwealth Arbitration Court, but there is also abundant evidence of its strength in the Convention Debates and also in the debates in the Federal House following the introduction of the first Commonwealth Conciliation and Arbitration Bill in 1903.8

As we all know, the arbitration system has largely failed to make strikes redundant---or to create a new province for law and order. But to some extent the reasons for this are made clear by Professor Sykes. First, awards are by and large only minima---and bind the employer.9 Second, the system envisages forms of collective bargaining with arbitration as only a last resort.

One reason why the 1980's has exacerbated the dilemma about the right to strike is that the centralised wage system has on the one hand tried to encourage collective bargaining---or productivity bargaining through the award restructuring process---but on the other to make awards a maximum through the no extra claims undertakings. The only way to make such a system work---and it is a system which I argue is inherently corporatist and coercive---is to greatly restrict the right to strike. Ask the pilots! (and if you want to follow up my arguments on this see my article titled 'From Consensus to Coercion: The Australian Air Pilots Dispute' (1990) 32 J.I.R.238). In this regard I thought Kenneth Davidson remarks in a recent article in the Age on the right to strike rather perceptive. He said two of the industrial relations lessons of the 1980's are:

  • The right to strike is incompatible with a centralised wage-fixing system within Australia's arbitration system, and;
  • Legal sanctions against strikes by groups of workers who step outside the system are likely to be more effective if the sanctions against renegade groups are supported by the rest of the trade union movement.10

So what is the answer?

We must search for a system of industrial relations which results in less strikes---not because they are banned---but because the system makes more obvious to the parties that strikes are in neither of their interests. I believe that such a system will not be one based purely on enterprise bargaining or individual bargaining. It is possible to maintain the fundamentals of our system of industrial award regulation---if only to maintain basic rights about matters such as unfair dismissal, maternity leave etc.---but link it with other mechanisms designed to engender the mutual self interests of labour and capital. Mechanisms such as profit sharing and employee share ownership can go a long way towards achieving these ends. But less confrontationist union and management attitudes are also essential.

So my hope is that the freedom to strike legislation I am arguing for, will become a dead letter. An anachronism on the statute books---rather like the Constitutional guarantee of the freedom to strike in Japan.



References

    1. See Gray, Ewing.

    2. Law Book Co., 1960, p.26.

    3. Davies v Davies, at p.393.

    4. See R.C. McCallum, M. Pittard and G.F. Smith, Australian Labour Law: Cases and Materials. Butterworths, 1990. See also Wedderburn, The Worker and the Law, 3rd ed. Penguin, 1986.

    5. R. Ben-Israel, International Labour Standards: The Case of the Freedom to Strike, Klumer, 1988, p.103.

    6. See Roy Green, The Right to Strike: Options for New Industrial Legislation, Evatt Foundation, 1990,. pp.19-20.

    7. Peter R.A. Gray, 'The Right to Strike in Australia' at pp.21-22.

    8. Sykes, Strike Law in Australia, supra, at p.6.

    9. This observation is subject to any 'no extra claims' commitment made by a union to the IRC and is subject to provision such as Section 312 of the Industrial Relations Act 1988 (Cth). 10. 'The Right to strike poses a dilemma for unions', The Age, March 1991.



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