Tenth Anniversary Conference

A Retrospective

Ray Evans

One of the most enduring images in the history of western culture is the city where people live together in peace and concord, and do so at the very highest level of human achievement.

A memorable quotation in this tradition of this image of the great city is from Alceus, the Greek poet of 600 BC

"Not houses finely roofed, nor the stones of walls well built, nor canals, nor dockyards, make the city, but men able to use their opportunity."

Those memorable words could serve as the motto for this Society, and my summary of the H R Nicholls achievement is that together we have drawn a map which will enable those of our fellow Australians including, we hope, our political leaders, who seek to travel to such a city, to make that journey.

You all know the story of the traveller in Ireland who had become lost, and asked a local farmer for directions to Dublin. The answer he received was not helpful. "If I were going to Dublin", the lost traveller was told, "I wouldn't start from here."

Contrary to the gloomy advice of the Irish farmer, the H R Nicholls Society can offer directions to all who inquire. The map we have drawn over the last decade will provide the diligent pilgrim with all the information he needs concerning the direction he ought to take to reach the great city we seek. And the map will serve its purpose wherever the starting point may be.

Now in drawing this map we had to perform a task similar to that which Colombus carried out more than 500 years ago. Colombus' great problem, in seeking support for his voyage westward across the Atlantic, was that most of his contemporaries believed the world was flat.

Our most difficult problem, a decade ago, was that many of the business and political leaders in Australia at the time, but particularly the employer representatives of the Industrial Relations Club and their friends in the Liberal Party, were totally convinced that their world was flat, and that those extremists who argued that it was round were mad, bad, and dangerous to know.

The most authoritative exposition of the flat earth doctrine in our time was the Hancock Report. It was that report, which should have been sub-titled "An Official Proof that the Earth is Flat" led directly to the establishment of the H R Nicholls Society. The three people who wrote the report were Charlie Fitzgibbon, formerly the Federal Secretary of the WWF, Professor (as he then was) Keith Hancock, and George Polites, whose membership of this Committee was the culmination of a life-time of diligent service "representing" employers within the IR Club, or "the system" as it has become widely described.

The most important passages in the Hancock report were the two paragraphs arguing that trade unions, because of their alleged power, were entitled to different treatment from the rest of us by those entrusted with judicial authority. This doctrine of trade union privilege was a C20 version of the medieval doctrine of benefit of clergy.

On the rule of law, the Hancock Committee said the following:-

"if we ask why civil litigants accept the adjudicators' decisions (Hancock means court decisions) we find part of the answer in the ethics accepted by the disputants; but part, too, lies in their relative weakness. The two factors are inter-related: the ethic of accepting decisions gains strength from the difficulty of doing otherwise."

In two sentences the Hancock Committee thus pronounced the end of the rule of law. Court decisions are based, they suggested, on the relative strength of the disputants. We were then led to infer, from the unsupported and outrageous statement that our courts find in favour of the strong, that courts ought to do so. Such a doctrine then enabled the Hancock Committee to propose immunity from arbitral sanctions for trade unions on the grounds that trade unions are, and I quote;

"centres of power:- they replace the powerlessness of the 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."

The fact that George Polites AC CMG MBE signed that document revealed the extent to which employers' organisations had become deeply infected by flat earth convictions.

After the H R Nicholls Society had become something of a cause celebre (and the pivotal figure in that train of events was Charles Copeman) the IR Club responded to this threat to flat earth orthodoxy.

John Halfpenny, then Secretary of the Amalgamated Metal Workers' Union, and ALP candidate for the Senate, delivered the annual Arthur Calwell Lecture at Monash University on September 9, 1986. He used this lecture to call on the Labor Movement to "combat the black and sinister hand" of the New Right, symbolised by the H R Nicholls Society.

Changing the metaphor he accused members of the New Right of portraying themselves as white knights, but they wore white hooded gowns and were the industrial relations branch of the Ku Klux Klan.

That statement led in due course to legal action and the payment of damages to two of the Society's founders, Peter Costello and myself.

More important from the Society's point of view was the reaction of the employer members of the IR Club. On October 1, 1986, Brian Powell, then chief executive of the Australian Chamber of Manufacturers, said

"There are self-interested extremists in the New right who are damaging Australian industrial relations. A small group of people, not all the Right, are acting in a manner that is as damaging as we saw in Spain and Germany in the 1930s. . . some fascists are trying to force the extremes of Thatcherism on the Liberal Party. It is not the role of employers to adopt destabilising and disruptive policies which some fascists are advocating."

