Industrial Relations Under the New Keating Government
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
- (1) the appointment of Laurie Brereton to the Industrial
- (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
- (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
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
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
- "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
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.