Standing Fast

Industrial Relations Under the New Keating Government

Paul Houlihan

This paper endeavours to look at how industrial relations in Australia will be affected by, and because of, the success of Paul Keating on March 13th this year.

It will consider a number of issues germane to the subject:

(1) the appointment of Laurie Brereton to the Industrial Relations portfolio;
(2) Paul Keating's speech to the Institute of Directors on April 21st;
(3) the terms of the apparent deal done between the Government and the ACTU on this issue; and,
(4) try to answer the question "why now?".

The appointment of Brereton was probably the most unusual and interesting in the new Ministry.

Brereton is from the "political" rather than the "industrial" wing of the Labor movement. He has what is best called a 'colourful' past, to borrow a phrase from the Fairfax press, but he also has an awesome reputation for achievement---frequently without any great deal of political finesse.

He gets things done, often by 'doing over' the people who are opposed to him.

His appointment needs to be seen from two perspectives:

(1) the relationship between the Government and the ACTU; and
(2) the role of the Labor Council of NSW in the NSW Right faction of the ALP.

As to the relationship between the Government and the ACTU, the reality is that it is really a relationship between Keating and Kelty. There is very little real relationship outside of that very important one.

Obviously the articulate Mr Ferguson has been given a certain liberty in which he can talk about the "Feral Govmin" without getting into trouble, but there is no sign of any relationship there. It is all about Keating, Kelty and their agendas.

And that brings us to the role of the Labor Council of NSW. Bill Kelty's agenda very clearly calls for the abolition of the State Trades & Labor Councils with all authority being vested in the ACTU. He sees these bodies in the classic Leninist mould as being "counter centres" and wants them removed.

Kelty has no real problems in achieving this goal except for Victoria and NSW. Those States are the only two TLC's with any financial strength. Victoria is of course enjoying the enlightened leadership of John Halfpenny at the VTHC and what an interesting circus that is. Kelty wants Halfpenny to go---Halfpenny wants Kelty stuffed and mounted and of course Jeff Kennett wishes "long life and prosperity" to both of them.

In NSW, the Labor Council is led by Michael Easson. He is about as far away from Halfpenny, and indeed Kelty, as you can get.

It is important for us all to remember that the nature of politics in NSW is different to the rest of the mainland, having far more in common with Tasmania than any other State. That is so for a singular reason, namely the legitimacy of Labor Governments in those two States and that legitimacy in large part springs from a well led union movement.

Moreover, the union movement in both States is used to having Labor governments around, and used to the limitations and restrictions that that causes. They are used to power, and particularly in NSW, they seek power with a clarity of purpose that could well be the model for other parts of the political ecology in our society.

It is the control of the Labor Council that makes the NSW Right an effective, well trained and highly competent political operation.

My theory is this. Kelty can do what he likes to the other Labour Councils---Brereton (of the NSW Right) is there to ensure that nothing happens to the NSW Labor Council.

The second aspect that I want to traverse in this paper is the really quite remarkable speech (and its surrounds for want of a better word) that the Prime Minister gave to the Institute of Directors in April.

I say "surrounds" because for a period of two days prior to the speech there was considerable speculation that the PM would announce the Government's repeal of s.134(C) of the Industrial Relations Act 1988.

That section, just put there by the former and unlamented Minister, Senator Peter Cook, laid down that no employer could register an enterprise agreement unless the agreement was made with a union.

'Fair enough', I hear you say, that an organisation that can claim to represent 27% of private industry employees should have 100% of the say!

Interestingly this proposal never actually made it into the PM's speech at all. It has figured very largely in all the discussions about this speech but it doesn't actually appear in it.

It has the appearance, to the uninitiated, of what was described in the Reagan White house as "creating deniability".

The speech is in fact a fairly ordinary speech---the PM accepts the credit for what went right in the eighties and blames the recession for what went wrong. Pretty much par for the course.