That statement got Brian Powell into a lot of trouble, and not long after he resigned from his position. Nevertheless a month or so later the Confederation of Australian industry (the CAI) published an article in its Industrial Review of November 1986 and made it clear to journalists that although the HRN Society was not named in the article, the critique was aimed directly at us. I quote from the article:

". . to indulge in escapist fantasies that all of these problems could somehow be solved by getting rid of industrial tribunals and using the courts of law as the battlefield for industrial disputes takes the debate into a dangerously irrelevant domain.

"If the only solution that such critics can come up with to resolve a dispute is to sue the union, then they have no solution at all.

"How can they reconcile their professed desire to see more harmony in the workplace with an extended use of legalistic remedies is in defiance of logic."

Milton Cockburn, in the SMH (21-11-86) quoted David Nolan, then director of the CAI's industrial council, as saying that his organisation had sought extensive changes to the present industrial relations system through a major overhaul of the Conciliation and Arbitration Act.

"But this is a very different thing from those who would do away with the system in its entirety.

"These critics of our centralised system, virtually none of whom have been involved in industrial relations, threaten employers with changes which would create conditions far worse than those which already exist."

David Nolan went on to complain that the critics like to condemn industrial relations practitioners who have spent their lives in the middle of real disputes for their continued support of the system.

Those two last statements were very important. They showed that the CAI was feeling vulnerable to criticism and that its officials were seeking to construct a defense against such a critique.

It has been in the arena of employers and corporations that the key battle has been waged, and is still being waged. In the flurry of consultation and negotiation which has been going on over the Reith labour market reform Bill which is to be introduced into the House tomorrow the successor to the CAI, ACCI, has been much involved and, predictably, has been on the wrong side of some of the key issues involved in that debate. The most important issue where they have lined up strongly on the wrong side of the fence has been over repeal of the conveniently belong' rule. It is this rule in the IR Act which bestows monopoly rights of representation, bestowed in effect by the Crown, on favoured trade unions. It lies at the heart of trade union privilege. Members of this Society have long pointed out that it has been the legal privilege of the trade unions which has given meaning and purpose to the life and work of employer organisations. And so we should not be surprised that when push came to shove the employer organisations should strive to prevent any diminution of that privilege.

I want now to say something about the unique contribution which Charles Copeman made during the Robe River dispute. It is easier perhaps for me to do so today because Charles is overseas and therefore not attending this conference. By holding fast against the combined pressures of the Federal Government and Prime Minister Bob Hawke, the WA State Government under Brian Burke, the ACTU under Simon Crean and Bill Kelty, the WA Trades and Labor Council, the disparagement of many of his industry and business colleagues, a generally hostile press and media, and most difficult of all, some of his own Board members Charles Copeman rendered his country a very great service.

The economic contribution which Robe River has made, since 1986, first to Peko, and now to its new owner North Ltd, is well understood within the capital markets. But what is not understood is that Charles Copeman changed the minds of very many up and coming executives within the mining industry, particularly, but beyond the mining industry more generally. They were converted from being flat earthers to a true understanding of the nature of the world we live in. And those people are now coming into positions of high responsibility throughout industry and commerce, and they are bringing with them, perhaps unknowingly, an understanding of the world which changed dramatically as a result of what Charles Copeman said and did at Robe River.

There are very, very few people, who could have withstood the sort of pressure to which Charles was subjected at that time. He succeeded because of his strong faith and deep commitment. Australia owes him a great deal and I hope it will not be long before that debt is acknowledged.

One of the factors which assisted him at the time of the Robe River dispute was the knowledge he had acquired and the friends he made at the inaugural conference of the H R Nicholls Society held in early March 1986.

One of the most important things that happened to the Society was the acknowledgment we received some time after the drama at Robe River from within the heartland of the trade union movement, the NSW Trades and Labor Council. In December 1989 a strategy document prepared by two young officers of that Council was leaked to the press and resulted in page one banner headlines in "The Australian". H R NICHOLLS SOCIETY WINS INTELLECTUAL AND POLITICAL DEBATE was the headline and the two authors, Mark Duffy and Michael Costa, summarised the political position which they saw in December 1989 and then commented as follows.

"We must begin planning for a change in new operating environments. The guiding principle in this planning must be to secure the future of the Labor Council of NSW not the ACTU.

"While it is true that these organisations have in recent periods acted as one, this will not be possible in the changed circumstance. (ie under a Coalition Government). In relation to industrial relations policy, the Coalition is committed to a drive against union power on Thatcherite lines.