The importance lies in a few sentences:

"The national interest depends on business---and to a very considerable extent I mean small and medium sized business."
"And by tying wages growth increasingly to productivity, unit labour costs will remain competitive."
"It depends crucially on Australian workers, who must continue to adapt and change and win for themselves the increasing incomes that are within their grasp."

Complaining about the slow pace at which enterprise bargains have been ratified, the PM points to the fact that 800 agreements covering three quarters of a million employees have been ratified, i.e. the average size of those firms is 920 employees. Hardly the small to medium sized business the PM is talking bout.

Throughout the speech the tone is for change. In the public debate both before and after the speech, the discussion is about change. Given Keating's record, I think we must expect real change to the IR system in Australia, probably along the lines set forth, not in the speech per se, but in the surrounding sound and fury.

If real change is to happen, then s.134(C) must go or be emasculated in some way as to render it harmless, and recognise as Keating clearly does, that if small to medium business is to be the motor of the economy, then union involvement in that sector (which is negligible today in terms of union membership) cannot be allowed to impede the motor from running. That's the message and that message has really got the 'Club' upset.

The next area I want to touch on is the terms of the deal that will be done which will enable Keating to make the IR reforms he says he wants to.

Again, an understanding of how the labour movement works is useful to grasp here as well.

A long time ago now, Charlie Oliver, the legendary AWU strongman, explained to me that his business was the same as GJ Coles---cash and carry, nothing for nothing and not much credit.

The Liberals of course are operating a Georges, in the age of Woolworths.

From discussions I've had since Keating's speech with senior union people, two things are very clear:

(1) Keating is going to remove the unions' exclusive rights under s.134; and
(2) there are a number of "quids", "pros" and "quos" attached to this proposal.

Firstly, there is no doubt that ss.45D & 45E of the Trade Practices Act are scheduled to go. I think it is hard to see how this can be prevented, and further, I think that if we get rid of the unions' exclusivity it is a fair trade. I say that because today, even the most club-footed union official is too deft to put himself in breach of 45D or 45E.

Secondly, Keating has undertaken to legislate for a "right to strike". This is of course said without any tongue in cheek, although it should have been--- this is the Labor Government that got the Victorian Supreme Court to lay down that there is no right to strike in the Airline Pilots Dispute (1989). One could say it is appropriate that having determined no such right existed, now they are going to confer it.

Again, I don't see this as being a very big deal at all. Despite the law, (and anyone with any knowledge of the area knew there was no right to strike) everyone believes that there is a right to strike---and most importantly, support the right to strike.

Now for those two issues the Keating package includes a couple of beauties. Let's look at the main points:

(1) removal of the exclusivity of union representation;
(2) the winding up of the Trade Union Training Authority;
(3) the winding up of WorkCare Australia;
(4) the 'right to strike'; and
(5) removal of ss.45D & E.

When I put it to a very senior union official recently that they weren't doing very well out of this deal, his reply said it all: "What do you want me do, start campaigning for John Hewson?"

The final issue I want to address is why is all of this happening now?

Within the Labour movement there has always been a division between the industrial, i.e. union side and the political side of the party.

This divide has always carried with it substantial status differences reflecting the founding role of the unions in the ALP. It also reflects the belief union officials have that they are the more pure representatives of the workers than are the compromised and careerist politicians.

Of course the rules of the ALP reflect this as well, generally giving about 60% of voting rights to affiliated unions and the remaining 40 to Branch members.

Another key area of division is the constant call by union delegates for the Parliamentarians to pay an increased proportion of their salary back to the Party which enabled them to earn their exalted salaries.

As we can all understand, Labor politicians, being merely human, find all this patronising and insulting nonsense fairly hard to take. But they have had to take it for years, largely because, no matter which measure you chose to use, the trade unions had been a lot more successful than the ALP.

Up until the 1980s that was.

If we simply look at what has happened at a federal level during the period of Labor's ascendancy, the role of the ACTU and of the union movement generally, has been enormously empowered.

There are union officials on every Board from the Reserve Bank down. Through the Accord process, the unions are equal partners in Government. Legislation has been re-written to facilitate union amalgamations.