"The agenda includes voluntary enterprise agreements; genuine voluntary unionism; outlawing the closed shop; increased sanctions and penalties. . .

"The H R Nicholls Society has won the intellectual and political debate and will soon have its collective hands on the levers of power.

"What seems clear is that the next conservative government will be no replay of the all talk no action' Fraser years. These guys mean business."

Duffy and Costa took a lot of stick for saying those things back in 1989. It is a disappointment, therefore, that their forecasts for 1990 have not been vindicated in 1996. And I wish to say a few critical things about the Reith reform Bill which I understand is to be brought down in the House of Representatives tomorrow.

I have not seen the Bill and so my understanding is based on second hand reports. There are nevertheless two very important criticisms which should be made. The first is that contained within the Bill is a substantial body of rhetoric and law directed against discrimination in the workplace. This is an example of muddleheadedness of the worst kind and it will lead to no end of trouble if the Bill is enacted.

Entering into an employment relationship, regardless from which side of the relationship you are coming, is rather like approaching matrimony. When you enter into matrimony the essence of the arrangement is that the two parties to the marriage contract discriminate against every one else in the world, save their intending partner in marriage. Even today, in a world where political correctness is powerful, there is no argument that people seeking marriage partners should not discriminate against, for example, people of different race or religion from themselves. It is still customary for people to choose someone of the opposite sex for a marriage partner, but the high priest of anti-discrimination, ex Senator Chris Puplick is doing his best to break down that convention.

An employment relationship is not, and should not be, seen as durable as a marriage relationship. But nevertheless discrimination in choosing either an employee or an employer is the essence of the process. There are some industries where blanket discrimination is the sine qua non of success. In the diamond industry in New York for example, we find there is virtually no one engaged in that industry who is not an Hassidic Jew. In the lead smelting industry it has long been known that pregnant women should not be allowed inside a lead smelter because of the dangers to the unborn baby, if peradventure the expectant mother should ingest more than a very low level of lead dust, are very serious. It was a long standing rule therefore that pregnant women, or more generally, women of child bearing age, were not to be exposed to such dangers.

In the early days of the banking industry, particularly in Britain, employees were forbidden to go to race-meetings or engage in any form of public gambling. It was usually an advantage, if you were seeking employment with a bank, to have a record of church attendance at a protestant or evangelical church.

The Chinese laundries of former times, and the Chinese restaurants of today, are dominated by Chinese people both as proprietors and as employees. There is a company producing health foods, so-called, which is owned by seventh day adventists, and which has a policy of preferring to employ co-religionists. The Roman Catholic Church has run into problems because it has sought to bring to an end employment relations with teachers in catholic schools who did not support, by precept and example, the moral standards which the church expected from their teaching staff.

It is from a complete misunderstanding of the nature of the employment relationship that the new minister should, in his new reform Bill, try to stamp out discrimination.

An employment relationship should be a contract between free people, between consenting adults to use the current and debased language, and they should be free to discriminate as they see fit. And they should be free to end the relationship in the same way, according to the agreement they made when they began the relationship.

This IR Bill, as far as we know it, has many faults. Nevertheless it is the centre piece of the Government's reform agenda and my reading of the play is that the Democrats and the Greens will combine to block the IR Bill in the Senate, thus leaving the Government with four choices.

  • First, it can accept amendments from the Democrats which will gut the bill of its most important provisions.
  • Second, it can obtain a double dissolution of the Parliament and put the defeated Bill to a vote of the two chambers sitting jointly after the election.
  • Third, it can abandon its ambitions for statutory change and put a referendum proposal to the people removing industrial relations from the powers listed in the Constitution as belonging to the Commonwealth.
  • Finally, it can give up on its ambitions for industrial relations reform.

The first and last options mean complete loss of legitimacy for the Howard Government. However, the double dissolution option is always very unpopular with a recently elected government, especially one which has been in opposition for 13 years. The third option, that of constitutional change brought about through referendum would, in my view, produce the best industrial relations and economic outcome. But the idea that important powers of regulation should be handed back to the States seems to be deeply offensive in Canberra, regardless on which side of politics one puts the argument.

The Bill itself has not been released. But the essential elements are widely known and already the debate over the options in the event of a Senate veto is developing. I am hoping that centralist pride (of which there is plenty around) will not prevent the first best option in our Australian context, constitutional amendment, from receiving close and serious consideration.